[Condensed Consolidated Performance](index=1&type=section&id=Condensed%20Consolidated%20Performance) [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue decreased by 2.9% year-on-year to HK$487,743 thousand, with profit for the period at HK$12,183 thousand, a slight decrease of 4.0% from the same period last year. Gross profit remained largely stable, but operating profit and profit before tax both decreased | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 487,743 | 502,149 | (14,406) | -2.9% | | Cost of sales | (350,604) | (364,755) | 14,151 | -3.9% | | Gross profit | 137,139 | 137,394 | (255) | -0.2% | | Other income | 19,097 | 28,779 | (9,682) | -33.6% | | Operating profit | 21,023 | 26,364 | (5,341) | -20.2% | | Profit before tax | 15,015 | 16,904 | (1,889) | -11.2% | | Profit for the period | 12,183 | 12,688 | (505) | -4.0% | | Basic earnings per share | 0.2 HK cents | 0.2 HK cents | 0 | 0% | [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded total comprehensive income of HK$77,690 thousand, primarily benefiting from a significant positive change in exchange differences on translation of foreign operations, reversing the comprehensive loss from the same period last year | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Profit for the period | 12,183 | 12,688 | (505) | | Exchange differences on translation of foreign operations | 65,507 | (35,578) | 101,085 | | Total comprehensive income / (loss) for the period | 77,690 | (22,890) | 100,580 | [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 and net assets both increased. Non-current assets rose, current assets slightly decreased, but current liabilities significantly reduced, leading to improvements in net current assets and total assets less current liabilities | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total non-current assets | 1,154,660 | 1,114,755 | 39,905 | 3.6% | | Total current assets | 1,332,296 | 1,355,562 | (23,266) | -1.7% | | Total current liabilities | 421,882 | 484,051 | (62,169) | -12.8% | | Net current assets | 910,414 | 871,511 | 38,903 | 4.5% | | Total assets less current liabilities | 2,065,074 | 1,986,266 | 78,808 | 4.0% | | Total non-current liabilities | 39,028 | 38,348 | 680 | 1.8% | | Net assets | 2,026,046 | 1,947,918 | 78,128 | 4.0% | | Total equity | 2,026,046 | 1,947,918 | 78,128 | 4.0% | [Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flow from operating activities significantly increased, cash outflow from investing activities substantially decreased, while financing activities shifted from net inflow to net outflow, primarily due to repayment of bank loans | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 70,583 | 23,174 | 47,409 | | Net cash used in investing activities | (52,333) | (254,278) | 201,945 | | Net cash (used in) / generated from financing activities | (97,644) | 110,065 | (207,709) | | Net decrease in cash and cash equivalents | (79,394) | (121,039) | 41,645 | | Cash and cash equivalents at end of period | 439,269 | 556,885 | (117,616) | [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity attributable to owners of the Company amounted to HK$1,858,604 thousand, an increase from the beginning of the year, primarily driven by profit for the period and positive exchange differences on translation of foreign operations | Metric | January 1, 2025 (HK$ thousand) | June 30, 2025 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 1,794,395 | 1,858,604 | 64,209 | | Non-controlling interests | 153,523 | 167,442 | 13,919 | | Total equity | 1,947,918 | 2,026,046 | 78,128 | - Profit for the period was **HK$2,205 thousand**, and exchange differences on translation of foreign operations amounted to **HK$61,566 thousand**, jointly driving equity growth[8](index=8&type=chunk) [Notes to the Condensed Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) [1. Company Information](index=7&type=section&id=1.%20Company%20Information) International Precision Group Limited was incorporated in the Cayman Islands in 2002 and listed on the Hong Kong Stock Exchange in 2004, primarily manufacturing and selling precision metal parts for automotive, hydraulic, and electronic equipment - The Company was incorporated in the Cayman Islands on July 10, 2002, and listed on the Main Board of the Hong Kong Stock Exchange on November 1, 2004[9](index=9&type=chunk) - Its principal business involves the manufacturing and sale of precision metal parts for automotive components, hydraulic equipment parts, and electronic equipment parts[9](index=9&type=chunk) [2. Basis of Preparation](index=7&type=section&id=2.%20Basis%20of%20Preparation) The unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using the historical cost convention, presented in Hong Kong dollars, with all values rounded to the nearest thousand - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - The statements are prepared on the historical cost basis, except for derivative financial instruments which are measured at fair value, and are presented in Hong Kong dollars[10](index=10&type=chunk) [3. Significant Accounting Policies](index=7&type=section&id=3.%20Significant%20Accounting%20Policies) The accounting policies adopted in this interim period are consistent with those of the previous year, with the initial adoption of HKFRS amendments issued by the HKICPA, which had no significant impact on financial position or performance - The accounting policies are consistent with those adopted in the annual financial statements for the year ended December 31, 2024[11](index=11&type=chunk) - The Group has initially adopted amendments to HKAS 21 (Amendment) Lack of Exchangeability and other amendments, which had no significant impact on the financial position and performance for the current and prior periods[11](index=11&type=chunk) [4. Operating Segment Information](index=8&type=section&id=4.%20Operating%20Segment%20Information) The Group is organized into six reportable segments based on customer location: Thailand, Malaysia, Mainland China/Macau/Hong Kong, North America, Europe, and other countries. Segment performance is primarily assessed by monitoring revenue and gross profit, with assets and liabilities reported periodically - The Group manages its business by coordinating departments based on customer location, divided into six reportable segments: Thailand, Malaysia, Mainland China, Macau and Hong Kong, North America, Europe, and other countries[12](index=12&type=chunk)[14](index=14&type=chunk) - Segment performance is primarily assessed based on revenue and gross profit, with segment assets and liabilities reported periodically to senior management[13](index=13&type=chunk) Revenue and Gross Profit by Geographical Region (HK$ thousand) | Region | 2025 H1 Revenue | 2025 H1 Gross Profit | 2024 H1 Revenue | 2024 H1 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Thailand | 2,405 | 676 | 9,562 | 2,616 | | Malaysia | 12,441 | 3,498 | 14,068 | 3,849 | | Mainland China, Macau and Hong Kong | 291,649 | 82,003 | 275,248 | 75,311 | | North America | 95,630 | 26,888 | 102,037 | 27,919 | | Europe | 66,862 | 18,800 | 86,503 | 23,668 | | Other countries | 18,756 | 5,274 | 14,731 | 4,031 | | **Total** | **487,743** | **137,139** | **502,149** | **137,394** | [5. Revenue and Other Income and Gains](index=10&type=section&id=5.%20Revenue%20and%20Other%20Income%20and%20Gains) The Group's revenue primarily derives from the sale of hydraulic equipment and automotive parts, with total revenue for H1 2025 at HK$487,743 thousand, a 2.9% year-on-year decrease. Total other income and gains were HK$19,097 thousand, a reduction from the prior period, mainly due to decreased exchange differences and bank interest income - Revenue represents the net invoiced value of goods sold during the period, after deducting returns and trade discounts[17](index=17&type=chunk) Revenue Composition (HK$ thousand) | Revenue Category | 2025 H1 | 2024 H1 | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of automotive parts | 216,366 | 226,890 | (10,524) | -4.6% | | Sales of hydraulic equipment parts | 254,322 | 251,685 | 2,637 | 1.0% | | Sales of electronic parts | 12,143 | 14,327 | (2,184) | -15.2% | | Others | 4,912 | 9,247 | (4,335) | -46.9% | | **Total Revenue** | **487,743** | **502,149** | **(14,406)** | **-2.9%** | Other Income and Gains (HK$ thousand) | Category | 2025 H1 | 2024 H1 | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Bank interest income | 1,976 | 4,671 | (2,695) | | Government grants | 5,902 | 6,278 | (376) | | Dividend income | 2,223 | 2,522 | (299) | | Rental income | 4,776 | 5,266 | (490) | | Others | 3,836 | 2,577 | 1,259 | | Gain on disposal of property, plant and equipment | – | 231 | (231) | | Gain on disposal of financial assets at fair value through profit or loss | 384 | – | 384 | | Net exchange differences | – | 7,234 | (7,234) | | **Total** | **19,097** | **28,779** | **(9,682)** | [6. Finance Costs](index=11&type=section&id=6.%20Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs significantly decreased by 38.9% to HK$5,360 thousand, primarily due to reduced bank loan interest and financial arrangement fees | Category | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on bank loans | 5,056 | 8,174 | (3,118) | -38.1% | | Financial arrangement fees | 256 | 510 | (254) | -49.8% | | Interest on lease liabilities | 48 | 93 | (45) | -48.4% | | **Total** | **5,360** | **8,777** | **(3,417)** | **-38.9%** | [7. Profit Before Tax](index=11&type=section&id=7.%20Profit%20Before%20Tax) The Group's profit before tax is stated after deducting various expenses, including cost of inventories sold, depreciation, amortization, share option expenses, and auditor's remuneration. Notably, a net exchange difference loss was recorded this period, compared to a gain in the prior period | Item | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 350,604 | 364,755 | (14,151) | | Depreciation of property, plant and equipment | 46,334 | 39,334 | 7,000 | | Depreciation of right-of-use assets | 464 | 863 | (399) | | Amortisation | 5,239 | 5,073 | 166 | | Equity-settled share option expenses | 438 | – | 438 | | Auditor's remuneration | 1,320 | 1,236 | 84 | | Net exchange differences | 4,914 | (7,234) | 12,148 | | Loss / (gain) on disposal of property, plant and equipment | 772 | (231) | 1,003 | [8. Income Tax](index=12&type=section&id=8.%20Income%20Tax) For the six months ended June 30, 2025, the Group's income tax expense was HK$2,832 thousand, a decrease from the prior period, primarily due to the recognition of deferred tax assets - Hong Kong Profits Tax is provided at a rate of **16.5%**, with other regions calculated at their respective prevailing local tax rates[21](index=21&type=chunk) | Category | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Current | 4,151 | 4,216 | (65) | | Deferred | (1,319) | – | (1,319) | | **Total** | **2,832** | **4,216** | **(1,384)** | [9. Earnings Per Share](index=12&type=section&id=9.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share remained at **0.2 HK cents**, consistent with the prior period, despite a slight decrease in profit attributable to equity holders of the Company | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (HK$ thousand) | 2,205 | 2,378 | | Weighted average number of ordinary shares in issue (thousand shares) | 1,052,254 | 1,052,254 | | Basic earnings per share (HK cents) | 0.2 | 0.2 | | Diluted earnings per share (HK cents) | 0.2 | 0.2 | [10. Interim Dividend Per Share](index=13&type=section&id=10.%20Interim%20Dividend%20Per%20Share) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the same period last year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil per ordinary share)[25](index=25&type=chunk) [11. Property, Plant and Equipment](index=13&type=section&id=11.%20Property,%20Plant%20and%20Equipment) As of June 30, 2025, the net book value of property, plant and equipment was HK$1,012,201 thousand, an increase from December 31, 2024, primarily due to additions and exchange adjustments during the period Net Book Value of Property, Plant and Equipment (HK$ thousand) | Item | June 30, 2025 | December 31, 2024 | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | **Total** | **1,012,201** | **973,341** | **38,860** | - Additions to property, plant and equipment amounted to **HK$63,042 thousand** during the period, with exchange adjustments of **HK$96,485 thousand**[26](index=26&type=chunk) [12. Inventories](index=14&type=section&id=12.%20Inventories) As of June 30, 2025, the Group's total inventories amounted to HK$327,693 thousand, a slight increase from December 31, 2024, primarily reflecting growth in work-in-progress and finished goods inventories | Inventory Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Raw materials | 83,579 | 97,580 | (14,001) | | Consumables | 18,293 | 16,321 | 1,972 | | Work-in-progress | 86,698 | 70,298 | 16,400 | | Finished goods | 139,123 | 134,722 | 4,401 | | **Total** | **327,693** | **318,921** | **8,772** | [13. Trade Receivables](index=14&type=section&id=13.%20Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to HK$404,617 thousand, an increase from December 31, 2024. The Group grants customers credit terms of 60 to 120 days and maintains strict control over overdue balances - The Group's trade terms with customers are primarily on an open account basis, with credit periods generally ranging from **60 to 120 days**[28](index=28&type=chunk) Ageing Analysis of Trade Receivables (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Within 1 month | 217,981 | 175,321 | 42,660 | | 1 to 2 months | 72,156 | 71,405 | 751 | | 2 to 3 months | 52,212 | 51,043 | 1,169 | | 3 to 4 months | 34,483 | 35,049 | (566) | | 4 to 12 months | 24,943 | 37,450 | (12,507) | | Over 1 year | 2,842 | – | 2,842 | | **Total** | **404,617** | **370,268** | **34,349** | [14. Cash and Bank Balances](index=15&type=section&id=14.%20Cash%20and%20Bank%20Balances) As of June 30, 2025, cash and bank balances amounted to HK$439,269 thousand, a decrease from December 31, 2024, primarily due to a reduction in pledged and restricted deposits | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Bank deposits, bank and cash in hand | 458,232 | 549,893 | (91,661) | | Less: Pledged and restricted deposits | (18,963) | (34,733) | 15,770 | | **Cash and cash equivalents** | **439,269** | **515,160** | **(75,891)** | [15. Trade Payables](index=15&type=section&id=15.%20Trade%20Payables) As of June 30, 2025, total trade payables amounted to HK$106,366 thousand, a slight increase from December 31, 2024 | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Within 1 month | 59,541 | 64,756 | (5,215) | | 1 to 2 months | 23,190 | 21,781 | 1,409 | | 2 to 3 months | 12,812 | 6,312 | 6,500 | | Over 3 months | 10,823 | 12,311 | (1,488) | | **Total** | **106,366** | **105,160** | **1,206** | [16. Share Capital](index=15&type=section&id=16.%20Share%20Capital) As of June 30, 2025, the Group's authorized share capital and issued and fully paid share capital remained unchanged at HK$200,000 thousand and HK$105,225 thousand, respectively | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Authorized share capital | 200,000 | 200,000 | | Issued and fully paid share capital | 105,225 | 105,225 | - There were no changes in the issued and fully paid share capital for the six months ended June 30, 2025, and for the year ended December 31, 2024[30](index=30&type=chunk) [17. Bank and Other Borrowings](index=16&type=section&id=17.%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total bank and other borrowings amounted to HK$205,776 thousand, a significant decrease from December 31, 2024, primarily due to the repayment of secured bank loans | Loan Category | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Bank loans – secured | – | 110,000 | (110,000) | | Bank loans – secured with a repayment on demand clause | 199,486 | 171,541 | 27,945 | | Bank loans – unsecured | – | 4,242 | (4,242) | | Other loans – non-controlling shareholders | 6,290 | 5,981 | 309 | | **Total** | **205,776** | **291,764** | **(85,988)** | Bank Loan Maturity Profile (HK$ thousand) | Maturity Period | June 30, 2025 | December 31, 2024 | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Within 1 year or on demand | 44,645 | 128,040 | (83,395) | | In the second year | 16,626 | 15,863 | 763 | | In the third to fifth year | 80,234 | 52,835 | 27,399 | | Over 5 years | 57,981 | 89,045 | (31,064) | | **Total** | **199,486** | **285,783** | **(86,300)** | [18. Capital Commitments](index=17&type=section&id=18.%20Capital%20Commitments) As of June 30, 2025, the Group's total contracted but unprovided capital commitments amounted to HK$10,690 thousand, a decrease from December 31, 2024, primarily reflecting reduced commitments for buildings and plant and machinery | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Plant and machinery | 1,474 | 3,299 | (1,825) | | Buildings | 9,216 | 15,321 | (6,105) | | **Total** | **10,690** | **18,620** | **(7,930)** | [19. Related Party Transactions](index=17&type=section&id=19.%20Related%20Party%20Transactions) As of June 30, 2025, total remuneration paid to key management personnel amounted to HK$5,674 thousand, a decrease from the same period last year | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Short-term employee benefits | 5,434 | 6,299 | (865) | | Post-employment benefits | 240 | 222 | 18 | | **Total remuneration paid to key management personnel** | **5,674** | **6,521** | **(847)** | [Chairman's Report](index=18&type=section&id=Chairman's%20Report) [Business Review](index=18&type=section&id=Business%20Review) Amidst a complex international economic environment, the Group's H1 2025 sales slightly decreased by 2.9% to HK$487,743 thousand. Sales of hydraulic equipment parts grew by 1.0%, while automotive and electronic equipment parts businesses declined. The Group is addressing challenges through cost control and the commencement of production at its Thailand factory - Affected by the US tariff war, the Russia-Ukraine conflict, and domestic industry 'involution', the Group's overall revenue remained relatively stable, with H1 sales recorded at **HK$487,743 thousand**, a year-on-year decrease of **2.9%**[35](index=35&type=chunk) - Sales of hydraulic equipment parts business were **HK$254,322 thousand**, a year-on-year increase of **1.0%**, primarily achieved through price reductions to maintain volume and expansion into the agricultural machinery sector[36](index=36&type=chunk) - Sales of automotive parts business were **HK$216,366 thousand**, a year-on-year decrease of **4.6%**, negatively impacted by both US tariff policies and increased penetration of new energy vehicles. Some parts have been transferred to the Thailand factory for production[37](index=37&type=chunk) - Sales of electronic equipment parts business were **HK$12,143 thousand**, a year-on-year decrease of **15.2%**, largely maintaining last year's level[37](index=37&type=chunk) - Through cost optimization measures such as lean projects, enhanced automation, and optimized supply chain management, the Group maintained its gross profit margin at **28.1%** (prior period: **27.4%**)[38](index=38&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) Despite a 2.9% decrease in total sales, the gross profit margin was maintained at 28.1% through cost control and automation. The reduction in other income was mainly due to lower exchange gains from a weaker US dollar and decreased bank interest income. Administrative expenses increased due to a non-wholly owned subsidiary's closure and exchange losses, but finance costs significantly decreased by 38.9% due to bank loan repayments. Net profit for the period slightly declined by 4.0% - Total sales decreased by **2.9%** year-on-year to **HK$487,743 thousand**, but the gross profit margin was maintained at **28.1%** (prior period: **27.4%**), with gross profit at **HK$137,139 thousand**[39](index=39&type=chunk) - Total other income amounted to **HK$19,097 thousand**, a year-on-year decrease, primarily due to unrealized exchange gains from a weaker US dollar (prior period exchange gain: **HK$7,234 thousand**) and a **HK$2,695 thousand** reduction in bank interest income[39](index=39&type=chunk) - Administrative expenses and other expenses were **HK$91,251 thousand**, a year-on-year increase of **6.5%**, mainly due to **HK$2,200 thousand** compensation from the closure of a non-wholly owned subsidiary and **HK$4,914 thousand** exchange losses from a weaker US dollar, partially offset by **HK$851 thousand** savings in utilities[40](index=40&type=chunk) - Research and development expenses were **HK$29,875 thousand**, a slight decrease, but continuous investment is maintained to preserve market competitiveness[41](index=41&type=chunk) - Finance costs were **HK$5,360 thousand**, a year-on-year decrease of **38.9%**, primarily due to the use of internal funds to repay bank loans[41](index=41&type=chunk) - Net profit for the period was **HK$12,183 thousand**, a year-on-year decrease of **4.0%**[41](index=41&type=chunk) [Pledge of the Group's Assets](index=21&type=section&id=Pledge%20of%20the%20Group's%20Assets) The Group reduced total bank and other borrowings by HK$85,988 thousand by repaying high-cost bank loans with internal funds. Some loans are secured by subsidiary equity and properties, with certain deposits restricted for loan repayment or letter of guarantee issuance - Total bank and other borrowings amounted to **HK$205,776 thousand**, a decrease of **HK$85,988 thousand** from the end of last year, primarily due to the use of internal funds to repay high-cost bank loans[42](index=42&type=chunk) - Loans are guaranteed by the Company and its subsidiaries, and secured by equity interests in subsidiaries and properties[42](index=42&type=chunk) - As of June 30, 2025, no deposits were pledged to secure general working capital (December 31, 2024: **HK$20,000 thousand**)[43](index=43&type=chunk) - Deposits of **HK$16,660 thousand** were restricted solely for loan repayment purposes[43](index=43&type=chunk) [Liquidity, Financial Resources and Financial Ratios](index=22&type=section&id=Liquidity,%20Financial%20Resources%20and%20Financial%20Ratios) The Group's net cash flow from operating activities significantly increased to HK$70,583 thousand, primarily benefiting from improved working capital management and the release of restricted funds. Cash outflow from investing activities substantially decreased, while net cash outflow from financing activities was mainly used for repaying high-cost bank loans. Overall net cash increased - Net cash generated from operating activities was **HK$70,583 thousand**, a year-on-year increase of **HK$47,409 