[Corporate Information](index=3&type=section&id=Corporate%20Information) This chapter provides fundamental administrative and legal information about the company, including board members, committees, secretaries, representatives, registered office, and auditors, along with its stock code - The company's stock code is **0314**[15](index=15&type=chunk) - The Board of Directors includes Executive Directors Mr. Ma Xuguang (Chairman) and Mr. Li Ji, Non-executive Director Mr. Yao Leiwen, and Independent Non-executive Directors Mr. Fan Xin, Mr. He Haijian, and Ms. Huang Bei[7](index=7&type=chunk) - The company's auditor is Ernst & Young[14](index=14&type=chunk) [2025 First Half Highlights](index=7&type=section&id=2025%20First%20Half%20Highlights) The Group successfully advanced its strategic transformation in H1 2025, aiming to become a commercial medical payment and service network centered on health insurance brokerage, achieving a **4.7 percentage point increase in overall gross margin to 14.4%** and a **59.6% reduction in normalized net loss** through strategic restructuring - The Group is strategically transforming to become a commercial medical payment and healthcare service network, focusing on corporate employee medical protection and health management with health insurance brokerage at its core[16](index=16&type=chunk) - Strategic restructuring and optimization were implemented for the specialty pharmacy and Huiminbao insurance business segments[17](index=17&type=chunk) Key Financial Highlights H1 2025 | Metric | Change | Value (H1 2025) | | :--- | :--- | :--- | | Overall Gross Margin | Up approx. 4.7 percentage points YoY | Approx. 14.4% | | Normalized Net Loss | Down approx. 59.6% YoY | | [Financial Summary](index=8&type=section&id=Financial%20Summary) This chapter outlines the Group's key financial performance for H1 2025 compared to H1 2024, showing a significant revenue decrease due to specialty pharmacy and Huiminbao business restructuring, but also a substantial improvement in gross margin and a narrowed normalized net loss, indicating initial success of strategic adjustments Key Financial Data H1 2025 (RMB thousands) | Metric | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | 1,224,064 | 2,363,780 | -48.2 | | Commercial Health Insurance Services | 83,118 | 109,648 | -24.2 | | — Corporate Health Insurance | 42,809 | 38,840 | 10.2 | | — Huiminbao Insurance | 40,309 | 70,808 | -43.1 | | Physician Research Assistance Services | 215,121 | 187,371 | 14.8 | | Specialty Pharmacy Business | 925,825 | 2,066,761 | -55.2 | | **Total Gross Profit** | 176,099 | 228,931 | -23.1 | | Gross Margin | 14.4% | 9.7% | 4.7 (percentage points) | | Operating Loss | (60,398) | (85,787) | -29.6 | | Normalized Net Loss | (11,996) | (29,694) | -59.6 | | IFRS Net Loss | (81,139) | (74,651) | 8.7 | | Cash and Specific Financial Assets | 850,606 | 1,338,734 | -36.5 | - Normalized net loss calculation excludes non-recurring and non-operating items such as share-based payment expenses, restructuring costs, loss on disposal of subsidiaries, and non-recurring government grants[22](index=22&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) This chapter details the Group's operating environment, strategic adjustments, business progress, financial performance, and future outlook for H1 2025, highlighting improved profitability through business restructuring and in-depth analysis of financial indicators [Industry Environment and Trends](index=10&type=section&id=INDUSTRY%20ENVIRONMENT%20AND%20TRENDS) China's multi-tiered healthcare security system is accelerating, with the medical insurance market entering a high-quality development phase 3.0, supported by government policies that create historic new opportunities for commercial health insurance - The 'Healthy China 2030' strategy is being deeply implemented, accelerating the construction of a multi-tiered healthcare security system[24](index=24&type=chunk) - The medical insurance market has entered a high-quality development phase 3.0, becoming the 'second pillar' beyond basic medical insurance[24](index=24&type=chunk) - Since 2025, multiple government departments have introduced policies to support the high-quality development of commercial health insurance, providing support for biomedical industry innovation and bringing historic new opportunities[25](index=25&type=chunk) [Company Strategy and Differentiated Advantages](index=10&type=section&id=COMPANY%20STRATEGY%20AND%20DIFFERENTIATED%20ADVANTAGES) The company deepens its 'commercial health insurance + healthcare management' strategic service model, aiming to become a leading domestic commercial medical payment system and healthcare service network, integrating high-quality medical services and data insights into insurance solutions to form an 'integrated medical, pharmaceutical, health, and insurance' closed-loop service model - The company is deepening its 'commercial health insurance + healthcare management' strategic service model, aiming to become a leading domestic commercial medical payment system and healthcare service network[26](index=26&type=chunk) - Leveraging professional insurance brokerage services, healthcare service delivery, and data & AI-enabled operational capabilities, the company has built a value ecosystem connecting patients, doctors, medical institutions, pharmaceutical companies, and payers[27](index=27&type=chunk) - The core differentiated advantage lies in deeply integrating high-quality medical service capabilities and data insights into insurance solutions, forming a unique 'integrated medical, pharmaceutical, health, and insurance' closed-loop service model[28](index=28&type=chunk) [Business Progress and Operational Highlights](index=11&type=section&id=BUSINESS%20PROGRESS%20AND%20OPERATIONAL%20HIGHLIGHTS) In H1 2025, the company focused on commercial health insurance, significantly enhancing its end-to-end service capabilities by integrating healthcare service networks and pharmaceutical supply chains, while corporate health insurance business continued to grow, supported by physician research assistance and specialty pharmacy businesses - Commercial Health Insurance Services: As of June 30, 2025, the company served **526 industry-leading enterprises** nationwide, covering over **1.49 million members**, with managed premiums of approximately **RMB 863 million**, a year-on-year increase of approximately **34.8%**, and a premium renewal rate of approximately **105.3%**[31](index=31&type=chunk) - A five-year strategic cooperation framework agreement was signed with Arthur J. Gallagher (Singapore) Pte. Ltd. to enhance client insurance service experience[31](index=31&type=chunk) - Physician Research Assistance Services: As of June 30, 2025, **1,009 SMO projects** were completed, with another **854 projects** in progress; clients include all top ten listed pharmaceutical companies in China's innovative drug R&D sector, achieving a **100% retention rate** for the top ten clients[34](index=34&type=chunk) - Specialty Pharmacy Business: As of the end of the reporting period, **22 specialty pharmacies** were operated in major provincial capitals and economically developed regions nationwide, with direct payment mechanisms established with major insurance companies[35](index=35&type=chunk) - Healthcare Service Delivery Capability: As of June 30, 2025, **65 corporate clinics** were operated, with approximately **87,000 patient visits** in H1; **23 high-quality commercial medical institutions** were contracted, covering **118 service points**[37](index=37&type=chunk) - Pharmaceutical Supply Chain Capability: As of June 30, 2025, over **10,000 pharmacy outlets** were covered through contracts with major chain pharmacies[37](index=37&type=chunk) [Strategic Restructuring Drives Profitability Improvement](index=13&type=section&id=Strategic%20restructuring%20drives%20profitability%20improvement) The Group's strategic restructuring of specialty pharmacy and Huiminbao businesses since 2024 significantly improved overall profitability, with continuous gross margin expansion and a substantial reduction in normalized net loss, driven by business structure optimization, enhanced operational efficiency, and focused resource allocation - To strengthen its core commercial health insurance strategy and enhance operational efficiency and profitability, the company initiated restructuring plans for its specialty pharmacy and Huiminbao insurance business segments starting in 2024[38](index=38&type=chunk) Gross Margin Change (H1 2025 vs H1 2024) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Overall Gross Margin | 14.4% | 9.7% | Up 4.7 percentage points | | Commercial Health Insurance Business Gross Margin | 77.0% | 70.8% | Up 6.2 percentage points | | Specialty Pharmacy Business Gross Margin | 5.4% | 4.5% | Up 0.9 percentage points | - Normalized net loss decreased by approximately **59.6%** to approximately **RMB 12.0 million** (H1 2024: approximately RMB 29.7 million)[40](index=40&type=chunk) - The narrowed loss is primarily attributable to business structure optimization (increased proportion of high-gross-margin commercial health insurance business), improved operational efficiency (enhanced network synergy, digital operations), and focused resource allocation on core segments[40](index=40&type=chunk) [Outlook](index=14&type=section&id=OUTLOOK) Looking ahead to H2 2025 and beyond, the Group is confident in sustained business growth and improved profitability, driven by policy dividends and first-mover advantages (data accumulation, AI-driven solution design, service network expansion), which will scale core businesses, optimize profit structure, and enhance cash flow, while continuing to deepen strategic focus and digital transformation - The company is confident in continuing the trend of business scale growth and profitability improvement in H2 2025 and over the longer term[41](index=41&type=chunk) - Growth drivers stem from policy dividends (commercial health insurance and multi-tiered healthcare security system construction) and first-mover advantages (data accumulation, large model-driven solution design capabilities, expansion of medical and pharmaceutical delivery networks)[41](index=41&type=chunk) - The 'policy-led + competitiveness-driven' dual-engine model is expected to long-term support the Group's core business for scaled growth, optimized profit structure, and improved cash flow[41](index=41&type=chunk) - In the future, the company will continue to deepen its strategic focus, consolidate its leading position in integrated commercial health insurance and healthcare management, and accelerate digital and intelligent transformation[42](index=42&type=chunk) [Financial Review](index=14&type=section&id=FINANCIAL%20REVIEW) This section provides a detailed review of the Group's H1 2025 financial performance, including specific data and reasons for changes in revenue, cost of sales, gross profit, various expenses, income tax, and normalized net loss, emphasizing the positive impact of strategic restructuring on financial health [Revenue](index=15&type=section&id=Revenue) Total revenue decreased by **48.2%** year-on-year to **RMB 1.224 billion**, primarily due to the strategic restructuring of specialty pharmacy and Huiminbao businesses, while corporate health insurance revenue grew by **10.2%** and physician research assistance revenue increased by **14.8%** Revenue Breakdown (H1 2025 vs H1 2024) | Business Segment | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Commercial Health Insurance Services | 83,118 | 109,648 | -24.2 | | — Corporate Health Insurance | 42,809 | 38,840 | 10.2 | | — Huiminbao Insurance | 40,309 | 70,808 | -43.1 | | Physician Research Assistance Services | 215,121 | 187,371 | 14.8 | | Specialty Pharmacy Business | 925,825 | 2,066,761 | -55.2 | | **Total** | **1,224,064** | **2,363,780** | **-48.2** | - The growth in corporate health insurance revenue is primarily attributed to the competitive advantage in healthcare management capabilities and successful implementation of business development plans, leading to a significant increase in clients and insured members[47](index=47&type=chunk) - The decrease in specialty pharmacy business revenue and Huiminbao insurance business revenue is primarily due to strategic restructuring[47](index=47&type=chunk)[49](index=49&type=chunk) [Cost of Sales](index=16&type=section&id=Cost%20of%20Sales) Cost of sales decreased by **50.9%** year-on-year to **RMB 1.048 billion**, consistent with the revenue decline, primarily due to the strategic restructuring of the specialty pharmacy and Huiminbao business segments Cost of Sales Breakdown (H1 2025 vs H1 2024) | Business Segment | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Commercial Health Insurance Services | 19,103 | 32,047 | -40.4 | | Physician Research Assistance Services | 153,131 | 129,706 | 18.1 | | Specialty Pharmacy Business | 875,731 | 1,973,096 | -55.6 | | **Total** | **1,047,965** | **2,134,849** | **-50.9** | - The decrease in cost of sales is consistent with the decrease in revenue, primarily due to the strategic restructuring of the specialty pharmacy and Huiminbao business segments[52](index=52&type=chunk) [Gross Profit and Gross Margin](index=16&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Total gross profit decreased by **23.1%** year-on-year to **RMB 176.1 million**, but the overall gross margin significantly increased by **4.7 percentage points to 14.4%**, primarily driven by strong growth in the commercial health insurance services gross margin Gross Profit and Gross Margin Breakdown (H1 2025 vs H1 2024) | Business Segment | Gross Profit (RMB'000) H1 2025 | Gross Margin (%) H1 2025 | Gross Profit (RMB'000) H1 2024 | Gross Margin (%) H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Commercial Health Insurance Services | 64,015 | 77.0 | 77,601 | 70.8 | | Physician Research Assistance Services | 61,990 | 28.8 | 57,665 | 30.8 | | Specialty Pharmacy Business | 50,094 | 5.4 | 93,665 | 4.5 | | **Total** | **176,099** | **14.4** | **228,931** | **9.7** | - Overall gross margin significantly increased from approximately **9.7%** in H1 2024 to approximately **14.4%** in H1 2025, primarily due to the rise in commercial health insurance services gross margin[55](index=55&type=chunk) [Selling and Marketing Expenses](index=17&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses decreased by **41.3%** year-on-year to approximately **RMB 80.9 million**, mainly due to efficiency enhancement initiatives related to commercial health insurance services and the strategic restructuring of the specialty pharmacy business - Selling and marketing expenses decreased by approximately **41.3%** to approximately **RMB 80.9 million**[58](index=58&type=chunk) - The primary reasons are efficiency enhancement initiatives related to commercial health insurance services and the strategic restructuring of the specialty pharmacy business[58](index=58&type=chunk) [Administrative Expenses](index=17&type=section&id=Administrative%20Expenses) Administrative expenses decreased by **7.0%** year-on-year to approximately **RMB 150.5 million**, primarily due to improved administrative efficiency through organizational optimization and digitalization - Administrative expenses decreased by approximately **7.0%** to approximately **RMB 150.5 million**[59](index=59&type=chunk) - The primary reason is the enhancement of administrative efficiency through organizational optimization and digitalization[59](index=59&type=chunk) [Research and Development Expenses](index=17&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses significantly decreased by **66.1%** year-on-year to approximately **RMB 5.1 million**, primarily because initial R&D investments have yielded results, leading to a corresponding reduction in expenses - Research and development expenses significantly decreased by approximately **66.1%** to approximately **RMB 5.1 million**[60](index=60&type=chunk) - The primary reason is that initial R&D investments have yielded results, leading to a corresponding reduction in R&D expenses[60](index=60&type=chunk) [Restructuring Cost](index=17&type=section&id=Restructuring%20Cost) Restructuring costs amounted to approximately **RMB 13.5 million**, primarily stemming from the strategic transformation of the specialty pharmacy and Huiminbao business segments, including employee optimization severance payments and other asset losses - Restructuring costs amounted to approximately **RMB 13.5 million**[61](index=61&type=chunk) - This primarily includes employee optimization severance payments of approximately **RMB 12.4 million** (approximately RMB 9.1 million for specialty pharmacy business and approximately RMB 3.3 million for Huiminbao insurance business) and other asset losses of approximately **RMB 1.1 million**[61](index=61&type=chunk) [Other Expenses](index=18&type=section&id=Other%20expenses) Other expenses increased by approximately **RMB 16.7 million** to **RMB 20.1 million**, mainly due to increased losses from the disposal of subsidiaries and a higher net exchange difference - Other expenses increased by approximately **RMB 16.7 million** to approximately **RMB 20.1 million**[66](index=66&type=chunk) - This was primarily due to increased losses from the disposal of subsidiaries and a higher net exchange difference[66](index=66&type=chunk) [Income