[Financial Summary](index=1&type=section&id=2025%20First%20Half%20Financial%20Summary) This section provides an overview of the company's financial performance for the first half of 2025, highlighting key financial indicators and dividend decisions [Interim Results Overview](index=1&type=section&id=Interim%20Results) During the reporting period, the company's revenue, gross profit, profit for the period, and basic earnings per share all decreased year-on-year, and the board resolved not to declare an interim dividend Key Financial Performance Indicators | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 332.4 | 370.2 | -10.2% | | Gross Profit | 243.4 | 268.7 | -9.4% | | Profit for the Period | 15.3 | 33.4 | -54.2% | | Basic EPS | RMB 1.62 cents | RMB 3.53 cents | -54.1% | - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 (2024 H1: nil)[4](index=4&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the interim condensed consolidated financial statements, including the statement of profit or loss, other comprehensive income, and financial position [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In the first half of 2025, the company's revenue decreased by 10.2% year-on-year, and net profit decreased by 54.2%, but exchange differences turned from loss to gain, partially offsetting the decline in operating performance Key Financial Performance Indicators | Metric | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 332,364 | 370,189 | -10.2% | | Cost of Sales | (88,975) | (101,503) | -12.3% | | Gross Profit | 243,389 | 268,686 | -9.4% | | Profit Before Tax | 17,803 | 40,333 | -55.8% | | Profit for the Period | 15,322 | 33,409 | -54.2% | | Exchange Differences (Other Comprehensive Income) | 13,689 | (2,523) | N/A | - Basic earnings per share attributable to ordinary equity holders of the parent was **RMB 1.62 cents**, compared to **RMB 3.53 cents** in the same period last year[5](index=5&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets and total equity both increased, net current assets significantly rose, but non-current assets slightly decreased, with new short-term borrowings added Key Financial Performance Indicators | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 216,385 | 218,226 | -0.8% | | Total Current Assets | 332,943 | 287,331 | +15.9% | | Total Assets | 549,328 | 505,557 | +8.7% | | Total Current Liabilities | 82,748 | 69,139 | +19.7% | | Net Current Assets | 250,195 | 218,192 | +14.7% | | Total Equity | 423,107 | 394,096 | +7.4% | - New interest-bearing loans of **RMB 20,000 thousand** were added, compared to nil as of December 31, 2024[6](index=6&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim condensed consolidated financial statements, covering accounting policies, segment information, and key financial items [Basis of Preparation and Changes in Accounting Policies](index=5&type=section&id=1.%20Basis%20of%20Preparation%20and%20Changes%20in%20the%20Group's%20Accounting%20Policies) The financial statements are prepared in accordance with HKAS 34 and presented in RMB; revised HKFRS accounting standards were adopted for the first time this period, but had no material impact due to the Group's currency convertibility - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting and presented in RMB[8](index=8&type=chunk) - The Group first adopted the revised HKAS 21 'Lack of Exchangeability', but as the currencies used for transactions and functional currencies are convertible, the revision had no impact on the financial information[9](index=9&type=chunk)[10](index=10&type=chunk) [Operating Segment Information](index=6&type=section&id=2.%20Operating%20Segment%20Information) The Group primarily operates a single business segment: manufacturing and selling nutritional supplements and packaged health foods in China, Australia, and New Zealand, with revenue and non-current assets concentrated in these regions - The Group operates a single reportable segment, which is the manufacturing and sale of nutritional supplements and the sale of packaged health foods in China, Australia, and New Zealand[11](index=11&type=chunk) Revenue Analysis by Major Market | Region | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 273,002 | 304,902 | | New Zealand | 52,571 | 52,862 | | Australia | 437 | 3,463 | | Other Countries | 6,354 | 8,962 | | **Total** | **332,364** | **370,189** | Geographical Distribution of Non-current Assets | Region | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 134,373 | 138,178 | | New Zealand | 37,445 | 37,564 | | Australia | 179 | 173 | | **Total** | **171,997** | **175,915** | - No revenue from transactions with a single external customer accounted for **10% or more** of the Group's revenue[15](index=15&type=chunk) [Revenue, Other Income and Gains](index=7&type=section&id=3.%20Revenue,%20Other%20Income%20and%20Gains) Revenue primarily derives from goods sales, recognized upon transfer; other income and gains include bank interest, government grants, reversal of trade receivables impairment, and net exchange differences - All revenue is derived from the sale of goods, recognized at the point in time when goods or services are transferred[17](index=17&type=chunk) Analysis of Other Income and Gains | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Bank Interest Income | 798 | 572 | | Government Grants | 628 | 573 | | Reversal of Impairment Loss on Trade Receivables | 163 | – | | Net Exchange Differences | 108 | – | | Rental Income | 1,899 | 2,089 | | Others | 223 | 258 | | **Total** | **3,819** | **3,492** | [Profit Before Tax](index=8&type=section&id=4.%20Profit%20Before%20Tax) Profit before tax is derived after deducting costs of inventories sold, staff costs, depreciation, amortization, lease payments, R&D expenses, and includes reversal of trade receivables impairment, net exchange differences, and government grants Key Deductions/(Additions) to Profit Before Tax | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 88,975 | 101,503 | | Staff Costs | 46,712 | 46,473 | | Depreciation of Property, Plant and Equipment | 4,325 | 4,446 | | Research and Development Expenses | 440 | 416 | | Reversal of/(Impairment Loss on) Trade Receivables | (163) | 837 | | Net Exchange Differences | (108) | 4,737 | | Government Grants | (628) | (573) | [Income Tax Expense](index=8&type=section&id=5.%20Income%20Tax%20Expense) In the first half of 2025, income tax expense significantly decreased year-on-year, mainly due to lower pre-tax profit of the New Zealand subsidiary; income tax is calculated at statutory rates of 25% for China, 28% for New Zealand, and 30% for Australia Analysis of Income Tax Expense | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Current — New Zealand | 2,318 | 8,218 | | Deferred | 163 | (1,294) | | **Total** | **2,481** | **6,924** | - The decrease in income tax expense was mainly due to a reduction in the pre-tax profit of Good Health Products Limited, a New Zealand subsidiary of the company, during the reporting period compared to the same period last year[37](index=37&type=chunk) - The income tax rate for Chinese subsidiaries is **25%**, New Zealand **28%**, and Australia **30%**[20](index=20&type=chunk) [Dividends](index=9&type=section&id=6.%20Dividends) The Board resolved not to declare any interim dividend for the reporting period and did not recommend any dividend for the year 2024 - The Board has resolved not to declare any interim dividend for the reporting period (for the six months ended June 30, 2024: nil)[21](index=21&type=chunk) - The Board did not recommend the declaration of any dividend for the year ended December 31, 2024[21](index=21&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=9&type=section&id=7.%20Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) Basic earnings per share is calculated based on profit for the period attributable to ordinary equity holders of the parent and the weighted average number of ordinary shares outstanding during the reporting period, with no potential dilutive ordinary shares - Basic earnings per share is calculated based on the profit for the period attributable to ordinary equity holders of the parent and the weighted average number of **946,298,370 ordinary shares** outstanding during the reporting period[22](index=22&type=chunk) - For the periods ended June 30, 2025 and 2024, the Group had no potential dilutive ordinary shares outstanding[23](index=23&type=chunk) [Property, Plant and Equipment](index=9&type=section&id=8.%20Property,%20Plant%20and%20Equipment) No impairment losses on property, plant and equipment were recognized during the reporting period, and additions significantly decreased year-on-year - No impairment losses on property, plant and equipment were recognized for the reporting period and the same period last year[24](index=24&type=chunk) - Additions to property, plant and equipment during the reporting period amounted to **RMB 253,000** (for the six months ended June 30, 2024: **RMB 9,028,000**)[24](index=24&type=chunk) [Inventories](index=9&type=section&id=9.%20Inventories) As of June 30, 2025, total inventories decreased by 5.5% year-on-year, mainly due to reduced raw materials to meet e-commerce channel development and optimize inventory management Composition of Inventories | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Raw Materials | 7,032 | 18,332 | | Work in Progress | 3,175 | 1,523 | | Finished Goods | 102,057 | 99,144 | | Purchased Goods | 203 | 86 | | **Total** | **112,467** | **119,085** | [Trade Receivables](index=10&type=section&id=10.%20Trade%20Receivables) As of June 30, 2025, net trade receivables significantly increased by 49.2% year-on-year, mainly due to increased sales revenue from cross-border e-commerce channels and higher e-commerce platform receivables Carrying Amount of Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 65,990 | 45,429 | | Impairment | (3,508) | (3,527) | | **Carrying Amount** | **62,482** | **41,902** | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 44,046 | 38,962 | | 1 to 3 months | 17,834 | 2,543 | | 3 months to 1 year | 429 | 303 | | Over 1 year | 173 | 94 | | **Total** | **62,482** | **41,902** | [Trade Payables](index=10&type=section&id=11.%20Trade%20Payables) As of June 30, 2025, trade payables increased by 39.8% year-on-year, mainly due to continuous growth in cross-border e-commerce sales and increased raw material procurement to boost core product output Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 14,912 | 11,310 | | 1 to 3 months | 1,836 | 124 | | 3 months to 1 year | 360 | 556 | | Over 1 year | 760 | 760 | | **Total** | **17,868** | **12,750** | - Trade payables are interest-free and generally settled within **30 to 90 days**[27](index=27&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section offers management's perspective on the Group's business performance, financial position, and operational highlights for the reporting period [Business Review](index=11&type=section&id=Business%20Review) The Group's H1 performance was significantly impacted by slow global economic growth, uncertain trade policies, and intensified industry competition, leading to notable declines in revenue and profit; gross profit margin remained stable, but selling and distribution expenses as a percentage of sales revenue increased; the Group continues to focus on its 'Good Health' brand cross-border e-commerce business, enhancing market influence through diversified promotions and new product launches - In the first half of 2025, the Group's performance declined due to slow global economic growth, uncertain trade policies, and intensified industry competition, with revenue decreasing by **10.2%** and profit by **54.2%**[28](index=28&type=chunk) - Gross profit margin remained stable at approximately **73.2%**, but selling and distribution expenses as a percentage of sales revenue increased by approximately **7.1%** to **57.4%**[28](index=28&type=chunk) - The Group continues to focus on its 'Good Health' brand cross-border e-commerce business, building traffic through Douyin influencer promotions, off-site promotions, self-broadcasting, and short video combinations, while expanding sales channels such as distributors, pharmacies, duty-free shops, and e-commerce platforms[29](index=29&type=chunk) - For the six months ended June 30, 2025, the Group launched a total of **11 new products**, including **9** from the 'Good Health' series and **2** from the 'Living Nature' series[30](index=30&type=chunk) [Performance Analysis](index=12&type=section&id=Performance) This section provides a detailed analysis of changes in financial indicators during the reporting period and their main causes, including decreased revenue, stable gross profit, increased selling and distribution expenses, and reduced income tax expense [Revenue](index=12&type=section&id=Revenue) In the first half of 2025, revenue decreased by 10.2% year-on-year to RMB 332.4 million, primarily due to a decline in income from infant and child products on domestic distributor platforms - Revenue for the first half of 2025 was approximately **RMB 332.4 million**, a decrease of approximately **RMB 37.8 million** or **10.2%** compared to the first half of 2024[32](index=32&type=chunk) - The decrease in revenue was mainly due to a decline in income generated from infant and child products on domestic distributor platforms during the reporting period[32](index=32&type=chunk) [Gross Profit](index=12&type=section&id=Gross%20Profit) In the first half of 2025, gross profit decreased by 9.4% year-on-year to RMB 243.4 million, but the gross profit margin remained stable at 73.2% - Gross profit for the first half of 2025 was approximately **RMB 243.4 million**, a decrease of approximately **RMB 25.3 million** or **9.4%** compared to the first half of 2024[33](index=33&type=chunk) - The gross profit margin for the first half of 2025 was approximately **73.2%**, remaining stable compared to approximately **72.6%** in the first half of 2024[33](index=33&type=chunk) [Other Income and Gains](index=12&type=section&id=Other%20Income%20and%20Gains) In the first half of 2025, other income and gains increased by approximately RMB 0.3 million year-on-year to RMB 3.8 million, mainly driven by higher bank interest income - Other income and gains for the first half of 2025 were approximately **RMB 3.8 million**, an increase of approximately **RMB 0.3 million** compared to approximately **RMB 3.5 million** in the first half of 2024[34](index=34&type=chunk) - The increase was mainly due to higher bank interest income[34](index=34&type=chunk) [Selling and Distribution Expenses](index=13&type=section&id=Selling%20and%20Distribution%20Expenses) In the first half of 2025, selling and distribution expenses increased by 2.4% year-on-year to RMB 190.7 million, rising to 57.4% of sales revenue, mainly due to increased promotional investment in cross-border e-commerce channels and higher personnel costs from staff expansion - Selling and distribution expenses for the first half of 2025 were approximately **RMB 190.7 million**, an increase of approximately **RMB 4.4 million** or **2.4%** compared to the first half of 2024[35](index=35&type=chunk) - Selling and distribution expenses as a percentage of sales revenue for the first half of 2025 were approximately **57.4%**, an increase of **7.1%** compared to approximately **50.3%** in the first half of 2024[35](index=35&type=chunk) - The increase in expenses was mainly due to the Group's continued vigorous development of the 'Good Health' brand's cross-border e-commerce business in the Chinese market, increased investment in sales promotion resources, and expanded personnel in the cross-border e-commerce department, leading to higher labor costs[35](index=35&type=chunk) [Administrative Expenses](index=13&type=section&id=Administrative%20Expenses) In the first half of 2025, administrative expenses decreased by 2.4% year-on-year to RMB 36.5 million, with its proportion to sales revenue remaining largely stable - Administrative expenses for the first half of 2025 were approximately **RMB 36.5 million**, a decrease of approximately **RMB 0.9 million** or **2.4%** compared to approximately **RMB 37.4 million** in the first half of 2024[36](index=36&type=chunk) - Administrative expenses as a percentage of sales revenue remained largely stable[36](index=36&type=chunk) [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) In the first half of 2025, income tax expense decreased by RMB 4.4 million year-on-year to RMB 2.5 million, mainly due to reduced pre-tax profit of the New Zealand subsidiary - Income tax expense for the first half of 2025 was approximately **RMB 2.5 million**, a decrease of approximately **RMB 4.4 million** compared to approximately **RMB 6.9 million** in the first half of 2024[37](index=37&type=chunk) - The decrease in income tax expense was mainly due to a reduction in the pre-tax profit of Good Health Products Limited, a New Zealand subsidiary of the company, during the reporting period compared to the same period last year[37](index=37&type=chunk) [Overall Performance Summary](index=14&type=section&id=Overall%20Performance%20Summary) Considering all factors, the Group's profit margin for the first half of 2025 decreased from 9.0% in the first half of 2024 to 4.6%, mainly due to lower revenue and increased selling and distribution expenses as a percentage of sales - The profit margin for the first half of 2025 was approximately **4.6%**, a decrease of approximately **4.4%** compared to approximately **9.0%** in the first half of 2024[38](index=38&type=chunk) - The decrease in profit margin was mainly due to reduced revenue and an increase in selling and distribution expenses as a percentage of sales revenue[38](index=38&type=chunk) [Other Comprehensive Income](index=14&type=section&id=Other%20Comprehensive%20Income) In the first half of 2025, the Group recorded an exchange gain of approximately RMB 13.7 million, compared to an exchange loss in the same period last year, mainly due to a significant appreciation of the New Zealand dollar against the RMB - An exchange gain of approximately **RMB 13.7 million** was recorded in the first half of 2025, compared to an exchange loss of approximately **RMB 2.5 million** in the first half of 2024[39](index=39&type=chunk) - This year's gain was mainly due to a significant appreciation of the New Zealand dollar against the RMB[39](index=39&type=chunk) [Liquidity and Capital Resources](index=14&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the Group's cash and cash equivalents increased, mainly due to net cash inflow from financing activities and exchange rate effects; inventories decreased, while trade receivables and payables both grew, and new short-term borrowings were added [Cash Flow](index=14&type=section&id=Cash%20Flow) As of June 30, 2025, cash and cash equivalents increased by approximately RMB 31.6 million compared to the end of 2024, primarily contributed by net cash inflow from operating activities, net cash inflow from financing activities, and exchange rate effects - As of June 30, 2025, cash and cash equivalents increased by approximately **RMB 31.6 million** compared to December 31, 2024[40](index=40&type=chunk) - Net cash inflow from operating activities was approximately **RMB 9.5 million**; net cash outflow from investing activities was approximately **RMB 0.03 million**; net cash inflow from financing activities was approximately **RMB 17.7 million**; and cash inflow from exchange rate effects was **RMB 4.4 million**[40](index=40&type=chunk) [Inventories](index=14&type=section&id=Inventories) As of June 30, 2025, inventories decreased by approximately RMB 6.6 million (5.5% decline), mainly due to increased raw material usage to meet e-commerce channel sales demand and enhanced raw material procurement management - As of June 30, 2025, the Group's inventories were approximately **RMB 112.5 million** (December 31, 2024: approximately **RMB 119.1 million**), a decrease of approximately **RMB 6.6 million** or **5.5%**[41](index=41&type=chunk) - The decrease in inventories was mainly due to the vigorous development of the 'Good Health' e-commerce channel, leading to increased raw material usage to meet H2 e-commerce sales demand, coupled with strengthened raw material procurement management[41](index=41&type=chunk) [Trade Receivables](index=15&type=section&id=Trade%20Receivables) As of June 30, 2025, trade receivables increased by approximately RMB 20.6 million (49.2% growth), mainly due to increased sales revenue from cross-border e-commerce channels, particularly higher e-commerce platform receivables - As of June 30, 2025, the Group's trade receivables were approximately **RMB 62.5 million** (December 31, 2024: approximately **RMB 41.9 million**), an increase of approximately **RMB 20.6 million** or **49.2%**[42](index=42&type=chunk) - The increase in trade receivables was mainly due to increased sales revenue from cross-border e-commerce channels, particularly the growth in receivables from e-commerce platforms[42](index=42&type=chunk) [Trade Payables](index=15&type=section&id=Trade%20Payables) As of June 30, 2025, trade payables increased by approximately RMB 5.1 million (39.8% growth), mainly due to continuous growth in cross-border e-commerce sales and increased raw material procurement to boost core product output - As of June 30, 2025, the Group's trade payables were approximately **RMB 17.9 million** (December 31, 2024: approximately **RMB 12.8 million**), an increase of approximately **RMB 5.1 million** or **39.8%**[43](index=43&type=chunk) - The increase in trade payables was mainly due to the continuous growth in cross-border e-commerce sales, leading to increased procurement of raw materials required for production to meet market demand and boost output of certain core products[43](index=43&type=chunk) [Exchange Rate Risk](index=15&type=section&id=Exchange%20Rate%20Risk) The Group manages foreign exchange risk through regular review and supervision; the Board considers the risk exposure controllable, and no hedging or alternative policies were implemented during the reporting period - The Group's domestic business transactions are primarily conducted in RMB, while overseas business transactions are mainly conducted in New Zealand Dollars, US Dollars, and Australian Dollars[44](index=44&type=chunk) - The Group manages its foreign exchange risk by regularly reviewing and monitoring its foreign exchange exposure, and the Directors consider the risk exposure to be controllable[44](index=44&type=chunk) - No hedging or other alternative policies were implemented to address such risks during the reporting period[44](index=44&type=chunk) [Borrowings and Pledged Assets](index=15&type=section&id=Borrowings%20and%20Pledged%20Assets) As of June 30, 2025, the Group added new borrowings of RMB 20.0 million at an annual interest rate of 2.6%, pledging approximately RMB 1.5 million in property as collateral - As of June 30, 2025, the Group's borrowings amounted to **RMB 20.0 million** at an annual interest rate of **2.6%** (December 31, 2024: nil)[45](index=45&type=chunk) - As of June 30, 2025, the Group pledged properties with a carrying amount of approximately **RMB 1.5 million** to secure the aforementioned borrowings[45](index=45&type=chunk) [Capital Expenditure](index=15&type=section&id=Capital%20Expenditure) In the first half of 2025, capital expenditure significantly decreased to RMB 0.3 million, primarily for fixed asset investments - In the first half of 2025, the Group invested approximately **RMB 0.3 million** (2024 H1: approximately **RMB 5.8 million**) in fixed assets[46](index=46&type=chunk) [Capital Commitments and Contingent Liabilities](index=16&type=section&id=Capital%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group had no significant capital commitments or contingent liabilities - As of June 30, 2025, the Group had no significant capital commitments or contingent liabilities (December 31, 2024: nil)[47](index=47&type=chunk) [Outlook](index=16&type=section&id=Outlook) This section outlines the macroeconomic environment and the Group's strategic priorities and operational focus for the upcoming period [Macroeconomic Outlook](index=16&type=section&id=Macroeconomic%20Outlook) In the first half of 2025, the global economy experienced slow growth, uncertain trade policies, and intensified industry competition; this trend is expected to continue in the second half, with China's economy facing structural breakthroughs and domestic demand challenges, but policies like supply-side reform, AI+ technology manufacturing, and expanded opening-up will inject vitality - In the first half of 2025, the global economy faced a complex situation of escalating risks and uneven recovery, with slower global economic growth and institutions like the World Bank and IMF generally lowering their full-year growth forecasts[48](index=48&type=chunk) - China's economy achieved better-than-expected growth amidst internal and external pressures, but still faces unresolved deflationary pressure, increased employment pressure, and insufficient consumer confidence[48](index=48&type=chunk) - In the second half of 2025, the global economic situation is expected to generally continue the first half's trend, and China's economic development will face challenges of structural breakthroughs and domestic demand stabilization[49](index=49&type=chunk) - The vigorous promotion and implementation of policies such as Supply-Side Reform 2.0, AI+ technology manufacturing, stabilizing employment and expanding domestic demand, and expanding high-level opening-up will inject vitality into China's high-quality economic development[49](index=49&type=chunk) [Group Strategy and Operational Focus](index=17&type=section&id=Group%20Strategy%20and%20Operational%20Focus) In the second half of the year, the Group will continue to focus on its年初-established operational management objectives, including vigorously developing e-commerce platforms, strengthening supply chain management, and optimizing promotional expenses to enhance overall profitability [Human Resources Management](index=17&type=section&id=Human%20Resources%20Management) The Group enhances employee capabilities in nutritional supplements, maternal and infant nutrition, and cross-border e-commerce operations and promotion through