thousand**, primarily due to improved working capital management and reduced restricted funds releasing liquidity[44](index=44&type=chunk) - Net cash outflow from investing activities was **HK$52,333 thousand**, a year-on-year decrease of **HK$201,945 thousand**, mainly due to significant acquisition expenditures in the prior period[45](index=45&type=chunk) - Net cash outflow from financing activities was **HK$97,644 thousand**, primarily due to the use of internal funds to repay high-cost bank loans[45](index=45&type=chunk) - As of June 30, 2025, the Group's net cash was **HK$233,493 thousand**, an increase of **HK$10,097 thousand** from December 31, 2024[45](index=45&type=chunk) [Currency Risk and Management](index=23&type=section&id=Currency%20Risk%20and%20Management) The Group faces foreign currency exchange rate fluctuation risks, particularly the negative impact of RMB appreciation on profitability, as revenue is primarily settled in USD, EUR, and RMB, while expenses are settled in JPY, RMB, THB, and HKD. Management continuously assesses and implements measures to mitigate these risks - The Group is exposed to foreign currency exchange rate fluctuation risks, with revenue primarily settled in USD, EUR, and RMB, while expenses are settled in JPY, RMB, THB, and HKD[46](index=46&type=chunk) - RMB appreciation would have a negative impact on the Group's profitability[46](index=46&type=chunk) - Management continuously assesses foreign exchange risks and takes measures to mitigate them when necessary[46](index=46&type=chunk) [Human Resources](index=23&type=section&id=Human%20Resources) The Group is committed to talent pipeline development and employee safety training, with a share option scheme and retirement benefit plans in place. As of June 30, 2025, the total number of employees was **2,138**, a year-on-year decrease of **119** employees - The Company formulates a talent pipeline reserve list and development plans to ensure an ample supply of core talent[47](index=47&type=chunk) - To protect employees, the Company enhances production safety awareness and training, strengthening employees' understanding of risk points on production lines[47](index=47&type=chunk) - A share option scheme is in place to encourage and reward contributions from selected participants, and a Mandatory Provident Fund Scheme and local retirement benefit plans are established for employees[47](index=47&type=chunk) - As of June 30, 2025, the total number of employees was **2,138**, a decrease of **119** employees from the same period last year[47](index=47&type=chunk) [Outlook](index=24&type=section&id=Outlook) Facing a complex international economic environment and tariff policies, the Group will mitigate operational risks by expanding domestic sales and shifting US customer orders to its Thailand production base. The second half will focus on sales breakthroughs, developing new regional markets (e.g., Eastern Europe and Southeast Asia), accelerating new product R&D and mass production, and recruiting key talent to enhance production processes and R&D capabilities - To reduce reliance on overseas sales markets, the Group will expand its domestic sales market by launching new products; sales in the China region have increased from **55%** in the prior period to **60%** in the current period[48](index=48&type=chunk) - To mitigate tariff risks, the Group continues to gradually transfer US customer orders to its Thailand production base while expanding into Southeast Asian markets[48](index=48&type=chunk) - The primary task for the second half is sales breakthroughs, developing new regional markets (e.g., Eastern Europe and Southeast Asia), actively seeking new projects, accelerating new product sample progress, and achieving mass production[48](index=48&type=chunk) - The Group will drive future development through R&D, iterating and upgrading products, optimizing functions, and recruiting key talent to enhance production processes and R&D capabilities[48](index=48&type=chunk) [Additional Information](index=25&type=section&id=Additional%20Information) [Purchase, Redemption or Sale of the Company's Listed Securities](index=25&type=section&id=Purchase,%20Redemption%20or%20Sale%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, and the Company held no treasury shares - 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 on the Stock Exchange[51](index=51&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[51](index=51&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the same period last year - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[52](index=52&type=chunk) [Standard Code for Securities Transactions](index=25&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted its own code of conduct no less exacting than the Listing Rules' Standard Code, and established written guidelines for employees. All Directors confirmed compliance with the code, with no non-compliance by relevant employees identified - The Company has adopted its own code of conduct no less exacting than the Standard Code set out in Appendix C3 of the Listing Rules, and has established written guidelines for employees[53](index=53&type=chunk) - All Directors confirmed compliance with their own code and the Standard Code throughout the six months ended June 30, 2025[53](index=53&type=chunk) - The Company is not aware of any non-compliance by relevant employees with the written guidelines for employees[53](index=53&type=chunk) [Events After the Reporting Period](index=25&type=section&id=Events%20After%20the%20Reporting%20Period) Save as disclosed in this announcement, there have been no significant events after June 30, 2025, and up to the date of this announcement - There have been no significant events after June 30, 2025, and up to the date of this announcement[54](index=54&type=chunk) [Corporate Governance](index=26&type=section&id=Corporate%20Governance) The Company is committed to maintaining high corporate governance standards and has adopted the Corporate Governance Code in Appendix C1 Part 2 of the Listing Rules. Despite the Chairman and CEO roles being combined and independent non-executive directors missing a general meeting, the Board believes this structure benefits shareholders overall - The Company has adopted the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules and considers that it has complied with the code during the review period[55](index=55&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Zeng Guangsheng, which the Board believes provides strong and consistent leadership, benefiting shareholders as a whole[56](index=56&type=chunk) - Non-executive Director Mr. Chen Kuangguo and Independent Non-executive Director Mr. Yang Rusheng were unable to attend the Annual General Meeting held on May 16, 2025, due to other work commitments, constituting a deviation from Corporate Governance Code Provision C.1.5[56](index=56&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed matters relating to risk management, internal control, and financial reporting procedures[55](index=55&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=27&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the Stock Exchange's website and the Company's website. The interim report will be dispatched to shareholders and published on the websites in due course - This interim results announcement has been published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (http://www.ipegroup.com)[57](index=57&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the aforementioned websites in due course[57](index=57&type=chunk) [Board of Directors](index=27&type=section&id=Board%20of%20Directors) As of the date of this announcement, the Board of Directors comprises seven directors, including two executive directors (Mr. Zeng Guangsheng, also Chairman and CEO; Mr. Wu Kaiping), two non-executive directors (Ms. Zeng Jing; Mr. Chen Kuangguo), and three independent non-executive directors (Mr. Yang Rusheng; Mr. Zhang Zhenyu; Mr. Zhu Jianbiao) - The Board of Directors consists of seven directors: Mr. Zeng Guangsheng (Chairman and Chief Executive Officer), Mr. Wu Kaiping (Executive Director), Ms. Zeng Jing, Mr. Chen Kuangguo (Non-executive Directors), Mr. Yang Rusheng, Mr. Zhang Zhenyu, and Mr. Zhu Jianbiao (Independent Non-executive Directors)[58](index=58&type=chunk)

[Chairman's Report](index=1&type=section&id=Chairman's%20Report) [Interim Results and Dividends](index=1&type=section&id=Interim%20Results%20and%20Dividends) The Group's underlying profit attributable to shareholders decreased by 44% to HK$3.048 billion, primarily due to one-off gains in the prior period, with an interim dividend of HK$0.50 per share declared | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Underlying Profit Attributable to Shareholders | 3,048 | 5,441 | -44% | | Reported Profit Attributable to Shareholders | 2,908 | 3,174 | -8% | | Basic Earnings Per Share (HK$) | 0.63 | 1.12 | -43.75% | | Reported Earnings Per Share (HK$) | 0.60 | 0.66 | -9.09% | | Interim Dividend Per Share (HK$) | 0.50 | 0.50 | 0% | - The decrease in underlying profit was primarily due to attributable gains of approximately **HK$2.503 billion** in the prior period from government land resumption in new development areas and the disposal of a controlling interest in an investment property in North Point ("The Point") [2](index=2&type=chunk) - Fair value loss on completed investment properties and investment properties under development significantly reduced to **HK$140 million**, a substantial decrease from **HK$2.267 billion** in the prior period [2](index=2&type=chunk) [Suspension of Share Registration](index=1&type=section&id=Suspension%20of%20Share%20Registration) Share registration will be suspended from September 5 to September 8, 2025, to determine eligibility for the interim dividend, which will be paid on September 17, 2025 - Share registration will be suspended from **September 5 to September 8, 2025**, and the interim dividend will be paid on **September 17, 2025** [4](index=4&type=chunk) [Business Review](index=2&type=section&id=Business%20Review) [Hong Kong](index=2&type=section&id=Hong%20Kong) Hong Kong operations benefited from government policies and interest rate adjustments, improving the property market, while rental properties maintained stable occupancy and construction achieved industry recognition - The Hong Kong SAR Government's proactive measures to attract tourists and talent, develop an international education hub, coupled with stamp duty reductions and lower HKD bank interest rates, are favorable for the local property market [5](index=5&type=chunk) [Property Sales (Hong Kong)](index=2&type=section&id=Property%20Sales%20(Hong%20Kong)) Hong Kong property development revenue decreased by 22% to HK$3.812 billion, with pre-tax profit significantly lower due to prior period land resumption gains, though new projects achieved strong sales | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Attributable Hong Kong Property Development Revenue | 3,812 | 4,887 | -22% | | Attributable Hong Kong Property Development Pre-tax Profit | 310 | 1,499 | -79.3% | | Attributable Contracted Sales (Total) | 6,298 | N/A | N/A | | Unrecognized Attributable Contracted Sales (Total) | 10,424 | N/A | N/A | - The decrease in profit was primarily due to an attributable pre-tax gain of approximately **HK$1.055 billion** in the prior period from government land resumption in new development areas [5](index=5&type=chunk) - Several urban residential projects were launched, including "Belgravia Place" Phase 2 in Cheung Sha Wan, "The Southside" in Ma Tau Kok, and "Miami Quay" Phase 2 in Kai Tak, with "The Southside" achieving strong sales, selling all **181** residential units on its launch day [6](index=6&type=chunk) [Property Development (Hong Kong)](index=3&type=section&id=Property%20Development%20(Hong%20Kong)) The Group successfully completed a land exchange application in Hung Shui Kiu/Ha Tsuen, with substantial urban redevelopment projects planned for sale or lease in 2025 H2 and beyond, maintaining a robust development pipeline | Location | Development Type | Site Area (sq ft) | Group's Interest (%) | Estimated Attributable Floor Area (sq ft) | Attributable Land Premium (HK$ million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Hung Shui Kiu/Ha Tsuen New Development Area Zone 34B | Commercial/Residential | 178,718 | 50.00 | 580,828 | 931.36 | - Approximately **1.2 million sq ft** of attributable floor area from urban old building redevelopment projects has been allocated for sale in **2025 H2** [7](index=7&type=chunk) | Category | Number of Projects | Remaining Attributable Saleable/Floor Area (million sq ft) | | :--- | :--- | :--- | | Remaining unsold units from major launched development projects | 26 | 1.3 | | Projects planned for launch in 2025 H2 | 10 | 1.5 | | Urban old building redevelopment projects (all property rights acquired or reached compulsory sale threshold) | Multiple | 1.7 | | Central New Waterfront Site 3 | 1 | 1.6 | | Yau Tong Bay Project | 1 | 0.9 | | Hung Shui Kiu/Ha Tsuen New Development Area Zone 34B | 1 | 0.6 | | Other properties for development/under development | Multiple | 4.3 | | **Total** | **N/A** | **11.9** | [Land Bank](index=11&type=section&id=Land%20Bank) As of June 30, 2025, the Group held approximately 22.9 million sq ft of attributable land bank in Hong Kong, including 11.9 million sq ft for sale/development and 11.0 million sq ft of completed investment properties, actively participating in new development areas | Land Bank Category | Attributable Floor Area (million sq ft) | | :--- | :--- | | Properties for sale/development/under development | 10.6 | | Remaining saleable floor area from major launched projects | 1.3 | | Completed rental properties (including hotels) | 11.0 | | **Total** | **22.9** | - Urban old building redevelopment projects are expected to provide approximately **1.7 million sq ft** of attributable floor area for sale or lease in **2026 or later** [18](index=18&type=chunk) | New Territories Land Bank Region | Attributable Land Area (million sq ft) | | :--- | :--- | | Yuen Long District | 25.8 | | North District | 12.1 | | Tai Po District | 3.4 | | Tuen Mun District and Others | 0.6 | | **Total** | **41.9** | - The Group owns approximately **6.1 million sq ft** of attributable land in San Tin, "Northern Metropolis", of which approximately **0.334 million sq ft** will be resumed by the government [22](index=22&type=chunk) - An additional approximately **0.187 million sq ft** of the Group's land will be resumed by the government for the construction of the Northern Link main line, with expected cash compensation totaling approximately **HK$540 million** [23](index=23&type=chunk) [Rental Properties (Hong Kong)](index=14&type=section&id=Rental%20Properties%20(Hong%20Kong)) Hong Kong's attributable gross rental income slightly increased to HK$3.411 billion, but pre-tax net rental income decreased by 1% to HK$2.483 billion, with major rental properties maintaining an average occupancy rate of 93% | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Attributable Gross Rental Income | 3,411 | 3,396 | +0.4% | | Attributable Pre-tax Net Rental Income | 2,483 | 2,512 | -1% | | IFC Attributable Gross Rental Income | 803 | 819 | -2% | | Major Rental Properties Average Occupancy Rate | 93% | N/A | N/A | | Category | Attributable Floor Area (million sq ft) | Percentage (%) | | :--- | :--- | :--- | | Shopping Malls or Retail Shops | 5.7 | 54 | | Offices | 4.2 | 40 | | Industrial | 0.2 | 2 | | Residential and Serviced Apartments | 0.4 | 4 | | **Total** | **10.5** | **100** | [Retail Property Portfolio](index=15&type=section&id=Retail%20Property%20Portfolio) Despite economic uncertainties and changing consumption patterns, the Group's retail property portfolio maintained high occupancy rates, successfully attracting footfall and stimulating consumption through tenant mix adjustments and marketing strategies - The Group's retail property portfolio maintained high overall occupancy rates, successfully attracting a large number of family customers by introducing specialty restaurants, lifestyle stores, and beauty brands, and organizing various marketing activities [26](index=26&type=chunk) - MCP (Metro City Plaza) and Maritime Square won "Best Shopping Mall Creative – Hong Kong" and "Best Regional Shopping Mall – Hong Kong" awards, respectively [26](index=26&type=chunk) - Leasing interest for the podium malls of two large urban redevelopment projects in Tai Kok Tsui and Hung Hom was strong, expected to further enhance the Group's rental income [27](index=27&type=chunk) [Office Property Portfolio](index=16&type=section&id=Office%20Property%20Portfolio) Despite weak office leasing demand in Hong Kong, the Group's premium office property portfolio performed stably, with major properties maintaining 90% or higher occupancy, and "The Henderson" and a new Central waterfront project securing significant leases - Overall occupancy rates for IFC in Central, AIA Central in North Point, and the Kowloon East office portfolio remained at approximately **90% or above** [28](index=28&type=chunk) - "The Henderson" achieved an occupancy rate of approximately **80%**, attracting premium tenants such as Christie's, Audemars Piguet, and Carlyle, thereby solidifying the Group's recurring income base [29](index=29&type=chunk) - Phase 1 of the Central New Waterfront flagship project secured a lease with quantitative trading firm "Jane Street Asia Limited" for over **223,000 sq ft**, setting a decades-long record for office leasing in Central's core business district [30](index=30&type=chunk) [Construction](index=17&type=section&id=Construction) The Group received "Developer of the Year – Hong Kong" and "Luxury Residential Development of the Year – Hong Kong" awards, with several residential projects achieving five-star ratings and four development projects completed during the period - The Group won "Developer of the Year – Hong Kong" and "Luxury Residential Development of the Year – Hong Kong" at the **2025 Asia Property Awards** [31](index=31&type=chunk) - "Baker Circle • Euston" in Hung Hom and "Square Mile" in Mong Kok were both rated five-star residential estates by the Hong Kong Institute of Surveyors [31](index=31&type=chunk) | Project Name and Location | Development Type | Group's Interest (%) | Attributable Floor Area (sq ft) | | :--- | :--- | :--- | :--- | | Belgravia Place Phase 1 (Cheung Sha Wan) | Commercial/Residential | 100.00 | 293,566 | | The Horizon (Cheung Sha Wan) | Residential | 100.00 | 171,664 | | Square Mile (Mong Kok) | Commercial/Residential | 100.00 | 88,367 | | The Forest (Tai Po) | Commercial/Residential | 100.00 | 49,077 | | **Total** | **N/A** | **N/A** | **602,674** | [Property Management (Hong Kong)](index=18&type=section&id=Property%20Management%20(Hong%20Kong)) The Group's property management companies manage over 85,000 residential and industrial/commercial units, 10 million sq ft of retail and office space, and 20,000 parking spaces, maintaining industry leadership with integrated management systems and community engagement - The Group's property management member companies manage over **85,000** residential and industrial/commercial units, **10 million sq ft** of retail and office space, and **20,000** parking spaces [33](index=33&type=chunk) - Integrated management systems compliant with **ISO 9001, ISO 10002, ISO 14001, and ISO 45001** have been adopted, earning recognitions such as the "Hong Kong Service Award for Excellence" and "Q-Mark Service Scheme" [33](index=33&type=chunk) - The "Year of Vitality" theme promoted public awareness of physical and mental well-being, organizing various sports, music, and environmental activities in collaboration with charitable organizations [33](index=33&type=chunk) [Mainland China](index=19&type=section&id=Mainland%20China) Mainland China's real estate market operated steadily with government support, strong performance in tier-one cities, and the Group's property sales and rental income impacted by reduced project completions and market pressures [Real Estate Market Overview](index=19&type=section&id=Real%20Estate%20Market%20Overview) In H1 2025, local governments introduced pro-housing policies and financial easing measures, boosting demand and market confidence, leading to a stable overall market with resilient tier-one cities and easing inventory pressure in tier-two cities - Local governments introduced pro-housing policies and financial easing measures, effectively boosting demand, reducing homebuyer costs, and enhancing market confidence [34](index=34&type=chunk) - The central government's implementation of new residential policies injected new impetus into real estate development, ensuring overall market stability [34](index=34&type=chunk) - Tier-one cities showed greater resilience, while tier-two cities experienced a deep consolidation, gradually easing inventory pressure [34](index=34&type=chunk) [Completed Development Projects](index=19&type=section&id=Completed%20Development%20Projects) The Group completed four development projects in Mainland China during the period, totaling 1.04 million sq ft of attributable floor area, including office and commercial projects in Shanghai and residential/commercial projects in Chengdu, Chongqing, and Tianjin | Project Name | Use | Group's Interest (%) | Attributable Floor Area (million sq ft) | | :--- | :--- | :--- | :--- | | Shanghai "The Metropolis Commercial Center" | Office and Commercial | 51 | 0.42 | | Chengdu "River & Mountain Mansion" Phase 2 | Residential | 50 | 0.28 | | Chongqing "Platinum Central" Phase 2 | Residential | 50 | 0.08 | | Tianjin "Metropolitan Riverfront" Phase 2 | Residential and Commercial | 50 | 0.26 | | **Total** | **N/A** | **N/A** | **1.04** | [Property Investment](index=20&type=section&id=Property%20Investment) The Group concentrated resources on leasing major property investment projects like Guangzhou "The Metropolis" and Shanghai "The West Bund Center", achieving over 80% occupancy, with new completions expected to boost future recurring income - Guangzhou "The Metropolis" two Grade A office towers and Shanghai "The Metropolis Plaza" both achieved over **80% occupancy** by the end of June 2025 [36](index=36&type=chunk) - The newly completed Shanghai "The Metropolis Commercial Center" and the nearing completion Shenzhen "Cloud Tower" in Nanshan District are expected to increase rental income [36](index=36&type=chunk) [Property Development (Mainland China)](index=20&type=section&id=Property%20Development%20(Mainland%20China)) The Group continues to explore development opportunities in tier-one