Tax](index=18&type=section&id=Income%20Tax) During the reporting period, the Group recorded an income tax credit of approximately **RMB 1.2 million**, an increase from **RMB 0.5 million** in H1 2024 - Income tax credit was approximately **RMB 1.2 million** (H1 2024: RMB 0.5 million)[67](index=67&type=chunk) [Normalized Net Loss](index=18&type=section&id=Normalized%20Net%20Loss) Normalized net loss decreased by **59.6%** year-on-year to **RMB 12.0 million**, a metric that better reflects the company's ongoing operating performance by excluding non-recurring and non-operating items - Normalized net loss decreased by approximately **59.6%** to approximately **RMB 12.0 million** (H1 2024: approximately RMB 29.7 million)[74](index=74&type=chunk) Normalized Net Loss Reconciliation (H1 2025 vs H1 2024) | Metric | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Loss for the year (IFRS) | (81,139) | (74,651) | | Add: Share-based payment expenses | 42,804 | 45,857 | | Add: Restructuring costs | 13,523 | – | | Add: Loss on disposal of subsidiaries | 12,177 | – | | Less: Government grants | (1,163) | (900) | | **Normalized Net Loss for the year** | **(11,996)** | **(29,694)** | [Capital Management](index=20&type=section&id=Capital%20Management) The Group primarily funds its working capital requirements through cash flows generated from operations and monitors cash and cash equivalents levels, with net cash outflow from operating activities of approximately **RMB 63.5 million** in H1 2025 - Working capital requirements are primarily funded by cash flows generated from operations[75](index=75&type=chunk) - In H1 2025, net cash outflow from operating activities was approximately **RMB 63.5 million**[75](index=75&type=chunk) [Liquidity, Financial Resources and Gearing Ratio](index=20&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Gearing%20Ratio) As of June 30, 2025, the Group recorded net current assets of approximately **RMB 674.3 million**, a gearing ratio of approximately **47.8%**, and cash and specific financial assets of approximately **RMB 851 million**, with future liquidity needs expected to be met by operating cash flows - As of June 30, 2025, net current assets were approximately **RMB 674.3 million**[76](index=76&type=chunk) - The gearing ratio was approximately **47.8%** (December 31, 2024: approximately 47.0%)[76](index=76&type=chunk) - As of June 30, 2025, cash and specific financial assets amounted to approximately **RMB 850.6 million**[77](index=77&type=chunk) [Significant Investments, Material Acquisitions and Disposals](index=21&type=section&id=Significant%20Investments%2C%20Material%20Acquisitions%20and%20Disposals) During the reporting period, the company subscribed to a **USD 30 million** wealth management product issued by JPMorgan Chase Bank and disposed of equity in a non-wholly owned subsidiary for approximately **RMB 5.9 million**, with no other significant investments, acquisitions, or disposals - Subscribed to a wealth management product with a principal amount of **USD 30,000,000** from JPMorgan Chase Bank, National Association for wealth management purposes[80](index=80&type=chunk) - As of June 30, 2025, the fair value of this wealth management product was approximately **USD 30.1 million**, accounting for approximately **11.7%** of the Group's total assets[81](index=81&type=chunk) - Disposed of equity in a non-wholly owned subsidiary for a total consideration of **RMB 5,899,786**[83](index=83&type=chunk) [Capital Expenditure](index=22&type=section&id=Capital%20Expenditure) The Group's total capital expenditure for H1 2025 amounted to **RMB 1.52 million**, primarily for purchasing office equipment, software, and leasehold improvements, representing a significant decrease from H1 2024 Capital Expenditure Breakdown (H1 2025 vs H1 2024) | Item | Six Months Ended June 30, 2025 (RMB'000) | Six Months Ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Purchase of property, plant and equipment | (1,516) | (6,625) | | Purchase of other intangible assets | – | (2,185) | | **Total** | **(1,516)** | **(8,810)** | - Major capital expenditures were related to the purchase of office equipment, software, and leasehold improvements[89](index=89&type=chunk) [Currency Risk](index=22&type=section&id=Currency%20Risk) The Group primarily operates in China with transactions settled in RMB, but faces foreign exchange risk due to certain cash and bank balances denominated in non-functional currencies; management monitors this risk and will consider hedging if necessary - The Group primarily operates in China, with most transactions settled in RMB[91](index=91&type=chunk) - The Group is exposed to foreign exchange risk due to certain cash and bank balances denominated in non-functional currencies[91](index=91&type=chunk) - Currently, there is no foreign exchange hedging policy, but management monitors foreign exchange risk and will consider hedging when necessary[91](index=91&type=chunk) [Pledge of Assets](index=23&type=section&id=Pledge%20of%20Assets) The Group's pledged deposits decreased from approximately **RMB 105.4 million** as of December 31, 2024, to approximately **RMB 37.9 million** as of June 30, 2025 - Pledged deposits decreased from approximately **RMB 105.4 million** as of December 31, 2024, to approximately **RMB 37.9 million** as of June 30, 2025[93](index=93&type=chunk) [Contingent Liabilities](index=23&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[94](index=94&type=chunk) [Employees and Remuneration Policies](index=23&type=section&id=Employees%20and%20Remuneration%20Policies) As of June 30, 2025, the Group had **2,950 employees**, primarily based in China, and is committed to a competitive and fair remuneration system including basic salary and performance bonuses, with standard employment and confidentiality agreements for all employees and non-compete agreements for senior management - As of June 30, 2025, there were **2,950 employees**, with the majority based in China[95](index=95&type=chunk) - Remuneration policies include basic salaries and performance bonuses, with performance evaluations conducted at least annually[97](index=97&type=chunk) - Standard employment and confidentiality agreements are entered into with all employees, and non-compete agreements are signed with senior management and key personnel[96](index=96&type=chunk) [Future Investment Plans and Expected Funding](index=23&type=section&id=Future%20Investment%20Plans%20and%20Expected%20Funding) As of June 30, 2025, the Group had no other significant investment and capital asset plans - As of June 30, 2025, there were no other significant investment and capital asset plans[98](index=98&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This chapter covers other important information including corporate governance, shareholder equity, share schemes, and securities transactions; post-reporting period, the company changed its Hong Kong share registrar and terminated its restricted share unit scheme, while generally complying with corporate governance and disclosing directors' and substantial shareholders' interests [Subsequent Events After The Reporting Period](index=24&type=section&id=SUBSEQUENT%20EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) Subsequent to the reporting period, the company changed its Hong Kong share registrar and prematurely terminated its restricted share unit scheme as all restricted share units had vested - Effective August 1, 2025, the Hong Kong share registrar has been changed to Tricor Investor Services Limited[103](index=103&type=chunk) - On August 18, 2025, the Board resolved to prematurely terminate the Restricted Share Unit Scheme, as all **10,004,000** relevant shares had formally vested[104](index=104&type=chunk) [Use of Net Proceeds From Listing](index=24&type=section&id=USE%20OF%20NET%20PROCEEDS%20FROM%20LISTING) The Group has fully utilized the net proceeds from its global offering by the end of 2024 according to the planned timetable - The Group has fully utilized the net proceeds from its global offering by the end of 2024 according to the planned timetable[106](index=106&type=chunk) [Dividend](index=24&type=section&id=DIVIDEND) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[107](index=107&type=chunk) [Compliance With The Corporate Governance Code](index=25&type=section&id=COMPLIANCE%20WITH%20THE%20CORPORATE%20GOVERNANCE%20CODE) The company generally complied with the Corporate Governance Code during the reporting period, with deviations including the combined roles of Chairman and CEO held by Mr. Ma Xuguang and the absence of a dividend policy, though the Board believes the current structure ensures power balance and efficient operations - The company has complied with all applicable code provisions of the Corporate Governance Code, except for the following deviations[112](index=112&type=chunk) - Deviation from Code Provision C.2.1: The roles of Chairman and Chief Executive Officer are combined and held by Mr. Ma Xuguang[113](index=113&type=chunk) - Deviation from Code Provision F.1.1: The company has not yet adopted a dividend policy, intending to retain most available funds and future earnings to finance business development[117](index=117&type=chunk) - The Board believes the existing structure does not compromise the balance of power, as there are sufficient checks and balances, directors fulfill their fiduciary duties, the Board comprises experienced individuals making collective decisions, and it facilitates consistent leadership and efficient strategic planning for the Group[114](index=114&type=chunk) [Model Code For Securities Transactions](index=26&type=section&id=MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS) All directors confirmed compliance with the Model Code for Securities Transactions set out in Appendix C3 of the Listing Rules during the reporting period, and employees who may possess unpublished inside information are also required to comply with this code - Following specific enquiries made to all Directors, each Director has confirmed compliance with the required standards set out in the Model Code throughout the reporting period[118](index=118&type=chunk) - Employees of the company who may possess unpublished inside information are also required to comply with the Model Code[119](index=119&type=chunk) [Change In Directors' And The Senior Management's Information](index=26&type=section&id=CHANGE%20IN%20DIRECTORS'%20AND%20THE%20SENIOR%20MANAGEMENT'S%20INFORMATION) Since the publication of the company's 2024 annual report, there have been no changes in the information of the company's directors and senior management requiring disclosure under Listing Rule 13.51B(1) - Since the publication date of the company's 2024 annual report, there have been no changes in the information of the company's directors and senior management requiring disclosure under Listing Rule 13.51B(1)[120](index=120&type=chunk) [Directors' And Chief Executive's Interests And Short Positions In Shares, Underlying Shares And Debentures](index=27&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVE'S%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES%2C%20UNDERLYING%20SHARES%20AND%20DEBENTURES) As of June 30, 2025, Executive Directors Mr. Ma Xuguang and Mr. Li Ji each held long positions of **97,000,000 shares** in the company, representing **12.69%** of the total share capital, primarily through controlled corporations and jointly held interests Directors' Interests in Shares and Underlying Shares (As of June 30, 2025) | Name of Director | Capacity/Nature of Interest | Total Number of Shares/Underlying Shares Held(1) | Approximate Percentage of the Company's Equity (%)(1) | | :--- | :--- | :--- | :--- | | Mr. Ma Xuguang | Interest in controlled corporation; jointly held interest with another person | 97,000,000 (L) | 12.69% | | Mr. Li Ji | Interest in controlled corporation; jointly held interest with another person | 97,000,000 (L) | 12.69% | - As of June 30, 2025, the company had a total of **764,420,514 shares** in issue[127](index=127&type=chunk) - Mr. Ma Xuguang and Mr. Li Ji will continue to be bound by the acting-in-concert agreement to act in concert in the management and operation of the Group[127](index=127&type=chunk) [Substantial Shareholders' Interests And Short Positions In Shares And Underlying Shares](index=29&type=section&id=SUBSTANTIAL%20SHAREHOLDERS'%20INTERESTS%20AND%20SHORT%20POSITIONS%20IN%20SHARES%20AND%20UNDERLYING%20SHARES) As of June 30, 2025, the company's substantial shareholders included Mr. Ma Xuguang, Mr. Li Ji, Tencent Mobility Limited, TPP Follow-on I Holding H Limited, Eight Roads Investments, Impresa Fund III Limited Partnership, and Mr. Zhang Jingxin, who, along with their controlled entities, held interests in the company's shares Substantial Shareholders' Interests in Shares and Underlying Shares (As of June 30, 2025) | Name of Shareholder | Capacity/Nature of Interest | Total Number of Shares/Underlying Shares Held(1) | Approximate Percentage of the Company's Equity (%)(1) | | :--- | :--- | :--- | :--- | | Mr. Ma | Interest in controlled corporation; jointly held interest with another person | 97,000,000 | 12.69% | | Mr. Li | Interest in controlled corporation; jointly held interest with another person | 97,000,000 | 12.69% | | Wise Approach | Beneficial owner | 40,410,926 | 5.29% | | Lucky Seven | Beneficial owner | 57,000,000 | 7.46% | | Simul | Interest in controlled corporation | 57,000,000 | 7.46% | | Spire-succession | Beneficial owner | 40,000,000 | 5.23% | | Shining-succession | Interest in controlled corporation | 40,000,000 | 5.23% | | Tencent Mobility Limited | Beneficial owner | 168,266,382 | 22.01% | | TPP Follow-on I Holding H Limited | Beneficial owner | 40,852,974 | 5.34% | | Tencent | Interest in controlled corporation | 209,119,356 | 27.36% | | Eight Roads Investments | Beneficial interest; interest in controlled corporation | 59,329,899 | 7.76% | | Impresa Fund III Limited Partnership | Beneficial interest; interest in controlled corporation | 64,828,424 | 8.48% | | Mr. Zhang Jingxin | Interest in controlled corporation | 38,982,854 | 5.10% | - Tencent is a substantial shareholder of the company, holding over **20%** of voting rights, and indirectly holds shares through Tencent Mobility Limited and TPP Follow-on I Holding H Limited[135](index=135&type=chunk)[142](index=142&type=chunk) [Directors' Rights To Acquire Shares Or Debentures](index=34&type=section&id=DIRECTORS'%20RIGHTS%20TO%20ACQUIRE%20SHARES%20OR%20DEBENTURES) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries entered into any arrangements enabling directors or their spouses or children under 18 to benefit from acquiring shares or debentures of the company or any other body corporate - At no time during the six months ended June 30, 2025, had the company or any of its subsidiaries entered into any arrangements to enable the directors to acquire benefits by means of the acquisition of shares or debentures of the company or any other body corporate[151](index=151&type=chunk) [Share Schemes](index=34&type=section&id=SHARE%20SCHEMES) This section details the company's 2017 Plan and Restricted Share Unit (RSU) Scheme, including their purposes, participants, share quantities, and changes during the reporting period, noting that the RSU Scheme was prematurely terminated due to all units vesting [2017 Plan](index=34&type=section&id=2017%20Plan) The 2017 Plan aims to attract and retain talent, with **6,656,220 outstanding share options** as of June 30, 2025, representing approximately **0.87%** of total issued shares; no new options were granted during the reporting period, and none will be granted post-listing - The 2017 Plan aims to attract and retain the most competent key personnel, provide additional incentives, and promote the successful development of the company's business[156](index=156&type=chunk) - As of June 30, 2025, there were **6,656,220 outstanding 2017 Plan share options**, representing approximately **0.87%** of the total issued shares[159](index=159&type=chunk)[163](index=163&type=chunk) - No 2017 Plan share options were granted during the reporting period, and the company has not and will not grant further 2017 Plan share options after listing[159](index=159&type=chunk)[166](index=166&type=chunk) Details of 2017 Plan Share Option Movements (H1 2025) | Grantee | Outstanding as at January 1, 2025 | Exercised during the period | Forfeited/cancelled/lapsed during the period | Outstanding as at June 30, 2025 | Approximate percentage of total issued shares as at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | 6,174,117 | 237,800 | 84,397 | 5,851,920 | 0.77% | | Service providers | 804,900 | 600 | – | 804,300 | 0.10% | | **Total** | **6,979,017** | **238,400** | **84,397** | **6,656,220** | **0.87%** | [Restricted Share Unit Scheme](index=37&type=section&id=RSU%20Scheme) The 2021 Restricted Share Unit Scheme, adopted to recognize grantee contributions, was prematurely terminated on August 18, 2025, as all **10,004,000 relevant shares** granted to Mr. Zhou Teng had fully vested by June 30, 2025 - The Restricted Share Unit Scheme aims to recognize grantees' contributions, incentivize retention, and attract suitable personnel[169](index=169&type=chunk) - The total number of shares available for delivery under the scheme is **10,004,000 shares**[171](index=171&type=chunk) - As of June 30, 2025, all **6,502,600 relevant