regular comprehensive training and corporate culture education, while offering competitive compensation and benefits - As of June 30, 2025, the Group employed **481 staff** (including **350** in China, **128** in New Zealand, and **3** in Australia)[50](index=50&type=chunk) - Total salaries and related costs for the six months ended June 30, 2025, were approximately **RMB 51.5 million** (2024 H1: approximately **RMB 51.7 million**)[50](index=50&type=chunk) - The Group enhances employee capabilities in nutritional supplements, maternal and infant nutrition, and cross-border e-commerce operations and promotion through regular comprehensive training and corporate culture education[50](index=50&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=17&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities, nor did they hold any treasury shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[51](index=51&type=chunk) - During the reporting period, the Group did not hold any treasury shares[51](index=51&type=chunk) [Core Business Objectives](index=17&type=section&id=Core%20Business%20Objectives) The Group will focus on developing e-commerce platforms to expand sales and brand influence; strengthen supply chain management to enhance production capacity and operational efficiency; and optimize promotional expenses to improve overall profitability - Vigorously develop e-commerce platforms to continuously expand sales scale: optimize innovative promotion strategies to increase brand user numbers; for some core products, strive to achieve the goal of being the top seller in their category on e-commerce platforms for the full year, expanding brand influence; accelerate new product R&D[52](index=52&type=chunk) - Strengthen supply chain management, develop high-quality suppliers, enhance production capacity, timely meet customer demand, and strive to shorten production and procurement cycles to improve operational efficiency[52](index=52&type=chunk) - Optimize promotional expenses to enhance overall profitability[52](index=52&type=chunk) [Other Information](index=18&type=section&id=Other%20Information) This section provides additional corporate governance and administrative information, including compliance, post-reporting events, and board details [Standard Code for Securities Transactions](index=18&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company has adopted the Standard Code for Securities Transactions as set out in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed compliance during the reporting period and up to the announcement date - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[53](index=53&type=chunk) - The company has made specific enquiries with the Directors and Supervisors, and all Directors and Supervisors have confirmed that they have complied with the Standard Code for the six months ended June 30, 2025, and up to the date of this announcement[53](index=53&type=chunk) [Corporate Governance Code](index=18&type=section&id=Corporate%20Governance%20Code) The Board believes the company has complied with Part 2 of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules during the reporting period and up to the announcement date - The Directors believe that the company has complied with Part 2 of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules for the six months ended June 30, 2025, and up to the date of this announcement[54](index=54&type=chunk) [Events After the Reporting Period](index=18&type=section&id=Events%20After%20the%20Reporting%20Period%20for%20the%20Six%20Months%20Ended%20June%2030,%202025) As of the announcement date, no significant events affecting the Group occurred after the reporting period - No significant events affecting the Group occurred after the six months ended June 30, 2025, and up to the date of this announcement[55](index=55&type=chunk) [Interim Dividends](index=18&type=section&id=Interim%20Dividends) The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[56](index=56&type=chunk) [Review of Interim Results](index=18&type=section&id=Review%20of%20Interim%20Results) The Group's unaudited condensed consolidated interim results have been reviewed by the company's Audit Committee, comprising three independent non-executive directors, responsible for reviewing and monitoring financial reporting, internal controls, and risk management systems - The Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, have been reviewed by the company's Audit Committee[57](index=57&type=chunk) - The Audit Committee comprises three independent non-executive Directors, Mr. Yu Bo, Mr. Ye Bangyin, and Mr. Cheng Jianming, with Mr. Ye Bangyin serving as the Chairman of the Audit Committee[57](index=57&type=chunk) - The primary responsibilities of the Audit Committee are to review and monitor the company's financial reporting, internal control, and risk management systems[57](index=57&type=chunk) [Publication of Interim Report](index=19&type=section&id=Publication%20of%20Interim%20Report) This interim results announcement has been published on the HKEX and company websites, and the full interim report will be dispatched to shareholders and published online in due course - This interim results announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.zs-united.com)[58](index=58&type=chunk) - The Group's interim report for the six months ended June 30, 2025, containing all relevant information required by the HKEX Listing Rules, will be dispatched to the company's shareholders (upon request) and published on the aforementioned websites in due course[58](index=58&type=chunk) [Board Information](index=19&type=section&id=By%20Order%20of%20the%20Board) The announcement is issued by Mr. Gui Pinghu, Chairman of the Board, on behalf of the Board, and lists the executive and independent non-executive directors as of the announcement date - The announcement is issued by Mr. Gui Pinghu, Chairman of the Board of Nanjing ZhongSheng United Co., Ltd., on behalf of the Board[59](index=59&type=chunk) - As of the date of this announcement, the executive Directors are Mr. Gui Pinghu, Ms. Zhang Yuan, and Ms. Zhu Feifei; and the independent non-executive Directors are Mr. Yu Bo, Mr. Ye Bangyin, and Mr. Cheng Jianming[60](index=60&type=chunk)

Company Information and Financial Summary [Company Overview](index=1&type=section&id=Company%20Overview) Zhengye International Holdings Company Limited announced its interim results for the six months ended June 30, 2025, with stock code 3363 - Company Name: **ZHENGYE INTERNATIONAL HOLDINGS COMPANY LIMITED**[2](index=2&type=chunk) - Stock Code: **3363**[2](index=2&type=chunk) - Reporting Period: Six months ended **June 30, 2025**[2](index=2&type=chunk)[3](index=3&type=chunk) [Financial Summary](index=1&type=section&id=Financial%20Summary) For the six months ended June 30, 2025, the company's revenue decreased by 2.11% year-on-year, gross profit margin significantly declined to 9.09%, and profit attributable to owners of the company and basic earnings per share both substantially decreased Financial Summary for the Six Months Ended June 30 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 1,137,332 | 1,161,830 | -2.11% | | Gross Profit Margin | 9.09% | 14.08% | -4.99 percentage points | | Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) | 89,094 | 110,867 | -19.64% | | Profit and Total Comprehensive Income Attributable to Owners of the Company for the Period | 2,325 | 15,026 | -84.53% | | Return on Equity Attributable to Owners of the Company for the Period | 0.21% | 1.36% | -1.15 percentage points | | Basic Earnings Per Share (RMB cents) | 0.46 | 3.01 | -84.72% | Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue decreased by 2.11% year-on-year, with increased cost of sales leading to a 36.89% significant reduction in gross profit, while profit before tax and total comprehensive income for the period both substantially declined by 80.29% and 88.57% respectively Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 1,137,332 | 1,161,830 | -2.11% | | Cost of Sales | (1,033,911) | (998,232) | +3.57% | | Gross Profit | 103,421 | 163,598 | -36.89% | | Other Income | 42,804 | 34,170 | +25.27% | | Other Gains and Losses | 7,806 | (1,591) | N/A (from loss to profit) | | Distribution and Selling Expenses | (33,835) | (46,800) | -27.69% | | Administrative and Other Expenses | (57,940) | (66,391) | -12.73% | | Finance Costs | (21,187) | (23,135) | -8.42% | | Research and Development Expenses | (36,116) | (40,198) | -10.16% | | Profit Before Tax | 3,792 | 19,238 | -80.29% | | Income Tax Expense | (1,691) | (851) | +98.71% | | Profit and Total Comprehensive Income for the Period | 2,101 | 18,387 | -88.57% | | Profit for the Period Attributable to Owners of the Company | 2,325 | 15,026 | -84.53% | | Non-controlling Interests | (224) | 3,361 | N/A (from profit to loss) | | Basic Earnings Per Share (RMB cents) | 0.46 | 3.01 | -84.72% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly increased, non-current assets rose, while net current assets decreased, with a significant increase in bank and other borrowings leading to higher current and total liabilities Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | **Non-current Assets** | | | | | Property, Plant and Equipment | 1,468,012 | 1,427,194 | +2.86% | | Investment Properties | 143,876 | 115,138 | +24.96% | | Intangible Assets | 18,322 | 10,995 | +66.64% | | Total Non-current Assets | 1,777,012 | 1,726,327 | +2.94% | | **Current Assets** | | | | | Inventories | 212,352 | 200,510 | +5.91% | | Trade and Other Receivables | 728,077 | 686,735 | +6.02% | | Bank Balances and Cash | 198,228 | 187,379 | +5.79% | | Total Current Assets | 1,225,158 | 1,149,633 | +6.57% | | **Current Liabilities** | | | | | Trade and Other Payables | 337,852 | 362,337 | -6.76% | | Bank and Other Borrowings (due within one year) | 749,742 | 591,788 | +26.69% | | Total Current Liabilities | 1,102,088 | 971,159 | +13.48% | | Net Current Assets | 123,070 | 178,474 | -31.04% | | **Total Equity** | 1,409,043 | 1,406,942 | +0.15% | | **Non-current Liabilities** | | | | | Bank and Other Borrowings | 444,315 | 446,896 | -0.58% | | Total Non-current Liabilities | 491,039 | 497,859 | -1.37% | Notes to the Condensed Consolidated Financial Statements [Basis of Preparation and Principal Accounting Policies](index=5&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using the historical cost basis, with no significant impact from new HKFRS amendments applied this period - Preparation basis: **Hong Kong Accounting Standard 34** and **Appendix D2 of the Listing Rules**[8](index=8&type=chunk) - Accounting basis: **Historical cost basis**[9](index=9&type=chunk) - Application of new accounting policies: First-time application of amendments to **Hong Kong Financial Reporting Standards** had no significant impact on the financial position and performance for the current and prior periods[9](index=9&type=chunk) [Segment Information](index=6&type=section&id=Segment%20Information) The Group operates in packaging paper and paper packaging segments, with packaging paper revenue increasing and paper packaging revenue decreasing, leading to a slight decline in total group revenue, while packaging paper profit significantly decreased and paper packaging segment turned from profit to loss Segment Revenue and Profit (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue** | | | | | Packaging Paper | 815,784 | 792,912 | +2.88% | | Paper Packaging | 321,548 | 368,918 | -12.84% | | **Segment Profit/(Loss)** | | | | | Packaging Paper | 2,840 | 10,318 | -72.47% | | Paper Packaging | (1,467) | 13,200 | N/A (from profit to loss) | | Group Profit Before Tax | 3,792 | 19,238 | -80.29% | [Other Income](index=7&type=section&id=Other%20Income) For the six months ended June 30, 2025, the Group's other income increased by 25.27% year-on-year, primarily due to higher government grants and miscellaneous income Details of Other Income (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Interest Income from Bank Deposits | 1,282 | 1,659 | -22.72% | | Government Grants | 30,224 | 27,810 | +8.68% | | Miscellaneous Income | 11,269 | 4,671 | +141.25% | | Total | 42,804 | 34,170 | +25.27% | [Other Gains and Losses](index=8&type=section&id=Other%20Gains%20and%20Losses) During the reporting period, the Group's other gains and losses turned from a loss to a gain, primarily due to a net gain of approximately RMB8,454,000 from the disposal of investment properties - Net gain of approximately **RMB8,454,000** from the disposal of investment properties led to a shift from loss to gain in other gains and losses[15](index=15&type=chunk) - Net foreign exchange losses increased from **RMB48,000** to **RMB428,000**[15](index=15&type=chunk) - Net loss on disposal of property, plant and equipment decreased from **RMB1,543,000** to **RMB220,000**[15](index=15&type=chunk) [Finance Costs](index=8&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs decreased by 8.42% year-on-year, mainly due to reduced interest on bank and other borrowings Details of Finance Costs (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Interest on Bank Borrowings | 18,913 | 20,038 | -5.61% | | Interest on Other Borrowings | 1,705 | 1,984 | -14.06% | | Interest on Lease Liabilities | 569 | 680 | -16.32% | | Total | 21,187 | 23,135 | -8.42% | [Profit Before Tax and Income Tax Expense](index=8&type=section&id=Profit%20Before%20Tax%20and%20Income%20Tax%20Expense) The Group's profit before tax significantly decreased by 80.29%, while income tax expense increased by 98.71% year-on-year, with depreciation and amortization being key deductions, and Chinese subsidiaries benefiting from preferential tax rates - Key deductions from profit before tax included depreciation of property, plant and equipment of **RMB55,395,000** (2024: RMB61,870,000)[17](index=17&type=chunk) - Income tax expense increased from **RMB851,000** in 2024 to **RMB1,691,000** in 2025[18](index=18&type=chunk) - Chinese subsidiaries enjoy preferential tax rates of **15%** or a two-tier system based on their classification as high-tech enterprises or small-profit enterprises[19](index=19&type=chunk) [Dividends](index=9&type=section&id=Dividends) The Board of Directors decided not to declare an interim dividend for the six months ended June 30, 2025 - No interim dividend declared for the first half of **2025**[21](index=21&type=chunk)[74](index=74&type=chunk) [Earnings Per Share](index=9&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share significantly decreased to RMB0.46 cents from RMB3.01 cents in the prior year Basic Earnings Per Share (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company Used to Calculate Basic Earnings Per Share | 2,325 | 15,026 | -84.53% | | Number of Ordinary Shares Used to Calculate Basic Earnings Per Share | 500,000,000 | 500,000,000 | 0% | | Basic Earnings Per Share (RMB cents) | 0.46 | 3.01 | -84.72% | [Property, Plant and Equipment](index=10&type=section&id=Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the carrying amount of property, plant and equipment increased to RMB1,468,012,000, primarily due to additions of RMB98,974,000, offset by depreciation and disposals - Carrying amount of property, plant and equipment increased from **RMB1,427,194,000** as of January 1, 2025, to **RMB1,468,012,000** as of June 30, 2025[24](index=24&type=chunk) - Additions to plant and equipment during the period amounted to **RMB98,974,000**[24](index=24&type=chunk) - Depreciation during the period amounted to **RMB55,395,000**[24](index=24&type=chunk) [Investment Properties](index=10&type=section&id=Investment%20Properties) As of June 30, 2025, the carrying amount of investment properties increased to RMB143,876,000, mainly due to increased construction costs and transfers of investment properties under construction, partially offset by disposals - Carrying amount of investment properties increased from **RMB115,138,000** as of January 1, 2025, to **RMB143,876,000** as of June 30, 2025[25](index=25&type=chunk) - Construction costs incurred during the period amounted to **RMB38,729,000**[25](index=25&type=chunk) - Net gain of approximately **RMB8,454,000** from the disposal of investment properties during the period[15](index=15&type=chunk) [Intangible Assets](index=11&type=section&id=Intangible%20Assets) As of June 30, 2025, the carrying amount of intangible assets increased to RMB18,322,000, primarily due to new additions of RMB9,534,000 during the period, amortized on a straight-line basis over five years - Carrying amount of intangible assets increased from **RMB10,995,000** as of January 1, 2025, to **RMB18,322,000** as of June 30, 2025[27](index=27&type=chunk) - New intangible assets added during the period amounted to **RMB9,534,000**[27](index=27&type=chunk) - Intangible assets are amortized on a straight-line basis over **five years**[28](index=28&type=chunk) [Trade and Other Receivables](index=11&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables increased to RMB728,077,000, with a significant increase in trade receivables backed by bills and a change in the aging structure of trade receivables not backed by bills - Total trade and other receivables increased from **RMB686,735,000** as of December 31, 2024, to **RMB728,077,000** as of June 30, 2025[29](index=29&type=chunk) - Trade receivables backed by bills increased from **RMB204,515,000** to **RMB247,030,000**[29](index=29&type=chunk) - Among trade receivables not backed by bills, the proportion of **0-60 days** aging decreased, while **61-180 days** and above aging increased[31](index=31&type=chunk) - The Group provides an average credit period of **30 to 120 days** to trade customers[30](index=30&type=chunk) [Bank Balances and Cash / Pledged Bank Deposits](index=12&type=section&id=Bank%20Balances%20and%20Cash%20%2F%20Pledged%20Bank%20Deposits) As of June 30, 2025, bank balances and cash increased to RMB198,228,000, and pledged bank deposits rose to RMB76,232,000, serving as collateral for bank financing - Bank balances and cash increased from **RMB187,379,000** as of December 31, 2024, to **RMB198,228,000** as of June 30, 2025[6](index=6&type=chunk)[32](index=32&type=chunk) - Pledged bank deposits increased from **RMB64,428,000** as of December 31, 2024, to **RMB76,232,000** as of June 30, 2025, serving as collateral for bank financing[6](index=6&type=chunk)[32](index=32&type=chunk) - Bank balances bear interest at annual rates ranging from **0.05% to 1.8%**, while pledged bank deposits bear interest at annual rates ranging from **0.05% to 1.4%**[32](index=32&type=chunk) [Trade and Other Payables](index=13&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables decreased to RMB337,852,000, primarily due to a reduction in trade payables and secured bills payable - Total trade and other payables decreased from **RMB362,337,000** as of December 31, 2024, to **RMB337,852,000** as of June 30, 2025[33](index=33&type=chunk) - Trade payables decreased from **RMB227,394,000** to **RMB178,589,000**[33](index=33&type=chunk) - Bills payable (secured) increased from **RMB9,334,000** to **RMB52,429,000**[33](index=33&type=chunk) - Credit period for material purchases ranges from **30 to 120 days**[33](index=33&type=chunk) [Amounts Due to Directors](index=13&type=section&id=Amounts%20Due%20to%20Directors) As of June 30, 2025, amounts due to directors were unsecured, interest-free, and repayable on demand - Amounts due to directors are **unsecured, interest-free, and repayable on demand**[34](index=34&type=chunk) [Bank and Other Borrowings](index=14&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2025, total bank and other borrowings increased to RMB1,129,957,000, with a significant portion being secured borrowings and a notable increase in borrowings due within one year - Total bank and other borrowings increased from **RMB995,054,000** as of December 31, 2024, to **RMB1,129,957,000** as of June 30, 2025[35](index=35&type=chunk) - Borrowings due within one year increased from **RMB548,158,000** to **RMB685,642,000**[35](index=35&type=chunk) - Most borrowings consist of **secured bank borrowings (RMB1,014,445,000)** and **secured other borrowings (RMB115,512,000)**[35](index=35&type=chunk) - Fixed-rate borrowings have effective annual interest rates ranging from **0.68% to 5.98%**, while floating-rate borrowings range from **3.15% to 4.50%**[36](index=36&type=chunk) [Deferred Taxation](index=15&type=section&id=Deferred%20Taxation) As of June 30, 2025, net deferred tax liabilities decreased to RMB6,794,000 from RMB7,889,000 as of December 31, 2024, with no deferred tax liabilities recognized for taxable temporary differences related to undistributed earnings of Chinese subsidiaries - Net deferred tax liabilities decreased from **RMB7,889,000** as of December 31, 2024, to **RMB6,794,000** as of June 30, 2025[37](index=37&type=chunk) - No deferred tax liabilities were recognized for taxable temporary differences related to undistributed earnings of Chinese subsidiaries, amounting to approximately **RMB863,507,000**[38](index=38&type=chunk) [Share Capital](index=16&type=section&id=Share%20Capital) As of June 30, 2025, the company's issued share capital was HKD50,000,000, comprising 500,000,000 ordinary shares, with no changes during the reporting period - Issued share capital: **HKD50,000,000**[39](index=39&type=chunk) - Number of ordinary shares issued: **500,000,000** shares, with a par value of **HKD0.1** per share[39](index=39&type=chunk) - No changes in authorized and issued share capital during the reporting period[61](index=61&type=chunk) [Pledge of Assets](index=16&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group's total pledged assets increased to RMB653,654,000, primarily including buildings and construction in progress, plant and machinery, leasehold land, trade receivables backed by bills, pledged bank deposits, and inventories - Total pledged assets increased from **RMB599,729,000** as of December 31, 2024, to **RMB653,654,000** as of June 30, 2025[40](index=40&type=chunk) - Key pledged assets include **buildings and construction in progress (RMB236,316,000)**, **plant and machinery (RMB78,395,000)**, and **trade receivables backed by bills (RMB136,118,000)**[40](index=40&type=chunk) [Capital Commitments](index=17&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments (contracted and authorized) amounted to approximately RMB87,861,000, primarily for the acquisition of property, plant and equipment and investment properties, a significant decrease from the end of last year - Total capital commitments decreased from **RMB176,628,000** as of December 31, 2024, to **RMB87,861,000** as of June 30, 2025[42](index=42&type=chunk)[68](index=68&type=chunk) - Primarily for the acquisition of **property, plant and equipment** and **investment properties**[68](index=68&type=chunk) [Related Party Transactions and Balances](index=17&type=section&id=Related%20Party%20Transactions%20and%20Balances) The Group's related party balances primarily consist of amounts due to directors, and total remuneration for key management personnel decreased during the reporting period - Amounts due to directors are disclosed in the **condensed consolidated statement of financial position**[43](index=43&type=chunk) - Remuneration and other benefits for key management personnel decreased from **RMB11,478,000** in 2024 to **RMB9,285,000** in 2025[44](index=44&type=chunk) Management Discussion and Analysis [Business Review](index=18&type=section&id=Business%20Review) The Group manufactures paper packaging products and produces corrugated medium and kraftliner, aiming to be an eco-friendly packaging enterprise, with total revenue decreasing by 2.11% and profit attributable to owners of the company significantly down by 84.53% due to macroeconomic and trade policy impacts - Main business: Providing **paper packaging products** and integrated packaging solutions for manufacturers of home appliances, food, consumer electronics, cosmetics, etc.; producing **corrugated medium** and **kraftliner** using recycled waste paper[45](index=45&type=chunk) - Strategic goal: To become one of the **world's leading eco-friendly packaging ecosystem enterprises**[46](index=46&type=chunk) - Product scope: **Kraftliner cartons, color-printed cartons, honeycomb paper products, exquisite color box packaging, corrugated medium, kraftliner**[46](index=46&type=chunk) - Operating entities: Owns **10 wholly-owned subsidiaries** and **4 non-wholly-owned subsidiaries** in different regions of China[46](index=46&type=chunk) - Operating revenue: **RMB1,137,332,000**, a year-on-year decrease of **2.11%**[49](index=49&type=chunk) - Profit attributable to owners of the company: **RMB2,325,000**[52](index=52&type=chunk) - Basic earnings per share: **RMB0.0046**[52](index=52&type=chunk) [Macroeconomic Environment](index=19&type=section&id=Macroeconomic%20Environment) The global economic recovery remains weak with trade and policy uncertainties, while China's economy shows long-term positive trends, but traditional manufacturing and service sectors face significant transformation pressures - Global economic recovery is weak, with numerous uncertainties in the trade and policy environment[50](index=50&type=chunk) - China's economy maintains a long-term positive trend, with manufacturing demonstrating advantages in skill density, supply chain maturity, and industrial collaboration efficiency[50](index=50&type=chunk) - Traditional manufacturing and service industries face significant pressure for transformation and upgrading[50](index=50&type=chunk) [Paper Packaging Business Performance](index=19&type=section&id=Paper%20Packaging%20Business%20Performance) The paper packaging business saw a significant decline in sales unit price and gross profit margin, with revenue decreasing by 12.84% due to tariff increases and trade policy uncertainties, despite stable order volumes from new customer development - Export orders from existing downstream customers significantly declined due to tariff increases and trade policy uncertainties[51](index=51&type=chunk) - Order growth from newly developed fast-moving consumer goods and home appliance customers kept order volume largely stable[51](index=51&type=chunk) - Sales unit price significantly decreased by approximately **13.10%**[51](index=51&type=chunk) - Operating revenue was