and key tier-two cities, holding approximately 9.54 million sq ft of attributable land bank across 14 cities, with about 65% designated for residential development - As of the end of June 2025, in addition to approximately **2.3 million sq ft** of attributable inventory, the Group held developable land bank totaling approximately **9.54 million sq ft** of attributable floor area across **14 cities** [37](index=37&type=chunk) | Land Bank Use | Group's Estimated Attributable Developable Floor Area (million sq ft) | Percentage (%) | | :--- | :--- | :--- | | Residential | 6.19 | 65 | | Office | 1.68 | 18 | | Commercial | 1.37 | 14 | | Other | 0.30 | 3 | | **Total** | **9.54** | **100** | [Property Sales (Mainland China)](index=22&type=section&id=Property%20Sales%20(Mainland%20China)) Attributable Mainland property development revenue decreased by 16% to RMB2.177 billion (HK$2.361 billion) due to fewer completed pre-sold residential properties, resulting in a pre-tax loss of RMB100 million (HK$108 million) | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Attributable Mainland Property Development Revenue | 2,177 | 2,590 | -16% | | Attributable Pre-tax Loss | 100 | 25 | +300% | | Attributable Contracted Sales (Total) | 1,135 | 1,830 | -38% | | Attributable Sales Floor Area (10,000 sq ft) | 90 | 114 | -21% | - Unrecognized attributable contracted sales totaled approximately **HK$2.275 billion**, of which approximately **HK$621 million** is expected to be recognized in **2025 H2** upon property completion and delivery to buyers [40](index=40&type=chunk) [Rental Properties (Mainland China)](index=22&type=section&id=Rental%20Properties%20(Mainland%20China)) The Group's attributable completed rental property portfolio in Mainland China expanded to approximately 13.4 million sq ft, but gross rental income decreased by 10% (RMB terms) and attributable gross rental income by 12% to HK$922 million due to economic uncertainties and competition | Category | Attributable Floor Area (million sq ft) | Percentage (%) | | :--- | :--- | :--- | | Office | 9.5 | 71 | | Commercial | 3.9 | 29 | | **Total** | **13.4** | **100** | | Region | Attributable Floor Area (million sq ft) | Percentage (%) | | :--- | :--- | :--- | | Beijing | 2.2 | 16 | | Shanghai | 7.2 | 54 | | Guangzhou | 2.6 | 19 | | Other | 1.4 | 11 | | **Total** | **13.4** | **100** | | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Gross Rental Income (RMB terms) | N/A | N/A | -10% | | Attributable Gross Rental Income (HK$ terms) | 922 | 1,047 | -12% | | Attributable Pre-tax Net Rental Income (HK$ terms) | 661 | 764 | -13% | - Beijing "World Financial Centre" occupancy rate declined to **60%**, while Shanghai "Henderson Metropolitan" office occupancy was **97%** and retail **93%** [42](index=42&type=chunk) - Shanghai "The West Bund Center" leasing interest was strong, with occupancy rate increasing to over **60%** [43](index=43&type=chunk) [Property Management (Mainland China)](index=24&type=section&id=Property%20Management%20(Mainland%20China)) Shanghai Star Property Management manages approximately 14 million sq ft of projects in Mainland China, holding multiple ISO certifications and receiving numerous awards for sustainable development and professional management - Shanghai Star Property Management manages approximately **14 million sq ft** of projects in Mainland China, including **5,600** parking spaces [45](index=45&type=chunk) - Star Property has obtained management standard certifications compliant with **ISO 9001, ISO 14001, ISO 45001, ISO 10002, and ISO 50001** [45](index=45&type=chunk) - Star Property received the **WELL Health-Safety Leader Award** and was recognized as a "Top 10 China Office Property Service Provider 2025" and "Leading China Property ESG Sustainable Development Enterprise 2025" [46](index=46&type=chunk) [Henderson Land Development Company Limited](index=25&type=section&id=Henderson%20Land%20Development%20Company%20Limited) Henderson Land Development's attributable loss narrowed to HK$41 million in H1 2025, operating through Citistore and Unicorn department stores/supermarkets, with member loyalty programs integrated into H•COINS | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Attributable Loss to Shareholders | 41 | 69 | -40.58% | | Citistore Self-operated Goods Sales Revenue | 128 | 145 | -11.72% | | Citistore Total Commission Income | 138 | 155 | -11% | | Citistore After-tax Loss | 7 | 11 | -36.36% | | Unicorn Total Sales | 582 | 588 | -1% | | Unicorn After-tax Loss | 30 | 53 | -43.39% | - Henderson Land Development primarily operates through **five "Citistore" department stores**, **one "C-Life" homeware store**, and **two "APITA" or "UNY" department stores** and **two "UNY" supermarkets** [47](index=47&type=chunk) - The "CU APP" member loyalty program has been integrated with the Company's "H•COINS" member loyalty program, providing a more convenient shopping experience for **860,000 members** [47](index=47&type=chunk) [Overall Performance (HLD)](index=25&type=section&id=Overall%20Performance%20(HLD)) Henderson Land Development's attributable loss for H1 2025 narrowed to HK$41 million, an improvement from HK$69 million in the prior period | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Attributable Loss to Shareholders | 41 | 69 | -40.58% | [Citistore](index=25&type=section&id=Citistore) Citistore's total sales, including self-operated and consignment goods, decreased by 13%, with self-operated goods revenue down 12% to HK$128 million, and a narrowed after-tax loss of HK$7 million | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Sales | N/A | N/A | -13% | | Self-operated Goods Sales Revenue | 128 | 145 | -11.72% | | Gross Profit Margin | 32% | N/A | N/A | | Total Commission Income | 138 | 155 | -11% | | After-tax Loss | 7 | 11 | -36.36% | [Unicorn](index=25&type=section&id=Unicorn) Unicorn's total sales, including self-operated and consignment goods, slightly decreased by 1% to HK$582 million, with an after-tax loss of HK$30 million, a reduction from the prior period | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Sales | 582 | 588 | -1% | | After-tax Loss | 30 | 53 | -43.39% | [Outlook (HLD)](index=25&type=section&id=Outlook%20(HLD)) Henderson Land Development will continue strict cost control and operational streamlining while expanding its loyalty program and leveraging technology to improve operations in a challenging environment - Henderson Land Development will continue to implement strict cost control, carefully reviewing all expenses and streamlining operational processes [49](index=49&type=chunk) - Efforts will focus on expanding the member base of its loyalty program and utilizing technology to understand customer needs, with the aim of improving operations [49](index=49&type=chunk) [Miramar Hotel and Investment Company, Limited](index=26&type=section&id=Miramar%20Hotel%20and%20Investment%20Company%2C%20Limited) Miramar's revenue decreased by 7.6% to HK$1.295 billion, and attributable profit by 13.7% to HK$322.1 million, with underlying profit also down, while hotel occupancy was affected by upgrades, and rental income remained stable | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,295 | 1,402 | -7.6% | | Profit Attributable to Shareholders | 322.1 | 373.3 | -13.7% | | Underlying Profit Attributable to Shareholders | 341.8 | 397.9 | -14.1% | [Overall Performance (Miramar)](index=26&type=section&id=Overall%20Performance%20(Miramar)) Miramar's revenue for H1 2025 decreased by 7.6% to HK$1.295 billion, with attributable profit down 13.7% to HK$322.1 million, and underlying profit (excluding fair value changes) decreasing by 14.1% to HK$341.8 million | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,295 | 1,402 | -7.6% | | Profit Attributable to Shareholders | 322.1 | 373.3 | -13.7% | | Underlying Profit Attributable to Shareholders | 341.8 | 397.9 | -14.1% | [Hotel and Serviced Apartment Business](index=26&type=section&id=Hotel%20and%20Serviced%20Apartment%20Business) Hotel and serviced apartment total revenue decreased by 5.7% to HK$280 million, and EBITDA by 29.0% to HK$53.5 million, with occupancy rates slightly down due to major IoT upgrade works at The Mira Hong Kong | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 280 | 297 | -5.7% | | EBITDA | 53.5 | 75.3 | -29.0% | | The Mira Hong Kong Average Occupancy Rate | 90.3% | 91.6% | -1.3% | | Hotel ICON Average Occupancy Rate | 92.9% | 94.6% | -1.7% | - The Mira Hong Kong underwent extensive smart IoT facility upgrade works starting in June, affecting approximately **10%** of room availability monthly [51](index=51&type=chunk) - The Mira Hong Kong and Hotel ICON both received the internationally renowned Muslim travel indicator "CrescentRating" **5-level Muslim-friendly hotel certification** [51](index=51&type=chunk) [Rental Business](index=26&type=section&id=Rental%20Business) Rental business revenue decreased by 3.9% to HK$385.5 million, and EBITDA by 5.2% to HK$322.8 million, with a fair value reduction of HK$14.7 million for investment properties, while office and retail occupancy rates remained above 90% | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 385.5 | 401.1 | -3.9% | | EBITDA | 322.8 | 340.5 | -5.2% | | Total Investment Property Fair Value Decrease | 14.7 | N/A | N/A | | Office and Retail Average Occupancy Rate | >90% | N/A | N/A | - Miramar continuously optimized its asset management strategy, meticulously adjusting the tenant mix to significantly increase the proportion of semi-retail tenants in office properties to nearly **60%** [52](index=52&type=chunk) [Food and Beverage Business](index=26&type=section&id=Food%20and%20Beverage%20Business) Food and beverage total revenue decreased by 2.4% to HK$139.4 million, with an EBITDA loss of HK$2.8 million, which turned into a profit of HK$3.8 million after excluding a one-off provision for restaurant closures | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 139.4 | 142.8 | -2.4% | | EBITDA Loss | 2.8 | N/A | N/A | | EBITDA Excluding One-off Loss Provision | 3.8 | N/A | N/A | - "The Masterpiece" became Hong Kong's first high-end Chinese restaurant to receive "Halal-Friendly" certification and was awarded one diamond by the **Black Pearl Restaurant Guide 2025** [53](index=53&type=chunk) [Travel Business](index=26&type=section&id=Travel%20Business) Travel business revenue decreased by 12.4% to HK$490.5 million, and EBITDA by 61.6% to HK$15.4 million, primarily due to weak local economy, exchange rate fluctuations, and geopolitical factors dampening travel demand | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 490.5 | 560 | -12.4% | | EBITDA | 15.4 | 40 | -61.6% | - The weak local economy, coupled with exchange rate volatility and geopolitical safety factors, further suppressed travel demand, especially for long-haul and high-end travel products [54](index=54&type=chunk) [The Hong Kong and China Gas Company Limited](index=27&type=section&id=The%20Hong%20Kong%20and%20China%20Gas%20Company%20Limited) Hong Kong and China Gas reported HK$27.514 billion in revenue, with a 3% increase in after-tax operating profit to HK$3.996 billion, but a 3% decrease in attributable profit to HK$2.964 billion, while actively expanding gas sources and new energy businesses | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 27,514 | N/A | N/A | | After-tax Operating Profit | 3,996 | 3,880 | +3% | | Profit Attributable to Shareholders | 2,964 | 3,055 | -3% | | Core Profit Excluding Borrowing Exchange Gains/Losses | N/A | N/A | +4% | | Towngas Smart Energy Core Profit | 719 | 705 | +2% | [Overall Performance (Towngas)](index=27&type=section&id=Overall%20Performance%20(Towngas)) Hong Kong and China Gas's H1 2025 revenue reached HK$27.514 billion, with after-tax operating profit up 3% to HK$3.996 billion, but attributable profit decreased by 3% to HK$2.964 billion, though core business profit increased by 4% excluding exchange losses | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 27,514 | N/A | N/A | | After-tax Operating Profit | 3,996 | 3,880 | +3% | | Profit Attributable to Shareholders | 2,964 | 3,055 | -3% | | Core Profit Excluding Borrowing Exchange Gains/Losses | N/A | N/A | +4% | | Towngas Smart Energy Core Profit | 719 | 705 | +2% | [Utilities Business](index=27&type=section&id=Utilities%20Business) [Hong Kong Utilities Business](index=27&type=section&id=Hong%20Kong%20Utilities%20Business) Hong Kong gas sales remained largely flat, with over 5,000 new customers, and the company actively promoted gas-fired dehumidification and combined heat and power systems for energy saving and carbon reduction - Hong Kong gas sales were **14.935 billion MJ**, largely flat year-on-year; the customer base increased by over **5,000** to approximately **2.04 million** [56](index=56&type=chunk) - Actively promoting the application of gas-fired dehumidification and combined heat and power systems, with the North District Hospital expansion project introducing a "cold, heat, and power trigeneration" system, expected to save users **HK$5 million** in energy costs and reduce **3,900 tons** of carbon emissions annually [56](index=56&type=chunk) [Mainland China Utilities Business](index=27&type=section&id=Mainland%20China%20Utilities%20Business) Mainland China's city gas sales remained stable with 980,000 new customers and an 8% increase in gas price spread to RMB0.54 per cubic meter, while "Gas+" businesses expanded and water/environmental profits grew - City gas customer base increased by **980,000** in H1, with gas price spread increasing by **8%** to **RMB0.54 per cubic meter** [57](index=57&type=chunk) - Developed **75** new large industrial and commercial customers, adding an annual gas consumption scale of **240 million cubic meters**, and achieved over **20%** energy savings for users in dyeing industry direct-fired heat exchange retrofits [57](index=57&type=chunk) - Focused on expanding "Gas+" businesses, including energy-saving retrofits for industrial and commercial customers, energy management for public institutions, and integrated energy solutions for industrial parks [57](index=57&type=chunk) - Water and environmental businesses achieved profit growth due to increased sales volume and cost optimization [57](index=57&type=chunk)[58](index=58&type=chunk) [Gas Source Business](index=28&type=section&id=Gas%20Source%20Business) Hong Kong and China Gas's Gas Source segment secured long-term international LNG agreements totaling 1.5 million tons annually from 2027, reducing procurement costs, and the Jintan gas storage facility in Changzhou, Jiangsu, entered a multi-reservoir operation phase - The Gas Source segment optimizes benefits for Towngas city gas enterprises through a "unified negotiation, separate signing" approach, where Hong Kong and China Gas directly negotiates gas supply and pricing with upstream suppliers [59](index=59&type=chunk) - Long-term international LNG agreements for a total of **1.5 million tons** annually have been secured, to be implemented progressively from **2027**, with the first batch of contracts for approximately **0.5 million tons** [59](index=59&type=chunk) - The Jintan gas storage facility in Changzhou, Jiangsu, has entered a new phase of multi-reservoir synchronized operation, enhancing overall emergency supply and market peak shaving efficiency [59](index=59&type=chunk) [Growth Businesses](index=28&type=section&id=Growth%20Businesses) The Group actively developed renewable energy, sustainable aviation fuel (SAF), green methanol, and hydrogen businesses, achieving significant growth in solar power generation, securing SAF supply agreements, expanding green methanol production, and launching hydrogen energy projects [Renewable Energy Business](index=28&type=section&id=Renewable%20Energy%20Business) As of June 30, 2025, 128 zero-carbon smart industrial parks were established across 24 provincial regions, with distributed solar PV capacity reaching 2.6 GW and solar power sales increasing by 44% to 1.18 billion kWh - **128** zero-carbon smart industrial parks have been established across **24** provincial regions nationwide; industrial and commercial distributed PV installed capacity reached **2.6 GW** [60](index=60&type=chunk) | Indicator | 2025 H1 | YoY Change (%) | | :--- | :--- | :--- | | Solar Power Sales | 1.18 billion kWh | +44% | | Power Trading Settlement Volume | 3.64 billion kWh | +14% | - Actively developing "Energy as a Service" (EaaS) to build an integrated "PV + storage + power sales" carbon reduction business model [60](index=60&type=chunk) - Successfully issued "Zero-Carbon Smart Phase 2" asset-backed special plan (quasi-REIT) products, raising approximately **RMB470 million**, with further issuance planned for H2 [61](index=61&type=chunk) [Sustainable Aviation Fuel](index=28&type=section&id=Sustainable%20Aviation%20Fuel) EcoCeres, a strategic shareholder incubated by Hong Kong and China Gas, secured a multi-year SAF supply agreement with British Airways, aiming to reduce approximately 400,000 tons of carbon emissions, with a new Malaysian plant expected to commence production this year - EcoCeres, Inc., a strategic shareholder incubated by Hong Kong and China Gas, signed a multi-year Sustainable Aviation Fuel (SAF) supply agreement with British Airways, which will help reduce approximately **400,000 tons** of carbon emissions [62](index=62&type=chunk) - EcoCeres' new plant in Malaysia is expected to commence production this year, with an annual total capacity exceeding **400,000 tons** [62](index=62&type=chunk) [Green Methanol](index=29&type=section&id=Green%20Methanol) Green methanol products gained market recognition and orders, with full-year sales projected at 20,000 tons, and a new investment platform, VENEX, established with Foshan Gas to expand production capacity in Inner Mongolia and plan a new plant in Foshan - Green methanol products successfully certified and widely recognized by the market, with the business entering a growth phase, securing numerous orders, and full-year sales projected to reach **20,000 tons** [63](index=63&type=chunk) - Completed the establishment of a new investment platform, VENEX, with Foshan Gas Group Co., Ltd., injecting the Inner Mongolia Ordos green methanol plant into VENEX to expand capacity [63](index=63&type=chunk) - Plans to build a new plant in Foshan, Guangdong-Hong Kong-Macao Greater Bay Area, with Phase 1 capacity of **200,000 tons**, expected to commence production in **2027** [63](index=63&type=chunk) [Hydrogen Energy](index=29&type=section&id=Hydrogen%20Energy) Hong Kong's hydrogen energy initiatives include the first public EV hydrogen charging project and hydrogen power generation for the National Games, with the first green hydrogen project at Tseung Kwan O landfill expected to produce 330 kg of green hydrogen daily by 2026 - Hong Kong's first public EV automatic hydrogen charging project has launched and will provide hydrogen power for the **15th National Games golf event venue** [64](index=64&type=chunk) - Hong Kong's first green hydrogen project at the Tseung Kwan O landfill expansion is expected to be completed and operational in **2026**, producing **330 kg of green hydrogen daily** [64](index=64&type=chunk) [Extended Businesses](index=29&type=section&id=Extended%20Businesses) Towngas Smart Energy completed its first round of strategic financing of US$45 million, supporting national expansion and AI-driven digital platform upgrades, while smart kitchen sales grew 25% and comprehensive home insurance sales reached 50% of insurance business - Towngas Smart Energy completed its first round of strategic financing of **US$45 million** in H1, which will support its rapid national scale development, enhance product and service capabilities, and fully apply AI technology to upgrade IoT and other digital platform capabilities [65](index=65&type=chunk) - Smart kitchen business sales increased by **25%** year-on-year in H1; comprehensive home insurance sales accounted for **50%** of insurance business sales [65](index=65&type=chunk) [Outlook (Towngas)](index=29&type=section&id=Outlook%20(Towngas)) Full-year Hong Kong gas sales are expected to remain flat, while Mainland China's city gas pipeline network is maturing, allowing for a lighter asset development model, with growth businesses driving future development - Full-year Hong Kong gas sales are expected to remain largely flat [65](index=65&type=chunk) - Mainland China's city gas pipeline network development is maturing, allowing for reduced capital investment and continued development under a lighter asset model [65](index=65&type=chunk) - The future strategy and goal are to maintain steady progress in utilities and leverage growth businesses as new development drivers [65](index=65&type=chunk) [Hong Kong Ferry (Holdings) Company Limited](index=30&type=section&id=Hong%20Kong%20Ferry%20(Holdings)%20Company%20Limited) Hong Kong Ferry's underlying profit decreased by 19% to HK$69 million, but attributable profit increased by 36% to HK$122 million, with stable property development and investment, increased ferry losses due to engine damage but approved fare hikes, and growing medical and beauty services | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Underlying Profit | 69 | 85 | -19% | | Profit Attributable to Shareholders | 122 | 90 | +36% | [Overall Performance (HK Ferry)](index=30&type=section&id=Overall%20Performance%20(HK%20Ferry)) Hong Kong Ferry's underlying profit for H1 2025 decreased by approximately 19% to HK$69 million, while attributable profit, including fair value changes in investment properties, increased by approximately 36% to HK$122 million | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Underlying Profit | 69 | 85 | -19% | | Profit Attributable to Shareholders | 122 | 90 | +36% | [Property Development and Investment Business](index=30&type=section&id=Property%20Development%20and%20Investment%20Business) Gross rental income from shops and malls decreased by 5% to HK$60 million, with major shop occupancy rates ranging from 80% to 100%, and the company acquired new retail properties in Tsuen Wan for investment | Indicator | 2025 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | | Gross Rental Income from Shops and Malls | 60 | -5% | | "The Avenue" Shop Occupancy Rate | 100% | N/A | | "The Reach" Shop Occupancy Rate | 95% | N/A | | "The Apex" Shop Occupancy Rate | 91% | N/A | | "The Peak Plaza" Occupancy Rate | 87% | N/A | | "The Harbourfront Plaza" Occupancy Rate | 80% | N/A | - Approval was obtained from the Urban Renewal Authority to convert the residential portion of "The Horizon" for youth hostel use, with market-rate rent collection commencing at the end