shares** granted to Mr. Zhou Teng had vested, with no relevant shares remaining unvested[173](index=173&type=chunk)[177](index=177&type=chunk) - Given that all relevant shares had formally vested, the Board resolved on August 18, 2025, to prematurely terminate the Restricted Share Unit Scheme[178](index=178&type=chunk) [Purchase, Sale Or Redemption Of Listed Securities Or Sale Of Treasury Shares](index=38&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20LISTED%20SECURITIES%20OR%20SALE%20OF%20TREASURY%20SHARES) For the six months ended June 30, 2025, the company repurchased a total of **14,299,800 shares** on the Stock Exchange for approximately **HKD 64.41 million**, held as treasury shares, and additionally repurchased **36,673,200 ordinary shares** for the 2023 Share Award Scheme - For the six months ended June 30, 2025, the company repurchased a total of **14,299,800 shares** on the Stock Exchange for a total consideration of approximately **HKD 64,407,389**, which are held as treasury shares[179](index=179&type=chunk) - A total of **36,673,200 ordinary shares** were repurchased for the 2023 Share Award Scheme, with a total consideration of **RMB 132,860,000**[285](index=285&type=chunk) - As of June 30, 2025, the company held **14,299,800 treasury shares**[181](index=181&type=chunk) [Audit Committee](index=39&type=section&id=AUDIT%20COMMITTEE) The Audit Committee, together with the Board, has reviewed the Group's adopted accounting principles and practices, as well as the interim results for the reporting period - The Audit Committee, together with the Board, has reviewed the accounting principles and practices adopted by the Group and the interim results for the reporting period[182](index=182&type=chunk) [Independent Review Of Auditor](index=39&type=section&id=INDEPENDENT%20REVIEW%20OF%20AUDITOR) The interim financial report for the six months ended June 30, 2025, was not audited but was reviewed by Ernst & Young in accordance with Hong Kong Standard on Review Engagements 2410, resulting in an unmodified review report - The interim financial report was not audited but was reviewed by Ernst & Young in accordance with Hong Kong Standard on Review Engagements 2410[183](index=183&type=chunk) - An unmodified review report was issued[183](index=183&type=chunk) [Independent Auditor's Review Report](index=40&type=section&id=Independent%20Auditor's%20Review%20Report) Ernst & Young reviewed the interim financial information of Spai Health Technology Co., Ltd. for the six months ended June 30, 2025, concluding that nothing came to their attention to suggest the interim financial information was not prepared in all material respects in accordance with International Accounting Standard 34, noting this is a review report, not an audit opinion - Ernst & Young has reviewed the interim financial information for the six months ended June 30, 2025[187](index=187&type=chunk) - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, with a scope significantly smaller than an audit, thus no audit opinion is expressed[188](index=188&type=chunk) - The conclusion is that nothing has come to the auditor's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[191](index=191&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=42&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the Group's profit or loss and other comprehensive income for the six months ended June 30, 2025, showing a loss for the period of **RMB 81.139 million**, an increase from H1 2024, with basic and diluted loss per share both at **RMB 0.12** Summary of Profit or Loss and Other Comprehensive Income (RMB thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | 1,224,064 | 2,363,780 | | Gross Profit | 176,099 | 228,931 | | Loss before tax | (82,369) | (75,159) | | Loss for the period | (81,139) | (74,651) | | Total comprehensive loss for the period | (83,335) | (74,311) | - Basic and diluted loss per share attributable to ordinary equity holders of the parent company were both **RMB 0.12**[196](index=196&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=44&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position as of June 30, 2025, showing a decrease in total current assets and total equity compared to December 31, 2024, while total non-current assets slightly increased Summary of Financial Position (RMB thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total non-current assets | 292,944 | 285,165 | | Total current assets | 1,539,381 | 1,980,127 | | Total current liabilities | 865,130 | 1,036,613 | | Net current assets | 674,251 | 943,514 | | Total equity | 956,314 | 1,201,586 | - As of June 30, 2025, financial assets at fair value through profit or loss amounted to **RMB 365,638 thousand**[198](index=198&type=chunk) - As of June 30, 2025, cash and cash equivalents amounted to **RMB 258,089 thousand**[198](index=198&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=46&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement presents the Group's changes in equity for the six months ended June 30, 2025, showing a decrease in total equity from **RMB 1.202 billion** at the beginning of the period to **RMB 956 million** at the end, primarily due to loss for the period and repurchase of ordinary shares Summary of Changes in Equity (RMB thousands) | Metric | As at January 1, 2025 (audited) | Loss for the period | Repurchase of ordinary shares | As at June 30, 2025 (unaudited) | | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the parent | 1,225,877 | (71,985) | (198,922) | 995,879 | | Non-controlling interests | (24,291) | (9,154) | – | (39,565) | | **Total Equity** | **1,201,586** | **(81,139)** | **(198,922)** | **956,314** | - Share-based payment expenses for the period amounted to **RMB 42,804 thousand**[201](index=201&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=48&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement presents the Group's cash flows for the six months ended June 30, 2025, showing a net cash outflow from operating activities of **RMB 63.471 million**, a net cash inflow from investing activities of **RMB 280.845 million**, a net cash outflow from financing activities of **RMB 206.450 million**, and cash and cash equivalents of **RMB 258.089 million** at period-end Summary of Cash Flows (RMB thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash flows used in operating activities | (63,471) | (1,282) | | Net cash flows used in investing activities | 280,845 | (94,350) | | Net cash flows used in financing activities | (206,450) | (120,750) | | Net increase/(decrease) in cash and cash equivalents | 10,924 | (216,382) | | Cash and cash equivalents at end of period | 258,089 | 279,383 | - Net cash flows from investing activities shifted from an outflow in H1 2024 to an inflow in H1 2025, primarily due to increased proceeds from the withdrawal of financial products at fair value through profit or loss[205](index=205&type=chunk) [Notes to Interim Condensed Consolidated Financial Information](index=51&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Information) This chapter provides detailed notes to the interim condensed consolidated financial information, covering company and group information, changes in accounting policies, operating segment information, revenue and expense breakdowns, taxation, dividends, loss per share, balance sheet item details, related party transactions, and fair value information for financial instruments, offering supplementary explanations for the financial statements [1. Corporate and Group Information](index=51&type=section&id=1.%20CORPORATE%20AND%20GROUP%20INFORMATION) Spai Health Technology Co., Ltd. is a limited company incorporated in the Cayman Islands, listed on the Main Board of the Hong Kong Stock Exchange on December 23, 2022, with its principal businesses including specialty pharmacy, physician research assistance, and health insurance services, primarily operating in China - The company was listed on the Main Board of The Stock Exchange of Hong Kong Limited on **December 23, 2022**[210](index=210&type=chunk) - The Group's principal businesses are specialty pharmacy business, physician research assistance business, and health insurance services business[209](index=209&type=chunk) - The Group's principal places of operation and geographical markets are located in the People's Republic of China[209](index=209&type=chunk) [2. Basis of Preparation](index=51&type=section&id=2.%20BASIS%20OF%20PREPARATION) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024, with all values rounded to the nearest RMB thousand - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting[211](index=211&type=chunk) - All values are rounded to the nearest thousand (RMB thousands)[211](index=211&type=chunk) [3. Changes in Accounting Policies](index=52&type=section&id=3.%20CHANGES%20IN%20ACCOUNTING%20POLICIES) The accounting policies adopted for the interim financial information are consistent with the 2024 annual consolidated financial statements, except for the first-time adoption of amended IFRS Accounting Standard 21 'Lack of Exchangeability,' which had no impact on the financial information as all currencies transacted by the Group are exchangeable - First-time adoption of amended IFRS Accounting Standard 21 'Lack of Exchangeability'[215](index=215&type=chunk) - As the currencies in which the Group's transactions are denominated and the functional currencies used by Group entities to translate into the Group's presentation currency are all exchangeable, these amendments had no impact on the interim condensed consolidated financial information[216](index=216&type=chunk) [4. Operating Segment Information](index=53&type=section&id=4.%20OPERATING%20SEGMENT%20INFORMATION) The Group is organized into three reportable operating segments by product and service: specialty pharmacy, physician research assistance, and health insurance services, with segment performance assessed based on gross profit, and nearly all revenue and non-current assets derived from operations in China during the reporting period - The Group has three reportable operating segments: specialty pharmacy business, physician research assistance business, and health insurance services business[221](index=221&type=chunk) - Segment performance is assessed based on the gross profit of the reportable segments[220](index=220&type=chunk) - During the reporting period, almost all of the Group's revenue was derived from operations in China, and the vast majority of the Group's non-current assets are located in mainland China[226](index=226&type=chunk) - No single customer accounted for **10% or more** of the Group's revenue[227](index=227&type=chunk) [5. Revenue](index=56&type=section&id=5.%20REVENUE) This note provides a revenue analysis by type of goods or services and timing of revenue recognition, showing that specialty pharmacy business remains the primary revenue source despite a significant decrease, while physician research assistance and health insurance services also experienced changes in revenue Revenue Analysis (RMB thousands) | Type of goods or services | 2025 | 2024 | | :--- | :--- | :--- | | Specialty pharmacy business | 925,825 | 2,066,761 | | Physician research assistance business | 215,121 | 187,371 | | Health insurance services business | 83,118 | 109,648 | | **Total** | **1,224,064** | **2,363,780** | - Revenue recognition timing: **RMB 1,003,571 thousand** recognized at a point in time, and **RMB 220,493 thousand** recognized over a period of time[231](index=231&type=chunk) [6. Other Income and Gains](index=57&type=section&id=6.%20OTHER%20INCOME%20AND%20GAINS) This note analyzes the Group's other income and gains, totaling **RMB 15.103 million** in H1 2025, a decrease from **RMB 19.033 million** in H1 2024, primarily due to reduced interest income Other Income and Gains Analysis (RMB thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Government grants | 1,163 | 900 | | Interest income | 5,154 | 10,212 | | Gain on financial assets at fair value through profit or loss | 7,349 | 7,227 | | Net gain on lease termination | 248 | 594 | | Others | 1,189 | 100 | | **Total** | **15,103** | **19,033** | [7. Restructuring Cost](index=58&type=section&id=7.%20RESTRUCTURING%20COST) This note details the Group's restructuring costs of **RMB 13.523 million** incurred in H1 2025, primarily comprising employee-related expenses and other losses from closing specialty pharmacy stores Restructuring Cost Breakdown (RMB thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Employee-related expenses | 12,427 | – | | Other losses | 1,096 | – | | **Total** | **13,523** | **–** | - Restructuring costs primarily arose from the strategic transformation of the specialty pharmacy and Huiminbao insurance business segments, including employee optimization severance payments and losses from property disposal and lease terminations[237](index=237&type=chunk)[61](index=61&type=chunk) [8. Loss Before Tax](index=59&type=section&id=8.%20LOSS%20BEFORE%20TAX) This note presents the Group's loss before tax from continuing operations of **RMB 82.369 million**, detailing the various expenses and income contributing to this loss, including cost of sales, depreciation and amortization, and staff costs Components of Loss Before Tax (RMB thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cost of inventories sold | 875,731 | 1,973,097 | | Cost of services provided | 172,234 | 161,752 | | Depreciation of property, plant and equipment | 2,115 | 3,829 | | Depreciation of right-of-use assets | 10,518 | 15,926 | | Amortisation of other intangible assets | 2,822 | 4,098 | | Staff costs (excluding directors' and chief executive's emoluments) | 280,479 | 351,235 | | Restructuring costs | 13,523 | – | - Loss before tax was **RMB 82,369 thousand** (H1 2024: RMB 75,159 thousand)[240](index=240&type=chunk) [9. Income Tax](index=60&type=section&id=9.%20INCOME%20TAX) This note explains the Group's income tax policies across different jurisdictions, including Cayman Islands exemption, Hong Kong's two-tiered profits tax rate, and mainland China's **25%** corporate income tax rate, with the Group recording an income tax credit of **RMB 1.23 million** during the reporting period - Cayman Islands: The company is exempt from taxation on income or capital gains[243](index=243&type=chunk) - Hong Kong: A two-tiered profits tax rate is applied, with the first **HKD 2,000,000** of assessable profits taxed at **8.25%** and profits above this amount taxed at **16.5%**[245](index=245&type=chunk) - Mainland China: The corporate income tax rate for PRC subsidiaries is **25%**[250](index=250&type=chunk) Income Tax (Credit)/Expense Analysis (RMB thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Current income tax | (904) | 1,257 | | Deferred income tax | (326) | (1,765) | | **Tax credit for the period** | **(1,230)** | **(508)** | [10. Dividends](index=61&type=section&id=10.%20DIVIDENDS) This note confirms that no dividends were paid or declared by the company during the period - During the period, no dividends were paid or declared by the company (Six months ended June 30, 2024: Nil)[253](index=253&type=chunk) [11. Loss Per Share Attributable To Ordinary Equity Holders Of The Parent](index=62&type=section&id=11.%20LOSS%20PER%20SHARE%20ATTRIBUTABLE%20TO%20ORDINARY%20EQUITY%20HOLDERS%20OF%20THE%20PARENT) This note explains the calculation of basic and diluted loss per share, which both amounted to **RMB 0.12** for the six months ended June 30, 2025, consistent with H1 2024 Loss Per Share Calculation (RMB) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent (RMB'000) | (71,985) | (78,202) | | Weighted average number of ordinary shares in issue during the period used in the basic loss per share calculation | 612,954,181 | 644,308,040 | | **Loss per share (RMB per share)** | **(0.12)** | **(0.12)** | - The effects of the share option scheme and convertible preference shares were anti-dilutive to the basic loss per share amounts presented, and thus no adjustments were made[255](index=255&type=chunk) [12. Property, Plant and Equipment](index=63&type=section&id=12.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) This note discloses that the Group's asset purchases for H1 2025 amounted to **RMB 1.516 million**, and it incurred a net loss on disposal of assets of **RMB 66 thousand** and restructuring costs of **RMB 824 thousand** - For the six months ended June 30, 2025, the cost of assets purchased by the Group amounted to **RMB 1,516,000** (H1 2024: RMB 6,625,000)[259](index=259&type=chunk) - Disposal of assets resulted in a net loss on disposal of **RMB 66,000** and restructuring costs of **RMB 824,000**[260](index=260&type=chunk) [13. Trade and Bills Receivables](index=63&type=section&id=13.%20TRADE%20AND%20BILLS%20RECEIVABLES) This note provides an aging analysis of trade and bills receivables, totaling **RMB 215.2 million** as of June 30, 2025, a decrease from **RMB 276 million** at the end of 2024, with the majority falling within 6 months Trade and Bills Receivables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bills receivable | 619 | 14,729 | | Trade receivables | 244,115 | 294,254 | | Provision for credit losses | (29,533) | (32,935) | | **Total** | **215,201** | **276,048** | Aging Analysis of Trade and Bills Receivables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 6 months | 169,929 | 249,638 | | 6 to 12 months | 45,272 | 26,410 | | **Total** | **215,201** | **276,048** | [14. Prepayments, Other Receivables and Other Assets](index=64&type=section&id=14.