approximately **RMB321,548,000**, a year-on-year decrease of approximately **12.84%**[51](index=51&type=chunk) - Gross profit margin was approximately **15.44%**, a significant year-on-year decrease of approximately **8.05 percentage points**[51](index=51&type=chunk) - Raw paper prices significantly decreased by approximately **5.12%**[51](index=51&type=chunk) [Papermaking Business Performance](index=20&type=section&id=Papermaking%20Business%20Performance) The papermaking business achieved over 10% capacity increase through production line upgrades, leading to an 11.94% sales volume growth, despite an 8.09% drop in sales unit price and a 3.95% rise in raw material costs, resulting in a 2.88% revenue increase and a 3.12 percentage point decline in gross profit margin - Completed speed-up modifications for some paper machine production lines, increasing capacity by over **10%**[53](index=53&type=chunk) - Sales volume increased by approximately **11.94%** year-on-year[53](index=53&type=chunk) - Sales unit price significantly decreased by approximately **8.09%**[53](index=53&type=chunk) - Raw material waste paper prices increased by approximately **3.95%** year-on-year[53](index=53&type=chunk) - Operating revenue was approximately **RMB815,784,000**, a year-on-year increase of approximately **2.88%**[53](index=53&type=chunk) - Gross profit margin was approximately **6.59%**, a year-on-year decrease of approximately **3.12 percentage points**[53](index=53&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) The Group's total revenue for the first half decreased by 2.11% to RMB1,137,332,000, with gross profit margin falling from 14.08% to 9.09%, and profit attributable to owners of the company significantly declining to RMB2,325,000, mainly due to reduced sales unit prices in the paper packaging business and intensified industry competition - Group's total revenue was **RMB1,137,332,000**, a year-on-year decrease of **2.11%**[54](index=54&type=chunk) - Group's gross profit margin was **9.09%**, a significant decrease from **14.08%** in the prior year[54](index=54&type=chunk) - Profit attributable to owners of the company was **RMB2,325,000**, a significant decrease from **RMB15,026,000** in the prior year[55](index=55&type=chunk) - The papermaking segment stabilized market share and achieved sales volume growth through **technological innovation, capacity enhancement, and cost reduction and efficiency improvement**[54](index=54&type=chunk) - The paper packaging segment's gross profit margin significantly declined due to **trade policy uncertainties, decreased existing customer orders, and a substantial drop in sales unit prices**[55](index=55&type=chunk) [Business Outlook](index=21&type=section&id=Business%20Outlook) Looking ahead, global economic challenges persist, with China focusing on expanding domestic demand and consumption, while the paper packaging industry faces intense competition but also opportunities from AI technology and green transformation, prompting the Group to pursue green and intelligent transformation through technological innovation, industrial integration, and overseas business expansion with a 'long-termism' strategy - Global economy faces challenges with weak investment growth, and the Chinese government will adopt comprehensive strategies to address inflation, with **expanding domestic demand and promoting consumption** as key priorities[56](index=56&type=chunk) - The paper packaging industry faces intense competition, but the application of **AI technology** and **green transformation** under the 'dual carbon' goals present development opportunities[57](index=57&type=chunk) - The Group will leverage its integrated industry chain advantages to pursue **technological innovation, industrial integration, and business model transformation**, exploring low-carbon growth models[58](index=58&type=chunk) - Exploring expansion into **overseas packaging businesses** to seek new growth directions and strategic layouts[58](index=58&type=chunk) - Promoting enterprise transformation towards **green, intelligent, and digital intelligence**, centered on 'user needs', driven by 'technological innovation', and supported by 'ecological cooperation'[58](index=58&type=chunk) [Current Assets, Liquidity and Financial Resources](index=22&type=section&id=Current%20Assets%2C%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's net assets slightly increased, bank and cash balances rose, but total borrowings significantly increased, leading to a rise in the net gearing ratio from 70.23% to 81.91% and a slight decrease in the current ratio Summary of Liquidity and Financial Resources (As of June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Net Assets | 1,409,043 | 1,406,942 | +0.15% | | Bank and Cash Balances | 198,228 | 187,379 | +5.79% | | Total Borrowings | 1,194,057 | 1,038,684 | +14.96% | | Equity Attributable to Owners of the Company | 1,122,753 | 1,120,428 | +0.21% | | Current Ratio | 1.11 | 1.18 | -0.07 | | Net Gearing Ratio | 81.91% | 70.23% | +11.68 percentage points | - Primary sources of funds are **cash generated from operating activities** and **bank loans**[59](index=59&type=chunk) [Capital Structure](index=22&type=section&id=Capital%20Structure) As of June 30, 2025, the company's issued share capital was HKD50,000,000, comprising 500,000,000 ordinary shares, with no changes during the reporting period - Issued share capital: **HKD50,000,000**[61](index=61&type=chunk) - Number of ordinary shares issued: **500,000,000** shares, with a par value of **HKD0.1** per share[61](index=61&type=chunk) - No changes in authorized and issued share capital during the reporting period[61](index=61&type=chunk) [Cash Flow](index=22&type=section&id=Cash%20Flow) For the six months ended June 30, 2025, net cash flow from operating activities turned into an inflow of RMB3,666,000, with net cash outflow from investing activities of RMB109,204,000 and net cash inflow from financing activities of RMB116,387,000 - Net cash flow from operating activities: **RMB3,666,000** inflow in 2025 (2024: RMB298,220,000 outflow)[62](index=62&type=chunk) - Net cash flow from investing activities: **RMB109,204,000** outflow, primarily for the acquisition of long-term assets[62](index=62&type=chunk) - Net cash flow from financing activities: **RMB116,387,000** inflow, mainly comprising proceeds from borrowings and repayment of borrowings[64](index=64&type=chunk) - Group's net cash inflow: **RMB10,849,000** inflow in 2025 (2024: RMB29,659,000 outflow)[64](index=64&type=chunk) - If the IFRIC agenda decision were not applied, net cash from operating activities would increase by **RMB177,197,000**, and net cash from financing activities would decrease by the same amount[66](index=66&type=chunk) [Capital Expenditure](index=23&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group's total capital expenditure was approximately RMB83,129,000, with the papermaking division accounting for 80.11% and the packaging division for 19.89% Details of Capital Expenditure (For the six months ended June 30) | Division | Amount (RMB thousands) | Proportion | | :--- | :--- | :--- | | Papermaking Division | 66,593 | 80.11% | | Packaging Division | 16,536 | 19.89% | | Total | 83,129 | 100.00% | [Contingent Liabilities](index=24&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities or material litigation or arbitration - No significant contingent liabilities or material litigation or arbitration[69](index=69&type=chunk) [Foreign Exchange Risk](index=24&type=section&id=Foreign%20Exchange%20Risk) The Group primarily operates in China, with most assets, revenue, and cash settled in RMB, and the directors believe exchange rate fluctuations have no significant impact on performance, currently having no foreign exchange hedging policy but will monitor closely - Primarily operates in China, with most assets, revenue, and cash settled in **RMB**[70](index=70&type=chunk) - Directors believe exchange rate fluctuations have **no significant impact** on performance[70](index=70&type=chunk) - Currently has **no foreign exchange hedging policy**, but will monitor closely and consider hedging arrangements[70](index=70&type=chunk) [Human Resources Management](index=24&type=section&id=Human%20Resources%20Management) As of June 30, 2025, the Group had 2,605 employees, with production and quality control personnel accounting for the largest proportion, and R&D technical and engineering personnel making up 13.40% - Total number of employees: **2,605** (December 31, 2024: 2,705)[71](index=71&type=chunk) - Approximately **522** employees are engineers, technical personnel, or have higher education backgrounds[71](index=71&type=chunk) Employee Functional Distribution (As of June 30) | Function | Number of Employees | Proportion | | :--- | :--- | :--- | | Management and Administration | 348 | 13.36% | | Sales and Marketing | 115 | 4.41% | | Research and Development, Technical and Engineering | 349 | 13.40% | | Production and Quality Control | 1,793 | 68.83% | | Total | 2,605 | 100.00% | Other Information [Repurchase, Sale or Redemption of Securities](index=25&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20Securities) During the reporting period, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - No repurchase, sale, or redemption of listed securities during the reporting period[73](index=73&type=chunk) - The company held no treasury shares[73](index=73&type=chunk) [Dividend Policy](index=25&type=section&id=Dividend%20Policy) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - No interim dividend recommended for the first half of **2025**[74](index=74&type=chunk) [Corporate Governance](index=25&type=section&id=Corporate%20Governance) During the reporting period, the company consistently complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules and adopted most best practices - Complied with all applicable code provisions of the **Corporate Governance Code** set out in **Appendix C1 of the Listing Rules** during the reporting period[75](index=75&type=chunk) - Adopted most **best practices**[75](index=75&type=chunk) [Standard Securities Dealing Code for Directors](index=25&type=section&id=Standard%20Securities%20Dealing%20Code%20for%20Directors) All current directors confirmed compliance with the Standard Securities Dealing Code for Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules during the reporting period - All current directors confirmed compliance with the **Standard Code** set out in **Appendix C3 of the Listing Rules**[76](index=76&type=chunk) [Events After Reporting Period](index=25&type=section&id=Events%20After%20Reporting%20Period) No significant events affecting the Group occurred after the reporting period and up to the announcement date, other than those disclosed in the announcement - No significant events after the reporting period[77](index=77&type=chunk) [Review by Audit Committee](index=25&type=section&id=Review%20by%20Audit%20Committee) The Group's condensed consolidated financial statements for the six months ended June 30, 2025, although unaudited, have been reviewed by the company's Audit Committee, comprising all independent non-executive directors - Condensed consolidated financial statements are **unaudited**[78](index=78&type=chunk) - Reviewed by the company's **Audit Committee**, comprising all independent non-executive directors[78](index=78&type=chunk) [Publication of Interim Results and Interim Report](index=25&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The interim results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited and the company, with the interim report to be published in due course - Interim results announcement published on the websites of **Hong Kong Exchanges and Clearing Limited** and the **company**[79](index=79&type=chunk) - Interim report will be published on the aforementioned websites in due course[79](index=79&type=chunk) [Acknowledgement](index=26&type=section&id=Acknowledgement) The Board of Directors extends gratitude to the management team, employees for their contributions, and all shareholders and business partners for their support - The Board of Directors thanks the **management team and employees** for their contributions[80](index=80&type=chunk) - Appreciation to all **shareholders and business partners** for their support[80](index=80&type=chunk) - Information on **Board members**[81](index=81&type=chunk)

截至2025年6月30日止六個月之中期業績公告 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 MBV INTERNATIONAL LIMITED 中國大人國際有限公司 （ 於 開 曼 群 島 註 冊 成 立 之 有 限 公 司 ） （股份代號：1957） 財務摘要 截至2025年6月30日止六個月（「本期間」）： 中國大人國際有限公司（「本公司」）董事（「董事」）會（「董事會」）提呈本公司及其附屬公司 （統稱「本集團」）於本期間的未經審核中期業績，連同去年同期的比較數字如下。中期業 績未經外聘核數師審核，惟已經本公司審核委員會審閱。 — 1 — • 本集團（定義見下文）錄得未經審核收益約87,300,000令吉，較截至2024年6月30日止 六個月（「去年同期」）的約92,700,000令吉減少約5.8%； • 本集團於本期間錄得本公司擁有人應佔期內溢利約8,200,000令吉，較去年同期的約 6,200,000令吉增加約32.3%； • 本集團於 ...

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 之 內 容 概 不 負 責 ， 對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明 ， 並 明 確 表 示 ， 概 不 對 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 之 任 何 損 失 承 擔 任 何 責 任 。 ISP HOLDINGS LIMITED 昇柏控股有限公司 （於百慕達註冊成立之有限公司） （股份代號：02340） 截 至 2025 年 6 月 30 日 止 六 個 月 之 未 經 審 核 中 期 業 績 公 告 昇 柏 控 股 有 限 公 司 （「 本 公 司 」） 之 董 事 （「 董 事 」） 會 （「 董 事 會 」） 公 佈 本 公 司 及 其 附 屬 公 司（ 統 稱「 本 集 團 」）截 至 2 0 25 年 6 月 3 0 日 止 六 個 月（「 報 告 期 間 」） 之 未 經 審 核 中 期 業 績 。 財務概覽 | | 截至 6 月 30 日 | | | | | --- | --- ...

（於開曼群島註冊成立的有限公司） （股份代號：1782） 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 中 期 業 績 公 告 國 際 商 業 數 字 技 術 有 限 公 司（「本 公 司」）董 事（「董 事」）會（「董 事 會」）欣 然 宣 佈 本 公 司 及 其 附 屬 公 司（統 稱「本 集 團」）截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 的 未 經 審 核 中 期 簡 明 綜 合 財 務 報 表。 本 集 團 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 的 未 經 審 核 中 期 簡 明 綜 合 財 務 業 績 已 經 本 公 司 審 計 委 員 會 及 管 理 層 審 閱，彼 等 認 為 編 製 該 等 財 務 業 績 的 過 程 符 合 適 用 的 會 計 準 則、香 港 聯 合 交 易 所 有 限 公 司（「聯 交 所」）證 券 上 市 規 則（「上 市 規 則」）及 其 他 適 用 法 律 的 規 定，並 已 作 出 充 分 披 露。 香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 ...

[Financial Summary](index=1&type=section&id=Financial%20Summary) The group's financial performance for the six months ended June 30, 2025, showed a significant decline in revenue and a shift from profit to loss Financial Summary for the Six Months Ended June 30, 2025 | Metric | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 249,838 | 332,923 | -25.0% | | Gross Profit | 51,096 | 87,481 | -41.6% | | (Loss)/Profit Attributable to Owners of the Company | (40,978) | 3,426 | -1,296.1% | | Basic and Diluted (Loss)/Earnings Per Share (HK cents) | (5.9) | 0.5 | - | [Interim Results](index=1&type=section&id=Interim%20Results) The interim results reflect a significant decline in profitability and asset values, with a shift from profit to loss for the period [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The group recorded a loss of HKD 42,415 thousand for the period, a significant reversal from the prior year's profit, driven by revenue decline and increased expenses Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 249,838 | 332,923 | -25.0% | | Cost of Sales | (198,742) | (245,442) | -19.0% | | Gross Profit | 51,096 | 87,481 | -41.6% | | Other Income and Net Gains and Losses | (6,831) | 3,683 | -285.5% | | Distribution Expenses | (18,384) | (19,596) | -6.2% | | Administrative Expenses | (65,408) | (59,642) | +9.7% | | (Loss)/Profit Before Income Tax | (42,661) | 7,651 | -657.5% | | (Loss)/Profit for the Period | (42,415) | 2,092 | -2127.8% | | (Loss)/Profit Attributable to Owners of the Company | (40,978) | 3,426 | -1296.1% | | Basic and Diluted (Loss)/Earnings Per Share (HK cents) | (5.9) | 0.5 | - | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets decreased, with significant reductions in non-current and current assets, while current liabilities increased, leading to a decline in net assets Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current Assets | 255,180 | 282,670 | -9.7% | | Current Assets | 490,917 | 497,619 | -1.3% | | **Liabilities** | | | | | Current Liabilities | 210,848 | 172,078 | +22.5% | | Non-current Liabilities | 18,499 | 23,185 | -20.3% | | **Equity** | | | | | Net Assets | 516,750 | 585,026 | -11.6% | | Total Equity | 516,750 | 585,026 | -11.6% | - Financial assets at fair value through profit or loss significantly decreased from **HKD 29,469 thousand** on December 31, 2024, to **HKD 23 thousand** on June 30, 2025[6](index=6&type=chunk)[15](index=15&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) These notes provide essential details on the group's operations, accounting policies, segment information, and financial position for the interim period [1. General Information](index=6&type=section&id=1.%20General%20Information) The company is an investment holding company primarily engaged in trading, retail, wholesale, and distribution of kitchenware and household products, with no significant operational changes during the period - The company's principal activities are investment holding, with its major subsidiaries engaged in the trading, retail, wholesale, and distribution of kitchenware and household products, and raw material trading[8](index=8&type=chunk) - There were no significant changes in the group's operations during the period[8](index=8&type=chunk) - The company's ultimate holding company is City Concord Limited, controlled by Dr. Wong Siu Wah (Chairman and Chief Executive Officer)[9](index=9&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and Appendix 16 of the Listing Rules, providing explanations for significant changes since the 2024 annual report - The condensed consolidated interim financial statements are prepared in accordance with Appendix 16 of the Listing Rules and Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the HKICPA[10](index=10&type=chunk) - The statements are unaudited but have been reviewed by the Company's Audit Committee[12](index=12&type=chunk) - The condensed consolidated interim financial statements are presented in Hong Kong Dollars, the Company's functional currency, with all values rounded to the nearest thousand[12](index=12&type=chunk) [3. Adoption of Hong Kong Financial Reporting Standards](index=7&type=section&id=3.%20Adoption%20of%20Hong%20Kong%20Financial%20Reporting%20Standards) The group adopted the HKAS 21 amendment 'Lack of Exchangeability' during the interim period, which had no material impact on the reported amounts or disclosures - The group has adopted the amendment to Hong Kong Accounting Standard 21 'Lack of Exchangeability' issued by the HKICPA for the first time during the interim period[13](index=13&type=chunk) - The application of an amendment to a Hong Kong Financial Reporting Standard during the interim period had no material impact on the amounts reported and/or disclosures contained in the condensed consolidated interim financial statements[13](index=13&type=chunk) [4. Segment Information](index=7&type=section&id=4.%20Segment%20Information) The group operates in kitchenware and household products trading and raw materials trading, with the former experiencing a significant decline in revenue and a shift to loss, while the latter saw growth [4. (i) Operating Segment Information](index=7&type=section&id=4.%20%28i%29%20Operating%20Segment%20Information) The kitchenware and household products segment saw a 31.0% revenue decrease and a shift from profit to loss, while the raw materials trading segment experienced 69.1% revenue growth and a 264.5% increase in segment results - The group has two business components: (i) trading of kitchenware and household products, including drinkware, tools and gadgets, bakeware and accessories, and food preparation products; and (ii) trading of raw materials, primarily plastics and silicone[14](index=14&type=chunk) Operating Segment Revenue and Results | Metric | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | **Kitchenware and Household Products Trading** | | | | | Revenue | 216,115 | 312,985 | -31.0% | | Segment Results | (45,428) | 9,582 | -574.1% | | **Raw Materials Trading** | | | | | Revenue | 33,723 | 19,938 | +69.1% | | Segment Results | 4,393 | 1,208 | +264.5% | | **Total** | | | | | Revenue | 249,838 | 332,923 | -25.0% | | Segment Results | (41,035) | 10,790 | -480.3% | Other Segment Information | Metric | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Fair Value Loss on Investment Properties | (16,900) | (4,000) | | Depreciation of Property, Plant and Equipment | (13,257) | (9,093) | | Net Fair Value Gains on Financial Assets/Liabilities at Fair Value Through Profit or Loss | 5,686 | 2,717 | [4. (ii) Disaggregation of Revenue and Geographical Segment Information](index=9&type=section&id=4.%20%28ii%29%20Disaggregation%20of%20Revenue%20and%20Geographical%20Segment%20Information) Revenue from external customers showed a significant 47.5% decrease in the US market but a 13.7% increase in the Asian market, with Hong Kong being the primary operational location for non-current assets Revenue by Geographical Region | Region | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | United States | 94,925 | 181,110 | -47.5% | | Asia | 97,520 | 85,766 | +13.7% | | Europe | 42,381 | 53,859 | -21.3% | | Canada | 12,146 | 9,972 | +21.8% | | Other Locations | 2,866 | 2,216 | +29.3% | | **Total** | 249,838 | 332,923 | -25.0% | - Asian revenue primarily includes revenue from Mainland China and Hong Kong, increasing from **HKD 73,665 thousand** in the prior period to **HKD 83,835 thousand** in the current period[18](index=18&type=chunk) - As of June 30, 2025, and December 31, 2024, over **85%** of the group's non-current assets (excluding financial instruments and deferred tax assets) were physically located in Hong Kong[19](index=19&type=chunk) [4. (iii) Information about Major Customers](index=10&type=section&id=4.%20%28iii%29%20Information%20about%20Major%20Customers) For the six months ended June 30, 2025, three major customers contributed over 10% of the group's revenue, all from the kitchenware and household products trading segment Major Customer Revenue Contribution | Customer | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Company A | 38,195 | 74,917 | | Company B | 33,746 | 35,105 | | Company C | 36,565 | Not Applicable | - Revenue from these three customers (two for the six months ended June 30, 2024) was entirely derived from the segment engaged in trading kitchenware and household products[21](index=21&type=chunk) [5. Revenue](index=10&type=section&id=5.%20Revenue) The group's revenue primarily stems from the sale of kitchenware and household products (HKD 216,115 thousand) and raw materials (HKD 33,723 thousand) for the six months ended June 30, 2025 Revenue Composition | Revenue Source | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Sale of Kitchenware and Household Products | 216,115 | 312,985 | | Sale of Raw Materials | 33,723 | 19,938 | | **Total** | 249,838 | 332,923 | - Revenue from the sale of kitchenware and household products and raw materials is recognized when control of the goods has been transferred to the customer, the customer has sufficient control over the goods, and the group has no unfulfilled obligations that could affect the customer's acceptance of the goods[20](index=20&type=chunk) [6. Other Income and Net Gains and Losses](index=11&type=section&id=6.%20Other%20Income%20and%20Net%20Gains%20and%20Losses) Net other income and gains/losses shifted to a loss of HKD 6,831 thousand for the six months ended June 30, 2025, primarily due to a significant increase in fair value losses on investment properties Composition of Other Income and Net Gains and Losses | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Bank Interest Income | 645 | 1,434 | | Dividend Income from Listed Equity Securities | 1,778 | – | | Rental Income | 1,311 | 1,561 | | Recoveries from Customers | 194 | – | | Government Grants | 89 | 1,469 | | Net Fair Value Gains on Financial Assets/Liabilities at Fair Value Through Profit or Loss | 5,686 | 2,717 | | Fair Value Loss on Investment Properties | (16,900) | (4,000) | | Others | 366 | 502 | | **Total** | (6,831) | 3,683 | - Fair value losses on investment properties increased from **HKD 4,000 thousand** in the prior period to **HKD 16,900 thousand** in the current period[22](index=22&type=chunk) [7. Finance Costs](index=11&type=section&id=7.%20Finance%20Costs) Finance costs decreased by 7.2% to HKD 3,374 thousand for the six months ended June 30, 2025, mainly due to reduced interest expenses on bank borrowings Composition of Finance Costs | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest expenses on financial liabilities measured at amortized cost: | | | | Bank Borrowings | 1,605 | 2,058 | | Bank Overdrafts | 746 | 384 | | Lease Liabilities | 1,023 | 1,195 | | **Total** | 3,374 | 3,637 | - The decrease in finance costs was primarily attributable to reduced interest expenses on bank borrowings[23](index=23&type=chunk) [8. Loss/Profit Before Income Tax](index=12&type=section&id=8.%20Loss%2FProfit%20Before%20Income%20Tax) The group reported a loss before income tax of HKD 42,661 thousand for the six months ended June 30, 2025, a reversal from the prior year's profit, influenced by inventory costs, depreciation, and employee benefits Factors Affecting Loss/Profit Before Income Tax | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Cost of Inventories Recognized as Expense | 190,812 | 233,612 | | Provision for Impairment Loss on Trade Receivables | 223 | 191 | | Depreciation of Property, Plant and Equipment | 13,257 | 9,093 | | Research Expenses | 15 | 108 | | Short-term Lease Expenses | 1,504 | 650 | | Low-value Lease Expenses | 78 | 107 | | Total Employee Benefit Expenses (including Directors' Emoluments) | 31,014 | 31,251 | | Net Exchange Gains/(Losses) | 1,039 | (662) | - Depreciation of property, plant and equipment increased from **HKD 9,093 thousand** in the prior period to **HKD 13,257 thousand** in the current period[24](index=24&type=chunk) - Net exchange gains shifted from a loss of **HKD 662 thousand** in the prior period to a gain of **HKD 1,039 thousand** in the current period[24](index=24&type=chunk) [9. Income Tax (Credit)/Expense](index=12&type=section&id=9.