of June this year [67](index=67&type=chunk) - In August 2025, multiple shops in Zone A, G/F of "Tai Hung Fai (Tsuen Wan) Centre" in Tsuen Wan were acquired for **HK$260 million**, with an annualized gross rental yield of approximately **5.6%**, intended for investment [67](index=67&type=chunk) [Ferry, Shipyard and Related Businesses](index=30&type=section&id=Ferry%2C%20Shipyard%20and%20Related%20Businesses) Ferry, shipyard, and related businesses recorded a loss of HK$12.5 million, an increase of HK$9.5 million, primarily due to reduced revenue from "Bauhinia Victoria Harbour Cruise" caused by a damaged ferry engine, though fare increases are expected to mitigate future losses | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | Change (HK$ million) | | :--- | :--- | :--- | :--- | | Loss | 12.5 | 3 | +9.5 | - The increased loss was primarily due to reduced revenue from the "Bauhinia Victoria Harbour Cruise" business as one ferry underwent engine replacement in H1 [68](index=68&type=chunk) - A fare increase for the North Point to Kwun Tong dangerous goods vehicle ferry service was successfully approved by the Transport Department, with new fares effective **April 12, 2025**, expected to reduce losses in H2 [68](index=68&type=chunk) [Medical, Health and Beauty Services](index=30&type=section&id=Medical%2C%20Health%20and%20Beauty%20Services) Medical, health, and beauty services continued to be profitable, with specialized services at H Zentre performing well, a new physiotherapy center planned, and AMOUR Medical Beauty Centre's revenue increasing by 26% to HK$22 million - Specialized services in cardiology, surgery, orthopedics, plastic surgery, and urology are provided at H Zentre in Tsim Sha Tsui, with steady performance and continued profitability [69](index=69&type=chunk) - AMOUR Medical Beauty Centre's revenue was **HK$22 million**, an increase of **26%** compared to the prior period [69](index=69&type=chunk) - While health and beauty businesses did not record net profit, overall EBITDA was positive during the review period [69](index=69&type=chunk) [Sunshine Real Estate Investment Trust](index=31&type=section&id=Sunshine%20Real%20Estate%20Investment%20Trust) Sunshine REIT's revenue decreased by 4.8% to HK$391.2 million, and net property income by 5.4% to HK$307.4 million, resulting in an after-tax loss of HK$172.2 million due to fair value impairment, though distributable income remained relatively stable | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 391.2 | 411 | -4.8% | | Property Operating Expenses | 83.8 | 86.1 | -2.7% | | Net Property Income | 307.4 | 325 | -5.4% | | Cost-to-Income Ratio | 21.4% | N/A | N/A | | Investment Property Fair Value Impairment | 314.3 | N/A | N/A | | After-tax Loss | 172.2 | (79.5) | N/A | | Distributable Income | 168.6 | 171.7 | -1.8% | | Cash Interest Expense | 91.5 | 106.3 | -14% | [Overall Performance (Sunshine REIT)](index=31&type=section&id=Overall%20Performance%20(Sunshine%20REIT)) Sunshine REIT's H1 2025 revenue decreased by 4.8% to HK$391.2 million, with net property income down 5.4% to HK$307.4 million, and an after-tax loss of HK$172.2 million after a HK$314.3 million fair value impairment on investment properties | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 391.2 | 411 | -4.8% | | Net Property Income | 307.4 | 325 | -5.4% | | Investment Property Fair Value Impairment | 314.3 | N/A | N/A | | After-tax Loss | 172.2 | (79.5) | N/A | | Distributable Income | 168.6 | 171.7 | -1.8% | | Cash Interest Expense | 91.5 | 106.3 | -14% | [Property Portfolio Performance](index=31&type=section&id=Property%20Portfolio%20Performance) Sunshine REIT's overall property portfolio occupancy rate decreased to 89.2% as of June 30, 2025, with negative rental reversions of 8.5% for offices and 7.1% for retail, while office passing rents slightly declined and retail remained stable | Indicator | 2025 June 30 | 2024 December 31 | Change | | :--- | :--- | :--- | :--- | | Overall Property Portfolio Occupancy Rate | 89.2% | 91.3% | -2.1% | | Office Occupancy Rate | 90.0% | 92.0% | -2.0% | | Retail Occupancy Rate | 87.6% | 90.1% | -2.5% | | Office Negative Rental Reversion | 8.5% | N/A | N/A | | Retail Negative Rental Reversion | 7.1% | N/A | N/A | | Overall Negative Rental Reversion | 7.7% | N/A | N/A | | Office Passing Rent (HK$ per sq ft) | HK$31.7 | HK$32.1 | -1.2% | | Retail Passing Rent (HK$ per sq ft) | HK$65.5 | HK$65.5 | 0% | [Outlook (Sunshine REIT)](index=31&type=section&id=Outlook%20(Sunshine%20REIT)) Hong Kong's commercial property market faces persistent challenges and negative rental reversion pressure, but refinancing for upcoming debt is progressing well, and potential lower financing costs may alleviate pressure on distributable income - Hong Kong's commercial property market continues to face severe headwinds, with negative rental reversion pressure expected to persist [72](index=72&type=chunk) - Refinancing arrangements for borrowings maturing within the next twelve months are progressing well, with favorable indicative pricing reflecting Sunshine REIT's financial strength [72](index=72&type=chunk) - Despite anticipated ongoing operational challenges, potentially lower financing costs may help alleviate pressure on distributable income [72](index=72&type=chunk) [Sustainability](index=33&type=section&id=Sustainability) The Group reaffirmed its "G.I.V.E." sustainability strategy, earning "Developer of the Year – Hong Kong" for the third consecutive year and multiple MIKE Awards, while actively engaging in youth empowerment and ESG challenges - The Group was again awarded "Developer of the Year – Hong Kong" for the **third consecutive year** [74](index=74&type=chunk) - Received the Global and Hong Kong "Most Innovative Knowledge Enterprise (MIKE) Award" for the **fifth time**, recognizing the Group's excellence in innovation [74](index=74&type=chunk) - Actively promoted youth empowerment programs through direct engagement with The Chinese University of Hong Kong, Hong Kong Baptist University, The Hong Kong Polytechnic University, and Chu Hai College of Higher Education, and sponsored ESG challenges [74](index=74&type=chunk) [Outlook (Group)](index=34&type=section&id=Outlook%20(Group)) Improved US-China trade talks and Hong Kong's talent policies are expected to support the property market, with the Group having ample land bank, 5,600 attributable residential units for sale in H2, and HK$12.699 billion in unrecognized property sales - Recent active discussions between the US and China on trade disputes have improved market sentiment [75](index=75&type=chunk) - The Hong Kong SAR Government's talent schemes and development of an international tertiary education hub will help boost housing demand, providing some support to the local property market [75](index=75&type=chunk) - The Group expects to have approximately **5,600** attributable residential units, or about **2.66 million sq ft** of attributable residential floor area, available for sale in Hong Kong in **2025 H2** [76](index=76&type=chunk) | Indicator | Amount (HK$ million) | | :--- | :--- | | Total Unrecognized Attributable Property Sales in Hong Kong and Mainland China | 12,699 | | Sales Amount Expected to be Recognized in 2025 H2 | 8,377 | - The Group currently holds **10.5 million sq ft** and **13.4 million sq ft** of attributable completed rental properties in Hong Kong and Mainland China, respectively [76](index=76&type=chunk) - The Hong Kong and China Gas Company Limited had over **45 million** city gas customers in Mainland China and Hong Kong by the end of June 2025, with its growth businesses expected to generate continuous revenue for the Group [77](index=77&type=chunk) [Group Finance](index=32&type=section&id=Group%20Finance) The Group maintains a robust financial position with stable net debt and gearing ratio, actively utilizing green financing, and possessing ample credit facilities and recurring income to support future development, while managing interest rate and exchange rate risks [Financial Overview](index=32&type=section&id=Financial%20Overview) The Group adheres to prudent financial management, with net debt of HK$67.415 billion and a gearing ratio of 21.1% as of June 30, 2025, and successfully issued HK$8 billion in 0.5% guaranteed convertible bonds in July 2025 | Indicator | 2025 June 30 (HK$ million) | 2024 December 31 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Debt | 67,415 | 67,989 | -0.84% | | Gearing Ratio | 21.1% | 21.1% | 0% | | Shareholder Loans | 73,923 | 66,215 | +11.64% | [Financial Resources and Liquidity](index=74&type=section&id=Financial%20Resources%20and%20Liquidity) As of June 30, 2025, the Group's total debt was HK$84.015 billion, with net debt of HK$67.415 billion and a gearing ratio of 21.1%, maintaining ample bank credit facilities and recurring income, while actively hedging interest rate and exchange rate risks | Indicator | 2025 June 30 (HK$ million) | 2024 December 31 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Debt | 84,015 | 85,908 | -2.2% | | Cash and Bank Balances | 16,600 | 17,919 | -7.36% | | Net Debt | 67,415 | 67,989 | -0.84% | | Shareholders' Equity | 320,138 | 322,147 | -0.62% | | Gearing Ratio | 21.1% | 21.1% | 0% | | Interest Coverage Ratio (times) | 1.56 | 2.13 | -26.8% | - As of June 30, 2025, the Group's overall effective annual borrowing interest rate was approximately **3.67%** (2024: approximately **4.50%**) [155](index=155&type=chunk) - **32%** of the Group's total debt (December 31, 2024: **37%**) was fixed-rate borrowings [161](index=161&type=chunk) - The Group entered into hedging arrangements with several counterparty banks, including interest rate swaps, cross-currency swaps, cross-currency interest rate swaps, and forward foreign exchange contracts, totaling **HK$16.018 billion**, representing **19%** of total debt [165](index=165&type=chunk) [Significant Acquisitions and Disposals](index=77&type=section&id=Significant%20Acquisitions%20and%20Disposals) There were no significant acquisitions or disposals during the review period, and a planned transaction to sell a new hotel site in Kimberley Road, Kowloon, to Miramar was terminated, with the Group proceeding to redevelop the property into a new hotel - There were no significant acquisitions or disposals by the Group during the review period [166](index=166&type=chunk) - The proposed transaction to sell the site at **16 Kimberley Road, Kowloon**, and its new hotel to Miramar was terminated due to the failure of Miramar's independent shareholders to pass an ordinary resolution [167](index=167&type=chunk) - The Group will proceed with the demolition of the existing building on the property and redevelop it into a new hotel according to approved building plans [167](index=167&type=chunk) [Resumption of Certain Land by HKSAR Government](index=77&type=section&id=Resumption%20of%20Certain%20Land%20by%20HKSAR%20Government) In H1 2025, the HKSAR Government resumed approximately 330,000 sq ft of the Group's developable leasehold land in Yuen Long South and Kam Tin for HK$353 million cash compensation, recognizing a pre-tax attributable gain of HK$240 million | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | | :--- | :--- | :--- | | Cash Compensation for Government Land Resumption | 353 | 1,860 | | Attributable Pre-tax Gain | 240 | 1,059 | - As of June 30, 2025, the Hong Kong SAR Government resumed approximately **330,000 sq ft** of the Group's developable leasehold land for sale located in Yuen Long South and Kam Tin, New Territories, Hong Kong [168](index=168&type=chunk) [Pledge of Assets](index=77&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, and December 31, 2024, the Group had not pledged any assets of its subsidiaries to any parties - As of **June 30, 2025**, and **December 31, 2024**, the Group had not pledged any assets of its subsidiaries to any parties [169](index=169&type=chunk) [Capital Commitments](index=78&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments decreased to HK$16.957 billion, with attributable capital commitments in joint ventures and certain associates also reduced to HK$3.993 billion | Indicator | 2025 June 30 (HK$ million) | 2024 December 31 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Group Capital Commitments | 16,957 | 19,030 | -10.89% | | Attributable Capital Commitments in Joint Ventures and Associates | 3,993 | 5,666 | -29.53% | [Contingent Liabilities](index=78&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group's contingent liabilities decreased to HK$12.835 billion, primarily comprising performance guarantees for subsidiaries and joint venture projects, guarantees for Mainland property buyers, and loan guarantees for Kai Tak and To Kwa Wan URA projects | Indicator | 2025 June 30 (HK$ million) | 2024 December 31 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Contingent Liabilities | 12,835 | 14,635 | -12.3% | - Primarily includes performance guarantees for subsidiary and joint venture projects (**HK$239 million**), guarantees for buyers of Mainland property units (**HK$2.523 billion**), and loan guarantees for joint ventures in the Kai Tak Development Area and To Kwa Wan URA projects [171](index=171&type=chunk) [Employees and Remuneration Policy](index=79&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 9,997 full-time employees, a slight increase, with total staff costs rising 4% to HK$1.594 billion, offering competitive remuneration and comprehensive benefits | Indicator | 2025 June 30 | 2024 December 31 | Change (%) | | :--- | :--- | :--- | :--- | | Number of Full-time Employees | 9,997 | 9,970 | +0.27% | | Total Staff Costs (HK$ million) | 1,594 | 1,533 | +4% | [Financial Statements](index=36&type=section&id=Financial%20Statements) [Consolidated Income Statement](index=36&type=section&id=Consolidated%20Income%20Statement) For H1 2025, the Group's revenue decreased by 19% to HK$9.552 billion, with operating profit (before fair value changes) down 34.6% to HK$2.304 billion, and attributable profit decreasing by 8% to HK$2.908 billion | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,552 | 11,762 | -19% | | Operating Profit Before Fair Value Changes | 2,304 | 3,518 | -34.6% | | Decrease in Fair Value of Investment Properties | (427) | (146) | +192.5% | | Operating Profit After Fair Value Changes | 1,877 | 3,372 | -44.3% | | Net Finance Costs | (933) | (579) | +61.1% | | Profit Before Tax | 2,562 | 4,271 | -40% | | Income Tax | 430 | (286) | N/A | | Profit for the Period | 2,992 | 3,985 | -24.9% | | Profit Attributable to Shareholders | 2,908 | 3,174 | -8% | | Basic Earnings Per Share (HK$) | 0.63 | 1.12 | -43.75% | | Reported Earnings Per Share (HK$) | 0.60 | 0.66 | -9.09% | [Consolidated Statement of Comprehensive Income](index=38&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For H1 2025, profit for the period was HK$2.992 billion, with other comprehensive income of HK$1.409 billion, primarily from exchange differences and share of associates/joint ventures, leading to a 95.8% increase in attributable total comprehensive income to HK$4.293 billion | Indicator | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 2,992 | 3,985 | -24.9% | | Exchange Differences | 662 | (322) | N/A | | Share of Other Comprehensive Income of Associates and Joint Ventures | 903 | (686) | N/A | | Other Comprehensive Income for the Period | 1,409 | (977) | N/A | | Total Comprehensive Income for the Period | 4,401 | 3,008 | +46.3% | | Total Comprehensive Income Attributable to Shareholders | 4,293 | 2,192 | +95.8% | [Consolidated Statement of Financial Position](index=39&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total non-current assets were HK$417.917 billion, with total current assets of HK$114.654 billion, and total equity attributable to shareholders slightly decreased to HK$320.138 billion | Indicator | 2025 June 30 (HK$ million) | 2024 December 31 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Investment Properties | 273,871 | 271,874 | +0.73% | | Interests in Associates | 50,669 | 50,564 | +0.21% | | Interests in Joint Ventures | 79,088 | 77,876 | +1.56% | | Total Non-current Assets | 417,917 | 412,247 | +1.38% | | Inventories | 84,234 | 85,608 | -1.61% | | Cash and Bank Balances | 16,600 | 17,919 | -7.36% | | Total Current Assets | 114,654 | 118,993 | -3.65% | | Trade and Other Payables | 24,464 | 26,811 | -8.75% | | Bank Borrowings (Current) | 8,672 | 8,001 | +8.39% | | Guaranteed Notes (Current) | 2,692 | 9,585 | -71.91% | | Total Current Liabilities | 37,251 | 45,811 | -18.69% | | Bank Borrowings (Non-current) | 61,292 | 54,626 | +12.2% | | Loans from Fellow Subsidiaries | 73,923 | 66,215 | +11.64% | | Total Non-current Liabilities | 156,591 | 144,852 | +8.1% | | Net Assets | 338,729 | 340,577 | -0.54% | | Total Equity Attributable to Shareholders | 320,138 | 322,147 | -0.62% | [Notes](index=41&type=section&id=Notes) The notes provide detailed financial information, including review of results, accounting policy changes, revenue breakdown, net other income, fair value changes of investment properties, pre-tax profit analysis, income tax, earnings per share, dividends, segment reporting, inventory, and receivables/payables [Review of Results and Basis of Preparation](index=41&type=section&id=Review%20of%20Results%20and%20Basis%20of%20Preparation) The unaudited condensed interim financial statements were reviewed by KPMG and the Audit Committee, prepared in accordance with Listing Rules and HKAS 34, applying consistent accounting policies with 2024, except for expected 2025 changes - The unaudited condensed interim financial statements were reviewed by KPMG in accordance with **HKSRS 2410** and by the Company's Audit Committee [86](index=86&type=chunk) - The condensed interim financial statements are prepared in accordance with applicable disclosure requirements of the **HKEX Listing Rules** and **HKAS 34 "Interim Financial Reporting"** issued by the Hong Kong Institute of Certified Public Accountants [87](index=87&type=chunk) [Changes in Accounting Policies](index=42&type=section&id=Changes%20in%20Accounting%20Policies) The Group applied amendments to HKAS 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability", which had no material impact on financial performance or position, and did not early adopt any new standards or interpretations - The Group applied amendments to **HKAS 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability"**, but this amendment did not have a material impact on the Group's financial performance or position [90](index=90&type=chunk) - The Group did not apply any new standards or interpretations that are not yet effective for the current accounting period [91](index=91&type=chunk) [Revenue](index=43&type=section&id=Revenue) Group revenue, primarily from property development, rental income, department stores, and hotels, totaled HK$9.552 billion in H1 2025, a 19% decrease, with HK$10.39 billion in unrecognized property sales contracts | Revenue Source | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Property Development (including property sales) | 4,008 | 4,943 | -19% | | Rental Income | 3,363 | 3,459 | -3% | | Department Store Business and Supermarket & Department Store Integrated Business | 745 | 778 | -4% | | Hotel Room Operations Business | 156 | 165 | -5% | | Other Businesses | 1,280 | 2,417 | -47% | | **Total** | **9,552** | **11,762** | **-19%** | - As of June 30, 2025, the cumulative total revenue expected to be recognized in the consolidated income statement in the future from sales contracts signed before property completion for properties in Hong Kong and Mainland China held by Group subsidiaries for development and sale, as well as sales contracts for completed properties awaiting transfer, amounted to **HK$10.39 billion** [94](index=94&type=chunk) [Net Other Income](index=44&type=section&id=Net%20Other%20Income) Net other income significantly decreased to HK$305 million from HK$1.035 billion in the prior period, mainly due to lower government land resumption gains (HK$240 million vs. HK$1.059 billion) and a net exchange gain of HK$84 million | Item | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | | :--- | :--- | :--- | | Net Gain on Disposal of Investment Properties | - | 94 | | Net Provision for Inventories | (69) | (25) | | Gain on Land Resumption | 240 | 1,059 | | Net Exchange Gain/(Loss) | 84 | (26) | | **Net Other Income** | **305** | **1,035** | - The significant decrease in net other income was primarily due to a reduction in land resumption gains from **HK$1.059 billion** in the prior period to **HK$240 million** in the current period [95](index=95&type=chunk) [Decrease in Fair Value of Investment Properties and Investment Properties Under Development](index=45&type=section&id=Decrease%20in%20Fair%20Value%20of%20Investment%20Properties%20and%20Investment%20Properties%20Under%20Development) The Group recorded a net fair value loss of HK$208 million on investment properties and investment properties under development (after non-controlling interests and deferred tax), a significant reduction from HK$665 million in the prior period, with total attributable net fair value loss of HK$132 million | Item | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | | :--- | :--- | :--- | | Net Fair Value Loss of Subsidiaries (after deferred tax and non-controlling interests) | (208) | (665) | | Attributable Net Fair Value Loss of Associates (after deferred tax) | (107) | (87) | | Attributable Net Fair Value Gain/(Loss) of Joint Ventures (after deferred tax) | 183 | (68) | | **Total Attributable Net Fair Value Loss of the Group** | **(132)** | **(820)** | - Valuation of completed investment properties is primarily based on the income capitalization approach, while investment properties under development are valued on a redevelopment basis [96](index=96&type=chunk) [Profit Before Tax](index=48&type=section&id=Profit%20Before%20Tax) For H1 2025, finance costs before capitalization were HK$2.833 billion, with capitalized finance costs of HK$1.628 billion, resulting in post-capitalization finance costs of HK$1.205 billion, while staff costs increased by 4% to HK$1.594 billion | Item | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs (before capitalization) | 2,833 | 3,433 | -17.5% | | Less: Amount Capitalized | (1,628) | (2,613) | -37.7% | | Finance Costs (after capitalization) | 1,205 | 820 | +46.95% | | Staff Costs | 1,594 | 1,533 | +4% | | Depreciation and Amortization | 231 | 247 | -6.5% | - Borrowing costs were capitalized at a weighted average annual interest rate ranging from **3.08% to 4.40%** (2024: ranging from **3.36% to 6.01%**) [100](index=100&type=chunk) [Income Tax](index=50&type=section&id=Income%20Tax) Income tax for H1 2025 was a credit of HK$430 million, compared to an expense of HK$286 million in the prior period, comprising current tax provision of HK$315 million and deferred tax credit of HK$745 million | Item | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | | :--- | :--- | :--- | | Hong Kong Profits Tax Provision | 208 | 271 | | Overseas Tax Provision | 100 | 152 | | Land Appreciation Tax Provision/(Over-provision) | 7 | (29) | | Current Period Tax | 315 | 394 | | Deferred Tax | (745) | (108) | | **Income Tax (Credit)/Expense** | **(430)** | **286** | - Hong Kong profits tax provision is calculated at a rate of **16.5%** [102](index=102&type=chunk) - Properties in Mainland China are subject to Land Appreciation Tax at progressive rates from **30% to 60%** on the appreciation amount [102](index=102&type=chunk) [Earnings Per Share](index=51&type=section&id=Earnings%20Per%20Share) For H1 2025, basic earnings per share were HK$0.60, and underlying earnings per share were HK$0.63, with no dilutive potential ordinary shares, and underlying profit (excluding fair value changes) decreased by 44% to HK$3.048 billion | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Basic Earnings Per Share | HK$0.60 | HK$0.66 | | Underlying Earnings Per Share | HK$0.63 | HK$1.12 | | Underlying Profit Attributable to Shareholders (HK$ million) | 3,048 | 5,441 | - The decrease in underlying profit was primarily due to higher cumulative fair value gains from property sales and government land resumption gains in the prior period [104](index=104&type=chunk) [Dividends](index=52&type=section&id=Dividends) The Board declared an interim dividend of HK$0.50 per share, totaling HK$2.421 billion, consistent with the prior period, which was not recognized as a liability at the period-end | Dividend Type | 2025 H1 (HK$ million) | 2024 H1 (HK$ million) | | :--- | :--- | :--- | | Interim Dividend Declared After Period-end (HK$0.50 per share) | 2,421 | 2,421 | | Final Dividend for Previous Financial Year Approved and Paid in Current Interim Period (HK$1.30 per share) | 6,294 | 6,294 | - The interim dividend proposed after the end of the reporting period was not recognized as a liability at the end of the reporting period [106](index=106&type=chunk) [Segment Reporting](index=53&type=section&id=Segment%20Reporting) The Group manages its businesses across property development, property leasing, department stores, hotel operations, other businesses, and utilities/energy, with significant profit contributions from associates and joint ventures | Segment | 2025 H1 Revenue (HK$ million) | 2025 H1 Segment Results (HK$ million) | | :--- | :--- | :--- | | Property Development | 4,008 | 344 | | Property Leasing | 3,363 | 2,427 | | Department Store Business and Supermarket & Department Store Integrated Business | 745 | 29 | | Hotel Room Operations Business | 156 | 36 | | Other Businesses | 1,280 | (30) | | Uti