%20PREPAYMENTS%2C%20OTHER%20RECEIVABLES%20AND%20OTHER%20ASSETS) This note details prepayments, other receivables, and other assets, with the current portion totaling **RMB 99.044 million** as of June 30, 2025, a decrease from **RMB 155 million** at the end of 2024, primarily due to a reduction in price adjustment compensation Prepayments, Other Receivables and Other Assets (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current: Lease deposits | 6,900 | 7,413 | | Current: Price adjustment compensation | 31,118 | 70,134 | | Current: Prepayments | 32,120 | 38,547 | | Current: Loans to non-controlling shareholders of subsidiaries | 27,585 | 47,483 | | Current: Funds receivable from external payment network providers | 4,813 | 7,950 | | Current: Consideration receivable for disposal of subsidiaries | 5,900 | – | | Current: Other receivables | 5,402 | 2,014 | | Current: Impairment provision | (15,468) | (18,877) | | **Total Current** | **99,044** | **154,621** | - Price adjustment compensation primarily refers to procurement rebates and payments receivable from pharmaceutical companies to compensate the Group for reduced drug sales prices under centralized procurement policies for specialty pharmacies[267](index=267&type=chunk) [15. Financial Assets at FVTPL](index=65&type=section&id=15.%20FINANCIAL%20ASSETS%20AT%20FVTPL) This note discloses that total financial assets at fair value through profit or loss amounted to **RMB 366 million**, a decrease from **RMB 632 million** at the end of 2024, comprising structured deposits, wealth management products, and money market funds with expected returns ranging from **2.10% to 4.58%** per annum Financial Assets at FVTPL (RMB thousands) | Item | June 30, 2025 (Carrying amount/Fair value) | December 31, 2024 (Carrying amount/Fair value) | | :--- | :--- | :--- | | Non-current: Structured deposits | 214,866 | 60,263 | | Current: Wealth management products | 59,711 | 474,683 | | Current: Structured deposits | – | 36,692 | | Current: Money market funds | 91,061 | 60,143 | | **Total** | **365,638** | **631,781** | - These financial assets refer to floating-rate money market funds, wealth management products, and structured deposits issued by certain banks, with expected returns ranging from **2.10% to 4.58%** per annum[269](index=269&type=chunk) [16. Trade and Bills Payables](index=65&type=section&id=16.%20TRADE%20AND%20BILLS%20PAYABLES) This note provides an aging analysis of trade and bills payables, totaling **RMB 152 million** as of June 30, 2025, a significant decrease from **RMB 413 million** at the end of 2024, with the majority due within 1 month Trade and Bills Payables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 61,814 | 216,625 | | 1 to 3 months | 45,244 | 98,870 | | 3 to 6 months | 24,795 | 64,077 | | Over 6 months | 20,109 | 33,231 | | **Total** | **151,962** | **412,803** | [17. Other Payables and Accruals](index=66&type=section&id=17.%20OTHER%20PAYABLES%20AND%20ACCRUALS) This note details other payables and accruals, totaling **RMB 495 million** as of June 30, 2025, an increase from **RMB 414 million** at the end of 2024, primarily due to a significant increase in insurance premiums payable Other Payables and Accruals (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Salaries and welfare payable | 81,069 | 110,847 | | Insurance premiums payable | 293,025 | 148,688 | | Provisions | 81,687 | 81,687 | | Other taxes payable | 22,618 | 29,663 | | Accrued expenses | 14,650 | 22,849 | | **Total** | **495,148** | **413,713** | - The balance of insurance premiums payable refers to insurance premiums collected by the Group as a trustee on behalf of insurance companies from insurance consumers until paid to the insurance companies[278](index=278&type=chunk) [18. Share Capital and Treasury Shares](index=67&type=section&id=18.%20SHARE%20CAPITAL%20AND%20TREASURY%20SHARES) This note explains changes in the company's share capital and treasury shares, with issued share capital amounting to **RMB 0.518 million** as of June 30, 2025, reflecting the issuance of **238,400 ordinary shares** upon exercise of share options, the repurchase of **14,299,800 ordinary shares** as treasury shares, and an additional repurchase of **36,673,200 ordinary shares** for the 2023 Share Award Scheme Issued and Fully Paid Share Capital (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 764,420,514 shares (2024: 764,182,114 shares) of ordinary shares with a par value of USD 0.0001 each | 518 | 518 | - For the six months ended June 30, 2025, **238,400 ordinary shares** were issued upon the exercise of share options[284](index=284&type=chunk) - A total of **36,673,200 ordinary shares** were repurchased for the 2023 Share Award Scheme, with a total consideration of **RMB 132,860,000**[285](index=285&type=chunk) - A total of **14,299,800 ordinary shares** were repurchased for a total consideration of **RMB 66,062,000** and held as treasury shares[286](index=286&type=chunk) [19. Commitments](index=68&type=section&id=19.%20COMMITMENTS) This note discloses the Group's capital commitments as of June 30, 2025, primarily for the purchase of property, plant, and equipment, amounting to **RMB 158 thousand** Capital Commitments (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Purchase of property, plant and equipment | 158 | 28 | [20. Related Party Transactions](index=69&type=section&id=20.%20RELATED%20PARTY%20TRANSACTIONS) This note details significant transactions and outstanding balances between the Group and related parties, including associate Shanxi Spai Pharmaceutical Co., Ltd. and Tencent-controlled companies, as well as key management personnel compensation - Related parties include associate Shanxi Spai Pharmaceutical Co., Ltd. and companies controlled by Tencent (Tencent is a substantial shareholder of the company)[290](index=290&type=chunk)[293](index=293&type=chunk) Significant Related Party Transactions (RMB thousands) | Type of Transaction | Related Party | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Provision of services | Companies controlled by Tencent | 1,872 | 845 | | Purchase of technical support services | Companies controlled by Tencent | 580 | 914 | | Purchase of products | Associate | 127 | 8,564 | | Purchase of payment services | Companies controlled by Tencent | 1,972 | 2,414 | | Loan to an associate | Associate | 6,000 | – | | Interest income | Associate | 104 | 182 | Outstanding Balances with Related Parties (RMB thousands) | Item | Related Party | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | :--- | | Total amounts due from related parties | | 7,829 | 1,755 | | Total amounts due to related parties | | 46 | 126 | - Total compensation for key management personnel amounted to **RMB 2,210 thousand** (H1 2024: RMB 2,098 thousand)[303](index=303&type=chunk) [21. Fair Value and Fair Value Hierarchy of Financial Instruments](index=73&type=section&id=21.%20FAIR%20VALUE%20AND%20FAIR%20VALUE%20HIERARCHY%20OF%20FINANCIAL%20INSTRUMENTS) This note explains the fair value measurement and hierarchy of the Group's financial instruments, where financial assets at fair value through profit or loss, primarily structured deposits, wealth management products, and money market funds, are measured using discounted cash flow valuation models (Level 2), with no transfers between fair value measurement levels during the reporting period Fair Value of Financial Assets (RMB thousands) | Item | June 30, 2025 (Carrying amount/Fair value) | December 31, 2024 (Carrying amount/Fair value) | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | 365,638 | 631,781 | - The fair value of unlisted investments (wealth management products, money market funds, structured deposits) is estimated using discounted cash flow valuation models[305](index=305&type=chunk) - Assets measured at fair value are all classified as Level 2 of the fair value hierarchy (significant observable inputs)[310](index=310&type=chunk) - During the reporting period, there were no transfers between Level 1 and Level 2 fair value measurements for financial assets and financial liabilities, nor any transfers into or out of Level 3[312](index=312&type=chunk) [22. Events After The Reporting Period](index=75&type=section&id=22.%20EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) This note states that no significant events occurred after the reporting period that would require additional disclosure or adjustment - No significant events occurred after the reporting period[314](index=314&type=chunk) [Definitions](index=76&type=section&id=Definitions) This chapter provides definitions for key terms and abbreviations used throughout the interim report to ensure consistent understanding of the report's content - This chapter lists definitions for key terms and abbreviations used in the interim report[317](index=317&type=chunk)

Charting the Future Spreading the Wings 展翅 騰 飛 構 見未 來 2025 INTERIM REPORT 中期報告 Contents 目錄 02 Corporate Information 公司資料 04 Operational Highlights 業務概覽 05 Condensed Consolidated Statement of Profit or Loss 簡明綜合損益表 07 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 簡明綜合損益及其他全面收益表 08 Condensed Consolidated Statement of Financial Position 簡明綜合財務狀況表 10 Condensed Consolidated Statement of Changes in Equity 簡明綜合權益變動表 11 Condensed Consolidated Statement of Cash Flows 簡明綜合現金流量表 13 ...

[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Board of Directors and Senior Management](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E4%B8%BB%E8%A6%81%E7%AE%A1%E7%90%86%E5%B1%A4) This section details the composition of the Board of Directors, including executive, non-executive, and independent non-executive directors, committee members, and key personnel, noting Mr. Lei YanQun's election as a non-executive director during the reporting period - The Board of Directors comprises **3 executive directors**, **4 non-executive directors**, and **4 independent non-executive directors**[7](index=7&type=chunk) - Mr. Lei YanQun was elected as a non-executive director on **July 23, 2025**, replacing Mr. Han Liu[7](index=7&type=chunk) [Company Contact and Registration Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%81%AF%E7%B5%A1%E5%8F%8A%E8%A8%BB%E5%86%8A%E4%BF%A1%E6%81%AF) This section provides essential contact and registration details, including legal advisors, auditors, registered office, headquarters, H-share registrar, principal bankers, and company website - The company's registered office is located at Room 1626, 16th Floor, Chenchuang Building, No. 198 Zhoushan East Road, Gongshu District, Hangzhou, Zhejiang Province, China[7](index=7&type=chunk) - The headquarters and principal place of business in China are located on the 21st-22nd floors of SF Headquarters Building, No. 3076 Xinghai Avenue, Nanshan District, Shenzhen, Guangdong Province, China[8](index=8&type=chunk) - The H-share registrar is Tricor Investor Services Limited[9](index=9&type=chunk) [Key Accounting Data and Financial Indicators](index=5&type=section&id=%E9%97%9C%E9%8D%B5%E6%9C%83%E8%A8%88%E6%95%B8%E6%93%9A%E5%92%8C%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) [2025 Interim Results Overview](index=5&type=section&id=2025%E5%B9%B4%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E7%B8%BD%E8%A6%BD) This section summarizes the company's key financial performance for the first half of 2025, showing significant growth in revenue, gross profit, net profit, and adjusted net profit, with net profit doubling and net margin reaching a record high 2025 Interim Results Overview | Indicator | Amount (RMB million) | Year-over-year Growth | Profit Margin | | :--- | :--- | :--- | :--- | | Revenue | 10,236.0 | 48.8% | - | | Gross Profit | 680.8 | 43.8% | 6.7% | | Net Profit | 137.0 | 120.4% | 1.3% | | Adjusted Net Profit | 160.2 | 139.0% | 1.6% | - Adjusted net profit and adjusted net profit margin are non-IFRS measures[11](index=11&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section reviews the company's business performance in the first half of 2025, highlighting its position as China's largest third-party on-demand delivery service provider, achieving robust revenue growth and a doubling of net profit through a focus on high-quality healthy growth, increased technology investment, and rider network expansion - The company is China's **largest third-party on-demand delivery service provider**[13](index=13&type=chunk) - Revenue for the first half of 2025 increased by **48.8%** to **RMB 10,236.0 million**[14](index=14&type=chunk) - Net profit increased by **120.4%** year-over-year, with net profit margin reaching a **record high**[14](index=14&type=chunk) - As of June 30, 2025, cash and cash equivalents and short-term wealth management investments were **RMB 1,134.1 million** and **RMB 1,260.4 million** respectively, indicating a healthy cash flow and ample capital reserves[14](index=14&type=chunk) [Overview](index=6&type=section&id=%E6%A6%82%E8%A7%88) In the first half of 2025, the company implemented a 'high-quality healthy growth' strategy, leveraging local life service insights, a nationwide flexible capacity network, and digital intelligence technology to achieve steady revenue growth and a doubled net profit, reinforcing its neutral open platform positioning and differentiated competitive advantages in comprehensive on-demand delivery services - Adhering to the 'high-quality healthy growth' strategy, achieving **steady revenue growth** and a **doubling of net profit** compared to the same period in 2024[13](index=13&type=chunk) - Leveraging a neutral open platform positioning and differentiated competitive advantages centered on comprehensive high-quality on-demand delivery services[13](index=13&type=chunk) [Intra-city Delivery Services](index=7&type=section&id=%E5%90%8C%E5%9F%8E%E9%85%8D%E9%80%81) Intra-city delivery service revenue increased by 43.1% year-over-year to RMB 5,778.7 million, driven by increased catering takeout demand, robust growth in non-catering scenarios, expanded active merchant and consumer base, penetration into lower-tier cities, and proactive pricing strategies, with strategic cooperation with SF Group also contributing significant incremental revenue - Intra-city delivery service revenue increased by **43.1%** from **RMB 4,038.0 million** in the first half of 2024 to **RMB 5,778.7 million** in the first half of 2025[16](index=16&type=chunk) - Non-catering scenario revenue increased by **28.6%** year-over-year to **RMB 2,142.0 million**[16](index=16&type=chunk) - Cooperation with SF Group generated **RMB 208.0 million** in external incremental revenue, a **29.5%** year-over-year increase[21](index=21&type=chunk) [Intra-city Delivery Services for Merchants](index=7&type=section&id=%E9%9D%A2%E5%90%91%E5%95%86%E5%AE%B6%E7%9A%84%E5%90%8C%E5%9F%8E%E9%85%8D%E9%80%81) Revenue from intra-city delivery services for merchants increased by 55.4% year-over-year to RMB 4,466.9 million, driven by an expanded merchant base, optimized customer structure, deep collaboration with traffic platforms, customized services across various scenarios, and rapid growth in lower-tier markets and tea beverage delivery - Revenue from intra-city delivery services for merchants reached **RMB 4,466.9 million**, a **55.4%** year-over-year increase[17](index=17&type=chunk) - As of June 30, 2025, the number of active merchants on the platform reached **850,000** over the past 12 months, a **55%** year-over-year increase[18](index=18&type=chunk) - Tea beverage delivery revenue increased by **105%** year-over-year, with high double-digit growth across categories such as supermarket convenience, pharmaceuticals, and maternal and infant products[19](index=19&type=chunk) - Revenue in lower-tier markets maintained **high growth**, with daily average order volume in county-level areas **doubling**[20](index=20&type=chunk) [Intra-city Delivery Services for Consumers](index=8&type=section&id=%E9%9D%A2%E5%90%91%E6%B6%88%E8%B2%BB%E8%80%85%E7%9A%84%E5%90%8C%E5%9F%8E%E9%85%8D%E9%80%81) Revenue from intra-city delivery services for consumers increased by 12.7% year-over-year to RMB 1,311.8 million, primarily due to an expanded active consumer base, increased user order frequency, enhanced brand influence, upgraded services like "Exclusive Express" and "Hourly Delivery," and active expansion into lower-tier markets - Revenue from intra-city delivery services for consumers was **RMB 1,311.8 million**, a **12.7%** year-over-year increase[22](index=22&type=chunk) - As of June 30, 2025, the active consumer base reached **24.77 million** over the past 12 months[24](index=24&type=chunk) - Revenue from 'Exclusive Express' services **tripled** year-over-year, and revenue from medium-to-long distance 'Hourly Delivery' services experienced **rapid growth**[23](index=23&type=chunk)

SUMMARY For the six months ended 30 June 2025 (the "Period"), the unaudited revenue of Shandong Weigao Group Medical Polymer Company Limited (the "Company") and its subsidiaries (the "Group") was approximately RMB6,644,048,000 ( s a m e p e r i o d i n 20 2 4: a p p ro x i m a t e l y RMB6,635,688,000), representing an increase of approximately 0.1% as compared with the same period last year, the unaudited net profit attributable to the owners of the Company was approximately RMB1,008,317,000 (same period i ...