%20Income%20Tax%20%28Credit%29%2FExpense) The group recorded an income tax credit of HKD 246 thousand for the six months ended June 30, 2025, compared to an expense in the prior year, mainly due to increased deferred tax credit and reduced current tax Composition of Income Tax (Credit)/Expense | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Tax attributable to the group's operations comprises: | | | | Current Tax - Hong Kong Profits Tax | 1,639 | 4,577 | | Current Tax - Income Tax Outside Hong Kong | 32 | 417 | | Current Tax - Withholding Tax Outside Hong Kong | – | 1,832 | | (Under)/Over Provision in Prior Years - Hong Kong Profits Tax | (3) | 18 | | Deferred Tax - Credit for the Period | (1,914) | (1,285) | | **Income Tax (Credit)/Expense** | (246) | 5,559 | - Hong Kong profits tax is provided at a rate of **16.5%** on estimated assessable profits for the year, with certain qualifying entities subject to an **8.25%** tax rate on the first **HKD 2,000,000** of assessable profits; Mainland China corporate income tax is calculated at **25%**[25](index=25&type=chunk) - No US income tax was provided for the six months ended June 30, 2025, as there were no assessable profits derived from the US[26](index=26&type=chunk) [10. Loss/Earnings Per Share](index=13&type=section&id=10.%20Loss%2FEarnings%20Per%20Share) Basic and diluted loss per share was 5.9 HK cents for the six months ended June 30, 2025, a reversal from the prior year's earnings, primarily due to the loss attributable to owners of the company [Basic Loss/Earnings Per Share](index=13&type=section&id=Basic%20Loss%2FEarnings%20Per%20Share) Basic loss per share was 5.9 HK cents, calculated based on a loss attributable to owners of HKD 40,978 thousand and a weighted average of 700,000,000 ordinary shares outstanding Basic Loss/Earnings Per Share | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company | (HKD 40,978,000) | HKD 3,426,000 | | Weighted Average Number of Ordinary Shares Outstanding | 700,000,000 shares | 700,000,000 shares | | Basic (Loss)/Earnings Per Share | (5.9 HK cents) | 0.5 HK cents | [Diluted Loss/Earnings Per Share](index=13&type=section&id=Diluted%20Loss%2FEarnings%20Per%20Share) Diluted loss/earnings per share is the same as basic loss/earnings per share, as there were no outstanding potential dilutive ordinary shares during the periods - Diluted loss/earnings per share is the same as basic loss/earnings per share because there were no outstanding potential dilutive ordinary shares for the six months ended June 30, 2025, and 2024[29](index=29&type=chunk) [11. Dividends](index=13&type=section&id=11.%20Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025, though a final dividend of 4.0 HK cents per share (totaling HKD 28,000 thousand) for the previous fiscal year was approved - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[30](index=30&type=chunk) Dividend Payment Details | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Final dividend approved and payable for the previous financial year | 28,000 (4.0 HK cents per share) | 14,000 (2.0 HK cents per share) | [12. Property, Plant and Equipment](index=14&type=section&id=12.%20Property%2C%20Plant%20and%20Equipment) The group acquired property, plant and equipment totaling approximately HKD 107 thousand for the six months ended June 30, 2025, a significant decrease from the prior year, and has pledged leased land and buildings as collateral for bank financing - For the six months ended June 30, 2025, the group acquired property, plant and equipment at a total cost of approximately **HKD 107 thousand**, compared to approximately **HKD 341 thousand** for the six months ended June 30, 2024[31](index=31&type=chunk) - As of June 30, 2025, the group had pledged leased land and buildings with a total carrying amount of approximately **HKD 14,300 thousand** as collateral for general bank financing granted to the group[31](index=31&type=chunk) [13. Inventories](index=14&type=section&id=13.%20Inventories) Total inventories decreased to HKD 82,940 thousand as of June 30, 2025, from HKD 90,708 thousand at December 31, 2024, primarily due to a reduction in raw materials Inventory Composition | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Goods Held for Resale | 33,810 | 34,446 | | Raw Materials | 49,130 | 56,262 | | **Total** | 82,940 | 90,708 | [14. Trade Receivables](index=14&type=section&id=14.%20Trade%20Receivables) Net trade receivables decreased to HKD 169,405 thousand as of June 30, 2025, from HKD 198,169 thousand at December 31, 2024, with a significant increase in receivables over 90 days Trade Receivables and Impairment Provision | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Receivables | 173,312 | 201,853 | | Less: Provision for Impairment Loss | (3,907) | (3,684) | | **Net** | 169,405 | 198,169 | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 Days | 47,506 | 51,874 | | 31 to 60 Days | 43,793 | 82,467 | | 61 to 90 Days | 15,969 | 51,614 | | Over 90 Days | 62,137 | 12,214 | | **Total** | 169,405 | 198,169 | - Trade receivables over **90 days** significantly increased from **HKD 12,214 thousand** on December 31, 2024, to **HKD 62,137 thousand** on June 30, 2025[33](index=33&type=chunk) [15. Financial Assets/Liabilities at Fair Value Through Profit or Loss](index=15&type=section&id=15.%20Financial%20Assets%2FLiabilities%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Financial assets at fair value through profit or loss significantly decreased to HKD 23 thousand (primarily derivative financial instruments) as of June 30, 2025, from HKD 29,469 thousand (primarily listed equity securities) at year-end 2024, with a notable reduction in financial liabilities Financial Assets/Liabilities at Fair Value Through Profit or Loss | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss: | | | | - Listed Equity Securities | – | 29,469 | | - Derivative Financial Instruments | 23 | – | | Financial liabilities at fair value through profit or loss: | | | | - Derivative Financial Instruments | (148) | (2,519) | | **Net** | (125) | 26,950 | - Derivative financial instruments refer to USD-denominated forward foreign exchange contracts, with a notional amount decreasing from **RMB 59,000,000** on December 31, 2024, to **RMB 6,000,000** on June 30, 2025[34](index=34&type=chunk) [16. Trade Payables](index=16&type=section&id=16.%20Trade%20Payables) Trade payables decreased to HKD 33,857 thousand as of June 30, 2025, from HKD 39,918 thousand at December 31, 2024, with credit terms generally ranging from 0 to 90 days Aging Analysis of Trade Payables | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 90 Days | 33,154 | 38,590 | | 91 to 180 Days | 703 | 1,197 | | 181 to 365 Days | – | 64 | | Over 365 Days | – | 67 | | **Total** | 33,857 | 39,918 | - The directors of the company believe that the carrying amounts of trade payables approximate their fair values[36](index=36&type=chunk) [17. Share Capital](index=16&type=section&id=17.%20Share%20Capital) As of June 30, 2025, the company's authorized share capital remained at HKD 100,000 thousand (10,000,000 thousand shares), and issued and fully paid share capital at HKD 7,000 thousand (700,000 thousand shares), consistent with December 31, 2024 Share Capital Structure | Item | June 30, 2025 (thousand shares) | June 30, 2025 (HKD thousands) | December 31, 2024 (thousand shares) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Authorized: Shares of HKD 0.01 par value each | 10,000,000 | 100,000 | 10,000,000 | 100,000 | | Issued and Fully Paid: Shares of HKD 0.01 par value each | 700,000 | 7,000 | 700,000 | 7,000 | [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the group's business and financial performance for the period, outlining future strategies, human resources, and liquidity management in a challenging global environment [Business Review](index=17&type=section&id=Business%20Review) The first half of 2025 saw continued global market volatility, influenced by tightening monetary policies, geopolitical tensions, and uncertain US tariff policies, suppressing consumer spending in the North American mid-to-high-end retail market - In the first half of 2025, global market conditions and the operating environment remained volatile and uncertain, primarily due to tightening monetary policies worldwide and ongoing geopolitical tensions[38](index=38&type=chunk) - Uncertainty and repeated extensions of US tariff policies further disrupted trade flows and suppressed profit margins[38](index=38&type=chunk) - Consumer spending habits in the mid-to-high-end priced houseware and drinkware retail markets in North America were also suppressed[38](index=38&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) The group's financial performance significantly deteriorated in the first half of 2025, shifting from profit to loss due to substantial revenue decline, narrower gross margins, fair value losses on investment properties, and increased operating costs [Revenue (Financial Review)](index=17&type=section&id=Revenue%20%28Financial%20Review%29) Revenue for the six months ended June 30, 2025, significantly decreased by 25.0% to HKD 249.8 million, primarily attributed to the uncertain outlook of US tariff policies Revenue Comparison | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | 249.8 | 332.9 | -25.0% | - This decrease in revenue was primarily due to the uncertain outlook of US tariff and expansion policies[39](index=39&type=chunk) [Gross Profit and Gross Margin](index=17&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by 41.6% to HKD 51.1 million, and gross margin declined by 5.8 percentage points to 20.5% for the six months ended June 30, 2025, mainly due to reduced revenue and suppressed consumer spending Gross Profit and Gross Margin Comparison | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | | Gross Profit | 51.1 million HKD | 87.5 million HKD | -41.6% | | Gross Margin | 20.5% | 26.3% | -5.8 percentage points | - The decline in gross margin was primarily attributable to suppressed customer consumption during the period[40](index=40&type=chunk) [Other Income and Net Gains and Losses (Financial Review)](index=17&type=section&id=Other%20Income%20and%20Net%20Gains%20and%20Losses%20%28Financial%20Review%29) Other income and net gains and losses decreased by 285.5% to a loss of HKD 6.8 million for the six months ended June 30, 2025, mainly due to fair value losses on investment properties Other Income and Net Gains and Losses Comparison | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change | | :--- | :--- | :--- | :--- | | Other Income and Net Gains and Losses | (6.8) | 3.7 | -285.5% | - The decrease was primarily due to fair value losses on investment properties, affected by the unfavorable conditions in the industrial and commercial real estate market[41](index=41&type=chunk) [Distribution Expenses](index=17&type=section&id=Distribution%20Expenses) Distribution expenses decreased by 6.2% to HKD 18.4 million for the six months ended June 30, 2025, primarily due to a corresponding reduction in marketing expenses and transportation costs with declining revenue Distribution Expenses Comparison | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change | | :--- | :--- | :--- | :--- | | Distribution Expenses | 18.4 | 19.6 | -6.2% | - This decrease was primarily attributable to a corresponding reduction in marketing expenses and transportation costs with the group's declining revenue[42](index=42&type=chunk) [Administrative Expenses](index=18&type=section&id=Administrative%20Expenses) Administrative expenses increased by 9.7% to HKD 65.4 million for the six months ended June 30, 2025, mainly due to depreciation and other operating costs incurred after the advanced manufacturing center commenced nano-fiber production Administrative Expenses Comparison | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change | | :--- | :--- | :--- | :--- | | Administrative Expenses | 65.4 | 59.6 | +9.7% | - This increase was primarily due to depreciation and other operating costs incurred after the group's advanced manufacturing center in Tseung Kwan O Industrial Estate commenced nano-fiber production operations[43](index=43&type=chunk) [Finance Costs (Financial Review)](index=18&type=section&id=Finance%20Costs%20%28Financial%20Review%29) Finance costs decreased by 7.2% to HKD 3.4 million for the six months ended June 30, 2025, primarily due to a reduction in bank borrowing interest rates Finance Costs Comparison | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change | | :--- | :--- | :--- | :--- | | Finance Costs | 3.4 | 3.6 | -7.2% | - The decrease in finance costs was primarily attributable to a reduction in bank borrowing interest rates[44](index=44&type=chunk) [Loss/Profit Attributable to Owners of the Company](index=18&type=section&id=Loss%2FProfit%20Attributable%20to%20Owners%20of%20the%20Company) The company reported a loss attributable to owners of HKD 41.0 million for the six months ended June 30, 2025, a significant reversal from the prior year's profit, driven by reduced revenue, fair value losses on investment properties, and increased operating expenses Loss/Profit Attributable to Owners of the Company Comparison | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change | | :--- | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company | (41.0) | 3.4 | -1296.1% | - The shift from profit to loss was primarily due to reduced revenue resulting from the uncertain outlook of US tariff and expansion policies, as well as continuous fair value losses on investment properties during the period[45](index=45&type=chunk) - Additionally, depreciation and other operating expenses increased as the group's advanced manufacturing center in Tseung Kwan O Industrial Estate commenced nano-fiber production operations[45](index=45&type=chunk) [Future Strategies](index=18&type=section&id=Future%20Strategies) The group is strategically adjusting by enhancing product lines through innovative design and technology upgrades, expanding its proprietary product portfolio, and entering new markets to offset demand slowdowns and capitalize on Asia-Pacific growth opportunities - The group is undergoing strategic adjustments, strengthening its product lines through innovative design and technological upgrades, expanding its proprietary product portfolio, and entering new markets[46](index=46&type=chunk) - This transformation helps offset the slowdown in demand caused by ongoing geopolitical tensions for brand owners, while focusing on growth opportunities in the Asia-Pacific market[46](index=46&type=chunk) - The first commercial launch of the nano-enhanced product line is planned for the fourth quarter of 2025, with these innovative technologies expected to significantly enhance the drinkware business[47](index=47&type=chunk) - The group anticipates these strategic initiatives will begin to positively impact performance in 2026[48](index=48&type=chunk) [Employees and Remuneration Policy](index=19&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the group's employee count decreased to 151, with a slight reduction in total staff costs, as it aims to streamline its organizational structure and retain talent through competitive remuneration Employee Count and Costs | Metric | June 30, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Employee Count | 151 persons | 163 persons | -7.36% | | Total Staff Costs (HKD millions) | 31.0 | 31.3 | -0.96% | - The group will continue to streamline its organizational structure through natural attrition and workflow re-engineering to enhance operational efficiency[49](index=49&type=chunk) - The group offers competitive remuneration packages, including salaries, medical insurance, discretionary bonuses, and participates in MPF schemes for Hong Kong employees and state-operated retirement benefit schemes for Mainland China employees[49](index=49&type=chunk) [Significant Investments Held and Future Plans for Material Investments in Capital Assets](index=19&type=section&id=Significant%20Investments%20Held%20and%20Future%20Plans%20for%20Material%20Investments%20in%20Capital%20Assets) As of June 30, 2025, the group held no significant investments other than investment properties and financial assets at fair value through profit or loss as disclosed in the condensed consolidated statement of financial position - As of June 30, 2025, no significant investments were held other than investment properties and financial assets at fair value through profit or loss as disclosed in the condensed consolidated statement of financial position[51](index=51&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=19&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) For the six months ended June 30, 2025, the group did not undertake any material acquisitions or disposals of subsidiaries and associates - For the six months ended June 30, 2025, the group did not undertake any material acquisitions or disposals of subsidiaries and associates[52](index=52&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=19&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The group manages its capital structure to ensure going concern and maximize shareholder returns, with increased cash and bank balances, higher bank borrowings, and an elevated gearing ratio, while maintaining ample bank financing facilities [Cash and Bank Balances and Borrowings](index=20&type=section&id=Cash%20and%20Bank%20Balances%20and%20Borrowings) Cash and bank balances increased to HKD 183.0 million as of June 30, 2025, primarily denominated in USD, RMB, and HKD, while bank borrowings rose to HKD 115.3 million and bank overdrafts significantly decreased Cash and Borrowings Situation | Metric | June 30, 2025 (HKD millions) | December 31, 2024 (HKD millions) | Change | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 183.0 | 116.7 | +56.8% | | Bank Borrowings | 115.3 | 68.1 | +69.3% | | Bank Overdrafts | 1.0 | 28.6 | -96.5% | - For the six months ended June 30, 2025, the annual interest rates for both bank borrowings and bank overdrafts decreased[54](index=54&type=chunk) [Cash Flow](index=20&type=section&id=Cash%20Flow) Operating activities generated HKD 51.2 million in cash for the six months ended June 30, 2025, a significant improvement from the prior year's cash used, primarily due to large customer orders received near period-end, while net cash from investing activities decreased and net cash from financing activities increased Cash Flow Comparison | Cash Flow Type | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | | :--- | :--- | :--- | | Cash from/(used in) Operating Activities | 51.2 (Generated) | (24.5) (Used) | | Net Cash from Investing Activities | 2.1 | 7.6 | | Net Cash Inflow/(Outflow) from Financing Activities | 39.3 (Inflow) | (26.6) (Outflow) | - Cash generated from operating activities was primarily attributable to large customer orders received by the group near the end of the period[55](index=55&type=chunk) - The decrease in net cash from investing activities was mainly due to reduced purchases of property, plant and equipment during the period[56](index=56&type=chunk) - The increase in net cash inflow from financing activities was due to an increase in bank borrowings during the period[56](index=56&type=chunk) [Gearing Ratio](index=20&type=section&id=Gearing%20Ratio) The group's gearing ratio, calculated as total borrowings divided by total equity, increased to 28.4% as of June 30, 2025, from 22.5% at December 31, 2024 Gearing Ratio Comparison | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio (including lease liabilities) | 28.4% | 22.5% | | Gearing Ratio (excluding lease liabilities) | 23.3% | 17.2% | [Bank Facilities](index=20&type=section&id=Bank%20Facilities) As of June 30, 2025, the group had total bank facilities of HKD 430.9 million, with HKD 116.3 million utilized, representing a utilization rate of 27.0%, indicating ample available financing Bank Facilities Situation | Metric | June 30, 2025 (HKD millions) | December 31, 2024 (HKD millions) | | :--- | :--- | :--- | | Total Bank Facilities | 430.9 | 430.9 | | Utilized Amount | 116.3 | 96.7 | | Utilization Rate | 27.0% | 22.4% | - Due to financial support from banks and a low utilization rate, the group has reserved ample financing facilities for future drawdown[58](index=58&type=chunk) [Exposure to Foreign Exchange Risk](index=21&type=section&id=Exposure%20to%20Foreign%20Exchange%20Risk) The group is primarily exposed to foreign exchange risk in USD and RMB, as revenue is mainly USD-denominated while cost of sales is in HKD and RMB, and manages this risk primarily through forward foreign exchange contracts - The group's revenue is primarily denominated in USD, while its cost of sales is mainly denominated in HKD and RMB, thus exposing it primarily to foreign exchange risk in USD and RMB[59](index=59&type=chunk) - The group primarily uses forward foreign exchange contracts to hedge foreign exchange risk in its ordinary course of business[59](index=59&type=chunk) [Pledge of Assets](index=21&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the group had pledged leased land and buildings, investment properties, and pledged bank deposits totaling approximately HKD 14.3 million, HKD 92.9 million, and HKD 20.7 million respectively, as collateral for general bank financing Pledged Assets Situation | Asset Type | June 30, 2025 (HKD millions) | December 31, 2024 (HKD millions) | | :--- | :--- | :--- | | Leased Land and Buildings | 14.3 | 14.5 | | Investment Properties | 92.9 | 109.8 | | Pledged Bank Deposits | 20.7 | 20.5 | [Contingent Liabilities](index=21&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 (December 31, 2024: nil)[61](index=61&type=chunk) [Capital Commitments](index=21&type=section&id=Capital%20Commitments) As of June 30, 2025, the group's capital commitments amounted to approximately HKD 2.0 million, primarily for the purchase and addition of property, plant and equipment, consistent with the prior year-end Capital Commitments | Item | June 30, 2025 (HKD millions) | December 31, 2024 (HKD millions) | | :--- | :--- | :--- | | Purchase and Addition of Property, Plant and Equipment | 2.0 | 2.0 | [Corporate Governance and Other Information](index=21&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's commitment to corporate governance, compliance with trading standards, audit committee functions, dividend policy, and information dissemination practices [Corporate Governance Code](index=21&type=section&id=Corporate%20Governance%20Code) The company adheres to the Corporate Governance Code, with the exception of the combined roles of Chairman and CEO, which the Board believes ensures consistent leadership and effective strategic planning - The company has adopted the code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[63](index=63&type=chunk) - The company has complied with the Corporate Governance Code, except for code provision C.2.1, which stipulates that the roles of chairman and chief executive of a listed issuer should be separate and not performed by the same individual[63](index=63&type=chunk) - The Board believes that the benefits of combining the roles of Chairman and Chief Executive Officer ensure consistent leadership direction within the group, enabling more effective and swift overall strategic planning[64](index=64&type=chunk) [Model Code for Securities Transactions by Directors](index=22&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The directors have adopted the Model Code for Securities Transactions by Directors of Listed Issuers and confirmed full compliance with its required standards during the period - The directors have adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules as the code of conduct for directors' dealings in the company's securities[65](index=65&type=chunk) - Following specific enquiries with all directors, all directors have confirmed their full compliance with the required standards of dealing set out in the Model Code during the period and up to the date of this announcement[65](index=65&type=chunk) [Audit Committee](index=22&type=section&id=Audit%20Committee) The Audit Committee, established in accordance with Listing Rule 3.21, is responsible for reviewing and overseeing the group's financial reporting, risk management, and internal controls, and has reviewed the interim financial statements - The company's Audit Committee was established in accordance with Listing Rule 3.21 and is responsible for reviewing and overseeing the group's financial reporting process, risk management, and internal controls[66](index=66&type=chunk) - The Audit Committee has reviewed the company's unaudited condensed interim financial statements for the six months ended June 30, 2025, and the accounting principles and practices adopted[66](index=66&type=chunk) [Interim Dividend](index=22&type=section&id=Interim%20Dividend) 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 (six months ended June 30, 2024: nil)[67](index=67&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=22&type=section&id=Purchase%20%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025 - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[68](index=68&type=chunk) [Publication of Information on the HKEX and Company Website](index=23&type=section&id=Publication%20of%20Information%20on%20the%20HKEX%20and%20Company%20Website) This results announcement is published on the HKEX and company websites, and the interim report for the six months ended June 30, 2025, will be dispatched to shareholders and posted on these websites in due course - This results announcement is published on the HKEX website www.hkexnews.hk and the company's website www.kingsflair.com.hk[69](index=69&type=chunk) - The company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and posted on the respective websites of the HKEX and the company in due course[69](index=69&type=chunk)