[Announcement Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) [Key Financial Highlights](index=1&type=section&id=%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E4%BA%AE%E9%BB%9E) Daphne International Holdings Limited demonstrated strong performance in the first half of 2025, with significant growth in revenue, operating profit, and profit attributable to owners of the Company, alongside an increase in basic earnings per share Key Financial Highlights for H1 2025 | Metric | H1 2025 (RMB million) | Change | | :--- | :--- | :--- | | Revenue | 198.3 | increased by 17% | | Operating profit | 70.5 | increased by 24% | | Profit attributable to owners of the Company | 64.7 | increased by 15% | | Basic EPS | RMB 0.033 | - | [Interim Results](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) During the reporting period, the company achieved substantial year-on-year growth in revenue and gross profit, with significant improvements in operating profit and profit for the period, reflecting strong operational efficiency and profitability Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 198,297 | 168,796 | | Cost of sales | (92,184) | (83,027) | | Gross profit | 106,113 | 85,769 | | Other income | 27,114 | 24,948 | | Operating profit | 70,518 | 56,732 | | Profit for the period | 64,599 | 55,860 | | Profit attributable to owners of the Company | 64,685 | 56,055 | | Basic earnings per share | 0.033 | 0.028 | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The company's total comprehensive income for the period increased year-on-year, primarily driven by higher profit for the period, but partially offset by other comprehensive loss from exchange differences on translating foreign operations Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 64,599 | 55,860 | | Exchange differences on translating foreign operations | (2,686) | 525 | | Total comprehensive income for the period | 61,913 | 56,385 | | Total comprehensive income attributable to owners of the Company | 61,999 | 56,580 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, non-current assets slightly decreased, while other financial assets within current assets significantly increased, and cash and cash equivalents decreased. Both current and non-current liabilities declined, with steady growth in net assets and equity attributable to owners Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | 2025年6月30日 (RMB thousand) | 2024年12月31日 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 384,098 | 392,887 | | Current assets | 535,551 | 538,285 | | Current liabilities | 120,370 | 156,934 | | Non-current liabilities | 11,478 | 11,995 | | Net assets | 787,801 | 762,243 | | Equity attributable to owners of the Company | 784,193 | 758,549 | - Other financial assets within current assets significantly increased from **RMB 30,477 thousand** as of December 31, 2024, to **RMB 133,819 thousand** as of June 30, 2025[7](index=7&type=chunk) - Cash and cash equivalents decreased from **RMB 476,170 thousand** as of December 31, 2024, to **RMB 376,643 thousand** as of June 30, 2025[7](index=7&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [1 General Information](index=5&type=section&id=1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Daphne International Holdings Limited and its subsidiaries primarily engage in the licensing, distribution, and sale of footwear products and accessories in Mainland China, with the company registered in the Cayman Islands and listed on the Hong Kong Stock Exchange - The Group primarily engages in the licensing, distribution, and sale of footwear products and accessories in Mainland China[8](index=8&type=chunk) - The Company is a limited company incorporated in the Cayman Islands, with its shares listed on The Stock Exchange of Hong Kong Limited[8](index=8&type=chunk) [2 Basis of Preparation](index=5&type=section&id=2%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and have been reviewed by the audit committee and approved by the Board, with no significant impact from new or revised standards adopted during the period - The condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[10](index=10&type=chunk) - This statement has been reviewed by the Company's Audit Committee and approved for issue by the Board of Directors on August 20, 2025[9](index=9&type=chunk) - The adoption of amendments to HKAS 21 and HKFRS 1 had no significant impact on the Group's operations or financial position[10](index=10&type=chunk) [3 Revenue and Segment Information](index=6&type=section&id=3%20%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates a single reportable segment, primarily deriving revenue from licensing fees and sales of goods to customers in Mainland China - The Group has only one reportable segment, with revenue derived from customers located in Mainland China[12](index=12&type=chunk) Composition of Revenue (For the six months ended June 30) | Source of Revenue | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | License fee income | 85,153 | 68,575 | | Sales of goods | 113,144 | 100,221 | | **Total Revenue** | **198,297** | **168,796** | [4 Other Income](index=6&type=section&id=4%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's other income primarily consists of gross rental income and interest income, with government grants and other miscellaneous income contributing a smaller portion Composition of Other Income (For the six months ended June 30) | Source of Income | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Gross rental income | 20,941 | 19,281 | | Interest income | 5,487 | 4,703 | | Government grants | 9 | 553 | | Others | 677 | 411 | | **Total Other Income** | **27,114** | **24,948** | [5 Other (Losses)/Gains — Net](index=6&type=section&id=5%20%E5%85%B6%E4%BB%96(%E虧%E6%90%8D)%E2%88%95%E6%94%B6%E7%9B%8A%20%E2%80%94%20%E6%B7%A8%E9%A1%8D) The Group's other net losses were primarily impacted by exchange losses, partially offset by fair value gains on financial assets at fair value through profit or loss and gains on disposal of property, plant and equipment Other (Losses)/Gains — Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair value gain on financial assets at fair value through profit or loss | 230 | 158 | | Gain on disposal of property, plant and equipment | 6 | - | | Net exchange (loss)/gain | (874) | 545 | | **Net** | **(638)** | **703** | [6 Operating Profit](index=7&type=section&id=6%20%E7%B6%93%E7%87%9F%E7%9B%88%E5%88%A9) Operating profit is stated after deducting various expenses, with cost of inventories sold, employee benefit expenses, and marketing and promotion expenses being major components, and inventory provision significantly decreased year-on-year Operating Profit Deductions (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Auditor's remuneration | 1,003 | 1,083 | | Cost of inventories sold | 92,184 | 83,027 | | Depreciation of investment properties | 8,388 | 8,405 | | Depreciation of property, plant and equipment | 675 | 520 | | Depreciation of right-of-use assets | 1,551 | 2,149 | | Employee benefit expenses | 25,613 | 23,129 | | Marketing and promotion expenses | 11,117 | 5,241 | - Cost of inventories sold includes an inventory provision of **RMB 1,180,000** (2024: RMB 3,339,000), representing a significant year-on-year decrease[16](index=16&type=chunk) [7 Finance Costs](index=7&type=section&id=7%20%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Finance costs primarily consist of interest on lease liabilities, which decreased year-on-year during the reporting period Finance Costs (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on lease liabilities | 112 | 193 | [8 Income Tax Expense](index=7&type=section&id=8%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense significantly increased year-on-year, primarily due to tax charges from the utilization of deferred tax assets related to tax losses and the net impact of tax credits from the reversal of excess provisions for deferred income tax liabilities related to unremitted earnings in China Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax – Mainland China | 660 | 732 | | Deferred income tax | 5,178 | - | | **Total Income Tax Expense** | **5,838** | **732** | - The increase in income tax expense was primarily due to tax charges arising from the utilization of deferred tax assets related to tax losses, and the net impact of tax credits from the reversal of excess provisions for deferred income tax liabilities related to unremitted earnings in China from the previous year[18](index=18&type=chunk) [9 Earnings Per Share](index=8&type=section&id=9%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Both basic and diluted earnings per share increased, with diluted earnings per share calculation considering the impact of share option exercises Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic earnings per share | 0.033 | 0.028 | | Diluted earnings per share | 0.032 | 0.028 | - In the first half of 2025, the exercise of share options had a dilutive effect on earnings, with the adjusted weighted average number of shares being **2,028,219,774**[19](index=19&type=chunk) - In the corresponding period of 2024, share options had no dilutive effect as their exercise price was higher than the average market price of the Company's shares, resulting in identical basic and diluted earnings per share[20](index=20&type=chunk) [10 Dividends](index=8&type=section&id=10%20%E8%82%A1%E6%81%AF) The Board does not recommend an interim dividend for the first half of 2025, but the final dividend for 2024, which was accrued or paid, increased compared to the previous year Dividends Accrued or Paid (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final dividend for the year ended December 31, 2024 | 36,355 | 17,934 | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[22](index=22&type=chunk) [11 Trade Receivables](index=9&type=section&id=11%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E8%B3%B4%E6%AC%BE) Net trade receivables decreased year-on-year, with a lower proportion of receivables within 30 days and an increased proportion of receivables over 60 days in the ageing analysis Net Trade Receivables and Ageing Analysis | Metric | 2025年6月30日 (RMB thousand) | 2024年12月31日 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables – net | 5,844 | 7,235 | | **Ageing analysis (net of loss allowance):** | | | | 0 to 30 days | 2,794 | 5,433 | | 31 to 60 days | 957 | 1,251 | | Over 60 days | 2,093 | 551 | - The Group generally grants credit terms of **30 to 60 days** to its trade customers[23](index=23&type=chunk) [12 Trade Payables](index=9&type=section&id=12%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E8%B3%B4%E6%AC%BE) Total trade payables slightly decreased year-on-year, with the majority of payables still falling within the 0 to 30 days ageing category Ageing Analysis of Trade Payables | Ageing | 2025年6月30日 (RMB thousand) | 2024年12月31日 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 33,074 | 34,729 | | 31 to 60 days | 278 | 43 | | Over 60 days | 2,091 | 2,119 | | **Total Trade Payables** | **35,443** | **36,891** | [Management Discussion and Analysis](index=10&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review](index=10&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) In H1 2025, despite global uncertainties, China's economy showed resilience with 5.3% GDP growth, and 'trade-in' policies boosted retail sales amid rational consumer behavior and rising e-commerce competition, prompting the Group to adopt a balanced strategy of brand licensing, wholesale, and direct retail to achieve steady revenue and operating profit growth [Macroeconomic and Market Environment](index=10&type=section&id=%E5%AE%8F%E8%A7%80%E7%B6%93%E6%BF%9F%E8%88%87%E5%B8%82%E5%A0%B4%E7%92%B0%E5%A2%83) In H1 2025, global geopolitical conflicts and market volatility created uncertainty, yet China's GDP grew by 5.3%, demonstrating economic resilience, while 'trade-in' policies boosted retail sales, but consumers shifted to rational spending, and e-commerce continued to grow amidst intensifying competition and the rise of content-driven platforms - In the first half of 2025, China's Gross Domestic Product (GDP) increased by **5.3%** year-on-year[25](index=25&type=chunk) - China's 'trade-in' policy for consumer goods boosted retail sales, with total retail sales of consumer goods increasing by **5.0%** year-on-year[25](index=25&type=chunk) - In the first half of 2025, national online retail sales reached **RMB 7.43 trillion**, representing an **8.5%** year-on-year increase[26](index=26&type=chunk) [Group Performance](index=10&type=section&id=%E9%9B%86%E5%9C%98%E8%A1%A8%E7%8F%BE) The Group implemented a robust and forward-looking strategy, balancing brand licensing, wholesale, and direct retail to strengthen its core 'Daphne' brand and cultivate 'Daphne.Lab', achieving steady growth in revenue and operating profit despite market challenges through optimized operations, enhanced brand licensing, and lean supply chain management - The Group adopted a dual-focus strategy, consolidating the industry-leading position of its core brand 'Daphne' while actively cultivating the 'Daphne.Lab' brand[27](index=27&type=chunk) - For the six months ended June 30, 2025, the Group's total revenue increased by **17%** year-on-year to approximately **RMB 198.3 million**, and operating profit increased by **24%** to approximately **RMB 70.5 million**[28](index=28&type=chunk) - Basic earnings per share were **RMB 0.033**, compared to **RMB 0.028** in the corresponding period of 2024[29](index=29&type=chunk) [Brand Licensing and Distribution Business](index=11&type=section&id=%E5%93%81%E7%89%8C%E6%8E%88%E6%AC%8A%E5%8F%8A%E5%88%86%E9%8A%B7%E6%A5%AD%E5%8B%99) The Group continues to strengthen the 'Daphne' brand's leading position in China's women's footwear industry through brand revitalization, celebrity endorsements, product innovation, and multi-channel marketing, enhancing brand image and market penetration, with significant growth in both license fee income and wholesale sales of goods, and continued expansion of online and offline store count - The 'Daphne' brand announced Chinese celebrity Victoria Song as its global brand ambassador in May 2025 and launched the 'Free Rebirth' fashion campaign[31](index=31&type=chunk) - The Group actively strengthened its brand licensing business, consolidating its influence on mainstream e-commerce platforms like Tmall and JD.com, while also achieving considerable growth on emerging channels such as Douyin and Pinduoduo[32](index=32&type=chunk) Brand Licensing and Distribution Business Revenue (For the six months ended June 30) | Source of Revenue | 2025 (RMB million) | 2024 (RMB million) | Year-on-year growth | | :--- | :--- | :--- | :--- | | License fee income | 85.2 | 68.6 | +24% | | Wholesale sales of goods | 102.7 | 91.5 | +12% | - As of June 30, 2025, the Group had **116** physical stores and **1,150** online stores, all operated by franchisees under the Group's licensing arrangements[33](index=33&type=chunk) [Retail Business](index=12&type=section&id=%E9%9B%B6%E5%94%AE%E6%A5%AD%E5%8B%99) The Group's avant-garde fashion brand 'Daphne.Lab' received acclaim for its unique aesthetics and brand image, enhancing brand awareness and e-commerce growth through collaborations with trendy artists, K-pop dance community events, and celebrity/influencer partnerships, while actively exploring offline retail models and continuously optimizing its supply chain for increased competitiveness - The 'Daphne.Lab' brand received widespread acclaim for its bold and avant-garde aesthetic style and distinct brand image, attracting attention and affection from numerous renowned Chinese and Korean celebrities and K-pop girl group members[34](index=34&type=chunk) - This spring, 'Daphne.Lab' collaborated with a trendy artist to launch the 'Slightly Floral Lollipop Generation 2' co-branded slippers, which received a positive market response[35](index=35&type=chunk) - Currently, the Group operates **2** directly-managed offline and **6** online 'Daphne.Lab' stores, continuously refining its offline strategy based on consumer trends and retail dynamics[36](index=36&type=chunk) - The Group continuously optimizes its supply chain processes to enhance overall efficiency and ensure stringent quality control, enabling a swift response to market demands[36](index=36&type=chunk) [Financial Review](index=13&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group achieved double-digit growth in revenue, operating profit, and profit attributable to owners in H1 2025, with improved operating profit margin and increased basic earnings per share; cash and cash equivalents decreased, but equity attributable to owners grew, and asset liquidity ratio and net debt ratio remained healthy, despite a significant increase in income tax expense [Financial Summary](index=13&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The Group achieved double-digit growth in revenue, operating profit, and profit attributable to owners in H1 2025, with improved operating profit margin and increased basic earnings per share; cash and cash equivalents decreased, but equity attributable to owners grew, and asset liquidity ratio and net debt ratio remained healthy Financial Summary (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 198.3 | 168.8 | +17% | | Other income | 27.1 | 24.9 | +9% | | Operating profit | 70.5 | 56.7 | +24% | | Profit attributable to owners of the Company | 64.7 | 56.1 | +15% | | Operating profit margin (%) | 35.6 | 33.6 | +2.0 percentage points | | Net profit margin (%) | 32.6 | 33.2 | -0.6 percentage points | | Basic earnings per share (RMB) | 0.033 | 0.028 | +18% | | **Balance Sheet Metrics:** | | | | | Cash and cash equivalents (RMB million) | 376.6 | 476.2 | -21% | | Equity attributable to owners of the Company (RMB million) | 784.2 | 758.5 | +3% | | Current ratio (times) | 4.4 | 3.4 | +29% | | Net debt ratio (%) | Net cash | Net cash | N/A | [Revenue and Gross Profit](index=14&type=section&id=%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5%E5%8F%8A%E6%AF%9B%E5%88%A9) The Group's total revenue increased by 17% year-on-year, primarily driven by growth in license fee income, wholesale sales of goods, and retail business, with the gross profit margin for sales of goods improving to 18.5%, reflecting better cost and inventory control Composition of Revenue and Gross Profit (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | License fee income | 85.2 | 68.6 | +24% | | Sales of goods – wholesale | 102.7 | 91.5 | +12% | | Sales of goods – retail | 10.4 | 8.7 | +20% | | Total sales of goods | 113.1 | 100.2 | +13% | | Cost of sales | (92.2) | (83.0) | +11% | | Gross profit from sales of goods | 20.9 | 17.2 | +22% | | Gross profit margin from sales of goods | 18.5% | 17.2% | +1.3 percentage points | | Total revenue | 198.3 | 168.8 | +17% | | Total gross profit | 106.1 | 85.8 | +24% | - The increase in license fee income was primarily due to an overall increase in the number of footwear and other product categories licensed to online franchisees[40](index=40&type=chunk) - The improvement in gross profit margin from sales of goods was mainly due to better cost and inventory control[41](index=41&type=chunk) [Other Income](index=15&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income increased by 9% year-on-year, primarily benefiting from higher rental income from investment properties, partly due to the recovery of long-outstanding rents - For the six months ended June 30, 2025, the Group's other income was approximately **RMB 27.1 million** (2024: RMB 24.9 million), primarily comprising gross rental income from investment properties of approximately **RMB 20.9 