Financial Performance - Revenue for the first half of 2025 reached RMB 483.1 million, a 7% increase from RMB 452.9 million in the same period of 2024[11] - Gross profit for the same period was RMB 336.9 million, reflecting a 3% increase from RMB 327.1 million year-over-year[11] - The company reported a pre-tax profit of RMB 33.7 million, compared to a pre-tax loss of RMB 11.9 million in the first half of 2024[11] - The group achieved revenue of RMB 483.11 million, a 7% increase year-on-year, with cloud subscription revenue at RMB 343.25 million, growing 12% and accounting for 71% of total revenue[18] - The group recorded a profit attributable to equity holders of RMB 33.51 million, compared to a loss of RMB 9.88 million in the same period last year, resulting in a basic earnings per share of RMB 0.105, up from a loss of RMB 0.031[18] - Operating cash inflow reached RMB 83.76 million, a 70% increase from RMB 49.33 million in the previous year, indicating continuous improvement in cash flow[18] - The company reported a profit of RMB 33.51 million for the period, a turnaround from a loss of RMB 9.88 million in the same period last year[43] - The company reported a total comprehensive income of RMB 33,504,000 for the period, compared to a loss of RMB 9,867,000 in the previous year[94] - For the six months ended June 30, 2025, the profit attributable to equity holders was RMB 33,513,000, compared to a loss of RMB 9,879,000 for the same period in 2024[125] Assets and Liabilities - Total assets as of June 30, 2025, amounted to RMB 1.81 billion, a 7% increase from RMB 1.69 billion at the end of 2024[11] - Total liabilities increased by 10% to RMB 872.2 million from RMB 791.4 million at the end of 2024[11] - Cash and bank balances as of June 30, 2025, amounted to RMB 1,334.30 million, an increase from RMB 1,259.03 million as of December 31, 2024[60] - The current ratio increased to 224% as of June 30, 2025, compared to 193% as of December 31, 2024, due to reclassification of certain deposits[61] - The company’s net assets rose to RMB 936,777,000, up from RMB 903,273,000 at the end of 2024, reflecting a solid financial position[97] Market Strategy and Growth - The company aims to expand its market presence by enhancing channel coverage in county-level markets and promoting global business expansion[17] - The company aims to expand its market share in small and micro enterprise cloud services and strengthen its leading position in the industry[34] - The company is committed to continuous product innovation in the fields of digital finance and commerce, enhancing its competitive edge in the market[17] - The company is focusing on the digital transformation of small and micro enterprises, leveraging AI and big data technologies to enhance service capabilities[16] - The company plans to enhance its direct sales channel, focusing on "structural efficiency, content-driven, and intelligent operations" to support sustainable growth[37] Technology and Innovation - AI agents are identified as a key strategic technology trend for 2025, which the company plans to leverage for operational improvements[14] - The group enhanced its digital tax products by integrating AI technology, improving efficiency and accuracy in automated accounting and tax compliance services for small and micro enterprises[20] - The group launched the 5.0 version of its application hosting platform, integrating AI technology to provide comprehensive security and operational services for small and micro enterprises[24] - The "AI-first" strategy will be fully implemented to accelerate the application of AI technology in product innovation and company operations[34] - The company plans to enhance the integration of finance and taxation services with business operations, leveraging AI to improve efficiency and accuracy[35] Employee and Organizational Development - The total number of employees remained stable at 991, with a focus on optimizing organizational structure and enhancing performance management systems[32] - The company has established a training plan for 2025, focusing on professional capabilities, talent development, and management skills[73] - The company has implemented a two-tier training system for new employees to enhance their competency efficiency[73] - The company has launched a "Backup Cadre Training Camp" to cultivate grassroots management talent[73] - The total compensation paid to key management personnel for the six months ended June 30, 2025, was RMB 11,880,000, up from RMB 11,061,000 in the same period of 2024, indicating a 7.4% increase[164] Research and Development - Total R&D investment for the six months ended June 30, 2025, was RMB 112.32 million, a decrease of 1% compared to the same period last year[50] - Research and development expenses were RMB 100,618,000, slightly down from RMB 102,490,000 in the previous year[92] - The company has conducted a series of training courses to enhance the professional capabilities of its R&D team[73] Corporate Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code as per the Listing Rules during the reporting period[89] - The company has not been involved in any significant litigation or arbitration as of June 30, 2025[87] - The interim financial information was approved and authorized for publication by the board of directors on August 26, 2025[174] Financial Management - The company incurred financial expenses of RMB 301,000, slightly down from RMB 314,000 in the previous year, showing effective cost control[102] - The company experienced a net cash outflow from investing activities of RMB 18,960,000 for the six months ended June 30, 2025, a decrease from RMB 344,341,000 in the prior year, indicating improved cash management[104] - The company recognized rental expenses of RMB 122,000 for short-term leases with Yonyou (Nanchang) for the six months ended June 30, 2025, compared to RMB 127,000 for the same period in 2024[156]

Financial Performance - The company's revenue for the fiscal year ending June 30, 2025, was HKD 27,680.5 million, a decrease of 23% year-on-year[25]. - Core operating profit was HKD 6,016.5 million, down 13% compared to the previous year[28]. - The total assets as of June 30, 2025, amounted to HKD 420,265.0 million, a decrease from HKD 445,157.6 million in the previous year[25]. - The net debt ratio increased to 58.1% from 55.0% year-on-year[25]. - The company reported a loss attributable to shareholders from continuing operations of HKD 16,302 million, primarily due to one-time provisions and losses[28]. - No final dividend was declared for the fiscal year ending June 30, 2025[28]. - The company maintained available funds of approximately HKD 45 billion, including cash and bank balances of about HKD 25.9 billion[28]. - The group achieved property investment revenue of HKD 1,821 million in mainland China, with a segment performance of HKD 843 million, indicating stable overall rental performance[77]. Property Development and Sales - Contract sales from property development and asset sales totaled approximately HKD 26 billion, with HKD 11 billion coming from Hong Kong projects[28]. - In the fiscal year ending June 30, 2025, the company's property development revenue in Hong Kong was HKD 2,696 million, with a segment profit of HKD 877 million, primarily from projects like The Pavilia and others[40]. - The total contract sales in Hong Kong for the fiscal year 2025 amounted to approximately HKD 11 billion, driven by residential projects such as The Pavilia and others[40]. - The "PAVILIA COLLECTION" projects achieved significant sales, with The Pavilia sold approximately 614 units for a total contract sales amount of about HKD 10.5 billion, ranking first among new developments in Hong Kong for 2025[42]. - The project "The Royal" achieved a total contract sales amount of approximately HKD 3.6 billion, with a highest price of HKD 51,000 per square foot, and was oversubscribed by up to 95 times during its launch[43]. - The company continues to focus on high-quality development and brand value enhancement, aiming to create long-term value for society and stakeholders[35]. Market Trends and Outlook - The residential property market in Hong Kong showed signs of recovery, with a 22% year-on-year increase in residential sale agreements, rising from 44,556 to 54,270 contracts[38]. - The total value of residential sale agreements also increased by 14% year-on-year, from approximately HKD 389 billion to HKD 442 billion[38]. - The company is positioned to benefit from the synergy effects of the Greater Bay Area, supporting the government's vision of transforming the area into a modern service center for finance and professional services[59]. - The Chinese real estate market is stabilizing due to favorable government policies, with measures to optimize purchasing conditions and reduce mortgage rates being implemented[66]. Land Reserves and Development Projects - The group holds approximately 7.14 million square feet of land reserves in Hong Kong for immediate development, with about 3.38 million square feet designated for property development[57]. - The company signed a strategic cooperation agreement with China Resources Land Limited in December 2023 to jointly develop the Longtian Village project, with construction expected to start in 2025[58]. - The company plans to increase land reserves by approximately 620,000 square feet over the next 3 to 5 years through planning and land exchange applications[61]. - The total floor area from converted agricultural land is expected to provide approximately 11.9 million square feet, with about 8.7 million square feet designated for medium to short-term projects[61]. Retail and Commercial Performance - K11 MUSEA achieved a rental rate of 96% as of June 30, 2025, with foot traffic increasing by 2% year-on-year, reaching a new high since its opening in 2019[48]. - The "100% DORAEMON & FRIENDS" exhibition at K11 MUSEA set a record for single-day foot traffic and boosted tourist sales by 10%[50]. - K11 Art Mall recorded its highest foot traffic since opening in 2009, maintaining a 100% overall rental rate[51]. - Sales of anime and trendy toy brands at K11 Art Mall grew by over 65% year-on-year, while major sports and fashion brands saw approximately 40% year-on-year growth[54]. Sustainability and Corporate Responsibility - The company aims to create sustainable value through its SV2030+ initiative, focusing on three pillars: "Future-Ready Places," "Corporate Resilience," and "Prosperous Living"[158]. - The company is committed to achieving net-zero emissions across all assets and operations, with a focus on responsible investment principles for new and existing projects[159]. - The company emphasizes transparency in corporate disclosures and aims to lead the industry in key ESG indices and ratings[159]. - The company has set a 2050 net-zero science-based target, verified by the Science Based Targets initiative, using the fiscal year 2023 as the baseline[166]. Leadership and Strategic Initiatives - The company appointed a new CEO, Ms. Huang, who has over 20 years of experience in real estate and will take office in November 2024[119]. - The company is considering strategic acquisitions to enhance its portfolio, targeting companies with complementary technologies[116]. - The company is actively involved in various committees and advisory boards to promote governance and sustainable practices[156]. - The company has conducted detailed climate risk analyses for core projects, including K11 ECOAST and 83 Qionglin Street, to develop targeted climate resilience measures[171].

Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 1,216,348, representing a 5.6% increase from RMB 1,151,455 in 2024[16]. - Gross profit decreased by 2.7% to RMB 244,188 from RMB 250,996 year-on-year[16]. - Profit attributable to owners of the parent increased by 56.8% to RMB 63,838 compared to RMB 40,743 in the previous year[16]. - Core net profit, excluding non-recurring expenses, rose by 6.3% to RMB 108,720 from RMB 102,289[16]. - Total revenue from property management services for the first half of 2025 was approximately RMB 964.3 million, compared to RMB 910.3 million in the same period of 2024, indicating a growth of about 5.9%[47]. - Community value-added services revenue increased by approximately RMB 15.9 million or 11.7% year-on-year, contributing to the overall revenue growth[86]. - Total cost of sales increased by approximately RMB 71.7 million or 8.0% to approximately RMB 972.2 million, primarily due to the expansion of managed area and diversification of value-added services[87]. - The net profit attributable to owners of the Company increased by approximately 56.8%, reaching approximately RMB 63.8 million for the six months ended June 30, 2025, compared to approximately RMB 40.7 million for the same period in 2024[121]. Assets and Liabilities - Total assets as of June 30, 2025, were RMB 2,598,967, slightly up from RMB 2,591,943 as of December 31, 2024[16]. - Total liabilities decreased to RMB 1,131,994 from RMB 1,148,459[16]. - Cash and bank balances were RMB 1,078,369, down from RMB 1,108,888[16]. - Trade receivables increased by approximately RMB 76.2 million to approximately RMB 840.1 million as of June 30, 2025, primarily due to business expansion and extended collection periods influenced by the overall economic environment[118]. - The Group's trade payables as of June 30, 2025, were approximately RMB 587.5 million, reflecting an increase of approximately RMB 7.0 million or 1.2% from RMB 580.5 million as of December 31, 2024, attributed to rising outsourcing personnel and equipment maintenance costs due to business expansion[134]. Property Management Operations - The total contracted GFA of property management as of the end of the period was 133.2 million sq.m., up from 125.6 million sq.m. in 2024[18]. - Times Neighborhood Holdings Limited achieved a revenue of approximately RMB 964.3 million from property management services in the first half of 2025, representing a growth of about 5.9% year-over-year, with this segment accounting for 79.3% of total revenue[28][34]. - As of June 30, 2025, the company managed a total of 930 property management projects, covering approximately 125.9 million square meters of gross floor area (GFA)[32][36]. - The company has a total of 999 contracted property management projects with a total contracted GFA of 133.2 million square meters as of June 30, 2025[32]. - The revenue from residential property management for the first half of 2025 was approximately RMB 652.2 million, which constituted 67.6% of the total property management service revenue, up from RMB 607.6 million in the same period of 2024[49]. Strategic Initiatives - The company aims to enhance its future growth through four strategic cores: scale expansion, dual ecosystem growth, value preservation, and organizational DNA transformation[31]. - The company continues to focus on enhancing its technological capabilities and service quality to drive brand growth and market expansion[20][23]. - The Group plans to enhance service satisfaction and focus on core urban areas and business types, leveraging residential services as a foundation for long-term development[74]. - The Group's strategy includes expanding into home renovation and household cleaning services, contributing to steady growth in community value-added services[61]. Awards and Recognition - The company was recognized as "TOP 11 in the 2025 TOP 100 Property Management Companies in China" for four consecutive years, highlighting its strong market position[22][29]. - The brand value of Times Neighborhood was assessed at RMB 9.83 billion, ranking it among the "2025 Top 100 Most Valuable Brands of China Property Management Service"[23]. - Times Neighborhood received multiple awards for its comprehensive capabilities, including "2025 China Excellent Listed Property Management Company by Investment Value" and "TOP 9 in Community Value-added Service Capabilities"[30]. Employee and Governance - The Group had 4,534 full-time employees as of June 30, 2025, a decrease from 4,673 employees as of December 31, 2024[169]. - Employee remuneration is based on performance, skills, knowledge, experience, and market trends, with regular reviews to align with industry standards[170]. - The Company has adopted the Corporate Governance Code to enhance corporate value and accountability[193]. - The Company has complied with all provisions of the Corporate Governance Code during the six months ended 30 June 2025[194]. Investment and Acquisitions - On April 24, 2025, the Group completed the acquisition of the remaining 20% equity interest in Chengdu Holytech Technology Co., Ltd., making it a wholly-owned subsidiary[145]. - Approximately 65% of the total net proceeds or HKD 511,383,716 was used for seeking selective strategic investment and acquisition opportunities[155]. - The Group has not identified any new investment or acquisition targets as of the report date[168].