[Company Overview](index=1&type=section&id=Company%20Overview) [Performance Summary](index=1&type=section&id=Performance%20Summary) Revenue grew 17.5% to RMB 1,045.1 million, but significant declines in gross profit and net profit drove margins and earnings per share lower Performance Summary for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,045.1 | 889.6 | +17.5% | | Gross Profit | 160.2 | 181.6 | -11.8% | | Gross Profit Margin | 15.3% | 20.4% | -5.1pp | | Profit for the Year | 24.4 | 47.0 | -48.1% | | Net Profit Margin | 2.3% | 5.3% | -3.0pp | | Profit for the Year Attributable to Owners of the Company | 22.6 | 45.3 | -50.1% | | Basic Earnings Per Share (RMB Yuan) | 0.15 | 0.31 | -51.6% | | Cash and Cash Equivalents | 585.9 | 883.0 | -33.6% | | GFA Under Management (Million sq.m.) | 47.4 | 43.5 | +9.0% | [Corporate Information](index=6&type=section&id=Corporate%20Information) The company was established in China in 2020, listed on the Hong Kong Stock Exchange in 2021, and primarily provides property management services in China - The company was established in China on December 22, 2020, and its H-shares were listed on the Main Board of the Hong Kong Stock Exchange on November 10, 2021[8](index=8&type=chunk) - The Group is primarily engaged in providing property management and related services in China[9](index=9&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim financial report is prepared under IAS 34, reviewed by KPMG, and includes an amendment to IAS 21 with no material impact - The interim financial report is prepared in accordance with the Listing Rules of the Hong Kong Stock Exchange and International Accounting Standard 34 "Interim Financial Reporting"[10](index=10&type=chunk) - The report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[11](index=11&type=chunk) - An amendment to IAS 21 was adopted during the period, but it had no significant impact on this report as there were no transactions involving non-convertible foreign currencies[12](index=12&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Revenue grew 17.5%, but faster cost growth, market competition, and impairment losses led to a 48.1% decline in profit for the period Abridged Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,045,087 | 889,622 | +17.5% | | Operating Costs | (884,899) | (708,033) | +25.0% | | Gross Profit | 160,188 | 181,589 | -11.8% | | Other (Expenses)/Income | (13,242) | 401 | -3400% | | Administrative Expenses | (81,283) | (84,714) | -4.0% | | Operating Profit | 25,589 | 58,216 | -56.0% | | Profit Before Tax | 32,979 | 62,167 | -47.0% | | Profit for the Period | 24,403 | 46,973 | -48.1% | | Profit Attributable to Equity Shareholders of the Company | 22,624 | 45,293 | -50.1% | | Basic Earnings Per Share (RMB Yuan) | 0.15 | 0.31 | -51.6% | [Revenue and Operating Costs](index=2&type=section&id=Revenue%20and%20Operating%20Costs) - Total revenue **increased by 17.5%** year-on-year to RMB 1,045.1 million, mainly due to expanded GFA under management and an increase in projects[4](index=4&type=chunk)[55](index=55&type=chunk) - Operating costs **grew by 25.0%** year-on-year to RMB 884.9 million, outpacing revenue growth primarily due to increased subcontracting costs from expanded GFA[4](index=4&type=chunk)[56](index=56&type=chunk) [Gross Profit and Gross Margin](index=2&type=section&id=Gross%20Profit%20and%20Gross%20Margin) - Gross profit **decreased by 11.8%** year-on-year to RMB 160.2 million, with the gross margin falling from 20.4% to **15.3%**[4](index=4&type=chunk)[57](index=57&type=chunk) - The decline in gross margin was mainly due to intense industry competition, which required increased upfront and quality maintenance investments in property management projects to gain market share[57](index=57&type=chunk) [Other Expenses and Income](index=8&type=section&id=Other%20Expenses%20and%20Income) - Other (expenses)/income shifted from an income of RMB 0.4 million in the same period of 2024 to an expense of RMB 13.2 million, a **decrease of approximately 3,400%**[20](index=20&type=chunk)[59](index=59&type=chunk) - The change was primarily due to fair value losses on investment properties and impairment losses on modular housing equipment[20](index=20&type=chunk)[59](index=59&type=chunk) [Operating Profit and Profit Before Tax](index=2&type=section&id=Operating%20Profit%20and%20Profit%20Before%20Tax) - Operating profit **decreased by 56.0%** year-on-year to RMB 25.6 million, and profit before tax **decreased by 47.0%** to RMB 33.0 million[4](index=4&type=chunk) [Income Tax and Profit for the Period](index=2&type=section&id=Income%20Tax%20and%20Profit%20for%20the%20Period) - Profit for the period **decreased by 48.1%** year-on-year to RMB 24.4 million, while profit attributable to equity shareholders **decreased by 50.1%** to RMB 22.6 million[5](index=5&type=chunk)[60](index=60&type=chunk) - The net profit margin fell to **2.3%**, mainly due to increased upfront and quality maintenance investments in property management projects and impairment losses on equipment from lower rental prices for modular housing[60](index=60&type=chunk) - Income tax expense was RMB 8.6 million, a decrease from RMB 15.2 million in the prior-year period, primarily due to lower profits[4](index=4&type=chunk)[25](index=25&type=chunk) [Earnings Per Share](index=3&type=section&id=Earnings%20Per%20Share) - Basic earnings per share **decreased to RMB 0.15** from RMB 0.31 in the same period of 2024[5](index=5&type=chunk)[25](index=25&type=chunk) - Diluted earnings per share were the same as basic earnings per share, as the Group had no dilutive potential ordinary shares[25](index=25&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) Total assets slightly decreased, cash and cash equivalents reduced, but the debt-to-asset ratio improved, while total equity saw a minor decline due to fair value changes in other financial assets Abridged Consolidated Statement of Financial Position as of June 30, 2025 | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 446,271 | 451,948 | -1.3% | | Current Assets | 1,996,073 | 2,089,496 | -4.5% | | Current Liabilities | 1,430,667 | 1,517,166 | -5.7% | | Net Current Assets | 565,406 | 572,330 | -1.2% | | Total Assets less Current Liabilities | 1,011,677 | 1,024,278 | -1.2% | | Non-current Liabilities | 118,376 | 124,772 | -5.1% | | Net Assets | 893,301 | 899,506 | -0.7% | | Total Equity | 893,301 | 899,506 | -0.7% | | Cash and Cash Equivalents | 585,935 | 883,012 | -33.6% | | Debt-to-Asset Ratio | 63.4% | 64.6% | -1.2pp | [Assets](index=4&type=section&id=Assets) - Non-current assets decreased slightly, mainly due to fair value losses on investment properties and impairment of property, plant and equipment[6](index=6&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - Current assets **decreased by 4.5%**, primarily due to the allocation of some idle funds to time deposits with maturities over three months, as well as payments of prior-year dividends and supplier accounts[6](index=6&type=chunk)[61](index=61&type=chunk) [Liabilities](index=4&type=section&id=Liabilities) - Current liabilities **decreased by 5.7%** and non-current liabilities **decreased by 5.1%**, resulting in a decline in total liabilities[6](index=6&type=chunk)[7](index=7&type=chunk) - The debt-to-asset ratio improved from 64.6% as of December 31, 2024, to **63.4%**, indicating a slight improvement in financial leverage[61](index=61&type=chunk) [Equity](index=5&type=section&id=Equity) - Total equity **decreased slightly by 0.7%** to RMB 893.3 million, mainly affected by fair value changes in other financial assets[7](index=7&type=chunk)[61](index=61&type=chunk) [Business Review and Operational Analysis](index=7&type=section&id=Business%20Review%20and%20Operational%20Analysis) [Overall Business Performance](index=14&type=section&id=Overall%20Business%20Performance) Total revenue grew 17.5%, driven by growth across all three segments, with property management services remaining the primary contributor Revenue Breakdown by Business Segment for the Six Months Ended June 30, 2025 | Business Segment | 2025 (RMB Thousand) | Revenue Share (%) | 2024 (RMB Thousand) | Revenue Share (%) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 745,627 | 71.3 | 615,433 | 69.2 | 21.2 | | Value-added Services to Non-property Owners | 122,836 | 11.8 | 106,083 | 11.9 | 15.8 | | Community Value-added Services | 176,624 | 16.9 | 168,106 | 18.9 | 5.1 | | Total | 1,045,087 | 100.0 | 889,622 | 100.0 | 17.5 | - The Group's total revenue **grew by 17.5%** year-on-year to RMB 1,045.1 million, driven by all three business segments[55](index=55&type=chunk) [Property Management Services](index=14&type=section&id=Property%20Management%20Services) Revenue from property management services grew 21.2% to RMB 745.6 million, driven by an expanded GFA of 47.4 million sq.m. and third-party market expansion - Revenue from property management services **grew by 21.2%** year-on-year to RMB 745.6 million, accounting for approximately **71.3% of total revenue**[34](index=34&type=chunk)[53](index=53&type=chunk) - GFA under management increased to **47.4 million sq.m.**, with GFA from third-party projects growing by **19.8%** to 24.9 million sq.m[35](index=35&type=chunk) - Newly signed GFA was approximately **2.6 million sq.m.**, a year-on-year increase of 5.6%; 28 new comprehensive property management projects were added, with third-party projects accounting for **89.3%**[36](index=36&type=chunk) [Revenue and GFA Under Management](index=14&type=section&id=Revenue%20and%20GFA%20Under%20Management) Details of GFA Under Management and Number of Projects for Property Management Services as of June 30, 2025 | Project Source | 2025 GFA (Thousand sq.m.) | 2025 Share (%) | 2025 No. of Projects | 2024 GFA (Thousand sq.m.) | 2024 Share (%) | 2024 No. of Projects | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beijing Urban Construction Group and its JVs or associates | 22,478 | 47.5 | 140 | 22,677 | 52.2 | 144 | | Third Parties | 24,887 | 52.5 | 149 | 20,778 | 47.8 | 123 | | Total | 47,365 | 100.0 | 289 | 43,455 | 100.0 | 267 | - Revenue from non-residential property management services **grew significantly by 32.3%** to RMB 441.8 million, accounting for **59.2% of total property management service revenue**, indicating effective portfolio adjustment[37](index=37&type=chunk)[38](index=38&type=chunk) [Market Expansion and Project Types](index=15&type=section&id=Market%20Expansion%20and%20Project%20Types) - Newly acquired projects featured more high-quality large-scale projects, a leading position in administrative office properties, steady progress in university and research institute business, rapid expansion in rail transit projects, and the first-time expansion into the new museum property sector[37](index=37&type=chunk) Revenue, GFA, and Number of Projects for Property Management Services by Property Type as of June 30, 2025 | Property Type | 2025 Revenue (RMB Thousand) | 2025 Revenue Share (%) | 2025 GFA (Thousand sq.m.) | 2025 GFA Share (%) | 2025 No. of Projects | 2024 Revenue (RMB Thousand) | 2024 Revenue Share (%) | 2024 GFA (Thousand sq.m.) | 2024 GFA Share (%) | 2024 No. of Projects | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Residential Properties | 303,865 | 40.8 | 28,333 | 59.8 | 158 | 281,562 | 45.8 | 27,675 | 63.7 | 156 | | Non-residential Properties | 441,762 | 59.2 | 19,032 | 40.2 | 131 | 333,871 | 54.2 | 15,780 | 36.3 | 111 | | Total | 745,627 | 100.0 | 47,365 | 100.0 | 289 | 615,433 | 100.0 | 43,455 | 100.0 | 267 | [Service Quality and Operational Management](index=16&type=section&id=Service%20Quality%20and%20Operational%20Management) - The Group adhered to a "people-oriented" approach to enhance service quality, revised inspection standards for various property types, upgraded university service standards, and introduced a tiered service model for university property staffing[39](index=39&type=chunk) - In 2025, the Group's brand value achieved breakthrough growth, rising to **16th place** in the China Property Service Top 100 ranking and receiving over 20 awards[39](index=39&type=chunk) - In operational management, the company strengthened its project pre-planning mechanism, implemented lean management, and continued efforts in accounts receivable collection and governance of loss-making or inefficient projects[40](index=40&type=chunk) [Digitalization](index=17&type=section&id=Digitalization) - The overall plan for the company's digital platform construction was completed, integrating the "Jia Xiang Hui" platform with the finance-business integration platform, and adding modules such as visitor appointments and delivery personnel identity registration[40](index=40&type=chunk) - A "400 + online" dual-dimensional satisfaction survey system was established, and a smart dormitory management system was launched in school projects, enriching personalized application scenarios[40](index=40&type=chunk) [Value-added Services to Non-property Owners](index=17&type=section&id=Value-added%20Services%20to%20Non-property%20Owners) Revenue from these services grew 15.8% to RMB 122.8 million, driven by engineering, sales office, and other services, though tenant and construction site services declined - Revenue from value-added services to non-property owners **grew by 15.8%** year-on-year to RMB 122.8 million, accounting for approximately **11.8% of total revenue**[41](index=41&type=chunk)[44](index=44&type=chunk)[53](index=53&type=chunk) [Service Types and Revenue](index=17&type=section&id=Service%20Types%20and%20Revenue) Revenue Breakdown for Value-added Services to Non-property Owners for the Six Months Ended June 30, 2025 | Service Type | 2025 Revenue (RMB Thousand) | 2025 Revenue Share (%) | 2024 Revenue (RMB Thousand) | 2024 Revenue Share (%) | | :--- | :--- | :--- | :--- | :--- | | Engineering, Operation and Maintenance Services | 43,577 | 35.5 | 35,047 | 33.0 | | Tenant Sourcing and Management Services | 16,754 | 13.6 | 26,772 | 25.2 | | Sales Office and Showroom Management and Delivery Services | 26,383 | 21.5 | 17,894 | 16.9 | | Construction Site Property and Modular Housing Leasing Services | 7,498 | 6.1 | 11,134 | 10.5 | | Other Services | 28,624 | 23.3 | 15,236 | 14.4 | | Total | 122,836 | 100.0 | 106,083 | 100.0 | [Engineering, Operation and Maintenance Services](index=18&type=section&id=Engineering,%20Operation%20and%20Maintenance%20Services) - Revenue from engineering, operation and maintenance services **grew by 24.3%** year-on-year to RMB 43.6 million, mainly benefiting from a continuous increase in IFM service projects and new client acquisition[44](index=44&type=chunk) - The Group secured 7 new clients from government, corporate, university, and hospital sectors, and explored IFM and energy management to reduce building energy consumption and carbon emissions through technology[44](index=44&type=chunk) [Tenant Sourcing and Management Services](index=18&type=section&id=Tenant%20Sourcing%20and%20Management%20Services) - Revenue from tenant sourcing and management services was RMB 16.8 million, accounting for approximately **13.6% of revenue** from value-added services to non-property owners[45](index=45&type=chunk) - Amid low vacancy rates in the office market, the company increased customer stickiness through diversified marketing initiatives and enhanced services[45](index=45&type=chunk) [Sales Office and Showroom Management and Delivery Services](index=18&type=section&id=Sales%20Office%20and%20Showroom%20Management%20and%20Delivery%20Services) - Revenue from sales office and showroom management and delivery services **grew by 47.4%** year-on-year to RMB 26.4 million, mainly due to service extensions and new project acquisitions[45](index=45&type=chunk) - Services covered 30 projects across multiple regions including Beijing, Hebei, Sichuan, Chongqing, and Hainan, demonstrating strengthening market expansion and service capabilities[45](index=45&type=chunk) [Construction Site Property and Modular Housing Leasing Services](index=19&type=section&id=Construction%20Site%20Property%20and%20Modular%20Housing%20Leasing%20Services) - Revenue from construction site property and modular housing leasing services **decreased by 32.7%** year-on-year to RMB 7.5 million, mainly due to the completion of key projects and a decline in market rents for modular housing[46](index=46&type=chunk) - The company is focusing on service innovation, strengthening market penetration, and seeking to utilize existing modular housing to build and operate "Builders' Homes" projects to increase revenue[46](index=46&type=chunk) [Other Value-added Services to Non-property Owners](index=19&type=section&id=Other%20Value-added%20Services%20to%20Non-property%20Owners) - Other non-property owner services revenue achieved **significant growth of 87.9%** to RMB 28.6 million, primarily driven by specialized cleaning and landscaping engineering services, particularly for metro projects[46](index=46&type=chunk) [Community Value-added Services](index=19&type=section&id=Community%20Value-added%20Services) Revenue grew 5.1% to RMB 176.6 million, driven by the promotion of livelihood-related businesses and exploration of community facility renewal services - Revenue from community value-added services **grew by 5.1%** year-on-year to RMB 176.6 million, accounting for approximately **16.9% of total revenue**[47](index=47&type=chunk)[49](index=49&type=chunk)[53](index=53&type=chunk) - The growth was mainly due to the company's increased promotion of livelihood-related businesses within community value-added services and the gradual exploration of community facility and equipment renewal services[49](index=49&type=chunk) [Service Types and Revenue](index=19&type=section&id=Service%20Types%20and%20Revenue) Revenue Breakdown for Community Value-added Services for the Six Months Ended June 30, 2025 | Service Type | 2025 Revenue (RMB Thousand) | 2025 Revenue Share (%) | 2024 Revenue (RMB Thousand) | 2024 Revenue Share (%) | | :--- | :--- | :--- | :--- | :--- | | Heating Services | 76,625 | 43.4 | 75,824 | 45.1 | | Catering Services | 37,965 | 21.5 | 42,122 | 25.1 | | Car Park Operation Services | 35,476 | 20.1 | 32,017 | 19.0 | | Other Services | 26,558 | 15.0 | 18,143 | 10.8 | | Total | 176,624 | 100.0 | 168,106 | 100.0 | [Heating Services](index=20&type=section&id=Heating%20Services) - Revenue from heating services **grew by 1.1%** year-on-year to RMB 76.6 million, accounting for approximately **43.4% of community value-added services**[49](index=49&type=chunk) - The Group provided heating operation services for 36 projects, with a total heating area of nearly **4.73 million sq.m.**, covering over 38,000 households[49](index=49&type=chunk) - The company continued to improve heating equipment upgrades and renovations, using technology for energy saving and emission reduction, and exploring intelligent variable frequency heating management[49](index=49&type=chunk) [Catering Services](index=20&type=section&id=Catering%20Services) - Revenue from catering services **decreased by 9.9%** year-on-year to RMB 38.0 million, mainly affected by changes in client budgets and demand[50](index=50&type=chunk) - The Group signed 2 new group catering projects and continued to provide catering services to ByteDance Group, enhancing its professional capabilities and market competitiveness[50](index=50&type=chunk) [Car Park Operation Services and Other Community Value-added Services](index=21&type=section&id=Car%20Park%20Operation%20Services%20and%20Other%20Community%20Value-added%20Services) - Revenue from car park operation services and other community value-added services **grew by 23.7%** to RMB 62.0 million[51](index=51&type=chunk) - The growth was mainly driven by the promotion of livelihood-related businesses, existing home improvement services (revenue of nearly RMB 6.0 million), and exploration of community renewal businesses (revenue of nearly RMB 4.0 million)[51](index=51&type=chunk) - The Group is actively exploring entry into the community elderly care service sector to meet customer needs and achieve business growth[51](index=51&type=chunk) [Financial Position and Liquidity](index=23&type=section&id=Financial%20Position%20and%20Liquidity) [Current Assets and Capital Structure](index=23&type=section&id=Current%20Assets%20and%20Capital%20Structure) The Group maintains a sound financial position, though cash decreased due to fund allocation to time deposits, dividend payments, and industry payment cycles - Current assets were approximately RMB 1,996.1 million, a **decrease of 4.5%** from December 31, 2024[61](index=61&type=chunk) - Cash and cash equivalents were approximately RMB 585.9 million, a **decrease of 33.6%** from December 31, 2024[61](index=61&type=chunk) - The decrease in cash was mainly due to the allocation of some idle funds to time deposits with maturities over three months, payment of prior-year dividends and supplier accounts, and the industry practice of customers paying property fees in the second half of the year[61](index=61&type=chunk) [Property, Plant and Equipment and Right-of-use Assets](index=23&type=section&id=Property,%20Plant%20and%20Equipment%20and%20Right-of-use%20Assets) These assets decreased by RMB 14.6 million, primarily due to increased depreciation and an impairment loss recognized on modular housing equipment - Property, plant and equipment and right-of-use assets were approximately RMB 185.2 million, a **decrease of RMB 14.6 million** from December 31, 2024[62](index=62&type=chunk) - The decrease was mainly due to increased depreciation and an impairment loss recognized on modular housing equipment[62](index=62&type=chunk) [Investment Properties](index=24&type=section&id=Investment%20Properties) Investment properties decreased by RMB 1.9 million, primarily attributable to fair value changes in investment real estate properties - Investment properties were approximately RMB 105.6 million, a **decrease of RMB 1.9 million** from December 31, 2024[63](index=63&type=chunk) - The decrease was mainly attributable to fair value changes in investment real estate properties[63](index=63&type=chunk) [Trade and Other Receivables and Prepayments](index=11&type=section&id=Trade%20and%20Other%20Receivables%20and%20Prepayments) These balances increased by RMB 103.9 million, mainly due to industry payment cycles and increased bid deposits and utility advances from market expansion - Trade and other receivables and prepayments were approximately RMB 901.5 million, an **increase of RMB 103.9 million** from December 31, 2024[27](index=27&type=chunk)[64](index=64&type=chunk) - The increase was mainly due to the industry practice of customers paying property fees in the second half of the year, leading to higher trade receivables[64](index=64&type=chunk) - The increase in other receivables was primarily due to higher bid deposits from market expansion and increased advances for water, electricity, and gas fees from business growth[64](index=64&type=chunk) Details of Trade and Other Receivables and Prepayments as of June 30, 2025 | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Receivables (net of provision) | 822,607 | 699,608 | | Amounts due from related parties | 14,075 | 16,018 | | Interest Receivable | 3,338 | 2,400 | | Deposits | 23,433 | 18,865 | | Other Receivables (net of provision) | 10,189 | 9,357 | | Prepayments | 13,888 | 38,175 | | Deductible VAT input tax | 14,971 | 14,166 | | **Total** | **901,493** | **797,560** | [Trade and Other Payables](index=12&type=section&id=Trade%20and%20Other%20Payables) These balances decreased by RMB 34.2 million, mainly due to payments made to suppliers during the reporting period - Trade and other payables were approximately RMB 1,013.6 million, a **decrease of RMB 34.2 million** from December 31, 2024[29](index=29&type=chunk)[65](index=65&type=chunk) - The decrease was mainly due to payments made to suppliers during the reporting period[65](index=65&type=chunk) Details of Trade and Other Payables as of June 30, 2025 | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Payables | 591,821 | 600,963 | | Amounts due to related parties | 10,243 | 8,064 | | Accrued wages and other benefits | 23,069 | 20,071 | | Other taxes and charges payable | 45,105 | 52,393 | | Deposits | 57,433 | 62,875 | | Receipts in advance | 86,894 | 80,017 | | Housing maintenance funds payable | 131,273 | 156,376 | | Other payables and accrued expenses | 67,797 | 67,067 | | **Total** | **1,013,635** | **1,047,826** | [Capital Expenditure](index=24&type=section&id=Capital%20Expenditure) Capital expenditure decreased by 39.0% year-on-year to RMB 6.9 million, mainly due to reduced payments for modular housing purchases - Capital expenditure was approximately RMB 6.9 million, a **decrease of 39.0%** from RMB 11.3 million in the same period of 2024[66](index=66&type=chunk) - The decrease was mainly due to reduced payments for modular housing purchases; capital expenditure in the current period was primarily for office equipment[66](index=66&type=chunk) [Borrowings and Pledge of Assets](index=24&type=section&id=Borrowings%20and%20Pledge%20of%20Assets) As of the end of the reporting period, the Group had no borrowings or bank loans and had not pledged any assets, indicating a sound financial structure - As of the end of the reporting period, the Group had **no borrowings or bank loans**[67](index=67&type=chunk) - As of the end of the reporting period, the Group had **not pledged any assets**[68](index=68&type=chunk) [Other Important Information](index=25&type=section&id=Other%20Important%20Information) [Material Investments, Acquisitions and Disposals, and Future Plans](index=25&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals,%20and%20Future%20Plans) The Group had no material investments, acquisitions, or disposals during the period and will continue to seek new business development opportunities - During the reporting period, the Group had **no material investments, acquisitions, or disposals**[69](index=69&type=chunk) - The Board has not approved other material investments or acquisitions or disposals of material capital assets but will continue to seek new opportunities for business development[69](index=69&type=chunk) [Use of Proceeds from Listing](index=25&type=section&id=Use%20of%20Proceeds%20from%20Listing) Net proceeds of approximately HK$246.91 million from the H-share listing have been utilized as planned, with the remainder held in interest-bearing deposits - The net proceeds from the listing were approximately **HK$246.91 million**[70](index=70&type=chunk) - As of December 16, 2024, the Board approved a change in the proposed use of approximately HK$151.73 million of unutilized proceeds[70](index=70&type=chunk) - As of the end of the reporting period, the proceeds have been used as planned, and the unused portion has been placed as interest-bearing deposits in domestic fundraising bank accounts[70](index=70&type=chunk) Details on the Use of Proceeds from Listing as of June 30, 2025 | Original Planned Use | Original Planned Amount (HK$ Million) | Unutilized Proceeds as of Dec 31, 2024 (HK$ Million) | Revised Use | Actual Amount Used for the Six Months Ended June 30, 2025 (HK$ Million) | Unutilized Proceeds as of June 30, 2025 (HK$ Million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Strategic investments and acquisitions | 148.15 | 91.04 | Strategic investments and acquisitions | 17.40 | 73.64 | | Enhancing digital and intelligent management systems | 24.69 | 15.17 | Enhancing digital and intelligent management systems | 1.25 | 13.92 | | Expanding value-added services | 12.35 | 7.59 | Expanding value-added services | 0.63 | 6.96 | | Working capital and general corporate purposes | 61.73 | 37.93 | Working capital and general corporate purposes | 3.48 | 34.45 | | **Total** | **246.91** | **151.73** | **Total** | **22.76** | **128.97** | [Contingent Liabilities and Foreign Exchange Risk](index=27&type=section&id=Contingent%20Liabilities%20and%20Foreign%20Exchange%20Risk) The Group had no significant contingent liabilities and does not expect significant foreign exchange risk as its operations are primarily conducted in RMB - As of the end of the reporting period, the Group had **no significant contingent liabilities**[72](index=72&type=chunk) - The Group conducts its business in RMB and does not expect to face significant risks related to exchange rate fluctuations; it currently does not employ a foreign exchange hedging policy[73](index=73&type=chunk) [Events After the Reporting Period](index=27&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events that could materially affect the Group's operational and financial performance have occurred since the end of the reporting period - Other than disclosed in this announcement, no significant events that could materially affect the Group's operational and financial performance occurred between the end of the reporting period and the date of this announcement[74](index=74&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 1,869 employees and maintains a competitive, performance-oriented remuneration plan with comprehensive benefits - As of June 30, 2025, the Group had **1,869 employees** (December 31, 2024: 1,871)[75](index=75&type=chunk) - The company has established a market-based, competitive, and performance-oriented remuneration plan, providing comprehensive benefits such as pensions and medical insurance[75](index=75&type=chunk) - The company emphasizes recruiting outstanding talent, providing continuous training programs and career development opportunities to build teams of executives, project managers, and professional talents[75](index=75&type=chunk) [Corporate Governance and Securities Transactions](index=27&type=section&id=Corporate%20Governance%20and%20Securities%20Transactions) The company has adopted and complied with the Corporate Governance Code and the Model Code for Securities Transactions by Directors as set out in the Listing Rules - The company has adopted and complied with the Corporate Governance Code contained in Appendix C1 of the Listing Rules of the Stock Exchange[76](index=76&type=chunk) - The company has adopted and complied with the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix C3 of the Listing Rules, and all directors have confirmed compliance[77](index=77&type=chunk) [Review of Accounts and Dividend](index=28&type=section&id=Review%20of%20Accounts%20and%20Dividend) The Audit Committee has reviewed the unaudited interim results, and the Board does not recommend the payment of an interim dividend for the period - The Audit Committee has reviewed the unaudited interim results for the six months ended June 30, 2025, and considers them to be in compliance with applicable accounting standards[80](index=80&type=chunk) - The Board of Directors **does not recommend the payment of an interim dividend** for the six months ended June 30, 2025[81](index=81&type=chunk) [Publication of Interim Results](index=28&type=section&id=Publication%20of%20Interim%20Results) The interim results announcement is available on the company's and the Stock Exchange's websites, with the interim report to be dispatched to shareholders in due course - The interim results announcement has been published on the company's website (www.bcjps.com) and the Stock Exchange's website (www.hkexnews.hk)[82](index=82&type=chunk) - The interim report will be dispatched to the company's shareholders and published on the aforementioned websites in due course[82](index=82&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) This report presents the unaudited interim condensed consolidated financial statements and management's discussion and analysis for the six months ended June 30, 2025 [Disclaimer](index=1&type=section&id=Disclaimer) HKEX and HKSE are not responsible for the content's accuracy or completeness and disclaim liability for any losses incurred from reliance on this announcement - HKEX is not responsible for the content, accuracy, or completeness of this announcement, and disclaims liability for any losses[1](index=1&type=chunk) [Company Information](index=1&type=section&id=Company%20Information) China Boton Group Company Limited's Board approved the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, reviewed by the Audit Committee - China Boton Group Company Limited (Stock Code: 3318) Board approved the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025[2](index=2&type=chunk) - The interim financial statements have been reviewed by the Company's Audit Committee[2](index=2&type=chunk) [Unaudited Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents China Boton Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, including the balance sheet, income statement, and comprehensive income statement [Interim Condensed Consolidated Balance Sheet](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, the Group's total assets slightly increased, driven by non-current asset growth, while current assets decreased; total liabilities and equity remained relatively stable Interim Condensed Consolidated Balance Sheet (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 4,590,960 | 4,434,214 | | Current assets | 1,719,706 | 1,863,711 | | **Total Assets** | **6,310,666** | **6,297,925** | | **Equity** | | | | Attributable to owners of the Company | 3,133,854 | 3,140,955 | | Non-controlling interests | 277,609 | 268,323 | | **Total Equity** | **3,411,463** | **3,409,278** | | **Liabilities** | | | | Non-current liabilities | 1,246,529 | 1,071,645 | | Current liabilities | 1,652,674 | 1,817,002 | | **Total Liabilities** | **2,899,203** | **2,888,647** | - Non-current assets increased, primarily driven by growth in property, plant, and equipment[3](index=3&type=chunk) - Current assets decreased, mainly due to reductions in inventories, trade and other receivables, and cash and cash equivalents[3](index=3&type=chunk) [Interim Condensed Consolidated Income Statement](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group's revenue and gross profit significantly declined, leading to a substantial decrease in profit for the period and a loss attributable to owners Interim Condensed Consolidated Income Statement (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 637,753 | 750,975 | | Cost of sales | (438,894) | (445,344) | | Gross profit | 198,859 | 305,631 | | Operating profit | 33,725 | 109,237 | | Profit before income tax | 10,840 | 81,230 | | Profit for the period | 8,707 | 62,682 | | Attributable to owners of the Company | (8,119) | 44,332 | | Basic and diluted (loss)/earnings per share (RMB) | (0.01) | 0.04 | - Revenue decreased by **15.1% year-on-year**, and gross profit decreased by **34.9% year-on-year**[5](index=5&type=chunk) - Profit for the period significantly decreased by **86.1% year-on-year**, with profit attributable to owners of the Company turning into a loss[5](index=5&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive income significantly decreased, mainly due to reduced profit for the period and changes in currency translation differences, resulting in a loss attributable to owners Interim Condensed Consolidated Statement of Comprehensive Income (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the period | 8,707 | 62,682 | | Currency translation differences | 2,604 | (3,292) | | Total comprehensive income for the period | 11,311 | 59,390 | | Attributable to owners of the Company | (4,875) | 42,461 | - Total comprehensive income for the period decreased by **80.9% year-on-year**, with the portion attributable to owners of the Company turning into a loss[7](index=7&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim condensed consolidated financial statements, covering company information, accounting policies, financial risk management, key estimates, segment information, and specific balance sheet and income statement items [General Information](index=6&type=section&id=General%20Information) China Boton Group, established in Cayman Islands in 2005 and listed on HKEX, primarily produces and sells flavors, fragrances, and e-cigarette products in China and Asia, with interim financial information presented in RMB - The Group's principal business involves the production and sale of flavors, fragrances, and e-cigarette products[8](index=8&type=chunk) - The Company was incorporated in the Cayman Islands on March 9, 2005, and listed on the Hong Kong Stock Exchange on December 9, 2005[8](index=8&type=chunk)[9](index=9&type=chunk) - The interim financial information is presented in **RMB** and was approved for issue by the Board on August 22, 2025[10](index=10&type=chunk)[11](index=11&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim financial statements are prepared in accordance with HKAS 34 and should be read with the annual financial statements; new and revised standards adopted have no material impact - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA[13](index=13&type=chunk) - The adoption of new and revised standards by the Group had no material impact on the financial performance and position for the current and prior periods[14](index=14&type=chunk) - Standards issued but not yet effective are not expected to have a significant impact on the entity in current or future reporting periods[15](index=15&type=chunk) [Financial Risk Management](index=7&type=section&id=Financial%20Risk%20Management) The Group faces market risks (exchange rate, interest rate), credit risk, and liquidity risk, with full details available in the annual financial statements - The Group is exposed to market risks (foreign exchange, fair value interest rate, cash flow interest rate), credit risk, and liquidity risk[16](index=16&type=chunk) - The interim financial statements should be read in conjunction with the annual financial statements for the year ended December 31, 2024, for complete financial risk management information[16](index=16&type=chunk) [Critical Accounting Estimates and Judgments](index=7&type=section&id=Critical%20Accounting%20Estimates%20and%20Judgments) Preparing interim financial statements involves management judgments, estimates, and assumptions, which may differ from actual results, with significant judgments consistent with the prior annual consolidated financial statements - The preparation of interim financial statements requires management to make judgments, estimates, and assumptions, and actual results may differ[17](index=17&type=chunk) - The significant judgments made during this period are consistent with those applied in the consolidated financial statements for the year ended December 31, 2024[17](index=17&type=chunk) [Revenue and Segment Information](index=8&type=section&id=Revenue%20and%20Segment%20Information) The Group operates in five segments: flavor enhancers, food flavors, daily use flavors, e-cigarette products, and investment properties; total revenue decreased year-on-year, primarily due to a significant decline in flavor enhancers - The Group's business is divided into five segments: flavor enhancers, food flavors, daily use flavors, e-cigarette products, and investment properties[18](index=18&type=chunk) Segment Revenue (RMB thousands) | Segment | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Flavor enhancers | 179,463 | 308,057 | -41.7% | | Food flavors | 93,051 | 90,286 | +3.1% | | Daily use flavors | 73,115 | 69,567 | +5.0% | | E-cigarette products | 267,233 | 256,132 | +4.3% | | Investment properties | 24,891 | 26,933 | -7.6% | | **Total** | **637,753** | **750,975** | **-15.1%** | - The flavor enhancers segment's operating profit turned from profit to loss, and the e-cigarette products segment's loss widened[20](index=20&type=chunk)[22](index=22&type=chunk) [Property, Plant and Equipment and Intangible Assets](index=10&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) As of June 30, 2025, the Group's net book value of property, plant, and equipment increased, while intangible assets slightly decreased, with a significant increase in additions to property, plant, and equipment during the period Property, Plant and Equipment and Intangible Assets (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | January 1, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net book value of property, plant and equipment at period end | 2,164,053 | 1,528,866 | | Net book value of intangible assets at period end | 1,597,156 | 1,721,629 | | Additions to property, plant and equipment (current period) | 204,622 | 72,496 | - Additions to property, plant, and equipment for the six months ended June 30, 2025, amounted to **RMB 204,622 thousands**, significantly higher than **RMB 72,496 thousands** in the same period last year[23](index=23&type=chunk) [Leases](index=10&type=section&id=Leases) As of June 30, 2025, both right-of-use assets and lease liabilities increased, along with higher depreciation and interest expenses for right-of-use assets during the period Lease Information (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Right-of-use assets | 156,771 | 152,934 | | Lease liabilities | 15,356 | 9,879 | Lease Expenses (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation expense for right-of-use assets | 5,630 | 4,227 | | Interest expense | 445 | 195 | - Lease liabilities (current and non-current) increased from **RMB 9,879 thousands** as of December 31, 2024, to **RMB 15,356 thousands** as of June 30, 2025[24](index=24&type=chunk) [Trade and Other Receivables](index=11&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, both net trade receivables and other receivables decreased, primarily due to a reduction in trade receivables, particularly those less than three months old Trade and Other Receivables (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables – net | 385,511 | 466,841 | | Other receivables – net | 489,653 | 473,222 | | **Total** | **875,808** | **938,946** | Aging Analysis of Trade Receivables (RMB thousands) | Aging of Trade Receivables | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Less than three months | 208,247 | 300,331 | | Over three months but not over one year | 153,163 | 149,314 | | Over one year | 267,746 | 265,288 | - Net trade receivables decreased from **RMB 466,841 thousands** to **RMB 385,511 thousands**, mainly due to a reduction in trade receivables aged less than three months[26](index=26&type=chunk)[27](index=27&type=chunk) - Trade bills are due within six months[27](index=27&type=chunk) [Share Capital](index=12&type=section&id=Share%20Capital) As of June 30, 2025, the Company's issued and fully paid ordinary share capital remained unchanged, with 1,080,512 thousand shares outstanding Share Capital (RMB thousands) | Indicator | June 30, 2025 (thousand shares) | Share Capital (RMB thousands) | Share Premium (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Issued ordinary shares | 1,080,512 | 101,522 | 1,292,432 | 1,393,954 | - The share capital structure remained unchanged from January 1, 2024, to June 30, 2025[29](index=29&type=chunk) [Shares Held Under Share Award Scheme](index=12&type=section&id=Shares%20Held%20Under%20Share%20Award%20Scheme) The Company adopted a share award scheme on December 11, 2023, to reward employees; as of June 30, 2025, 500,000 shares held by the trustee remained unawarded, with no shares awarded during the period - The Company adopted a share award scheme on December 11, 2023, to reward employees or service providers who have contributed to the Company and its subsidiaries[30](index=30&type=chunk) - No shares were awarded under the share award scheme for the six months ended June 30, 2025[30](index=30&type=chunk) - As of June 30, 2025, the trustee held **500,000 shares** that had not yet been awarded[30](index=30&type=chunk) [Trade and Other Payables](index=13&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables significantly decreased, primarily due to reductions in trade payables, accrued wages, and other payables Trade and Other Payables (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 292,667 | 432,587 | | Payables for consolidated businesses | 150,000 | 150,000 | | Accrued wages | 14,720 | 44,447 | | Other taxes payable | 27,543 | 35,136 | | Amount due to a related party | 27,470 | — | | **Total** | **629,461** | **807,141** | Aging Analysis of Trade Payables (RMB thousands) | Aging of Trade Payables | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Less than three months | 133,881 | 290,632 | - Total trade payables decreased from **RMB 432,587 thousands** to **RMB 292,667 thousands**, with the largest decrease in trade payables aged less than three months[31](index=31&type=chunk)[32](index=32&type=chunk) - A new amount due to a related party of **RMB 27,470 thousands** is unsecured, repayable on demand, and interest-free[31](index=31&type=chunk)[32](index=32&type=chunk) [Borrowings](index=14&type=section&id=Borrowings) As of June 30, 2025, the Group's total borrowings increased, mainly driven by the growth in non-current secured bank borrowings, primarily denominated in RMB and collateralized by various assets and guarantees Borrowings (RMB thousands) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current borrowings | 1,133,013 | 955,904 | | Current borrowings | 906,648 | 894,086 | | **Total Borrowings** | **2,039,661** | **1,849,990** | Borrowings by Currency (RMB thousands) | Borrowing Currency | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | RMB | 1,804,455 | 1,605,911 | | HKD | 235,206 | 244,079 | - Total borrowings increased by **RMB 189,671 thousands**, with non-current borrowings increasing by **RMB 177,109 thousands**[33](index=33&type=chunk) - Bank borrowings are secured by property, plant and machinery, investment properties, bank deposits, land use rights, 100% equity interest in Shenzhen Boton, personal guarantees from the Chairman, and corporate guarantees[38](index=38&type=chunk) [Revenue Details](index=15&type=section&id=Revenue%20Details) The Group's revenue primarily derives from goods sales and rental income; for the six months ended June 30, 2025, both sources experienced a decline Revenue by Source (RMB thousands) | Revenue Source | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of goods | 612,862 | 724,042 | | Rental income | 24,891 | 26,933 | | **Total Revenue** | **637,753** | **750,975** | - Revenue from sales of goods decreased by **15.3% year-on-year**, and rental income decreased by **7.6% year-on-year**[36](index=36&type=chunk) [Other Income](index=15&type=section&id=Other%20Income) For the six months ended June 30, 2025, the Group's other income decreased year-on-year, mainly due to a reduction in government grants and other miscellaneous income Other Income (RMB thousands) | Income Source | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants | 1,239 | 1,306 | | Others | 221 | 938 | | **Total** | **1,460** | **2,244** | - Other income decreased by **34.9% year-on-year**[37](index=37&type=chunk) [Other Gains - Net](index=16&type=section&id=Other%20Gains%20-%20Net) For the six months ended June 30, 2025, the Group's other gains – net significantly decreased, primarily due to a reduction in other gains Other Gains - Net (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair value loss on investment properties | (400) | (400) | | Others | 583 | 2,938 | | **Total** | **183** | **2,538** | - Other gains – net decreased by **92.8% year-on-year**[39](index=39&type=chunk) [Expenses by Nature](index=16&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, total expenses decreased, mainly due to lower raw materials and consumables used, employee benefit expenses, and consulting fees, despite a significant increase in advertising expenses Expenses by Nature (RMB thousands) | Expense Item | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation and amortization | 58,207 | 56,326 | | Employee benefit expenses | 91,466 | 96,929 | | Raw materials and consumables used | 348,588 | 405,999 | | Advertising expenses | 6,951 | 2,448 | | Consulting fees | 15,583 | 24,107 | | **Total Expenses** | **610,050** | **637,468** | - Raw materials and consumables used decreased by **14.2% year-on-year**, and employee benefit expenses decreased by **5.6% year-on-year**[40](index=40&type=chunk) - Advertising expenses significantly increased by **183.9% year-on-year**[40](index=40&type=chunk) [Finance Income and Costs](index=17&type=section&id=Finance%20Income%20and%20Costs) For the six months ended June 30, 2025, the Group's net finance income and costs both decreased, primarily due to reduced interest income, increased exchange gains, and changes in capitalized amounts Finance Income and Costs (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance income – interest income | 621 | 2,306 | | Finance costs – interest expense | (34,879) | (34,456) | | Finance costs – exchange gains | 3,582 | 737 | | Finance costs – net | (22,885) | (28,007) | - Interest income decreased by **73.1% year-on-year**, while exchange gains significantly increased by **385.8% year-on-year**[42](index=42&type=chunk) - Net finance costs decreased by **18.3% year-on-year**[42](index=42&type=chunk) [Income Tax Expense](index=17&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense significantly decreased, mainly due to lower current and deferred income taxes, with some high-tech subsidiaries enjoying a preferential tax rate of 15% Income Tax Expense (RMB thousands) | Indicator | Six months ended June 30, 2025 (RMB thousands) | Six months ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax | 10,570 | 31,464 | | Deferred income tax | (8,437) | (12,916) | | **Total** | **2,133** | **18,548** | - Income tax expense significantly decreased by **88.5% year-on-year**[43](index=43&type=chunk) - Certain Chinese subsidiaries, as high-tech enterprises, enjoy a preferential tax rate of **15%**[43](index=43&type=chunk) [Earnings Per Share](index=18&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to owners of the Company turned into a loss, resulting in basic and diluted earnings per share shifting from profit to loss Earnings Per Share | Indicator | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company (RMB thousands) | (8,119) | 44,332 | | Weighted average number of ordinary shares outstanding (thousand shares) | 1,080,012 | 1,080,493 | | Basic (loss)/earnings per share (RMB per share) | (0.01) | 0.04 | - Basic and diluted earnings per share turned from a profit of **RMB 0.04** in the prior period to a loss of **RMB 0.01** per share in the current period[45](index=45&type=chunk) - Diluted earnings per share are the same as basic earnings per share, as there were no potential dilutive effects in the current or prior periods[46](index=46&type=chunk) [Dividends](index=18&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend an interim dividend for the six months ended June 30, 2025[47](index=47&type=chunk) [Contingent Liabilities (Financial Notes)](index=18&type=section&id=Contingent%20Liabilities%20%28Financial%20Notes%29) As of June 30, 2025, the Company is involved in a legal dispute regarding the outstanding consideration of RMB 150,000,000 for the Kimree acquisition, with the outcome currently not reasonably estimable - The Company is involved in a legal dispute with one of the vendors of the Kimree acquisition, concerning outstanding consideration of **RMB 150,000,000**[48](index=48&type=chunk) - This outstanding consideration has been accrued and included in "Trade and other payables"[48](index=48&type=chunk) - The case is still in its early stages, and management cannot reasonably estimate the outcome[48](index=48&type=chunk) [Commitments](index=19&type=section&id=Commitments) As of June 30, 2025, the Group's capital commitments significantly decreased, while short-term lease-related commitments slightly declined Commitments (RMB thousands) | Commitment Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contracted but not provided for property, plant and equipment | 21,724 | 188,898 | | Short-term lease-related commitments (within one year) | 174 | 412 | - Capital commitments for property, plant, and equipment significantly decreased from **RMB 188,898 thousands** to **RMB 21,724 thousands**[49](index=49&type=chunk) [Related Party Transactions](index=19&type=section&id=Related%20Party%20Transactions) For the six months ended June 30, 2025, the Group did not enter into any significant related party transactions, consistent with the prior year - No significant related party transactions were entered into for the six months ended June 30, 2025[51](index=51&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business performance, financial position, market challenges, and future outlook for the reporting period, highlighting significant declines in revenue and net profit due to business downturns and economic uncertainties [Principal Activities of the Group](index=20&type=section&id=Principal%20Activities%20of%20the%20Group) The Group primarily designs and manufactures high-quality e-cigarette products and produces, trades, and sells extracts, flavors, and fragrances globally across various industries - The Group's core businesses include e-cigarette products (disposable, rechargeable, and accessories) and flavor and fragrance products (flavor enhancers, food flavors, daily use flavors)[52](index=52&type=chunk) - E-cigarette products are primarily sold to tobacco companies, independent e-cigarette manufacturers, and customers under various brands[52](index=52&type=chunk) - Flavor products are