million** (2024: RMB 19.3 million)[42](index=42&type=chunk) - The increase in gross rental income was mainly due to the recovery of long-outstanding rents from certain tenants[42](index=42&type=chunk) [Operating Expenses](index=15&type=section&id=%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Overall operating expenses increased, primarily driven by higher marketing and promotion expenses and employee benefit expenses - During the review period, the Group's operating expenses were approximately **RMB 62.7 million**, compared to approximately **RMB 54.0 million** in the corresponding period of 2024[43](index=43&type=chunk) - The overall increase in operating expenses was primarily attributable to higher marketing and promotion expenses and employee benefit expenses[43](index=43&type=chunk) [Operating Profit](index=15&type=section&id=%E7%B6%93%E7%87%9F%E7%9B%88%E5%88%A9) The Group's operating profit increased by 24% year-on-year, reaching approximately RMB 70.5 million, demonstrating strong profitability - For the first half of 2025, the Group recorded an operating profit of approximately **RMB 70.5 million**, an increase of approximately **RMB 13.8 million** or **24%** compared to approximately **RMB 56.7 million** in the corresponding period of 2024[44](index=44&type=chunk) [Finance Costs](index=15&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Finance costs primarily consisted of interest on lease liabilities, which decreased year-on-year during the reporting period - During the review period, interest on lease liabilities was approximately **RMB 0.1 million** (2024: RMB 0.2 million)[45](index=45&type=chunk) [Income Tax Expense](index=15&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense significantly increased, mainly due to the net impact of deferred tax asset utilization and the reversal of excess provisions for deferred income tax liabilities - For the six months ended June 30, 2025, the Group's income tax expense was approximately **RMB 5.8 million**, compared to approximately **RMB 0.7 million** in the corresponding period last year[46](index=46&type=chunk) - The increase in income tax expense was primarily due to tax charges arising from the utilization of deferred tax assets related to tax losses, and the net impact of tax credits from the reversal of excess provisions for deferred income tax liabilities related to unremitted earnings in China from the previous year[46](index=46&type=chunk) [Profit Attributable to Owners of the Company](index=15&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E6%9D%B1%E6%87%89%E4%BD%B5%E7%9B%88%E5%88%A9) Profit attributable to owners of the Company increased by 15% year-on-year, with basic earnings per share rising to RMB 0.033 - For the six months ended June 30, 2025, profit attributable to owners of the Company was approximately **RMB 64.7 million** (2024: RMB 56.1 million), representing an increase of approximately **RMB 8.6 million** or **15%** compared to the corresponding period of 2024[47](index=47&type=chunk) - During the review period, basic earnings per share were **RMB 0.033** (2024: RMB 0.028)[47](index=47&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=16&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) As of June 30, 2025, cash and cash equivalents decreased primarily due to fixed deposit placements and dividend payments, but the Group maintained a net cash position and an improved current ratio, holding financial investments to optimize returns on surplus cash Net Change in Cash and Cash Equivalents (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 38.5 | 45.9 | | Placement of fixed deposits with original maturity over three months | (102.6) | - | | Dividends paid to owners of the Company | (35.8) | (14.9) | | Net (decrease)/increase in cash and cash equivalents | (96.9) | 43.3 | - As of June 30, 2025, the Group's cash and cash equivalents were approximately **RMB 376.6 million** (as of December 31, 2024: RMB 476.2 million)[48](index=48&type=chunk) - The Group maintained a net cash position for its net debt ratio, and the current ratio further improved to **4.4 times** (as of December 31, 2024: 3.4 times)[50](index=50&type=chunk) [Foreign Exchange Risk Management](index=17&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group primarily faces foreign exchange risks related to HKD and USD, which are managed through regular review of net foreign exchange exposure, though no forward foreign exchange contracts were entered into for hedging during the reporting period - The Group is primarily exposed to foreign exchange risks related to HKD and USD[51](index=51&type=chunk) - For the six months ended June 30, 2025, the Group did not enter into any forward foreign exchange contracts for hedging foreign exchange risks[51](index=51&type=chunk) [Material Investments](index=17&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of June 30, 2025, the Group had no material investments - As of June 30, 2025, the Group had no material investments[52](index=52&type=chunk) [Future Plans for Material Investments and Capital Assets](index=17&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E4%B9%8B%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) As of June 30, 2025, the Group had no future plans for any material investments or capital assets - As of June 30, 2025, the Group had no future plans for any material investments or capital assets[53](index=53&type=chunk) [Pledged Assets](index=17&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of the end of the reporting period, the Group had no pledged or charged assets - As of June 30, 2025, and December 31, 2024, the Group had no pledged or charged assets[54](index=54&type=chunk) [Capital Expenditure and Commitments](index=17&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF%E5%8F%8A%E6%89%BF%E6%93%94) Capital expenditure during the reporting period primarily related to leasehold improvements and office equipment, decreasing compared to the prior year, with no material capital commitments - During the review period, the Group's capital expenditure was approximately **RMB 0.2 million** (2024: RMB 0.4 million), primarily for leasehold improvements and office equipment[55](index=55&type=chunk) - As of June 30, 2025, and December 31, 2024, the Group had no material capital commitments[55](index=55&type=chunk) [Contingent Liabilities](index=17&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of the end of the reporting period, the Group had no material contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group had no material contingent liabilities[56](index=56&type=chunk) [Human Resources](index=17&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) The Group's total employee count slightly increased, with employee benefit expenses growing by 11% year-on-year, mainly due to an increase in headcount, discretionary performance bonuses, and staff benefits and allowances, as the Group values talent and provides competitive compensation and benefits - As of June 30, 2025, the Group's total number of employees in Mainland China and Hong Kong was **113** (as of December 31, 2024: 109)[57](index=57&type=chunk) - During the review period, employee benefit expenses were approximately **RMB 25.6 million** (2024: RMB 23.1 million), representing an **11%** year-on-year increase[57](index=57&type=chunk) - The increase in employee benefit expenses was primarily due to an increase in headcount, discretionary performance bonuses, and staff benefits and allowances[57](index=57&type=chunk) [Outlook](index=18&type=section&id=%E5%B1%95%E6%9C%9B) Looking ahead to H2 2025, despite global economic complexities, China's long-term economic fundamentals remain robust, with the retail sector transitioning towards value-driven consumption, and the Group will continue to optimize its strategy, integrating brand licensing, direct retail, and wholesale businesses, strengthening the positioning of 'Daphne' and 'Daphne.Lab' brands, and advancing its omnichannel strategy for sustainable growth - The Group will continue to adopt a diversified business model, integrating brand licensing, direct retail, and wholesale businesses to enhance adaptability and long-term competitiveness[58](index=58&type=chunk) - The 'Daphne' brand plans to collaborate with a designer brand during Paris Fashion Week in October to launch the 'Cloud Soft' new collection and leverage its global brand ambassador for live stream promotions[59](index=59&type=chunk) - The 'Daphne.Lab' brand plans to hold a fashion show and launch a designer brand collaboration series at Shanghai Fashion Week in October to reinforce its avant-garde fashion image[59](index=59&type=chunk) - The Group will further advance its omnichannel strategy, continuously strengthening its presence on traditional and emerging e-commerce platforms, and expanding its offline retail network with a proactive yet prudent approach[60](index=60&type=chunk) [Other Information](index=19&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Purchase, Sale or Redemption of the Company's Shares](index=19&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD) During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's shares - 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 shares[61](index=61&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates or Joint Ventures](index=19&type=section&id=%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E6%88%96%E5%90%88%E8%B3%87%E4%BC%81%E6%A5%AD%E7%9A%84%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[62](index=62&type=chunk) [Securities Transactions by Directors](index=19&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E4%B9%8B%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) The company's directors confirmed compliance with the 'Model Code for Securities Transactions by Directors of Listed Issuers' during the reporting period, with no breaches by senior management or employees identified - Following specific enquiries made to all Directors, all Directors confirmed that they had complied with the requirements set out in the Model Code for the six months ended June 30, 2025[63](index=63&type=chunk) [Changes in Directors' Information](index=19&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) Effective June 19, 2025, Mr. Huang Shuncai resigned as an independent non-executive Director, and Ms. Xu Wenguan was appointed as an independent non-executive Director, Chairman of the Nomination Committee, and a member of the Audit and Remuneration Committees - Effective June 19, 2025, Mr. Huang Shuncai resigned as an independent non-executive Director[64](index=64&type=chunk) - Effective June 19, 2025, Ms. Xu Wenguan was appointed as an independent non-executive Director and the Chairman of the Nomination Committee, as well as a member of the Audit Committee and Remuneration Committee, respectively[64](index=64&type=chunk) [Compliance with Corporate Governance Code](index=19&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company complied with all applicable code provisions of the Corporate Governance Code during the reporting period and will continue to strengthen its corporate governance practices - For the six months ended June 30, 2025, the Company complied with all applicable code provisions set out in the Corporate Governance Code[65](index=65&type=chunk) [Sufficient Public Float](index=19&type=section&id=%E8%B6%B3%E5%A4%A0%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F) As of the end of the reporting period and the announcement date, the company maintained a sufficient public float, representing over 25% of its total issued share capital - For the six months ended June 30, 2025, and up to the date of this announcement, the Company maintained a sufficient public float, representing over **25%** of its total issued share capital, in accordance with the Listing Rules[66](index=66&type=chunk) [Events After the Reporting Period](index=20&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E4%BB%A5%E5%BE%8C%E4%BA%8B%E9%A0%85) From the end of the reporting period to the date of this announcement, the Directors were not aware of any material events affecting the Group - From June 30, 2025, to the date of this announcement, the Directors were not aware of any material events affecting the Group[67](index=67&type=chunk) [Review of Condensed Consolidated Interim Financial Statements](index=20&type=section&id=%E5%AF%A9%E9%96%B1%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) The Audit Committee reviewed and confirmed that the condensed consolidated interim financial statements were prepared in accordance with applicable accounting standards - The Audit Committee reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and considered them to be prepared in accordance with applicable accounting standards[68](index=68&type=chunk) [Publication of Interim Results and Interim Report](index=20&type=section&id=%E5%88%8A%E7%99%BB%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This announcement has been published on the company's website and HKEXnews website, and the interim report will be dispatched to shareholders and published on the aforementioned websites in due course - This announcement has been published on the Company's website (www.daphneholdings.com) and the HKEXnews website (www.hkexnews.hk)[69](index=69&type=chunk) - The 2025 interim report, containing all information required by the Listing Rules, will be dispatched to the Company's shareholders and published on the aforementioned websites in due course[69](index=69&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佈的內容概不負責，對其準確性或 完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何部份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。 二零二五年中期業績公佈 董事局主席報告 中期業績及股息 集團截至二零二五年六月三十日止六個月，股東應佔(未經審核)虧損為港幣四千 一百萬元，對比去年同期錄得虧損港幣六千九百萬元。每股虧損為港幣1.3仙 (二零 二四年：港幣2.3仙)。 由於期內錄得虧損，董事局宣佈不派發中期股息(二零二四年：無)。 1 業務回顧 中央政府於去年年底恢復並擴展深圳居民赴港「一簽多行」個人遊簽注；加上啟德體 育園於本年三月啟用後，本港積極舉辦更多國際盛事及大型活動，吸引國內外旅客來 港消費。然而，港人熱衷北上消費娛樂，令本港零售業持續受壓。據政府統計處資料 顯示，本港零售業整體總銷貨價值於二零二五年上半年較去年同期下跌 3.3%，當中超 級市場（包括百貨公司內之超市部門）貨品之銷貨價值較去年同期輕微上升 0.6%。 集團業務主要透過以下兩家全資附屬公司營運： (i) Citistore (Hong Kong) Limited ...

[Performance Summary](index=2&type=section&id=Performance%20Summary) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management emphasizes Smart Cloud growth, non-online marketing revenue exceeding RMB 10 billion, and AI transformation in search and global Apollo Go expansion - CEO Robin Li noted that robust Smart Cloud growth mitigated short-term pressure on online marketing, while the company deepens AI transformation of Baidu Search and accelerates Apollo Go's global expansion[5](index=5&type=chunk) - CFO Herman Yu stated that Baidu Core non-online marketing revenue, driven by new AI areas, exceeded **RMB 10 billion** for the first time, growing **34% year-over-year**, leading to a more balanced and diversified revenue structure[5](index=5&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) Q2 2025 total revenue decreased 4% to RMB 32.7 billion, operating income fell 45%, and non-GAAP net income declined 35%, reflecting core profitability challenges Q2 2025 Group Financial Summary (Consolidated Statements) | Metric | Q2 2024 | Q2 2025 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 33,931 RMB Million | 32,713 RMB Million | -4% | | **Operating Income** | 5,944 RMB Million | 3,277 RMB Million | -45% | | **Operating Income (Non-GAAP)** | 7,500 RMB Million | 4,445 RMB Million | -41% | | **Net Income Attributable to Baidu** | 5,488 RMB Million | 7,322 RMB Million | +33% | | **Net Income Attributable to Baidu (Non-GAAP)** | 7,396 RMB Million | 4,795 RMB Million | -35% | | **Diluted Earnings Per ADS** | 15.01 RMB | 20.35 RMB | +36% | | **Diluted Earnings Per ADS (Non-GAAP)** | 21.02 RMB | 13.58 RMB | -35% | Q2 2025 Baidu Core Financial Summary | Metric | Q2 2024 | Q2 2025 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 26,687 RMB Million | 26,251 RMB Million | -2% | | **Operating Income** | 5,608 RMB Million | 3,322 RMB Million | -41% | | **Operating Income (Non-GAAP)** | 7,005 RMB Million | 4,385 RMB Million | -37% | | **Net Income Attributable to Baidu Core** | 5,462 RMB Million | 7,382 RMB Million | +35% | | **Net Income Attributable to Baidu Core (Non-GAAP)** | 7,290 RMB Million | 4,792 RMB Million | -34% | [Operational Highlights](index=3&type=section&id=Operational%20Highlights) Key operational advancements include Smart Cloud's market leadership, Apollo Go's rapid growth and global expansion, and Baidu App's MAU increase with AI-generated search content [Smart Cloud](index=3&type=section&id=Smart%20Cloud) Smart Cloud innovates with Wenxin 4.5 and MuseSteamer, maintaining its sixth consecutive year as China's top AI public cloud service provider - Open-sourced the latest and most advanced foundation model, **Wenxin 4.5 series**, and launched the proprietary video generation model **MuseSteamer**[10](index=10&type=chunk) - According to IDC, Baidu Smart Cloud ranked first in China's AI public cloud service market for the **sixth consecutive year**[10](index=10&type=chunk) [Mobile Ecosystem](index=4&type=section&id=Mobile%20Ecosystem) Mobile ecosystem's AI transformation accelerates, with 64% of search results containing AI-generated content and Baidu App MAU growing 5% to 735 million - As of July 2025, **64%** of mobile search result pages included AI-generated content, up from 35% in April[13](index=13&type=chunk) - In June 2025, Baidu App's Monthly Active Users reached **735 million**, a **5% year-over-year increase**[13](index=13&type=chunk) [Autonomous Driving (Apollo Go)](index=4&type=section&id=Autonomous%20Driving) Apollo Go experienced rapid growth, with fully autonomous driving orders up 148% and cumulative orders over 14 million, initiating global expansion via strategic partnerships - In Q2 2025, Apollo Go provided over **2.2 million** fully autonomous driving orders, a **148% year-over-year increase**[13](index=13&type=chunk) - Established strategic partnerships with Uber and Lyft, planning to deploy thousands of fully autonomous vehicles in Asia, the Middle East, and European markets[13](index=13&type=chunk) [Corporate Updates](index=3&type=section&id=Corporate%20Updates) The company continues its share repurchase program, with $677 million repurchased since Q1 2025, and cumulative repurchases under the 2023 program reaching $2.3 billion - Since Q1 2025, Baidu repurchased **$677 million** in shares, with cumulative repurchases under the 2023 share repurchase program reaching **$2.3 billion**[10](index=10&type=chunk) [Detailed Financial Results](index=4&type=section&id=Detailed%20Financial%20Results) [Income Statement Analysis](index=4&type=section&id=Income%20Statement%20Analysis) Total revenue decreased 4% to RMB 32.7 billion, primarily due to a 15% decline in online marketing revenue, despite strong non-online marketing growth, leading to a 45% drop in operating income to RMB 3.3 billion Q2 2025 Revenue Composition | Revenue Item | Amount (RMB Billion) | YoY Change | | :--- | :--- | :--- | | **Baidu Core Total Revenue** | 26.3 | -2% | | - Online Marketing Revenue | 16.2 | -15% | | - Non-Online Marketing Revenue | 10.0 | +34% | | **iQIYI Revenue** | 6.6 | -11% | | **Total Revenue** | **32.7** | **-4%** | Q2 2025 Costs and Expenses | Expense Item | Amount (RMB Billion) | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | | Cost of Revenues | 18.4 | +12% | Increased costs related to Smart Cloud business and content costs | | Selling, General and Administrative Expenses | 6.0 | +5% | Increased channel spending | | Research and Development Expenses | 5.1 | -13% | Decreased personnel-related expenses | - Total other income, net, was **RMB 4.9 billion**, a **531% year-over-year increase**, primarily due to increased fair value gains and share of earnings from long-term investments[14](index=14&type=chunk) [Balance Sheet and Cash Flow Analysis](index=5&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Analysis) As of June 30, 2025, the company held **RMB 124.2 billion** in cash, cash equivalents, restricted cash, and short-term investments, with a net cash position of **RMB 155.1 billion**, indicating a robust financial standing; however, free cash flow for the quarter was negative **RMB 4.7 billion**, primarily due to increased investments in AI businesses Assets and Cash Flow Status (As of June 30, 2025) | Metric | Amount (RMB Billion) | | :--- | :--- | | Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments | 124.2 | | Net Cash Position | 155.1 | | Free Cash Flow (Q2 2025) | -4.7 | - Negative free cash flow was primarily due to increased investments in AI businesses[16](index=16&type=chunk) [Segment Performance](index=13&type=section&id=Segment%20Performance) Baidu Core revenue slightly decreased 2% year-over-year to RMB 26.3 billion, with operating income down 41% to RMB 3.3 billion, and profit margin declining from 21% to 13%, while iQIYI revenue decreased 11% to RMB 6.6 billion, turning from profit to an operating loss of RMB 46 million Q2 2025 Segment Performance Comparison | Segment | Total Revenue (RMB Million) | YoY Change | Operating Income (Loss) (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Baidu Core** | 26,251 | -2% | 3,322 | -41% | | **iQIYI** | 6,628 | -11% | (46) | Switched from Profit to Loss | [Financial Statements](index=9&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Provides detailed consolidated revenue, cost, expense, profit, and earnings per share data for the three and six months ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 [Condensed Consolidated Statements of Cash Flows](index=15&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Illustrates cash inflows and outflows from operating, investing, and financing activities, presented by segment for Baidu (excluding iQIYI) and iQIYI [Appendix](index=7&type=section&id=Appendix) [Non-GAAP Reconciliation](index=16&type=section&id=Non-GAAP%20Reconciliation) Provides detailed reconciliation between GAAP operating income, net income, and earnings per share and Non-GAAP metrics, excluding the impact of share-based compensation, intangible asset amortization, and other items [U.S. GAAP to IFRS Reconciliation](index=18&type=section&id=U.S.%20GAAP%20to%20IFRS%20Reconciliation) To meet diverse regulatory requirements, this section details adjustments made to financial statement items under U.S. GAAP and IFRS due to accounting policy differences, such as debt instrument investments, operating leases, and convertible notes

Interim Report 中期報告 2025 Characteristics of GEM of The Stock Exchange of Hong Kong Limited ("Stock Exchange") 香港聯合交易所有限公司（「 聯交所」）GEM之特點 GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. Given that t ...