康 龍 化 成（ 北 京 ）新 藥 技 術 股 份 有 限 公 司 （於中華人民共和國註冊成立的股份有限公司） 股份代號：3759 2025 中期報告 生命科學行業 的領先研發服務提供商 康龍化成（股票代碼：300759.SZ/3759.HK）是國際領先的生命科 學研發服務企業。自 2004 年成立以來，康龍化成一直致力於其人 才培養和設施建設，為包括小分子、大分子和細胞與基因治療藥 物在內的多療法藥物研發打造了一個貫穿藥物發現、臨床前及臨 床開發全流程的研發生產服務體系。康龍化成在中國、美國、英 國均開展運營，擁有超過 22,000 名員工，向北美、歐洲、日本和 中國的合作夥伴提供研發解決方案並與之保持良好的合作關係。 關於 康龍化成 目 | | 2 | 公司資料 | | --- | --- | --- | | 錄 | 4 | 財務業績摘要 | | | 5 | 管理層討論與分析 | | | 38 | 補充資料 | | | 58 | 中期簡明綜合損益表 | | | 59 | 中期簡明綜合全面收益表 | | | 60 | 中期簡明綜合財務狀況表 | | | 62 | 中期簡明綜合權益變動表 | | | 64 | ...

[Corporate Information](index=2&type=section&id=Corporate%20Information) This section outlines Cirtek Holdings Limited's key corporate details, including its board, committees, registered information, and stock code [Corporate Information Details](index=3&type=section&id=Corporate%20Information%20Details) This section details Cirtek Holdings Limited's key corporate information, including its board, committees, registered details, principal bankers, auditor, and stock code - Executive Directors include Chairman Mr. Chan Sing Ming, CEO Ms. Law Miu Lan, and Mr. Chan Tsz Fung[5](index=5&type=chunk)[6](index=6&type=chunk) - The Audit Committee is chaired by Ms. Luk Mei Yan, the Remuneration Committee by Mr. Lee Tak Cheong, and the Nomination Committee by Mr. Chan Sing Ming[5](index=5&type=chunk)[6](index=6&type=chunk) - The company's auditor is Ernst & Young, with principal bankers including HSBC, Bank of China (Hong Kong), and Citibank (Hong Kong)[8](index=8&type=chunk)[9](index=9&type=chunk) - The company's stock code is **1433**, and its website is http://www.cirtek.com[9](index=9&type=chunk)[10](index=10&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive overview of the Group's operational and financial performance, strategic initiatives, liquidity, and future outlook amidst global economic challenges [Review of Operations](index=5&type=section&id=Review%20of%20Operations) Despite global macroeconomic challenges, the Group maintained stable H1 2025 operations with slight revenue decrease but improved gross margin, driven by strategic expansion, innovation, and successful integration - The global macroeconomic environment remains complex, with ongoing trade frictions and tariff adjustments pressuring global supply chains and increasing market caution[11](index=11&type=chunk)[13](index=13&type=chunk) - In H1 2025, Mainland China's GDP grew **5.3%** year-on-year, with retail sales up **5.0%**; Eurozone GDP slightly increased **0.1%** quarter-on-quarter; US GDP growth slowed to **1.25%** year-on-year, but retail sales still rose **3.6%** year-on-year[11](index=11&type=chunk)[13](index=13&type=chunk) Group's Key Operating Indicators for H1 2025 | Indicator | H1 2025 (HKD Million) | H1 2024 (HKD Million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 258.2 | 264.5 | -2.4% | | Gross Profit Margin | 47.1% | 46.9% | +0.2 percentage points | - The Group strategically expanded its overseas sales team in H2 2024 to retain existing clients and secure more orders, leading to increased operating costs during the period[12](index=12&type=chunk)[14](index=14&type=chunk) - The Group's sales network spans over **40** markets globally, with production bases in Mainland China, Vietnam, Bangladesh, India, Turkey, Central America, and Southern Europe, effectively diversifying market and operational risks[15](index=15&type=chunk)[17](index=17&type=chunk) - The Group is committed to applying **RFID technology** to label products and actively introducing new eco-friendly materials and products to meet market demand for sustainable development, strengthening and expanding its customer base[16](index=16&type=chunk)[18](index=18&type=chunk) - The business integration of French packaging company Primway S.A.R.L was completed last year, successfully introducing new French clients and securing orders for the Group during the review period[19](index=19&type=chunk)[24](index=24&type=chunk) [Business and Financial Review](index=7&type=section&id=Business%20and%20Financial%20Review) This section reviews H1 2025 financial performance, showing slight revenue and gross profit declines, increased operating expenses, a shift to other operating expenses, and reduced profit for the period Key Financial Data for H1 2025 | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 258,178 | 264,519 | -2.4% | | Gross Profit | 121,611 | 124,174 | -2.1% | | Gross Profit Margin | 47.1% | 46.9% | +0.2 percentage points | | Other income and gains | 2,451 | 2,525 | -2.9% | | Selling and distribution expenses | 33,732 | 31,557 | +6.9% | | Administrative expenses | 60,283 | 57,323 | +5.2% | | Other operating (expenses)/income, net | (913) | 1,084 | Shift from income to expense | | Finance costs | 1,181 | 1,263 | -6.5% | | Income tax expense | 3,518 | 6,556 | -46.3% | | Profit for the period | 24,340 | 31,292 | -22.3% | - The slight decrease in gross profit was primarily due to a shift in product mix and margin pressure from customers and suppliers[22](index=22&type=chunk)[28](index=28&type=chunk) - Increased selling and distribution expenses were mainly attributable to higher staff costs and consultancy fees[30](index=30&type=chunk)[34](index=34&type=chunk) - The rise in administrative expenses was primarily due to inflationary impacts and increased operating costs from the Group's expansion strategy[31](index=31&type=chunk)[36](index=36&type=chunk) - Other operating income shifted to expense, mainly due to exchange differences and impairment of trade receivables[32](index=32&type=chunk)[37](index=37&type=chunk) - Reduced finance costs resulted from the repayment of certain bank loans during the reporting period[33](index=33&type=chunk)[39](index=39&type=chunk) - The significant decrease in income tax expense was mainly due to lower profit leading to reduced tax provisions[40](index=40&type=chunk)[41](index=41&type=chunk)[47](index=47&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=9&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group maintained robust liquidity with increased cash, reduced borrowings, and ample unutilized credit, despite a slight dip in net current assets Liquidity Position as of June 30, 2025 | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Net current assets | 81,100 | 88,100 | -7.9% | | Inventories | 69,000 | 83,200 | -17.1% | | Trade receivables | 53,900 | 57,600 | -6.5% | | Trade payables | 47,100 | 64,200 | -26.6% | | Cash and cash equivalents | 76,200 | 68,500 | +11.2% | | Pledged deposits | 4,400 | 4,300 | +2.3% | | Interest-bearing bank borrowings | 4,000 | 6,200 | -35.5% | | Total bank facilities | 120,800 | N/A | N/A | | Utilized bank facilities | 4,100 | N/A | N/A | | Unutilized bank facilities | 116,700 | N/A | N/A | - The Group's working capital is primarily sourced from cash generated by daily operations, equity funding, and interest-bearing loans[43](index=43&type=chunk)[49](index=49&type=chunk) - The Company has no intention to draw down the unutilized bank credit facilities, indicating confidence in its current liquidity[51](index=51&type=chunk)[55](index=55&type=chunk) [Foreign Exchange Exposure](index=10&type=section&id=Foreign%20Exchange%20Exposure) The Group's transactions and monetary assets are primarily denominated in HKD, RMB, EUR, and USD. While currently lacking a hedging policy, the Group faced no significant difficulties from exchange rate fluctuations in H1 2025 and will continue to monitor foreign exchange risks - The Group's transactions and monetary assets are primarily denominated in **HKD, RMB, EUR, and USD**[52](index=52&type=chunk)[56](index=56&type=chunk) - The Group currently has no foreign exchange hedging policy, but its operations or liquidity did not face any significant difficulties or impacts from exchange rate fluctuations for the six months ended June 30, 2025[52](index=52&type=chunk)[56](index=56&type=chunk) - The Group will continue to monitor its foreign exchange exposure and consider hedging significant currency risks when necessary[53](index=53&type=chunk)[57](index=57&type=chunk) [Charges on Group Assets](index=10&type=section&id=Charges%20on%20Group%20Assets) As of June 30, 2025, the Group pledged plant and machinery with a net book value of approximately **HK$6.7 million** and life insurance policies with a book value of approximately **HK$6.2 million** to secure bank loans Pledged Assets | Pledged Assets | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Plant and machinery | 6,700 | N/A | | Life insurance policies | 6,200 | 6,000 | [Prospects](index=11&type=section&id=Prospects) For 2025, the Group anticipates global economic constraints, responding by deepening global strategy, controlling costs, expanding RFID technology, strengthening sales, and maintaining financial prudence to seize opportunities - According to UN reports, global economic growth in 2025 will continue to face dual constraints from geopolitical tensions and trade policies, leading to cautious corporate investment and suppressed recovery by high debt and low productivity[59](index=59&type=chunk)[62](index=62&type=chunk) - The Group will leverage the advantages of its diverse regional production bases to serve local and neighboring markets, swiftly adjusting production capacity in response to market demand[60](index=60&type=chunk)[62](index=62&type=chunk) - The Group will strictly control costs through **automated production** and a **centralized procurement system**, while continuously expanding **RFID technology** related products and application markets to strengthen its competitive advantage[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - To expand market coverage, the Group will recruit local sales talent, broaden its sales network, and strive for high-quality clients and high-value orders[61](index=61&type=chunk)[63](index=63&type=chunk) - The Group will adhere to a prudent financial policy, controlling debt levels, strengthening cash flow, and maintaining ample cash reserves to enhance financial resilience and seize medium-to-long-term development opportunities[61](index=61&type=chunk)[63](index=63&type=chunk) [Corporate Governance and Other Information](index=12&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the Company's adherence to corporate governance standards, policies on securities transactions, dividend practices, public float, and other significant corporate events and employee information [Compliance with the Corporate Governance Code](index=12&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The Company maintains high corporate governance standards, with the Board confirming full compliance with Listing Rules Appendix C1 during the review period - The Company is committed to maintaining high standards of corporate governance to safeguard shareholders' interests, enhance company value, and ensure accountability[65](index=65&type=chunk)[67](index=67&type=chunk) - The Board has confirmed that the Company complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules during the review period[65](index=65&type=chunk)[67](index=67&type=chunk) [Model Code for Securities Transactions by Directors of the Company](index=13&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20the%20Company) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, with all directors and senior management confirming compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[68](index=68&type=chunk)[74](index=74&type=chunk) - All Directors and senior management confirmed their compliance with the relevant provisions of the Model Code from the Listing Date up to the date of this report[68](index=68&type=chunk)[74](index=74&type=chunk) [Interim Dividend](index=13&type=section&id=Interim%20Dividend) The Board does not recommend paying an interim dividend for the six months ended June 30, 2025 (2024: nil) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[69](index=69&type=chunk)[75](index=75&type=chunk) [Sufficiency of Public Float](index=13&type=section&id=Sufficiency%20of%20Public%20Float) As of the date of this report, the Company maintained the prescribed public float of not less than **25%** as required by the Listing Rules - The Company maintained the prescribed public float of not less than **25%** as required by the Listing Rules[69](index=69&type=chunk)[76](index=76&type=chunk) [Material Acquisitions and Disposals](index=13&type=section&id=Material%20Acquisitions%20and%20Disposals) During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material acquisitions and disposals of subsidiaries, associates, and joint ventures[70](index=70&type=chunk)[77](index=77&type=chunk) [Significant Investments](index=13&type=section&id=Significant%20Investments) During the reporting period, the Group held no significant investments whose fair value exceeded **5%** of the Group's total assets - During the reporting period, the Group held no significant investments whose fair value accounted for more than **5%** of the Group's total assets[71](index=71&type=chunk)[78](index=78&type=chunk) [Event After Reporting Period](index=13&type=section&id=Event%20After%20Reporting%20Period) Subsequent to the six months ended June 30, 2025, and up to the date of this report, the Directors are not aware of any significant events related to the Group's business or financial performance - Subsequent to the six months ended June 30, 2025, and up to the date of this report, no significant events related to the Group's business or financial performance have occurred[72](index=72&type=chunk)[79](index=79&type=chunk) [Contingent Liabilities](index=13&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil) - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[73](index=73&type=chunk)[80](index=80&type=chunk) [Employees](index=14&type=section&id=Employees) As of June 30, 2025, the Group employed **1,421** staff, with employee benefit expenses (excluding directors' emoluments) of approximately **HK$82.6 million** for the six months then ended, and remuneration reviewed annually based on market terms and individual qualifications Employees and Benefit Expenses | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of employees | 1,421 | N/A | | Employee benefit expenses (excluding directors' emoluments) | 82.6 Million HKD | 78.6 Million HKD | - Remuneration packages are generally determined by reference to market terms and individual qualifications, with salaries and wages reviewed annually based on performance appraisals and other relevant factors[81](index=81&type=chunk)[85](index=85&type=chunk) [Share Option Scheme](index=14&type=section&id=Share%20Option%20Scheme) The Company adopted a Share Option Scheme on February 21, 2020, valid for ten years. As of June 30, 2025, **198,000,000** options were authorized for grant. No new options were granted during the period, but **2,000,000** options granted to a senior management member at an exercise price of **HK$0.057** per share remain outstanding, representing **0.1%** of weighted average issued shares - The Share Option Scheme was adopted on **February 21, 2020**, and is valid for ten years from **March 12, 2020**[82](index=82&type=chunk)[86](index=86&type=chunk) - As of January 1, 2025, and June 30, 2025, the total number of share options authorized for grant under the scheme was **198,000,000**[84](index=84&type=chunk)[86](index=86&type=chunk) - On **September 15, 2020**, **2,000,000** share options were granted to a senior management member with an exercise price of **HK$0.057** per share, with vesting and exercise periods extending to **September 14, 2025**[83](index=83&type=chunk)[89](index=89&type=chunk) - For the six months ended June 30, 2025, the Company did not grant any share options under the Share Option Scheme[84](index=84&type=chunk)[86](index=86&type=chunk) - The total number of shares that may be issued upon exercise of granted share options (**2,000,000** shares) represents **0.1%** of the weighted average number of issued shares (**2,000,000,000** shares) for the six months ended June 30, 2025[87](index=87&type=chunk) [Purchase, Sale or Redemption of Listed Securities of the Company Including Treasury Shares](index=15&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities%20of%20the%20Company%20Including%20Treasury%20Shares) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities. As of June 