sold to industries such as tobacco, beverages, and daily food, while fragrance products are sold to beauty products, perfumes, and soaps[52](index=52&type=chunk) [Business Review](index=20&type=section&id=Business%20Review) The reporting period saw a complex global economy, international trade disruptions, and shifting consumption patterns, leading to challenges like rising production costs and regulatory tightening, which the Group addressed through cost control and automation - The global economy is complex, with international trade severely impacted by prolonged wars and geopolitical tensions, affecting consumption patterns[53](index=53&type=chunk) - E-cigarette product production costs increased, labor costs rose, and tariff uncertainties hindered overseas expansion[53](index=53&type=chunk) - The Group's total revenue decreased by **15.1% year-on-year** to **RMB 637.8 million**, gross profit decreased by **34.9% year-on-year** to **RMB 198.9 million**, and net profit for the period significantly decreased by **86.1% year-on-year** to **RMB 8.7 million**[53](index=53&type=chunk) [Segment Revenue Breakdown](index=21&type=section&id=Segment%20Revenue%20Breakdown) For the six months ended June 30, 2025, flavor enhancers revenue significantly declined by 41.7%, while food flavors, daily use flavors, and e-cigarette products saw slight increases, and investment property revenue decreased marginally Segment Revenue Breakdown (RMB millions) | Segment | 2025 Revenue (RMB millions) | % of Total Revenue | 2024 Revenue (RMB millions) | % of Total Revenue | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Flavor enhancers | 179.5 | 28.1% | 308.1 | 41.0% | -41.7% | | Food flavors | 93.1 | 14.6% | 90.3 | 12.0% | +3.1% | | Daily use flavors | 73.1 | 11.5% | 69.6 | 9.3% | +5.0% | | E-cigarette products | 267.2 | 41.9% | 256.1 | 34.1% | +4.3% | | Investment properties | 24.9 | 3.9% | 26.9 | 3.6% | -7.4% | | **Total** | **637.8** | **100.0%** | **751.0** | **100.0%** | **-15.1%** | - The **41.7% significant decrease** in flavor enhancers revenue was the primary reason for the overall revenue decline[54](index=54&type=chunk) - E-cigarette products became the largest revenue contributing segment, accounting for **41.9%**[54](index=54&type=chunk) [Flavor Enhancers Business Review](index=21&type=section&id=Flavor%20Enhancers%20Business%20Review) Flavor enhancers revenue significantly decreased by 41.7% due to intense competition, rising raw material costs, stricter regulations, and changing consumer demand, leading to higher production costs and lower profit margins - Flavor enhancers revenue was approximately **RMB 179.5 million**, a significant **41.7% year-on-year decrease**[56](index=56&type=chunk) - Challenges include intense industry competition, increased costs of natural raw materials, stricter government safety regulations, and changing consumer demand[56](index=56&type=chunk) - The Group will allocate resources to improve product quality, competitiveness, and diversify overseas markets[56](index=56&type=chunk) [Food Flavors Business Review](index=21&type=section&id=Food%20Flavors%20Business%20Review) Food flavors revenue slightly increased by 3.1% to approximately RMB 93.1 million, as the Group maintained stable income in a competitive market by continuously developing new flavors - Food flavors revenue was approximately **RMB 93.1 million**, a slight **3.1% year-on-year increase**[57](index=57&type=chunk) - The Group maintained stable revenue in a competitive market by developing new flavors[57](index=57&type=chunk) [Daily Use Flavors Business Review](index=22&type=section&id=Daily%20Use%20Flavors%20Business%20Review) Daily use flavors revenue increased by 5.0% to approximately RMB 73.1 million, driven by the acquisition of new customers and continued support from long-term partners - Daily use flavors revenue was approximately **RMB 73.1 million**, a **5.0% year-on-year increase**[58](index=58&type=chunk) - Revenue growth is attributed to an increase in new customers and continued support from long-term cooperative clients[58](index=58&type=chunk) [E-cigarette Products Business Review](index=22&type=section&id=E-cigarette%20Products%20Business%20Review) E-cigarette product revenue slightly increased by 4.3% to approximately RMB 267.2 million, benefiting from diversified local customers and an extensive marketing network, with management anticipating improved business in the second half through collaborations - E-cigarette product revenue was approximately **RMB 267.2 million**, a slight **4.3% year-on-year increase**[59](index=59&type=chunk) - Revenue growth benefited from diversified local customers and an extensive marketing network[59](index=59&type=chunk) - Management is negotiating collaborations with major companies, expecting enhanced synergies and improved business in the second half of the year[59](index=59&type=chunk) [Investment Properties Business Review](index=22&type=section&id=Investment%20Properties%20Business%20Review) Investment property revenue decreased by 7.4% to approximately RMB 24.9 million, primarily due to lease terminations by some tenants amid a challenging property market in Shenzhen, China - Investment property revenue was approximately **RMB 24.9 million**, a **7.4% year-on-year decrease**[60](index=60&type=chunk) - The revenue reduction is due to the challenging property market in Shenzhen, leading to lease terminations by some tenants[60](index=60&type=chunk) [Gross Profit Analysis](index=22&type=section&id=Gross%20Profit%20Analysis) For the six months ended June 30, 2025, the Group's gross profit was approximately RMB 198.9 million, a significant 34.9% year-on-year decrease Gross Profit (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Gross profit | 198.9 | 305.6 | -34.9% | - Gross profit significantly decreased by **34.9%**, reflecting declining revenue and challenges in cost control[61](index=61&type=chunk) [Net Profit for the Period Analysis](index=22&type=section&id=Net%20Profit%20for%20the%20Period%20Analysis) The Group's net profit for the period was approximately RMB 8.7 million, a substantial 86.1% year-on-year decrease, with the net profit margin falling to approximately 1.4% Net Profit for the Period (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Net profit for the period | 8.7 | 62.7 | -86.1% | | Net profit margin | 1.4% | 8.3% | -6.9 percentage points | - Net profit significantly decreased by **86.1%**, and the net profit margin dropped from **8.3% to 1.4%**[62](index=62&type=chunk) [Other Income Analysis](index=22&type=section&id=Other%20Income%20Analysis) For the six months ended June 30, 2025, other income was RMB 1.5 million, a 34.9% year-on-year decrease, mainly due to reduced auxiliary business income not classified under principal segments Other Income (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Other income | 1.5 | 2.2 | -34.9% | - Other income decreased by **34.9%**, primarily due to a reduction in other auxiliary business income[63](index=63&type=chunk) [Other Gains - Net Analysis](index=23&type=section&id=Other%20Gains%20-%20Net%20Analysis) For the six months ended June 30, 2025, other gains – net were approximately RMB 0.2 million, a significant decrease from RMB 2.5 million in the prior year, mainly due to the absence of gains from derecognition of Chinese subsidiaries Other Gains - Net (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | | :--- | :--- | :--- | | Other gains – net | 0.2 | 2.5 | - Other gains – net significantly decreased, mainly due to the absence of gains from the derecognition of Chinese subsidiaries in the current period[64](index=64&type=chunk) [Expenses Analysis](index=23&type=section&id=Expenses%20Analysis) Selling and marketing expenses increased by 5.5% year-on-year due to higher advertising costs, while administrative expenses decreased by 13.2% due to lower employee benefits, consulting, and office expenses Expenses (RMB millions) | Expense Item | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Selling and marketing expenses | 24.9 | 23.6 | +5.5% | | Administrative expenses | 146.3 | 168.5 | -13.2% | - Selling and marketing expenses as a percentage of total revenue increased from **3.1% to 3.9%**[65](index=65&type=chunk) - The reduction in administrative expenses is primarily due to decreases in employee benefit expenses, consulting fees, and office expenses[65](index=65&type=chunk) [Net Finance Costs Analysis](index=23&type=section&id=Net%20Finance%20Costs%20Analysis) For the six months ended June 30, 2025, net finance costs were approximately RMB 22.9 million, an 18.3% year-on-year decrease, primarily attributable to lower loan interest rates on borrowings Net Finance Costs (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | % Change | | :--- | :--- | :--- | :--- | | Net finance costs | 22.9 | 28.0 | -18.3% | - Net finance costs decreased primarily due to lower loan interest rates on borrowings[66](index=66&type=chunk) [Corporate Culture](index=23&type=section&id=Corporate%20Culture) The Group upholds its "Four New and Five Hearts" corporate culture, with core values of "high technology, high quality, high starting point, and high standards," aiming to enhance competitiveness and embark on internationalization - The Group's corporate culture embodies "Four New" (new brand, new culture, new strength, new image) and "Five Hearts" (attentiveness, dedication, meticulousness, sincerity, care)[67](index=67&type=chunk) - Core values are "high technology, high quality, high starting point, and high standards," aiming to enhance competitiveness and embark on an international journey[67](index=67&type=chunk) [Business Outlook](index=24&type=section&id=Business%20Outlook) The Group anticipates a slow global economic recovery in the second half of 2025, driven by emerging economies, and plans to actively regain domestic market share, accelerate globalization, and capture high-value-added markets through technological cooperation and production enhancements, while committing to green economy and sustainability - The global economy is expected to recover slowly and unevenly in the second half of 2025, with growth driven by emerging economies such as India and Southeast Asia[68](index=68&type=chunk) - The Group will actively regain domestic market share, accelerate globalization, and drive existing business growth in overseas markets through localization and technological cooperation[68](index=68&type=chunk) - The Group is committed to long-term goals such as green economy, carbon reduction, and enhancing resilience to maintain sustainable development[68](index=68&type=chunk) [Financial Review](index=24&type=section&id=Financial%20Review) As of June 30, 2025, the Group's net current assets and current ratio improved, but the gearing ratio increased, while maintaining a prudent financial management approach Financial Ratios (RMB millions) | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Net current assets | 67.0 | 46.7 | | Current ratio | 1.04 | 1.03 | | Gearing ratio | 59.8% | 54.3% | - Net current assets increased, primarily due to a reduction in trade and other payables[69](index=69&type=chunk) - The gearing ratio (total borrowings divided by total equity) increased from **54.3% to 59.8%**[70](index=70&type=chunk) [Funding](index=25&type=section&id=Funding) The Group can finance acquisitions through bank borrowings or equity fundraising and is confident in achieving its operational and expansion plans with funds generated from business operations - The Group can obtain financing for its acquisitions through bank borrowings or equity fundraising[71](index=71&type=chunk) - The Group is confident in having sufficient funds to achieve its operational and expansion plans[71](index=71&type=chunk) [Capital Structure](index=25&type=section&id=Capital%20Structure) During the reporting period, the Company's share capital consisted of ordinary shares, with the total number of issued shares remaining at 1,080,512,146 - The Company's share capital consists of ordinary shares, with the total number of issued shares remaining at **1,080,512,146**[72](index=72&type=chunk) [Foreign Exchange and Interest Rate Risk](index=25&type=section&id=Foreign%20Exchange%20and%20Interest%20Rate%20Risk) For the six months ended June 30, 2025, the Group recorded a net foreign exchange gain of approximately RMB 3.6 million; its primary business is RMB-denominated, with some transactions and borrowings in USD and HKD, and interest rate risk is not hedged but deemed insignificant Foreign Exchange Net Gain (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | | :--- | :--- | :--- | | Foreign exchange net gain | 3.6 | 0.7 | - Net foreign exchange gain significantly increased year-on-year; the primary business is denominated in **RMB**, with some transactions and borrowings in **USD** and **HKD**[73](index=73&type=chunk) - The Group does not hedge interest rate risk, and the Board believes it will not have a significant impact[73](index=73&type=chunk) [Pledged Assets of the Group](index=25&type=section&id=Pledged%20Assets%20of%20the%20Group) As of June 30, 2025, the Group pledged equity interests in certain subsidiaries, properties in Shenzhen and Huizhou, land use rights, bank deposits, and Hong Kong properties as collateral for borrowings - Pledged assets include equity interests in certain subsidiaries, various buildings, warehouses, investment properties, land use rights in Shenzhen and Huizhou, bank deposits, and Hong Kong properties[74](index=74&type=chunk) - Chairman Mr. Wang Mingfan provided personal guarantees[38](index=38&type=chunk) [Capital Expenditure](index=25&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group's investments in fixed assets and construction in progress significantly increased, while capital commitments substantially decreased, all funded by internal and financing sources Capital Expenditure (RMB millions) | Indicator | Six months ended June 30, 2025 (RMB millions) | Six months ended June 30, 2024 (RMB millions) | | :--- | :--- | :--- | | Investment in fixed assets and construction in progress | 241.6 | 75.3 | | Capital commitments for fixed assets | 21.7 | 188.9 | - Investments in fixed assets and construction in progress significantly increased by **220.8% year-on-year**[75](index=75&type=chunk) - Capital commitments for fixed assets significantly decreased from **RMB 188.9 million** to **RMB 21.7 million**[75](index=75&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend an interim dividend for the six months ended June 30, 2025[76](index=76&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 1,112 employees globally, offering competitive remuneration, retirement plans, share option schemes, and benefits, with performance-based bonuses, adhering to social security and provident fund regulations Employee Information | Indicator | June 30, 2025 | 2024 | | :--- | :--- | :--- | | Number of employees | 1,112 | 1,259 | - The number of employees decreased by **11.7% year-on-year**[77](index=77&type=chunk) - The Group offers comprehensive and competitive remuneration, retirement plans, share option schemes, and benefits, with discretionary bonuses based on performance[77](index=77&type=chunk) [Significant Investments](index=26&type=section&id=Significant%20Investments) For the six months ended June 30, 2025, the Group made a significant investment in a construction project on land in Huizhou, China, with a planned investment of approximately RMB 400 million to expand its e-cigarette products segment - The Group made a significant investment in a construction project located in Zhongkai High-tech Zone, Huizhou, China[78](index=78&type=chunk) - A planned investment of approximately **RMB 400 million** in fixed assets on this land aims to expand the e-cigarette products segment[78](index=78&type=chunk) [Contingent Liabilities (Management Discussion)](index=26&type=section&id=Contingent%20Liabilities%20%28Management%20Discussion%29) As of June 30, 2025, the Group had no significant contingent liabilities other than the legal dispute involving the vendor of the Kimree acquisition - The Group has no significant contingent liabilities, except for the legal dispute involving the vendor of the Kimree acquisition[79](index=79&type=chunk) [Land Resumption in Shenzhen](index=26&type=section&id=Land%20Resumption%20in%20Shenzhen) Shenzhen Boton Flavors & Fragrances Co., Ltd. received a letter from Shenzhen Nanshan government regarding the proposed acquisition of its land for a high-speed rail hub; compensation has been offered, and preliminary discussions suggest no significant operational impact - Shenzhen Boton Flavors & Fragrances Co., Ltd. received a letter from Shenzhen Nanshan government regarding the proposed acquisition of its land in Shenzhen for a high-speed rail hub construction[80](index=80&type=chunk) - Relevant departments have provided compensation proposals, but detailed information is not yet available[80](index=80&type=chunk)[81](index=81&type=chunk) - Preliminary discussions indicate that the land resumption (if implemented) will not have a significant impact on Shenzhen Boton's operations[81](index=81&type=chunk) [Legal Proceedings Against Vendor of an Acquisition](index=27&type=section&id=Legal%20Proceedings%20Against%20Vendor%20of%20an%20Acquisition) As of June 30, 2025, the Group is involved in four legal proceedings against the vendors of the Kimree acquisition, including claims for breach of non-compete clauses, fiduciary duties, and misrepresentation, with outcomes remaining uncertain - The Group is involved in **four legal proceedings** against the vendors of the Kimree acquisition, including Mr. Liu Qiuming and Mr. Xiang Zhiyong[82](index=82&type=chunk) - The lawsuits include claims for breach of non-compete clauses, breach of fiduciary duties, and misrepresentation regarding the terms of the acquisition agreement[82](index=82&type=chunk)[83](index=83&type=chunk) - Some cases are still ongoing, with uncertain outcomes, and the Company is seeking legal advice on whether the relevant claims are time-barred[82](index=82&type=chunk)[83](index=83&type=chunk) [Supplemental Agreement - Profit Guarantee Extension](index=28&type=section&id=Supplemental%20Agreement%20-%20Profit%20Guarantee%20Extension) The Group signed a supplemental agreement extending the profit guarantee arrangement for the sale of certain equity interests in Boton Flavors & Fragrances Co., Ltd. until March 31, 2026, requiring a minimum 5% net profit growth, which constitutes a discloseable connected transaction - The Group signed a supplemental agreement extending the profit guarantee arrangement for Boton Flavors & Fragrances Group until **March 31, 2026**[85](index=85&type=chunk) - The new guarantee requires Boton Flavors & Fragrances Group's net profit to grow by no less than **5%** from January 1, 2025, to March 31, 2026[85](index=85&type=chunk) - This supplemental agreement constitutes a connected transaction and is subject to reporting and announcement requirements under the Listing Rules[85](index=85&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) This section covers information on the Company's listed securities transactions, the operations of its Audit, Remuneration, and Nomination Committees, corporate governance practices, and the publication arrangements for the interim results report [Purchase, Sale or Redemption of Listed Securities](index=29&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[86](index=86&type=chunk) [Audit Committee](index=29&type=section&id=Audit%20Committee) The Audit Committee, comprising four independent non-executive directors, reviews and oversees the Group's financial reporting, risk management, and internal control systems, and has reviewed the unaudited interim condensed consolidated financial statements - The Audit Committee comprises **four independent non-executive directors**, with Mr. Wu Guanyun as Chairman[87](index=87&type=chunk) - The Committee's responsibilities include reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems[87](index=87&type=chunk) - The Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025[87](index=87&type=chunk) [Remuneration Committee](index=29&type=section&id=Remuneration%20Committee) The Remuneration Committee, consisting of four independent non-executive directors and one executive director, is responsible for considering and approving remuneration arrangements for the Group's senior employees, including salaries, bonuses, and long-term incentive plans - The Remuneration Committee comprises **four independent non-executive directors** (Chairman Mr. Wu Guanyun) and **one executive director** (Mr. Wang Mingfan)[88](index=88&type=chunk) - The Committee aims to consider and approve remuneration arrangements for the Group's senior employees, including terms for salaries, bonus schemes, and other long-term incentive plans[88](index=88&type=chunk) [Nomination Committee](index=29&type=section&id=Nomination%20Committee) The Nomination Committee, composed of four independent non-executive directors and two executive directors, reviews the Board's structure, size, and diversity, and makes recommendations on director appointments and succession planning - The Nomination Committee comprises **four independent non-executive directors** (Chairman Mr. Liang Weimin) and **two executive directors** (Mr. Wang Mingfan and Ms. Wang Xinyi)[89](index=89&type=chunk) - The Committee's responsibilities include reviewing the Board's structure, size, and diversity, and making recommendations to the Board on director appointments and succession planning[89](index=89&type=chunk) [Corporate Governance](index=29&type=section&id=Corporate%20Governance) The Company's Board is committed to maintaining high corporate governance standards for transparency and stakeholder protection, complying with all Code Provisions of Appendix C1 of the Listing Rules, except for the separation of Chairman and CEO roles - The Company is committed to maintaining good corporate governance standards to enhance corporate transparency and protect stakeholders' interests[90](index=90&type=chunk) - During the reporting period, the Company complied with all Code Provisions of Appendix C1 of the Listing Rules' Corporate Governance Code, except for Code Provision C.2.1[90](index=90&type=chunk) - Mr. Wang Mingfan serves concurrently as the Company's Executive Director, Chief Executive Officer, and Chairman, with the Board believing the current structure provides strong and continuous leadership[91](index=91&type=chunk) [Standard Code for Securities Transactions by Directors](index=30&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the reporting period - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions[92](index=92&type=chunk) - All directors confirmed compliance with the required standards set out in the Standard Code during the reporting period[92](index=92&type=chunk) [Publication of Interim Results and Interim Report](index=30&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This results announcement has been published on the HKEX and Company websites, and the 2025 interim report will be dispatched to shareholders and published on these websites in due course - This results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.boton.com.hk)[93](index=93&type=chunk) - The 2025 interim report will be dispatched to shareholders and published on the aforementioned websites in due course[93](index=93&type=chunk) [Board of Directors Composition](index=30&type=section&id=Board%20of%20Directors%20Composition) As of the announcement date, the Board comprises three executive directors, one non-executive director, and four independent non-executive directors - As of the announcement date, the Executive Directors are Mr. Wang Mingfan, Mr. Li Qinglong, and Ms. Wang Xinyi[95](index=95&type=chunk) - The Non-executive Director is Ms. Yin Shuzhen[95](index=95&type=chunk) - The Independent Non-executive Directors are Mr. Wu Guanyun, Mr. Liang Weimin, Mr. Zhou Xiaoxiong, and Mr. Qiu Haobo[95](index=95&type=chunk)