[Company Information](index=5&type=section&id=Company%20Information) [General Information](index=5&type=section&id=1%20General%20Information) Junlian Holdings Limited is a limited liability company incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange, primarily engaged in property agency services for industrial, commercial, and retail properties in Hong Kong, property investment, money lending, and securities investment - The company is incorporated in the Cayman Islands and listed on the Main Board of The Stock Exchange of Hong Kong Limited[7](index=7&type=chunk) - The Group's principal activities include providing industrial, commercial, and retail property agency services in Hong Kong, property investment, money lending, and securities investment[7](index=7&type=chunk) [Basis of Preparation](index=5&type=section&id=2%20Basis%20of%20Preparation) The unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, is prepared on a historical cost basis, adjusted for the revaluation of investment properties at fair value, complying with HKAS 34 and Listing Rules disclosure requirements. The Group adopted revised standards effective in 2025, with no material impact on results or financial position - The financial information is prepared on a historical cost basis, adjusted for the revaluation of investment properties at fair value, in compliance with HKAS 34 and Appendix D2 of the Listing Rules disclosure requirements[10](index=10&type=chunk) - The adoption of revised standards effective in 2025 had no material impact on the Group's results or financial position[12](index=12&type=chunk) [Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Condensed Consolidated Statement of Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income%20%28Unaudited%29) For the six months ended June 30, 2025, the Group shifted from profit to a loss of HKD 33,803 thousand, primarily due to a significant increase in fair value loss on investment properties. Despite a 19.36% year-on-year revenue growth, both operating and pre-tax profits turned into losses Key Figures from Condensed Consolidated Statement of Comprehensive Income | Metric | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 240,538 | 201,530 | +19.36% | | Fair value loss on investment properties | (47,200) | (3,400) | Loss widened | | Operating (loss)/profit | (25,036) | 19,788 | Shifted from profit to loss | | (Loss)/Profit before tax | (31,300) | 10,974 | Shifted from profit to loss | | (Loss)/Profit and total comprehensive (loss)/income for the period | (33,803) | 9,291 | Shifted from profit to loss | - The loss attributable to owners of the Company for the period was **HKD 33,343 thousand**, compared to a profit of HKD 9,504 thousand in the prior year period[4](index=4&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position%20%28Unaudited%29) As of June 30, 2025, the Group's total assets were HKD 1,539,222 thousand, a 5.90% decrease from the end of 2024, mainly due to a reduction in investment property fair value. Total liabilities and equity also decreased, while current liabilities declined Key Figures from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Total assets | 1,539,222 | 1,635,768 | -5.90% | | Investment properties | 905,700 | 952,900 | -4.95% | | Cash and cash equivalents | 209,947 | 285,998 | -26.60% | | Total liabilities | 461,717 | 524,460 | -12.06% | | Total equity | 1,077,505 | 1,111,308 | -3.04% | [(Loss)/Earnings per share](index=12&type=section&id=8%20%28Loss%29%2FEarnings%20per%20share) For the six months ended June 30, 2025, the loss attributable to owners of the Company resulted in a basic and diluted loss per share of HK cents 1.847, compared to a profit per share of HK cents 0.526 in the prior year period. Diluted loss per share was the same as basic loss per share due to the anti-dilutive effect of share options (Loss)/Earnings per share | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company (HKD thousands) | (33,343) | 9,504 | | Basic and diluted (loss)/earnings per share (HK cents) | (1.847) | 0.526 | - Diluted (loss)/earnings per share was the same as basic (loss)/earnings per share, as the exercise of the Company's share options had an anti-dilutive effect[29](index=29&type=chunk) [Interim Dividend](index=11&type=section&id=7%20Interim%20Dividend) The Board did not declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year period - The Board did not declare an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[27](index=27&type=chunk)[66](index=66&type=chunk) [Business Segment Performance](index=6&type=section&id=Business%20Segment%20Performance) [Revenue and Segment Information](index=6&type=section&id=3%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from property agency, rental income, and money lending interest. Total revenue grew 19.36% year-on-year in H1 2025. The property investment segment shifted from profit to loss due to fair value losses, while external customer revenue from property agency business increased - Executive Directors assess performance based on the Group's principal activities in Hong Kong, including property agency services for industrial, commercial, and retail properties, property investment, money lending, and securities investment[15](index=15&type=chunk) [Revenue Composition](index=6&type=section&id=3.1.1%20Revenue%20Composition) Revenue Composition (For the six months ended June 30) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Agency fees | 209,390 | 171,657 | +22.09% | | Rental income | 14,022 | 13,394 | +4.69% | | Interest income from money lending business | 17,126 | 16,479 | +3.92% | | **Total Revenue** | **240,538** | **201,530** | **+19.36%** | [Segment Results Analysis](index=7&type=section&id=3.1.2%20Segment%20Results%20Analysis) H1 2025 Segment Revenue from External Customers (HKD thousands) | Segment | 2025 | 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Commercial property agency | 55,126 | 64,859 | -15.01% | | Industrial property agency | 84,064 | 43,237 | +94.42% | | Retail property agency | 70,200 | 63,561 | +10.45% | | Property investment (rental income) | 14,022 | 13,394 | +4.69% | | Money lending business (interest income) | 17,126 | 16,479 | +3.92% | | Securities investment | - | - | - | | **Total** | **240,538** | **201,530** | **+19.36%** | H1 2025 Segment Results (HKD thousands) | Segment | 2025 | 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Commercial property agency | 2,453 | 2,505 | -2.1% | | Industrial property agency | (2,862) | 4,440 | Shifted from profit to loss | | Retail property agency | 9,965 | 474 | +1999.15% | | Property investment | (39,058) | 4,262 | Shifted from profit to loss | | Money lending business | 12,506 | 13,858 | -9.76% | | Securities investment | (1) | - | - | | **Segment results for reported segments** | **(16,997)** | **25,539** | **Shifted from profit to loss** | [Segment Assets and Liabilities](index=9&type=section&id=3.1.3%20Segment%20Assets%20and%20Liabilities) June 30, 2025 Segment Assets and Liabilities (HKD thousands) | Segment | Segment Assets | Segment Liabilities | | :--- | :--- | :--- | | Commercial property agency | 38,465 | 37,977 | | Industrial property agency | 81,836 | 87,186 | | Retail property agency | 62,864 | 55,600 | | Property investment | 906,956 | 21,022 | | Money lending business | 214,904 | 934 | | Securities investment | 7 | - | | **Total** | **1,305,032** | **202,719** | - Segment assets accounted for **84.78%** of total assets (1,305,032 / 1,539,222), and segment liabilities accounted for **43.90%** of total liabilities (202,719 / 461,717)[20](index=20&type=chunk)[21](index=21&type=chunk) [Other Income](index=10&type=section&id=4%20Other%20Income) Other income for H1 2025 was HKD 166 thousand, a 41.75% decrease from HKD 285 thousand in the prior year period Other Income (HKD thousands) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Other income | 166 | 285 | [Other Operating Costs](index=11&type=section&id=5%20Other%20Operating%20Costs) Other operating costs for H1 2025 were HKD 18,701 thousand, a 4.64% year-on-year increase, primarily driven by higher legal and professional fees, insurance expenses, and other miscellaneous expenses Other Operating Costs (HKD thousands) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Office and branch operating expenses | 5,621 | 5,598 | | Government rent and rates, building management fees | 3,184 | 3,527 | | Legal and professional fees | 2,779 | 1,558 | | Trademark license fees | 583 | 715 | | Insurance expenses | 2,112 | 1,923 | | Bank charges | 229 | 1,004 | | Auditor's remuneration | 733 | 733 | | Others | 3,460 | 2,813 | | **Total** | **18,701** | **17,871** | - Direct operating expenses for investment properties generating rental income amounted to **HKD 3,124 thousand**, of which **HKD 1,632 thousand** was included in other operating costs[23](index=23&type=chunk) [Income Tax Expense](index=11&type=section&id=6%20Income%20Tax%20Expense) Income tax expense for H1 2025 was HKD 2,503 thousand, a 48.72% year-on-year increase, mainly due to deferred tax shifting from a reversal to an expense. Hong Kong profits tax rate remained at 16.5%, with a two-tiered tax rate applicable to some subsidiaries Income Tax Expense (HKD thousands) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Hong Kong profits tax | 1,581 | 1,960 | | Deferred tax | 922 | (277) | | **Total** | **2,503** | **1,683** | - Hong Kong profits tax is provided at a rate of **16.5%** on the estimated assessable profit for the period, with a two-tiered tax rate of **8.25%** applicable to the first **HKD 2,000,000** of assessable profit for certain subsidiaries[26](index=26&type=chunk) [Assets and Liabilities Details](index=12&type=section&id=Assets%20and%20Liabilities%20Details) [Investment Properties](index=12&type=section&id=9%20Investment%20Properties) As of June 30, 2025, investment properties had a fair value of HKD 905,700 thousand, with a fair value loss of HKD 47,200 thousand recognized during the period, a significant increase from the prior year. Investment properties totaling HKD 627,500 thousand were pledged as collateral for bank borrowings Changes in Fair Value of Investment Properties (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | At beginning of period | 952,900 | 952,900 | | Changes in fair value | (47,200) | (3,400) (June 30, 2024) | | At end of period | 905,700 | 952,900 | - Investment properties totaling **HKD 627,500 thousand** were pledged as collateral for the Group's bank borrowings[30](index=30&type=chunk) [Loans Receivable](index=13&type=section&id=10%20Loans%20Receivable) As of June 30, 2025, total loans receivable were HKD 214,367 thousand, a 14.62% decrease from the end of 2024. Overdue loans significantly decreased by 86.34%, with the largest portion due within one year. All loans receivable are secured by property mortgages in Hong Kong Loans Receivable Maturity Profile (HKD thousands) | Maturity | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Overdue | 8,306 | 60,721 | | Within one year | 205,061 | 190,343 | | After one year but within two years | 1,000 | - | | **Total** | **214,367** | **251,064** | - Loans receivable refer to property mortgage loans granted to customers in Hong Kong[32](index=32&type=chunk) [Trade and Other Receivables](index=13&type=section&id=11%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were HKD 160,409 thousand, a significant 98.95% increase from the end of 2024. Current (not overdue) trade receivables constituted the largest portion and increased significantly Trade Receivables Ageing Analysis (HKD thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current (not overdue) | 147,111 | 74,323 | | Overdue less than 30 days | 6,366 | 4,207 | | Overdue 31 to 60 days | 5,724 | 1,742 | | Overdue 61 to 90 days | 943 | 352 | | Overdue 91 to 180 days | 265 | - | | **Total** | **160,409** | **80,624** | - Trade receivables primarily represent agency fees due from customers, with no general credit terms granted[34](index=34&type=chunk) [Bank Borrowings](index=14&type=section&id=12%20Bank%20Borrowings) As of June 30, 2025, total bank borrowings were HKD 234,541 thousand, a significant 37.00% decrease from the end of 2024. The current portion repayable within one year significantly declined. Bank borrowings are secured by the Group's investment properties and corporate guarantees from the Company Bank Borrowings Repayment Schedule (HKD thousands) | Repayment Period | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Repayable within one year | 15,006 | 146,006 | | Repayable after one year but within two years | 176,807 | 100,380 | | Repayable after two years but within five years | 42,728 | 126,658 | | **Total** | **234,541** | **373,044** | - Bank borrowings are secured by the Group's investment properties totaling **HKD 627,500 thousand** and corporate guarantees provided by the Company[35](index=35&type=chunk) [Trade and Other Payables](index=14&type=section&id=13%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were HKD 194,365 thousand, a significant 59.12% increase from the end of 2024, primarily comprising commissions and rebates payable to property consultants, co-operating real estate agents, and property purchasers - Total trade and other payables amounted to **HKD 194,365 thousand** (December 31, 2024: HKD 122,156 thousand)[6](index=6&type=chunk) - Trade payables primarily include commissions and rebates payable to property consultants, co-operating real estate agents, and property purchasers, with **HKD 19,129 thousand** due within 30 days for related agency fees already received[37](index=37&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Results Review](index=15&type=section&id=Results%20Review) The Group recorded a loss attributable to owners of HKD 33,343 thousand in H1 2025, compared to a profit of HKD 9,504 thousand in the prior year, primarily due to fair value losses from revaluation of investment properties - The Group recorded a loss attributable to owners of **HKD 33,343 thousand**, compared to a profit of HKD 9,504 thousand in the prior year period[39](index=39&type=chunk) - The loss for the interim period was primarily due to fair value losses arising from the revaluation of the Group's investment properties[39](index=39&type=chunk) [Market and Business Performance](index=15&type=section&id=Market%20and%20Business%20Performance) In H1 2025, Hong Kong's property market sentiment slightly improved, with increased non-residential property sales registrations. The Group's agency, property investment, and credit businesses showed stable or slight improvements, but investment property revaluation losses offset profits from other operations [Market Activities](index=15&type=section&id=Market%20Activities%20Slightly%20Improved) - Overall market sentiment slightly improved in H1 2025, with year-on-year increases in sales registrations for retail, office, and industrial properties[40](index=40&type=chunk) - The market rebound was primarily driven by the rise of AI startups boosting Hong Kong stocks, a significant drop in HIBOR, and the government's reduction of stamp duty on property transactions below HKD 4 million[40](index=40&type=chunk) - The overall business environment remains challenging, with market performance still well below pre-pandemic levels, ongoing geopolitical uncertainties, and the retail sector continuously impacted by cross-border consumption[40](index=40&type=chunk) [Agency Business](index=15&type=section&id=Agency%20Business%20Slightly%20Improved) - Operating results for the property agency business showed a slight improvement compared to the prior year period, benefiting from increased transactions in the non-residential property market[41](index=41&type=chunk) - The new management team actively promoted synergy between the sales team and relevant member companies of Midland Holdings, leading to a significant year-on-year increase in referral income from non-residential property business[41](index=41&type=chunk) - The increase in referral business also contributed to a rise in rebate expenses[41](index=41&type=chunk) [Property Investment Business](index=15&type=section&id=Property%20Investment%20Business%20Remains%20Stable) - Property leasing business continued to perform steadily in H1 2025, with high occupancy rates for serviced apartments and a slight increase in rental income[42](index=42&type=chunk) - For commercial properties, the overall environment remains challenging due to weak retail market conditions and the shadow of trade tensions[42](index=42&type=chunk) - Property leasing business continues to provide stable returns to the Group, with its performance only impacted by property revaluation losses[42](index=42&type=chunk) [Money Lending Business](index=16&type=section&id=Money%20Lending%20Business%20Remains%20Stable) - The operating environment for the money lending business remained challenging in H1 2025[43](index=43&type=chunk) - The Group consistently adheres to a prudent credit policy and has not relaxed its risk tolerance for high-risk businesses[43](index=43&type=chunk) - The money lending business continued to make a positive contribution to the Group during the interim period[43](index=43&type=chunk) [Property Revaluation](index=16&type=section&id=Property%20Revaluation) - The commercial property market is still a considerable distance from a full recovery, and asset prices have not yet stopped falling[44](index=44&type=chunk) - The Group's investment properties recorded revaluation losses exceeding the profits generated by other businesses, despite being non-cash in nature[44](index=44&type=chunk) [Outlook](index=16&type=section&id=Outlook) The Group anticipates an increasingly uncertain global economic landscape but sees opportunities from China's strong economic performance and Hong Kong's status as a capital safe haven. While the non-residential property market shows improvement, challenges persist, alongside investment opportunities arising from asset depreciation [Global Economy and Hong Kong Opportunities](index=16&type=section&id=Global%20Headwinds%20and%20Emerging%20Opportunities) - The global economic landscape is increasingly uncertain, with unpredictable US trade and foreign policies and escalating geopolitical tensions[45](index=45&type=chunk) - Mainland China's economy has performed relatively well year-to-date in 2025, with **5.4% growth in Q1** and a **5.2% increase in Q2 GDP**[45](index=45&type=chunk) - Hong Kong has become a safe haven for capital inflows, HIBOR is expected to remain low long-term, and in H1 2025, Hong Kong surpassed Wall Street as the world's preferred IPO destination[45](index=45&type=chunk)[46](index=46&type=chunk) - Tourist arrivals in Hong Kong are increasing, Kai Tak Sports Park and West Kowloon Cultural District will inject new impetus, and Hong Kong is further solidifying its position as a global education hub[46](index=46&type=chunk) [Non-Residential Property Market Challenges and Opportunities](index=17&type=section&id=Improvements%20Amidst%20Challenges) - While Hong Kong's non-residential property market shows signs of improvement, it still faces significant challenges, and a full recovery will take time[47](index=47&type=chunk) [Office Market](index=17&type=section&id=Office%20Market) - Favorable factors: Major transactions in Central demonstrate strong confidence from financial institutions in Hong Kong's prime office market, with some office prices falling by nearly **70%**, limiting further significant declines[48](index=48&type=chunk) - Unfavorable factors: AI applications may reduce recruitment and office demand, geopolitical tensions, and the market still faces severe oversupply of office space, leading to high vacancy rates[49](index=49&type=chunk) [Retail Shop Market](index=17&type=section&id=Retail%20Shop%20Market) - Favorable factors: The overall retail sector shows initial signs of stabilization, the government's "Mega Event Capital" initiatives are yielding results, and a weaker US dollar is helping Hong Kong's tourism regain competitiveness[50](index=50&type=chunk) - Unfavorable factors: Cross-border consumption has a profound impact, coupled with the prevalence of online shopping, it may take time for the local retail industry to emerge from its slump[51](index=51&type=chunk) [Industrial Building Market](index=17&type=section&id=Industrial%20Building%20Market) - Favorable factors: The industrial building market has seen significant price drops, with some properties now trading below construction costs, potentially attracting end-users and investors as interest rates decline[52](index=52&type=chunk) - Unfavorable factors: A full recovery remains distant, and while lower borrowing costs offer some relief, they are not a panacea[53](index=53&type=chunk) [Property Investment and Money Lending Business Outlook](index=17&type=section&id=Property%20Investment) - The residential leasing market has a positive outlook, benefiting from an increase in non-local students and an influx of mainland professionals to Hong Kong[54](index=54&type=chunk) - The retail