30, 2025, the Company held **10,460,000** treasury shares, with their disposition to be determined based on market conditions and capital management needs - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[90](index=90&type=chunk)[91](index=91&type=chunk) Changes in Treasury Shares | Item | June 30, 2025 (shares) | December 31, 2024 (shares) | | :--- | :--- | :--- | | Balance at beginning of period | 10,410,000 | 0 | | Purchased during the period | 50,000 | 10,410,000 | | Balance at end of period | 10,460,000 | 10,410,000 | - The Company intends to decide whether and when to cancel or sell these repurchased treasury shares at market price from time to time, based on market conditions and the Group's capital management needs[90](index=90&type=chunk)[91](index=91&type=chunk) [Disclosure of Interests](index=16&type=section&id=Disclosure%20of%20Interests) This section discloses the long positions of Directors, chief executives, and substantial shareholders in the Company's shares. Mr. Chan Sing Ming and Ms. Law Miu Lan indirectly hold **65.4%** through Charming International Limited, while Mr. Chan Tsz Fung directly holds **0.6%**. Charming International Limited is the only substantial shareholder (excluding Directors) with **5%** or more interest. No short positions were disclosed during the reporting period Directors' and Chief Executives' Long Positions in the Company's Shares | Name of Director | Nature of interest | Number and class of securities | Approximate percentage of total issued share capital | | :--- | :--- | :--- | :--- | | Mr. Chan Sing Ming | Controlled corporation interest | 1,308,000,000 shares | 65.4% | | Ms. Law Miu Lan | Controlled corporation interest | 1,308,000,000 shares | 65.4% | | Mr. Chan Tsz Fung | Beneficial owner | 12,000,000 shares | 0.6% | Substantial Shareholders' Long Positions in the Company's Ordinary Shares | Name of shareholder | Capacity/Nature of interest | Number of shares | Approximate percentage of the Company's total issued share capital | | :--- | :--- | :--- | :--- | | Charming International Limited | Beneficial interest | 1,308,000,000 | 65.4% | - Mr. Chan Sing Ming and Ms. Law Miu Lan respectively own **51%** and **49%** of the issued share capital of Charming International, and are therefore deemed to have an interest in the shares held by Charming International[102](index=102&type=chunk)[103](index=103&type=chunk) - As of June 30, 2025, no Directors and/or chief executives of the Company or their associates held any short positions in the shares or underlying shares of the Company[97](index=97&type=chunk)[100](index=100&type=chunk)[104](index=104&type=chunk)[108](index=108&type=chunk) [Competing Interests](index=18&type=section&id=Competing%20Interests) For the six months ended June 30, 2025, the Directors were unaware of any business or interest directly or indirectly competing with the Group's business, or any other conflicts of interest, involving Directors, substantial shareholders, or their respective associates - The Directors are not aware of any business or conflicts of interest that directly or indirectly compete or may compete with the Group's business[105](index=105&type=chunk)[109](index=109&type=chunk) [Audit Committee and Review of Unaudited Interim Condensed Consolidated Financial Information](index=18&type=section&id=Audit%20Committee%20and%20Review%20of%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information) The Audit Committee, chaired by Ms. Luk Mei Yan, reviewed the H1 2025 unaudited interim condensed consolidated financial information, confirming compliance with accounting standards and adequate disclosure - The Audit Committee comprises three independent non-executive directors, with Ms. Luk Mei Yan as its chairwoman[106](index=106&type=chunk)[110](index=110&type=chunk) - The Committee is responsible for independently reviewing the effectiveness of financial reporting processes, internal controls, and risk management systems, and assisting the Board in safeguarding the Group's assets[106](index=106&type=chunk)[110](index=110&type=chunk) - The Audit Committee has reviewed the unaudited interim condensed consolidated financial information for the six months ended June 30, 2025, and is of the opinion that it has complied with the applicable accounting standards and made adequate disclosures[111](index=111&type=chunk)[113](index=113&type=chunk) [Forward Looking Statements](index=19&type=section&id=Forward%20Looking%20Statements) This report contains forward-looking statements regarding the Group's future financial position, operating results, and business, which involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - This report contains forward-looking statements regarding the Group's financial position, operating results, and business[112](index=112&type=chunk)[114](index=114&type=chunk) - These forward-looking statements involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements[112](index=112&type=chunk)[114](index=114&type=chunk) [Appreciation](index=19&type=section&id=Appreciation) The Board expresses sincere gratitude to all staff for their hard work and contributions, and to shareholders, customers, and suppliers for their continued support - The Board expresses its appreciation for the dedication, contribution, and professionalism of all staff[115](index=115&type=chunk) - The Board extends its sincere gratitude to all shareholders, customers, and suppliers for their consistent and valuable support to the Group[115](index=115&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=19&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group experienced slight decreases in revenue and gross profit, increased selling and administrative expenses, a shift from other operating income to expense, reduced finance costs, and significantly lower income tax, resulting in a notable decline in profit and earnings per share for the period Summary of Interim Condensed Consolidated Statement of Profit or Loss | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 258,178 | 264,519 | -2.4% | | Cost of sales | (136,567) | (140,345) | -2.7% | | Gross profit | 121,611 | 124,174 | -2.1% | | Other income and gains | 2,451 | 2,525 | -2.9% | | Selling and distribution expenses | (33,732) | (31,557) | +6.9% | | Administrative expenses | (60,283) | (57,323) | +5.2% | | Other operating (expenses)/income, net | (913) | 1,084 | Shift from income to expense | | Finance costs | (1,181) | (1,263) | -6.5% | | Share of (loss)/profit of an associate | (95) | 208 | Shift from profit to loss | | Profit before tax | 27,858 | 37,848 | -26.4% | | Income tax expense | (3,518) | (6,556) | -46.3% | | Profit for the period | 24,340 | 31,292 | -22.3% | | Basic earnings per share (HK cents) | 1.22 | 1.56 | -21.8% | | Diluted earnings per share (HK cents) | 1.22 | 1.56 | -21.8% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=20&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's profit for the period was **HK$24.34 million**. Due to other comprehensive loss from net exchange differences on translating foreign operations of **HK$12.96 million**, total comprehensive income attributable to owners of the Company was **HK$11.38 million**, a significant decrease from the prior year Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Profit for the period | 24,340 | 31,292 | -22.3% | | Net exchange differences arising from translation of foreign operations | (12,957) | (9,979) | +29.8% (Loss widened) | | Total comprehensive income for the period attributable to owners of the Company | 11,383 | 21,313 | -46.6% | [Interim Condensed Consolidated Statement of Financial Position](index=21&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total non-current assets slightly decreased, as did total current assets. Total current liabilities decreased, leading to a slight reduction in net current assets. Both total assets less current liabilities and net assets showed a minor downward trend Summary of Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 209,328 | 211,864 | -1.2% | | Total current assets | 226,378 | 240,566 | -5.9% | | Inventories | 68,992 | 83,227 | -17.1% | | Trade receivables | 53,939 | 57,562 | -6.3% | | Cash and cash equivalents | 76,222 | 68,519 | +11.2% | | Total current liabilities | 145,258 | 152,500 | -4.7% | | Trade payables | 47,089 | 64,233 | -26.6% | | Interest-bearing bank borrowings | 4,047 | 6,246 | -35.2% | | Net current assets | 81,120 | 88,066 | -7.9% | | Total assets less current liabilities | 290,448 | 299,930 | -3.2% | | Net assets | 242,315 | 245,934 | -1.5% | | Total equity | 242,315 | 245,934 | -1.5% | [Interim Condensed Consolidated Statement of Changes in Equity](index=22&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity decreased from **HK$245.934 million** at the beginning of the period to **HK$242.315 million**, influenced by a profit for the period of **HK$24.34 million**, other comprehensive loss from foreign currency translation differences (**HK$12.957 million**), and final dividend payments (**HK$15 million**), resulting in a net reduction in equity Summary of Interim Condensed Consolidated Statement of Changes in Equity | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total equity at January 1 | 245,934 | 195,032 | | Profit for the period | 24,340 | 31,292 | | Net exchange differences arising from translation of foreign operations | (12,957) | (9,979) | | Total comprehensive income for the period | 11,383 | 21,313 | | Final dividend | (15,000) | 0 | | Repurchase of shares | (2) | 0 | | Total equity at June 30 | 242,315 | 216,345 | [Interim Condensed Consolidated Statement of Cash Flows](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flow from operating activities slightly decreased. Investing activities shifted from net inflow to outflow, mainly due to significantly increased property, plant, and equipment purchases. Net cash used in financing activities decreased, primarily from reduced bank loan repayments. Cash and cash equivalents increased by period-end, but the net increase was lower than the prior year Summary of Interim Condensed Consolidated Statement of Cash Flows | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net cash flows from operating activities | 33,908 | 34,902 | -2.8% | | Net cash (used in)/from investing activities | (15,914) | 5,248 | Shift from inflow to outflow | | Purchase of items of property, plant and equipment | (15,849) | (6,000) | +164.2% (Expenditure increased) | | Net cash flows used in financing activities | (8,454) | (12,182) | -30.6% (Expenditure decreased) | | Repayment of bank loans | (4,282) | (14,277) | -70.0% (Expenditure decreased) | | Net increase in cash and cash equivalents | 9,540 | 27,968 | -65.9% | | Cash and cash equivalents at end of period | 80,653 | 61,105 | +32.0% | - Cash flow from investing activities shifted from a net inflow of **HK$5.248 million** in H1 2024 to a net outflow of **HK$15.914 million** in H1 2025, primarily due to a significant increase in purchases of property, plant, and equipment[122](index=122&type=chunk) - Net cash flows used in financing activities decreased, mainly due to a significant reduction in bank loan repayments[122](index=122&type=chunk) [Notes to Interim Condensed Consolidated Financial Information](index=25&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the Group's corporate information, basis of preparation, accounting policy changes, operating segments, revenue, profit before tax, income tax, dividends, earnings per share, property, plant and equipment, trade receivables, trade payables, share capital, commitments, related party transactions, and fair value of financial instruments [Corporate and Group Information](index=26&type=section&id=Corporate%20and%20Group%20Information) This note clarifies Cirtek Holdings Limited's registration, principal place of business, primary business of manufacturing and selling printed products, and identifies Charming International Limited as its direct and ultimate holding company - The Company is a limited liability company incorporated in the Cayman Islands, with its principal place of business in Lai Chi Kok, Kowloon, Hong Kong[124](index=124&type=chunk)[129](index=129&type=chunk) - The Group is principally engaged in the manufacture and sale of printed products[125](index=125&type=chunk)[129](index=129&type=chunk) - Charming International Limited is the Company's direct and ultimate holding company[125](index=125&type=chunk)[129](index=129&type=chunk) [Basis of Preparation](index=26&type=section&id=Basis%20of%20Preparation) This unaudited interim condensed consolidated financial information is prepared in accordance with HKAS 34 Interim Financial Reporting and applicable disclosure requirements of the Listing Rules, and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024 - The financial information is prepared in accordance with **HKAS 34 Interim Financial Reporting** and the applicable disclosure requirements of the Listing Rules[126](index=126&type=chunk)[130](index=130&type=chunk) - It should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[126](index=126&type=chunk)[130](index=130&type=chunk) [Changes in Accounting Policies and Disclosures](index=26&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) Accounting policies align with 2024 annual statements, except for new HKFRS standards (HKAS 21, HKFRS 1 Amendments) with no significant financial impact, and no early adoption of other new standards - Revised HKFRS accounting standards were adopted, including **HKAS 21** and **HKFRS 1 (Amendments) Lack of Exchangeability**[127](index=127&type=chunk)[131](index=131&type=chunk) - The adoption of the above revised standards had no significant financial impact on this interim condensed consolidated financial information[128](index=128&type=chunk)[131](index=131&type=chunk) - The Group has not early adopted any new and revised HKFRS accounting standards that have been issued but are not yet effective[128](index=128&type=chunk)[131](index=131&type=chunk) [Operating Segment Information](index=27&type=section&id=Operating%20Segment%20Information) The Group has one reportable operating segment: manufacturing and selling printed products. Geographically, Mainland China remains the largest revenue market, but US revenue significantly decreased, while other regions grew. Non-current assets are primarily located in Mainland China and Bangladesh - The Group has only one reportable operating segment, which is the manufacture and sale of printed products[133](index=133&type=chunk)[135](index=135&type=chunk) Revenue by Location of Customers | Region | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Mainland China | 85,437 | 93,527 | -8.6% | | Bangladesh | 45,108 | 44,476 | +1.4% | | Hong Kong | 25,298 | 27,293 | -7.3% | | Vietnam | 24,205 | 21,610 | +12.0% | | India | 13,146 | 15,940 | -17.5% | | United States | 4,355 | 7,797 | -44.1% | | Other countries/regions | 60,629 | 53,876 | +12.5% | | Total revenue | 258,178 | 264,519 | -2.4% | Non-current Assets by Location of Assets | Region | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Mainland China | 90,485 | 101,094 | -10.5% | | Bangladesh | 57,300 | 47,420 | +20.8% | | Hong Kong | 22,659 | 18,821 | +20.4% | | Vietnam | 8,314 | 5,258 | +58.1% | | Other countries/regions | 23,327 | 30,137 | -22.6% | | Total non-current assets | 202,085 | 202,730 | -0.3% | [Revenue, Other Income and Gains](index=28&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) The Group's revenue primarily stems from printed product sales, recognized upon goods transfer. For the six months ended June 30, 2025, total revenue was **HK$258.178 million**, slightly down year-on-year. Other income and gains totaled **HK$2.451 million**, mainly from freight and transport income, scrap material sales, government grants, and net fair value gains on financial assets at fair value through profit or loss - Revenue refers to the net invoiced value of goods sold, after deducting provisions for returns, trade discounts, and rebates[142](index=142&type=chunk) - Revenue primarily arises from the sale of printed products, with revenue recognized at the point in time when goods are transferred[144](index=144&type=chunk) Details of Other Income and Gains | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Freight