[Announcement Information](index=1&type=section&id=Announcement%20Information) This announcement details Asia Energy Logistics Group's unaudited interim results for the six months ended June 30, 2025 [Cover and Company Information](index=1&type=section&id=Cover%20and%20Company%20Information) This section provides essential company details and confirms the nature of the interim results announcement - Company Name: **Asia Energy Logistics Group Limited** (Stock Code: **351**)[2](index=2&type=chunk) - This announcement is for the unaudited consolidated results for the six months ended June 30, 2025[2](index=2&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's financial performance and position for the interim period [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Revenue from continuing operations grew 29.5%, while the loss for the period significantly narrowed by 59.1% to HKD 14,685 thousand Condensed Consolidated Statement of Comprehensive Income Key Data (HKD thousands) | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue (Continuing Operations) | 29,615 | 22,869 | +29.5% | | Gross Profit (Continuing Operations) | 3,259 | 2,436 | +33.8% | | Other Income (Continuing Operations) | 1,608 | 363 | +343.0% | | Employee Costs | (5,348) | (14,530) | -63.2% | | Loss Before Tax from Continuing Operations | (14,685) | (35,898) | -59.1% | | Loss for the Period (Continuing Operations) | (14,685) | (35,898) | -59.1% | | Profit for the Period (Discontinued Operations) | – | 13,686 | -100.0% | | Total Loss for the Period | (14,685) | (22,212) | -33.9% | | Loss for the Period Attributable to Owners of the Company | (14,685) | (21,684) | -32.3% | | Basic and Diluted Loss Per Share (Continuing Operations) | (0.74) HK cents | (1.77) HK cents | -58.2% | | Basic and Diluted Earnings Per Share (Discontinued Operations) | – | 0.69 HK cents | -100.0% | | Total Basic and Diluted Loss Per Share | (0.74) HK cents | (1.08) HK cents | -31.5% | - Revenue from continuing operations primarily derived from chartering income, telecommunication services income, and e-commerce trading income[3](index=3&type=chunk) - Employee costs significantly decreased by **63.2%**, a major reason for the narrowed loss for the period[3](index=3&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets and equity decreased, yet net current assets remained robust, indicating healthy liquidity and leverage ratios Condensed Consolidated Statement of Financial Position Key Data (HKD thousands) | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 68,573 | 73,447 | -6.7% | | Current Assets | 89,294 | 99,248 | -10.0% | | Current Liabilities | 10,097 | 8,711 | +15.9% | | Net Current Assets | 79,197 | 90,537 | -12.5% | | Total Assets Less Current Liabilities | 147,770 | 163,984 | -9.9% | | Net Assets | 147,770 | 162,229 | -8.8% | | Total Equity | 147,770 | 162,229 | -8.8% | - Trade and other receivables decreased from **HKD 15,651 thousand** to **HKD 6,317 thousand**, a **59.6%** decrease[5](index=5&type=chunk) - Bank balances and cash slightly increased from **HKD 62,772 thousand** to **HKD 67,709 thousand**[5](index=5&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated interim financial statements [Basis of Preparation](index=5&type=section&id=Basis%20of%20Preparation) The interim financial statements adhere to HKAS 34 and Listing Rules, requiring careful judgment and estimates - Financial statements prepared in accordance with **HKAS 34 Interim Financial Reporting** and the **Listing Rules**[6](index=6&type=chunk) - Preparation requires judgments, estimates, and assumptions affecting policy application and reported amounts of assets, liabilities, income, and expenses[6](index=6&type=chunk) - The 2024 annual financial statements were filed with the Registrar of Companies in Hong Kong, and the auditor's report was unqualified[6](index=6&type=chunk) [Adoption of New/Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=Adoption%20of%20New%2FRevised%20Hong%20Kong%20Financial%20Reporting%20Standards) New/revised HKFRS standards effective January 1, 2025, were adopted with no material impact on the interim financial statements - The Group first adopted new/revised Hong Kong Financial Reporting Standards accounting standards effective **January 1, 2025**[7](index=7&type=chunk)[8](index=8&type=chunk) - The adoption of HKAS 21 (Amendment) "Lack of Exchangeability" had no significant impact on the financial statements[9](index=9&type=chunk) [Revenue](index=6&type=section&id=Revenue) Continuing operations revenue increased 29.5%, driven by telecommunication services and new e-commerce trading, despite a decline in chartering income Revenue from Continuing Operations Breakdown (HKD thousands) | Revenue Source | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Chartering Income | 14,786 | 20,432 | -27.6% | | Telecommunication Services Income | 8,877 | 2,437 | +264.2% | | E-commerce Trading Income | 5,952 | – | New | | **Total Revenue (Continuing Operations)** | **29,615** | **22,869** | **+29.5%** | - Telecommunication services income significantly increased by **264.2%**, and e-commerce trading business is a new revenue source for the period[10](index=10&type=chunk) [Other Income](index=7&type=section&id=Other%20Income) Other income surged 343% year-on-year, primarily due to a substantial increase in bank interest income Other Income Breakdown (HKD thousands) | Revenue Source | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Bank Interest Income | 1,207 | 56 | +2055.4% | | Net Exchange Gain | 8 | 61 | -86.9% | | Reimbursement from Charterers | 134 | 74 | +81.1% | | Miscellaneous Income | 259 | 172 | +50.6% | | **Total Other Income** | **1,608** | **363** | **+343.0%** | - Bank interest income surged from **HKD 56 thousand** to **HKD 1,207 thousand**, the main driver of other income growth[11](index=11&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group's continuing operations span shipping, telecom, and e-commerce, with telecom and e-commerce showing significant revenue growth - The Group's reportable segments include continuing operations (shipping and logistics, telecommunication-related business, e-commerce trading) and discontinued operations[12](index=12&type=chunk)[13](index=13&type=chunk) - Segment results refer to the results from each reportable segment, excluding the allocation of corporate income and expenses[14](index=14&type=chunk) [Continuing Operations](index=8&type=section&id=Continuing%20Operations) Telecom and e-commerce revenues grew substantially, while shipping and logistics revenue decreased but improved gross profit, leading to an overall segment profit Continuing Operations Segment Revenue and Profit (Six Months Ended June 30, 2025, HKD thousands) | Segment | External Customer Segment Revenue | Segment (Loss) Profit | | :--- | :--- | :--- | | Telecommunication-Related Business | 8,877 | (1,140) | | Shipping and Logistics | 14,786 | 1,329 | | E-commerce Trading Business | 5,952 | 12 | | **Total** | **29,615** | **201** | - Shipping and logistics segment revenue decreased year-on-year, but segment profit turned from loss to profit, mainly due to cost control[15](index=15&type=chunk)[16](index=16&type=chunk) - Telecommunication-related business revenue significantly increased but still recorded a segment loss of **HKD 1,140 thousand**[15](index=15&type=chunk) [Discontinued Operations](index=9&type=section&id=Discontinued%20Operations) Discontinued operations in H1 2024 primarily reflect revenue and profit from the sale of a vessel in the shipping and logistics segment Discontinued Operations Segment Revenue and Profit (Six Months Ended June 30, 2024, HKD thousands) | Segment | External Customer Segment Revenue | Segment Profit | | :--- | :--- | :--- | | Shipping and Logistics (Discontinued) | 24,779 | 13,686 | - On May 23, 2024, the company agreed to sell a vessel (M/V Clipper Panorama), which constituted discontinued operations[13](index=13&type=chunk) [Geographical Information](index=10&type=section&id=Geographical%20Information) Non-current assets are concentrated in Hong Kong and China, with all telecom and e-commerce revenue originating from China Geographical Distribution of Non-Current Assets (HKD thousands) | Region | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Hong Kong | 4,213 | 7,207 | | China | 25 | 50 | - Revenue from telecommunication-related business and e-commerce trading business is entirely from China[19](index=19&type=chunk) - Shipping and logistics services, due to their multinational operations, do not present geographical segment revenue[18](index=18&type=chunk) [Major Customers](index=10&type=section&id=Major%20Customers) In H1 2025, three customers each contributed over 10% of group revenue across shipping, telecom, and e-commerce segments Major Customers Contributing 10% or More of Group Revenue (HKD thousands) | Customer | Segment | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Customer A | Shipping and Logistics | 14,786 | Not Applicable | | Customer B | Telecommunication-Related Business | 6,120 | Not Applicable | | Customer C | E-commerce Trading Business | 5,952 | Not Applicable | | Customer D | Shipping and Logistics (Continuing Operations) | Not Applicable | 20,432 | | Customer D | Shipping and Logistics (Discontinued Operations) | Not Applicable | 24,779 | - In H1 2025, Customers A, B, and C became major customers, while major customer D's revenue share in H1 2024 was below **10%** in H1 2025[20](index=20&type=chunk)[21](index=21&type=chunk) [Finance Costs](index=11&type=section&id=Finance%20Costs) Finance costs from continuing operations decreased by 54.4% year-on-year, mainly due to reduced interest on lease liabilities Finance Costs Breakdown (HKD thousands) | Cost Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Other Borrowings | – | 30 | -100.0% | | Interest on Lease Liabilities | 119 | 233 | -48.9% | | **Total Finance Costs** | **119** | **263** | **-54.7%** | - Interest on lease liabilities decreased from **HKD 233 thousand** to **HKD 119 thousand**, the main reason for the decline in finance costs[22](index=22&type=chunk) [Loss Before Tax from Continuing Operations](index=12&type=section&id=Loss%20Before%20Tax%20from%20Continuing%20Operations) Loss before tax significantly narrowed, primarily due to reduced employee costs, depreciation, and asset write-offs Major Deductions for Loss Before Tax from Continuing Operations (HKD thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 2,892 | 2,457 | +17.7% | | Depreciation of Right-of-Use Assets | 1,488 | 2,985 | -50.1% | | Employee Costs | 5,348 | 14,530 | -63.2% | | Write-off of Other Receivables | 1,241 | – | New | | Write-off of Intangible Assets | 1,000 | – | New | - Employee costs significantly decreased by **63.2%**, a key factor in narrowing the loss[23](index=23&type=chunk) - This period saw new write-offs of other receivables of **HKD 1,241 thousand** and intangible assets of **HKD 1,000 thousand**[23](index=23&type=chunk) [Income Tax](index=13&type=section&id=Income%20Tax) No income tax provision was made due to the absence of estimated taxable profit for the Group entities during the reporting period - Hong Kong profits tax rate is **16.5%**, and China corporate income tax rate is **25%**[24](index=24&type=chunk) - No income tax provision was made as the Group entities had no estimated taxable profit or incurred tax losses during the reporting period[24](index=24&type=chunk) [(Loss) Earnings Per Share](index=13&type=section&id=(Loss)%20Earnings%20Per%20Share) Basic and diluted loss per share from continuing operations significantly narrowed by 58.2%, with no earnings from discontinued operations (Loss) Earnings Per Share (HK cents) | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Continuing Operations | (0.74) | (1.77) | -58.2% | | Discontinued Operations | – | 0.69 | -100.0% | | **Total** | **(0.74)** | **(1.08)** | **-31.5%** | - Basic and diluted loss per share were consistent for the six months ended June 30, 2025, and 2024, as there were no potential dilutive ordinary shares[25](index=25&type=chunk) [Dividends](index=14&type=section&id=Dividends) The company neither paid nor declared any dividends during the reporting period, and the Board does not recommend any - The company neither paid nor declared dividends for the six months ended June 30, 2025, and 2024[26](index=26&type=chunk) - The directors do not recommend the payment of any dividends for the six months ended June 30, 2025, and 2024[27](index=27&type=chunk) [Trade and Other Receivables](index=14&type=section&id=Trade%20and%20Other%20Receivables) Total trade and other receivables decreased 59.6%, mainly due to a substantial reduction in other receivables from a regulated securities broker Trade and Other Receivables Breakdown (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Receivables from Services Income | 3,090 | 407 | +659.2% | | Other Receivables | 3,470 | 4,383 | -20.8% | | Deposits for Vessel Operations | – | 354 | -100.0% | | Other Receivables from a Regulated Securities Broker | – | 9,903 | -100.0% | | Prepayments | 89 | 936 | -90.5% | | Less: Loss Allowance for Other Receivables | (1,337) | (1,337) | 0.0% | | **Total** | **6,317** | **15,651** | **-59.6%** | - Other receivables from a regulated securities broker decreased from **HKD 9,903 thousand** to zero, the main reason for the decline in total receivables[28](index=28&type=chunk) - All trade receivables have an aging within **30 to 90 days**[29](index=29&type=chunk) - Other receivables of **HKD 1,337 thousand** were overdue for more than **240 days** and bear interest at **10% per annum**[30](index=30&type=chunk) [Trade and Other Payables](index=15&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables increased by 24.1% year-on-year, primarily driven by a significant rise in trade payables Trade and Other Payables Breakdown (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables | 3,756 | 701 | +435.8% | | Accrued Expenses and Other Payables | 2,043 | 3,770 | -45.8% | | Receipts in Advance | 838 | 878 | -4.5% | | **Total** | **6,637** | **5,349** | **+24.1%** | - Trade payables significantly increased from **HKD 701 thousand** to **HKD 3,756 thousand**[31](index=31&type=chunk) - The credit period for trade payables is generally within **90 days**, with all aging within **30 days**[32](index=32&type=chunk) [Share Capital](index=16&type=section&id=Share%20Capital) The total number of issued shares remained unchanged at 1,994,975,244 shares as of June 30, 2025 - As of June 30, 2025, the total number of issued shares was **1,994,975,244**, the same as December 31, 2024[33](index=33&type=chunk)[34](index=34&type=chunk) [Related Party Transactions and Balances](index=16&type=section&id=Related%20Party%20Transactions%20and%20Balances) Remuneration for key management personnel decreased, and consulting fees payable to a related entity were reduced to zero Key Management Personnel Remuneration (HKD thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Salaries and Other Benefits | 2,491 | 2,847 | -12.5% | | Contributions to Defined Contribution Retirement Plans | 18 | 18 | 0.0% | | **Total** | **2,509** | **2,865** | **-12.5%** | - Consulting fees payable to Ascent Financial Public Relations Limited decreased from **HKD 300 thousand** in the prior year to zero[36](index=36&type=chunk) - Disclosed related party transactions constitute connected transactions exempt from reporting, announcement, and independent shareholders' approval requirements under the Listing Rules[36](index=36&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business performance, financial position, and future outlook across its operating segments [Business Review](index=17&type=section&id=Business%20Review) The Group's core businesses are shipping, telecom, and e-commerce, with significant growth in telecom and e-commerce, and a completed vessel sale - The Group's main businesses include shipping and logistics, telecommunication-related business in China, and e-commerce trading business[37](index=37&type=chunk) [Continuing Operations](index=17&type=section&id=Continuing%20Operations%20(Business%20Review)) Shipping and logistics revenue declined but gross profit improved, while telecom and e-commerce businesses saw substantial revenue growth [Shipping and Logistics](index=17&type=section&id=Shipping%20and%20Logistics) Revenue decreased by 28%, but gross profit increased by 34% due to higher vessel utilization and cost control measures - Shipping and logistics business revenue was approximately **HKD 14,786 thousand**, a year-on-year decrease of approximately **28%**[39](index=39&type=chunk) - Gross profit was approximately **HKD 3,335 thousand**, a year-on-year increase of approximately **34%**, mainly due to higher vessel utilization, reduced dry-docking losses in 2024, and decreased repair and maintenance[39](index=39&type=chunk) - The Group currently operates one dry bulk vessel with a total capacity of approximately **32,000 DWT**, fully utilized during the reporting period[38](index=38&type=chunk)[39](index=39&type=chunk) [Telecommunication-Related Business](index=17&type=section&id=Telecommunication-Related%20Business) Revenue surged by 264% from new client acquisition, though gross loss increased due to lower profit margins - Telecommunication-related business revenue was approximately **HKD 8,877 thousand**, a year-on-year increase of approximately **264%**, mainly due to new client development in H1 2025[40](index=40&type=chunk) - Gross loss was approximately **HKD 88 thousand**, a year-on-year increase of approximately **69%**, mainly due to lower profit margins for certain customers[40](index=40&type=chunk) [E-commerce Trading Business](index=18&type=section&id=E-commerce%20Trading%20Business) This new business, launched in Q4 2024, generated HKD 5,952 thousand in revenue and HKD 12 thousand in gross profit - The Group commenced e-commerce trading business in China in **Q4 2024**[41](index=41&type=chunk) - Revenue of approximately **HKD 5,952 thousand** and gross profit of approximately **HKD 12 thousand** were recorded during the reporting period[41](index=41&type=chunk) [Discontinued Operations](index=18&type=section&id=Discontinued%20Operations%20(Business%20Review)) This section details the sale of a vessel in May 2024, with related results accounted for as discontinued operations - The Group agreed to sell a vessel on May 23, 2024, for a consideration of **USD 9,500,000** (approximately **HKD 74,100,000**)[42](index=42&type=chunk) - The sale was completed in August 2024, and the related results were accounted for as discontinued operations[42](index=42&type=chunk) [Prospects](index=18&type=section&id=Prospects) The Group navigates market challenges in shipping and telecom, while aiming for competitiveness in e-commerce and seeking synergistic investments - The Group will continue to seek suitable investment opportunities that generate synergy with existing businesses and contribute positively[45](index=45&type=chunk) [Shipping and Logistics](index=18&type=section&id=Shipping%20and%20Logistics%20(Prospects)) The dry bulk market faces geopolitical and tariff challenges, prompting vessel repositioning and cost reduction efforts - The dry bulk shipping market faces challenges and opportunities from new US tariffs and geopolitical dynamics[43](index=43&type=chunk) - The Group has repositioned its vessel to the East Coast of the Atlantic and implemented measures to reduce operating costs[43](index=43&type=chunk) [Telecommunication-Related Business](index=19&type=section&id=Telecommunication-Related%20Business%20(Prospects)) Traditional SMS services face challenges from market shifts and regulatory changes, necessitating cautious expansion and new client acquisition - Traditional SMS business faces significant challenges due to changes in customer operating environment and recent regulatory changes[44](index=44&type=chunk) - The Group will cautiously promote business development and cooperation while expanding new customer segments[44](index=44&type=chunk) [E-commerce Trading Business](index=19&type=section&id=E-commerce%20Trading%20Business%20(Prospects)) Facing intense competition in China, the company plans to maintain competitiveness through innovation, product quality, and strategic investments - The Chinese e-commerce market is increasingly competitive, with evolving marketing models[45](index=45&type=chunk) - The company believes it can maintain market competitiveness through continuous innovation and maintaining product quality[45](index=45&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) Continuing operations revenue increased 29%, and the loss significantly narrowed by 59% due to reduced costs and absence of financial asset sale losses - Revenue from continuing operations was approximately **HKD 29,615 thousand**, a year-on-year increase of approximately **29%**[46](index=46&type=chunk) - Loss from continuing operations was approximately **HKD 14,685 thousand**, a year-on-year decrease of approximately **59%**[46](index=46&type=chunk) - The reduction in loss was mainly attributable to decreased employee costs and other operating expenses, and no loss from the sale of financial assets at fair value through profit or loss this period[46](index=46&type=chunk) - Basic and diluted loss per share from continuing operations was **0.74 HK cents**, and zero for discontinued operations[47](index=47&type=chunk) [Financial Resources, Liquidity, and Gearing Ratio](index=20&type=section&id=Financial%20Resources%2C%20Liquidity%2C%20and%20Gearing%20Ratio) Cash and bank balances increased, while total equity and net current assets decreased, maintaining healthy liquidity and gearing ratios Key Financial Resources Indicators (HKD thousands) | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 67,709 | 62,772 | +7.9% | | Total Equity Attributable to Owners of the Company | 147,770 | 162,229 | -8.9% | | Net Current Assets | 79,197 | 90,537 | -12.5% | | Current Ratio | 884% | 1,139% | -22.4% | | Gearing Ratio | 7% | 6% | +16.7% | - Total number of issued shares was **1,994,975,244**[48](index=48&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, and Future Plans for Material Investments or Capital Assets](index=20&type=section&id=Significant%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The Group holds a portfolio of listed investments, completed a vessel sale, and has no current plans for other material investments - Financial assets at fair value through profit or loss include a portfolio of listed equity and convertible bond investments with a fair value of approximately **HKD 15,268 thousand**, representing approximately **10%** of total assets[49](index=49&type=chunk) - The Group will closely monitor capital market performance and adopt the most appropriate strategy[49](index=49&type=chunk) - The vessel sale was completed in **August 2024**[51](index=51&type=chunk) - As of the date of this announcement, the Board has not approved any plans for material investments or additional capital assets[51](index=51&type=chunk) [Pledges of Assets and Contingent Liabilities](index=21&type=section&id=Pledges%20of%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group reported no pledges of assets or contingent liabilities - As of June 30, 2025, the Group had no pledges of assets[52](index=52&type=chunk) - As of June 30, 2025, the Group had no contingent liabilities[52](index=52&type=chunk) [Capital Commitments](index=21&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no capital commitments - As of June 30, 2025, the Group had no capital commitments[53](index=53&type=chunk) [Exchange Rate Fluctuation Risk](index=21&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The Group considers its foreign exchange risk to be very low and therefore does not use hedging instruments - The Group's assets, liabilities, and transactions are primarily denominated in the functional currencies of its business operations, facing very low risk of foreign exchange rate fluctuations[54](index=54&type=chunk) - Therefore, the Group does not use hedging instruments or other hedging methods[54](index=54&type=chunk) [Employees and Remuneration Policies](index=22&type=section&id=Employees%20and%20Remuneration%20Policies) The Group had 19 full-time employees, with significantly reduced employee costs, and remuneration is based on market practice and duties - As of June 30, 2025, the Group had **19** full-time employees, the same as December 31, 2024[55](index=55&type=chunk) - Employee costs for the reporting period were approximately **HKD 5,348 thousand**, a significant year-on-year decrease of **63.2%**[55](index=55&type=chunk) - Remuneration is determined based on duties, work experience, and market practice, with share option and retirement benefit schemes in place[55](index=55&type=chunk) - As of June 30, 2025, there were no outstanding share options granted under the 2018 Share Option Scheme[55](index=55&type=chunk) [Corporate Governance](index=22&type=section&id=Corporate%20Governance) The company upholds high corporate governance standards, complying with the code despite a long-vacant CEO position [Compliance with Corporate Governance Code](index=22&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company adheres to the Corporate Governance Code, with the CEO's duties handled by other executive directors since 2009 - The company has consistently complied with the Corporate Governance Code, except for the CEO position being vacant since **March 2009**[56](index=56&type=chunk) - The CEO's duties are performed by other executive directors, and the Board believes this has no significant impact on the Group's operations[56](index=56&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=23&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period - All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the review period[57](index=57&type=chunk) [Sufficient Public Float](index=23&type=section&id=Sufficient%20Public%20Float) The company maintained a sufficient public float as of June 30, 2025, and up to the announcement date - The company maintained a sufficient public float[58](index=58&type=chunk) [Review of Interim Results](index=23&type=section&id=Review%20of%20Interim%20Results) The Audit Committee reviewed the Group's unaudited consolidated interim results for H1 2025 without expressing any disagreements - The Group's unaudited consolidated interim results for the six months ended June 30, 2025, have been reviewed by the Audit Committee with no disagreements expressed[59](index=59&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries engaged in purchasing, selling, or redeeming any listed securities during the review period - During the review period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[60](index=60&type=chunk) [Publication of Interim Results and Interim Report](index=23&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This announcement is available on HKEXnews and the company website, with the interim report to follow for shareholders - This announcement has been published on the HKEXnews website (http://www.hkexnews.hk) and the company's website (https://www.aelg.com.hk)[61](index=61&type=chunk) - The interim report will be dispatched to the company's shareholders and uploaded to the aforementioned websites in due course[61](index=61&type=chunk) [Glossary](index=24&type=section&id=Glossary) This section defines key terms used throughout the report, including company specifics and regulatory references [Glossary](index=24&type=section&id=Glossary%20(sub-section)) This sub-section provides definitions for key terms, company names, and relevant financial and regulatory standards used in the report - Provides definitions for key terms used in the report, such as "2018 Share Option Scheme", "Audit Committee", "Corporate Governance Code"[62](index=62&type=chunk)[63](index=63&type=chunk) - Clarifies that "the Company" refers to Asia Energy Logistics Group Limited, and "the Group" refers to the Company and its subsidiaries[62](index=62&type=chunk) - The report date is **August 22, 2025**, and lists the Board of Directors[64](index=64&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示概不因本公告全部或任何部份內容而產 生或因依賴該等內容而引致之任何損失承擔任何責任。 BEIJING MEDIA CORPORATION LIMITED 北青傳媒股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：1000） 截至二零二五年六月三十日止六個月 半年度業績公告 財務摘要： 北青傳媒股份有限公司（「本公司」或「北青傳媒」，連同其附屬公司，統稱「本集團」）董事 （「董事」）會（「董事會」）謹此提呈本集團截至二零二五年六月三十日止六個月（「二零二五 年上半年」或「報告期」）的未經審核綜合業績及本集團於二零二四年同期的比較業績。 – 3 – 合併資產負債表（未經審核） – 1 – 1. 營業總收入下降32.63%至人民幣65,985千元（二零二四年同期營業總收入：人民幣 97,937千元）。 2. 歸屬於本公司股東之淨虧損為人民幣19,047千元（二零二四年同期歸屬於本公司股 東之淨虧損：人民幣9,420千元）。 3. 每股虧損為人民幣0.10元（二零二四年同期每股虧 ...