and transport income | 194 | 104 | +86.5% | | Interest income | 17 | 218 | -92.2% | | Sales of scrap materials | 758 | 749 | +1.2% | | Government grants | 197 | 138 | +42.8% | | Net fair value gains on financial assets at fair value through profit or loss | 163 | 94 | +73.4% | | Others | 1,122 | 1,222 | -8.2% | | Total | 2,451 | 2,525 | -2.9% | - Government grants primarily relate to unemployment insurance compensation paid to local governments and the acquisition of new machinery for the Group, recognized in profit or loss over the useful lives of the related assets from deferred income[151](index=151&type=chunk)[152](index=152&type=chunk) [Profit Before Tax](index=30&type=section&id=Profit%20Before%20Tax) This note details expenses impacting profit before tax, showing increases in various costs and depreciation, a shift in net exchange differences to expense, and a reversal in trade receivables impairment Components of Profit Before Tax | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Cost of sales | 136,567 | 140,345 | -2.7% | | Depreciation of property, plant and equipment | 10,099 | 10,258 | -1.5% | | Depreciation of right-of-use assets | 6,696 | 6,397 | +4.7% | | Amortisation of other intangible assets | 44 | 31 | +41.9% | | Short-term lease expenses | 745 | 857 | -13.0% | | Employee benefit expenses (excluding directors' emoluments) | 82,559 | 78,594 | +5.0% | | Net exchange differences | 1,569 | (1,126) | Shift from income to expense | | Trade receivables (reversal of impairment)/impairment | (656) | 324 | Shift from impairment to reversal | | Net gain on disposal of items of property, plant and equipment | 0 | (282) | Shift from gain to nil | - Cost of inventories sold includes employee benefit expenses and depreciation of property, plant and equipment and right-of-use assets[155](index=155&type=chunk) - For the six months ended June 30, 2025, a reversal of inventory provision of **HK$217,000** (2024: **HK$1,649,000**) was included in cost of sales[156](index=156&type=chunk) [Income Tax](index=31&type=section&id=Income%20Tax) The Group is exempt from income tax in the Cayman Islands and British Virgin Islands. Hong Kong profits tax is levied at **16.5%**, with qualifying subsidiaries paying **8.25%** on the first **HK$2 million** of assessable profits under the two-tiered system. Total tax expense for the six months ended June 30, 2025, was **HK$3.518 million**, a significant decrease year-on-year - The Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands[158](index=158&type=chunk)[161](index=161&type=chunk) - Hong Kong profits tax is provided at a rate of **16.5%**, with qualifying subsidiaries subject to the two-tiered profits tax regime paying **8.25%** on the first **HK$2,000,000** of assessable profits[159](index=159&type=chunk)[161](index=161&type=chunk) Details of Income Tax Expense | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Current - Hong Kong | 556 | 948 | -41.4% | | Current - Elsewhere | 2,962 | 5,578 | -46.9% | | Deferred | 0 | 30 | -100.0% | | Total tax expense for the period | 3,518 | 6,556 | -46.3% | [Dividend](index=32&type=section&id=Dividend) The Board does not recommend paying an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: same) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[163](index=163&type=chunk)[167](index=167&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Company](index=32&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Company) For the six months ended June 30, 2025, both basic and diluted earnings per share attributable to ordinary equity holders of the Company were **1.22 HK cents**, down from **1.56 HK cents** in the prior year. Calculations are based on profit for the period and the weighted average number of ordinary shares outstanding, with share options having an anti-dilutive effect on basic EPS Earnings Per Share Data | Indicator | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company | 24,340,000 HKD | 31,292,000 HKD | -22.3% | | Weighted average number of ordinary shares in issue | 1,989,540,278 shares | 2,000,000,000 shares | -0.5% | | Basic earnings per share | 1.22 HK cents | 1.56 HK cents | -21.8% | | Diluted earnings per share | 1.22 HK cents | 1.56 HK cents | -21.8% | - No adjustment has been made to the basic earnings per share amounts for dilution as the outstanding share options had an anti-dilutive effect on the basic earnings per share amounts presented[165](index=165&type=chunk)[168](index=168&type=chunk) [Property, Plant and Equipment](index=32&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group's acquisitions of property, plant and equipment amounted to approximately **HK$15.85 million**, a significant increase from **HK$5.642 million** in the prior year Acquisition Cost of Property, Plant and Equipment | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Acquisition cost | 15,850 | 5,642 | +180.9% | [Trade Receivables](index=33&type=section&id=Trade%20Receivables) As of June 30, 2025, the Group's net book value of trade receivables was **HK$53.939 million**, a decrease from December 31, 2024. Credit terms typically range from **30 to 90 days**. The aging analysis shows a significant reduction in receivables over three months old Trade Receivables and Impairment | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade receivables | 55,855 | 60,134 | -7.1% | | Impairment | (1,916) | (2,572) | -25.5% | | Net book value | 53,939 | 57,562 | -6.3% | - The Group primarily enters into trade terms with customers on credit, with credit periods generally ranging from **30 to 90 days** from the statement date[171](index=171&type=chunk)[172](index=172&type=chunk) Aging Analysis of Trade Receivables (Net of Loss Allowance) | Aging | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Within 1 month | 29,637 | 32,204 | -8.0% | | 1 to 2 months | 14,444 | 14,381 | +0.4% | | 2 to 3 months | 9,063 | 6,629 | +36.7% | | Over 3 months | 795 | 4,348 | -81.7% | | Total | 53,939 | 57,562 | -6.3% | [Trade Payables](index=34&type=section&id=Trade%20Payables) As of June 30, 2025, the Group's total trade payables were **HK$47.089 million**, a significant decrease from December 31, 2024. Trade payables are non-interest-bearing and typically settled within **30 to 150 days**. The aging analysis shows a notable reduction in payables within one month, while those aged two to three months increased Aging Analysis of Trade Payables | Aging | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Within 1 month | 8,912 | 26,093 | -65.9% | | 1 to 2 months | 10,974 | 17,992 | -38.9% | | 2 to 3 months | 24,059 | 10,317 | +133.2% | | Over 3 months | 3,144 | 9,831 | -68.0% | | Total | 47,089 | 64,233 | -26.6% | - Trade payables are non-interest-bearing and are normally settled within **30 to 150 days**[177](index=177&type=chunk)[178](index=178&type=chunk) [Share Capital](index=34&type=section&id=Share%20Capital) As of June 30, 2025, the Company's authorized and issued and fully paid share capital remained stable. During the period, the Company repurchased **50,000** shares on the Stock Exchange for a total consideration of **HK$2,000**, increasing total treasury shares to **10,460,000** Share Capital Structure | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Authorized share capital (5,000,000,000 shares of HK$0.01 each) | 50,000 | 50,000 | | Issued and fully paid share capital (2,000,000,000 shares of HK$0.01 each) | 20,000 | 20,000 | Changes in Treasury Shares | Item | Number of ordinary shares | Amount (HK$ Thousand) | | :--- | :--- | :--- | | Balance at January 1, 2025 | 10,410,000 | 416 | | Purchased during the period | 50,000 | 2 | | Balance at June 30, 2025 | 10,460,000 | 418 | [Commitments](index=35&type=section&id=Commitments) As of June 30, 2025, the Group's contracted but unprovided commitments for plant and machinery were **HK$0.523 million**, a significant decrease from **HK$3.418 million** as of December 31, 2024 Contractual Commitments | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Plant and machinery (contracted but not provided for) | 523 | 3,418 | -84.7% | [Related Party Transactions](index=36&type=section&id=Related%20Party%20Transactions) During the period, the Group engaged in product sales (**HK$1.821 million**) and commission expenses (**HK$2.708 million**) with an associate. Sales to the associate were at published prices for major customers but with longer credit terms. Key management personnel emoluments totaled **HK$3.188 million** Details of Related Party Transactions | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Sales of products to an associate | 1,821 | 1,104 | +65.0% | | Commission expenses | 2,708 | 2,364 | +14.6% | - Sales to an associate are conducted at published prices offered to the Group's major customers, but generally with longer credit terms of up to **six months**[186](index=186&type=chunk)[190](index=190&type=chunk) - Commission expenses arose from sales of subsidiary products arranged by an associate, with commissions charged at **3% to 5%** of the transaction value[187](index=187&type=chunk) Key Management Personnel Emoluments | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 3,170 | 3,771 | -15.9% | | Pension scheme contributions | 18 | 27 | -33.3% | | Total | 3,188 | 3,798 | -16.1% | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=37&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) This note details fair value measurement of financial instruments, with key management insurance contracts (Level 3) valued at **HK$6.23 million**, showing an increase, and no transfers between fair value hierarchy levels Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Financial assets | 6,230 | 6,034 | +3.2% | - The fair values of financial instruments such as cash and cash equivalents, trade receivables, trade payables, and lease liabilities approximate their carrying amounts, primarily due to their short maturities[193](index=193&type=chunk)[197](index=197&type=chunk) - Key management personnel insurance contracts are classified as financial assets at fair value through profit or loss, with their fair value measured based on account value less surrender charges[196](index=196&type=chunk)[198](index=198&type=chunk) Changes in Fair Value Hierarchy (Level 3) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | At January 1 | 6,067 | 5,940 | | Total gains recognized in profit or loss | 163 | 127 | | At June 30/December 31 | 6,230 | 6,067 | - During the period, there were no transfers between Level 1 and Level 2 fair value measurements for financial assets and liabilities, nor any transfers into or out of Level 3[207](index=207&type=chunk)

Web3 and Cryptocurrency Focus - The company has established Web3 as a strategic focus since 2024, aiming for breakthroughs in investment, application, and computing power services[12]. - As of the end of the reporting period, the company holds 92.0692 units of Bitcoin, 943.6293 units of Ethereum, and 6,091.7000 units of Solana, with unrealized gains of approximately $7.5 million[14]. - The company announced the establishment of the LK Crypto division in July 2025, which will manage all Web3 and cryptocurrency-related businesses[15]. - The implementation of the Hong Kong Stablecoin Ordinance on August 1, 2025, has established a licensing system for stablecoin issuers, enhancing the regulatory framework for virtual asset activities[12]. - The company aims to further increase its cryptocurrency holdings to achieve stable asset preservation and appreciation amid market volatility[14]. - The company is focusing on compliance construction to meet the strict requirements of the Stablecoin Ordinance, which includes anti-money laundering and investor protection measures[15]. - The company is leveraging Hong Kong's policy advantages to participate in more innovative project investments and collaborations in the Web3 space[15]. - The company is committed to optimizing its investment portfolio in compliance with regulations to enhance market trust and reduce risks[12]. - The company is strategically positioned to capitalize on emerging technologies and strengthen its competitive business layout in the Web3 sector[14]. Gaming Business Performance - The gaming business reported a 5.8% year-over-year increase in overseas revenue, demonstrating improved brand recognition and user loyalty[20]. - As of June 30, 2025, the company operates 15 online games, ensuring stable cash flow through refined operations and user engagement[23]. - The gaming business will focus on product innovation, market expansion, and technology upgrades to drive growth and competitiveness in the second half of 2025[22]. - The company aims to explore new gameplay and mechanisms in gaming, incorporating market trends and user preferences to inject new momentum into business growth[23]. Financial Performance Overview - Revenue for the six months ended June 30, 2025, decreased by approximately 51.5% to RMB 28.5 million from RMB 58.8 million for the same period in 2024[38]. - Game business revenue contributed approximately RMB 17.1 million, a decrease of 26.6% or RMB 6.2 million compared to the same period in 2024[41]. - Film and television business revenue was approximately RMB 11.4 million, down about 67.9% or RMB 24.1 million from RMB 35.5 million in the same period in 2024[41]. - Gross profit for the six months ended June 30, 2025, was approximately RMB 5.4 million, down about 63.3% from RMB 14.7 million in the same period in 2024[43]. - Gross margin for the six months ended June 30, 2025, was approximately 18.9%, a decrease of about 6.1% from 25.0% in the same period in 2024[43]. - Operating loss for the six months ended June 30, 2025, was approximately RMB 8.4 million, compared to an operating loss of RMB 13.2 million for the same period in 2024, reflecting improved cost control[49]. - The company incurred a loss of RMB 12,764,000 during the period, compared to a profit of RMB 11,429,000 in the previous period, indicating a shift in financial performance[160]. Investment and Capital Expenditures - The company invested in EcoPowX, focusing on environmentally friendly solutions for AI computing and Bitcoin network power supply, with equipment installation completed and awaiting final testing[18]. - Total capital expenditures for the six months ended June 30, 2025, were approximately RMB 65.9 million, an increase from RMB 43.9 million for the same period in 2024, including significant investments in cryptocurrencies and financial assets[56]. - The company invested RMB 56,358,000 in intangible assets during the period, compared to RMB 41,927,000 in the same period last year, representing a 34.4% increase in investment[161]. Shareholder and Equity Information - The total number of issued shares as of June 30, 2025, was 368,024,964[75]. - Major shareholder Zhu Li holds 107,346,040 shares, representing 29.17% of the company's equity[80]. - Wangfeng Management Limited, as a beneficial owner, holds 66,576,160 shares, representing 18.09% of the company's equity[80]. - The total employee compensation for the six months ended June 30, 2025, was approximately RMB 13.5 million, a decrease from RMB 21.2 million for the same period in 2024, with 64 employees as of the reporting date[60]. Restricted Share Units and Stock Options - A total of 31,889,287 restricted share units have been granted and remain unexercised as of June 30, 2025[88]. - The board approved an extension of the validity period for all granted restricted stock units by an additional ten years, effective from March 20, 2024[93]. - The company has a stock option plan approved on November 20, 2014, with various grants made at different exercise prices ranging from HKD 0.335 to HKD 8.10[112]. - The total number of stock options available for grant under the stock option plan as of June 30, 2025, is 0, as the plan expires on December 29, 2024[124]. Corporate Governance and Compliance - The company believes it complies with the corporate governance code, except for a deviation regarding the separation of the roles of Chairman and CEO[145]. - The group has not made any changes to its risk management policies as of June 30, 2025[175]. - The group expects no significant impact from new standards and amendments that will come into effect in the foreseeable future[172].