shop leasing outlook is cautiously optimistic, with the Group's retail leasing portfolio expected to benefit from a gradual recovery in the retail market[54](index=54&type=chunk) - The money lending business still faces multiple challenges, but the real estate market shows signs of warming up, transaction activity is increasing, and lower interest rates are expected to provide some support[55](index=55&type=chunk) [Opportunities Amidst Crisis](index=18&type=section&id=Crisis-ridden%20with%20Emerging%20Opportunities) - Some experienced investors or developers are willing to exit at discounted prices during deleveraging, with significant asset depreciation making returns attractive (e.g., Grade A office prices fell **51%** from peak, with returns increasing by **1.2 percentage points to 3.6%**)[56](index=56&type=chunk) - Hong Kong Exchanges and Clearing Limited and universities are actively acquiring properties for self-use, providing market support[56](index=56&type=chunk) - The Development Bureau expanded the definition of "hotel" to include student dormitories, exempting related planning procedures and simplifying applications, which is expected to stimulate more en-bloc property transactions and redevelopment investment opportunities[56](index=56&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's cash and cash equivalents decreased, bank borrowings significantly declined, and both the gearing ratio and current ratio improved. Return on equity shifted from positive to negative. Directors believe the Group's financial resources are sufficient for its ongoing working capital needs Key Indicators of Liquidity and Financial Resources | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents (HKD thousands) | 209,947 | 285,998 | -26.60% | | Bank borrowings (HKD thousands) | 234,541 | 373,044 | -37.00% | | Gearing ratio | 21.8% | 33.6% | Improved | | Current ratio | 2.7 | 2.3 | Improved | | Return on equity | -3.14% | +0.81% (June 30, 2024) | Shifted from positive to negative | - The Group had unutilized banking facilities of **HKD 73,000 thousand** from certain banks, consistent with the end of 2024[58](index=58&type=chunk) - The Directors believe the Group's financial resources are sufficient to meet its ongoing working capital requirements and are primarily invested in liquid instruments, products, or equities with good credit quality[59](index=59&type=chunk) - The Group faces minimal foreign exchange risk[60](index=60&type=chunk) [Loan Portfolio and Money Lending Business Information](index=20&type=section&id=The%20Group%27s%20Loan%20Portfolio%20and%20Money%20Lending%20Business%20Information) As of June 30, 2025, total outstanding loans receivable were HKD 214,400 thousand, involving 32 loans. All loans are secured by first mortgages on residential and/or non-residential properties, with an average loan-to-value ratio of approximately 48%. The Group strictly implements credit risk assessment and collection policies, with no loan impairment losses recognized during the period - As of June 30, 2025, outstanding loans receivable amounted to **HKD 214,400 thousand** (December 31, 2024: HKD 251,100 thousand), involving **32 loans**[62](index=62&type=chunk) - The largest outstanding loan receivable was **HKD 32,200 thousand** (approximately **15%** of the total outstanding loan portfolio), secured by a first mortgage on a prime residential property and two parking spaces, with a loan-to-value ratio of approximately **27%**[62](index=62&type=chunk) - All outstanding loans receivable are secured by first mortgages on residential and/or non-residential properties, with an average loan-to-value ratio of approximately **48%**. No loan impairment losses were recognized during the period[62](index=62&type=chunk) - The Group's money lending business is operated by Junlian Credit Limited, implementing strict credit risk assessments (including borrower's financial strength, collateral, market conditions) and regular review of the loan portfolio by a collection team[63](index=63&type=chunk) [Other Information](index=20&type=section&id=Other%20Information) [Contingent Liabilities](index=20&type=section&id=Contingent%20Liabilities) The Group has been involved in certain claims/litigations related to property agency services, but management, after legal advice, believes sufficient provisions have been made or there is no indication of potential outflow of economic resources based on current facts and evidence, thus no further provisions are required - The Group has been involved in certain claims/litigations related to property agency services, including several cases where third-party clients alleged that certain employees of the Group made misrepresentations regarding properties clients intended to purchase when providing advice[64](index=64&type=chunk) - Management believes that sufficient provisions have been made in the condensed consolidated financial statements to cover any potential liabilities, or based on current facts and evidence, there is no indication of a possible outflow of economic resources, thus no further provisions are required[64](index=64&type=chunk) [Staff Information](index=20&type=section&id=Staff%20Information) As of June 30, 2025, the Group employed 385 full-time employees, a decrease from 405 at the end of 2024. The Group offers competitive remuneration and benefits, including discretionary bonuses, profit-linked incentives, share options, education allowances, medical and retirement benefits, and regular internal and external training - As of June 30, 2025, the Group employed **385 full-time employees** (December 31, 2024: 405 employees)[65](index=65&type=chunk) - Employee remuneration policy is determined with reference to industry practice, individual performance, qualifications, and experience, offering discretionary bonuses, profit-linked incentives, and share options[65](index=65&type=chunk) - The Group also provides other benefits to its employees, including education allowances, medical and retirement benefits, and regular internal and external training and development programs[65](index=65&type=chunk) [Corporate Governance](index=21&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules during the interim period and adopted a code of conduct for directors' securities transactions no less stringent than the standard code. Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the interim period - The Company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the interim period[67](index=67&type=chunk) - The Company has adopted its own code of conduct for directors' securities transactions, the terms of which are no less stringent than the standards set out in Appendix C3 of the Listing Rules, and all Directors have confirmed compliance[68](index=68&type=chunk) - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the interim period[69](index=69&type=chunk) [Review of Financial Statements and Publication](index=21&type=section&id=Review%20of%20Financial%20Statements) The Company's Audit Committee has reviewed and discussed the Group's unaudited condensed consolidated interim financial information with management. The interim results announcement has been published on the HKEX and Company websites, and the interim results report will be dispatched to shareholders and published in due course - The Company's Audit Committee has reviewed and discussed the Group's unaudited condensed consolidated interim financial information for the interim period with management[70](index=70&type=chunk) - This interim results announcement is published on the HKEX website and the Company's website, and the Company's 2025 interim results report will be dispatched to shareholders and published in due course[71](index=71&type=chunk) [Acknowledgement](index=21&type=section&id=Acknowledgement) The Board sincerely thanks all shareholders and clients for their continuous support and expresses gratitude to management and the team for their resilience and dedication during challenging times - The Board hereby expresses its sincere gratitude to all shareholders and clients for their continuous support[72](index=72&type=chunk) - Sincere appreciation is extended to the management and team for their resilience and dedication demonstrated during challenging times[72](index=72&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company's financial performance for the six months ended June 30, 2025, shows significant revenue growth of 30.26% to RMB 298.55 million and a substantial reduction in net loss by 38.48% to RMB 82.28 million Financial Highlights for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB '000) | 2024 (RMB '000) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 298,552 | 229,205 | 30.26% | | **Gross Profit** | 153,868 | 121,198 | 26.96% | | **Loss Before Tax** | (100,134) | (163,289) | (38.68)% | | **Loss for the Period** | (82,276) | (133,738) | (38.48)% | | **Net Loss Attributable to Owners of the Parent** | (74,086) | (129,653) | (42.86)% | [Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational performance, financial position, and strategic initiatives for the reporting period [Industry Overview and Core Technologies](index=2&type=section&id=Industry%20Overview%20and%20Core%20Technologies) Driven by national policies and large model breakthroughs, the medical AI industry is booming, with the company's domestically trained 'iFlytek Spark Medical Large Model' maintaining a leading edge in key technologies and applications - The company launched iFlytek Spark Medical Large Model X1, based on deep reasoning technology, as the only medical deep reasoning large model trained with fully domestic computing power, outperforming GPT-4o and DeepSeek R1 in several key metrics[10](index=10&type=chunk) Key Capability Enhancements of iFlytek Spark Medical Large Model | Capability Metric | March 2025 (X1) | July 2025 (Upgraded) | | :--- | :--- | :--- | | General Practice Assisted Diagnosis Accuracy Rate | 94.0% | 95.0% | | Health Consultation Answering Rate | 89.0% | 91.5% | | Physical Examination Report Interpretation Accuracy Rate | - | 86.3% | | Hospital Cardiology Primary Diagnosis Accuracy Rate | 90.1% | 91.2% | - In the first half of 2025, the company's total R&D investment (including R&D expenses and development expenditures) was **RMB 134.2 million**, accounting for **44.9% of total revenue** for the reporting period[17](index=17&type=chunk) - The company maintains multiple advantages in industry implementation, including massive professional knowledge data accumulation, fully self-developed large model technology, systematic innovative AI capabilities combining general and specialized applications, a robust technology implementation and service assurance system, and a firm commitment to fully localized hardware and software solutions[16](index=16&type=chunk)[18](index=18&type=chunk) [Business Review](index=8&type=section&id=Business%20Review) In the first half of 2025, total revenue grew 30.3% to RMB 298.6 million, with gross profit up 27.0% to RMB 153.9 million, driven by strong growth in regional and grassroots solutions Revenue and Gross Profit Breakdown by Business Segment (For the Six Months Ended June 30) | Business Segment | 2025 Revenue (RMB '000) | Revenue Share | YoY Growth | 2025 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Grassroots Solutions | 83,812 | 28.1% | 52.3% | 50.6% | | Regional Solutions | 57,625 | 19.3% | 178.1% | 25.9% | | Hospital Solutions | 52,862 | 17.7% | -10.0% | 61.5% | | Patient Management Services | 104,253 | 34.9% | 10.1% | 61.4% | | **Total** | **298,552** | **100.0%** | **30.3%** | **51.5%** | - The company's business is closely aligned with its mission of 'AI Assistant for Every Doctor, AI Health Assistant for Everyone,' upgrading its business classification into four major segments to empower government regulation, hospital efficiency, and personal health management through AI[23](index=23&type=chunk) [Grassroots Solutions](index=10&type=section&id=Grassroots%20Solutions) Driven by 'Smart Doctor Assistant,' this business saw revenue grow 52.3% to RMB 83.8 million, covering over 75,000 grassroots medical institutions with enhanced AI diagnostic accuracy - As of June 30, 2025, Smart Doctor Assistant covered **697 districts and counties** nationwide, serving over **75,000 grassroots medical institutions**[25](index=25&type=chunk) Key Operational Data for Smart Doctor Assistant | Metric | Cumulative Data | | :--- | :--- | | AI Assisted Diagnosis Suggestions | Over 1.01 billion times | | Standardized Electronic Medical Records Generated | Over 390 million copies | | Valuable Medical Records with Corrected Diagnoses | Over 1.763 million cases | | Unreasonable Prescriptions Identified | Over 110 million copies | - For the six months ended June 30, 2025, Grassroots Solutions recorded revenue of **RMB 83.8 million**, a **52.3% year-on-year increase**, accounting for **28.1% of total revenue**[26](index=26&type=chunk) [Regional Solutions](index=12&type=section&id=Regional%20Solutions) This business achieved a strong 178.1% revenue growth to RMB 57.6 million, primarily due to the widespread adoption of AI infectious disease prevention and control solutions across multiple provinces - For the six months ended June 30, 2025, Regional Solutions recorded revenue of **RMB 57.6 million**, a **178.1% year-on-year increase**, accounting for **19.3% of total revenue**, primarily driven by the application of AI infectious disease prevention and control solutions in multiple provinces[29](index=29&type=chunk) - AI Medical Insurance Solutions have covered **3,236 medical institutions** in **86 counties**, with an average detection rate of unreasonable expenditures reaching **3.9%**, ranking among the industry leaders[28](index=28&type=chunk) [Hospital Solutions](index=13&type=section&id=Hospital%20Solutions) Revenue for this segment decreased by 10.0% to RMB 52.9 million, as large model updates temporarily slowed application promotion, yet the 'three-in-one' smart hospital solution is deployed in over 500 hospitals - For the six months ended June 30, 2025, Hospital Solutions recorded revenue of **RMB 52.9 million**, a **10.0% year-on-year decrease**, accounting for **17.7% of total revenue**[31](index=31&type=chunk) - The AI medical record quality control system increased medical record quality inspection coverage from less than **5%** with traditional manual sampling to **100%** full coverage driven by AI[31](index=31&type=chunk) - iFlytek Spark Medical Large Model has been implemented in over **20 leading hospitals** nationwide and has established deep collaborations with top medical institutions such as Sichuan Huaxi Hospital and Shandong Qilu Hospital[30](index=30&type=chunk) [Patient Management Services](index=14&type=section&id=Patient%20Management%20Services) As the largest revenue source, this segment grew 10.1% to RMB 104.3 million, driven by AI post-diagnosis patient management, imaging cloud, and the 'iFlytek Xiaoyi' app, which surpassed 24 million downloads - For the six months ended June 30, 2025, Patient Management Services recorded revenue of **RMB 104.3 million**, a **10.1% year-on-year increase**, accounting for **34.9% of total revenue**[37](index=37&type=chunk) - As of June 30, 2025, the iFlytek Xiaoyi APP downloads exceeded **24 million**, with over **140 million AI consultations** completed and a user satisfaction rate of **98.0%**[36](index=36&type=chunk) - In the first half of 2025, the number of offline partner stores for smart hearing aids expanded from **227 to 380**, representing a **67.4% increase**[37](index=37&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) Total revenue increased by 30.3%, with gross margin stable at 51.5%, while net loss significantly narrowed by 38.5% to RMB 82.3 million, supported by increased bank borrowings [Operating Performance Analysis](index=18&type=section&id=Operating%20Performance%20Analysis) Revenue growth was driven by grassroots and regional solutions, with gross profit increasing 27.0% to RMB 153.9 million, while effective cost control led to a 38.5% reduction in net loss - Gross margin slightly decreased from **52.9%** in the prior year to **51.5%**, showing minimal fluctuation[40](index=40&type=chunk) - Selling expenses increased by **16.7%** year-on-year to **RMB 102.1 million**, primarily due to higher staff costs and advertising expenses; R&D expenses decreased by **15.4%** year-on-year to **RMB 114.5 million**, mainly due to reduced share option and intangible asset amortization[43](index=43&type=chunk)[45](index=45&type=chunk) Reconciliation of Non-IFRS Measures | Metric (RMB '000) | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Loss for the Period | (82,276) | (133,738) | | Add: Equity-settled share-based payments | 16,099 | 28,632 | | Add: Listing expenses | — | 18,735 | | **Adjusted Net Loss for the Period** | **(66,177)** | **(86,371)** | [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held RMB 743.9 million in cash, with net cash outflow from operations of RMB 169.2 million, leading to an increase in bank borrowings and a debt-to-asset ratio of 60.4% Condensed Cash Flow Statement (For the Six Months Ended June 30) | Item (RMB Million) | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (169.2) | (134.1) | | Net Cash Used in Investing Activities | (24.2) | (7.8) | | Net Cash From Financing Activities | 260.6 | 101.4 | | **Cash and Cash Equivalents at End of Period** | **743.9** | **102.0** | - Bank borrowings increased from **RMB 244.8 million** at the end of 2024 to **RMB 513.5 million** as of June 30, 2025[59](index=59&type=chunk) - The debt-to-asset ratio (total liabilities/total assets) increased from **52.8%** at the end of 2024 to **60.4%** as of June 30, 2025[60](index=60&type=chunk) [Outlook and Human Resources](index=24&type=section&id=Outlook%20and%20Human%20Resources) The company will pursue a 'top-tier technology, grounded application' strategy, focusing on leading AI medical technology and serving government, hospitals, and patients, supported by 928 employees and a total staff cost of RMB 167.6 million - The company will steadfastly implement its 'top-tier' (maintaining globally leading AI medical technology) and 'grounded' (focusing on critical social needs, serving GBC clients) development strategies[68](index=68&type=chunk) - As of June 30, 2025, the Group had **928 full-time employees**, a slight increase from **911** at the end of 2024[69](index=69&type=chunk) - For the six months ended June 30, 2025, total staff remuneration and welfare expenses amounted to **RMB 167.6 million**[71](index=71&type=chunk) [Condensed Consolidated Financial Statements](index=26&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the income statement, statement of financial position, and selected notes, reflecting revenue growth and reduced losses [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the reporting period, revenue reached RMB 298.6 million, a 30.3% increase, with gross profit at RMB 153.9 million, up 27.0%, leading to a narrowed loss of RMB 82.28 million Condensed Consolidated Statement of Profit or Loss (For the Six Months Ended June 30) | Item (RMB '000) | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 298,552 | 229,205 | | Gross Profit | 153,868 | 121,198 | | Loss Before Tax | (100,134) | (163,289) | | Loss and Total Comprehensive Expenses for the Period | (82,276) | (133,738) | | Loss Attributable to Owners of the Company | (74,086) | (129,653) | | Basic Loss Per Share (RMB) | (0.61) | (1.14) | [Condensed Consolidated Statement of Financial Position](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were RMB 2,323 million, total liabilities RMB 1,402 million, and net assets RMB 921 million, with increases in both assets and liabilities driven by trade receivables and bank borrowings Summary of Condensed Consolidated Statement of Financial Position | Item (RMB '000) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Non-current Assets** | 466,982 | 408,745 | | **Current Assets** | 1,855,774 | 1,681,192 | | **Total Assets** | **2,322,756** | **2,089,937** | | **Current Liabilities** | 1,157,438 | 1,000,289 | | **Non-current Liabilities** | 244,653 | 102,806 | | **Total Liabilities** | **1,402,091** | **1,103,095** | | **Net Assets** | **920,665** | **986,842** | [Notes to the Financial Statements (Selected)](index=29&type=section&id=Notes%20to%20the%20Financial%20Statements%20(Selected)) These notes detail revenue breakdown by business line and type, highlighting a major customer contributing over 10% of total revenue, and provide an aging analysis of trade receivables and payables Disaggregation of Revenue from Contracts with Customers (By Business Line) | Business Line (RMB '000) | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Grassroots Solutions | 83,812 | 55,042 | | Regional Solutions | 57,625 | 20,722 | | Hospital Solutions | 52,862 | 58,727 | | Patient Management Services | 104,253 | 94,714 | | **Total** | **298,552** | **229,205** | - During the reporting period, revenue from Customer A was **RMB 39.03 million**, accounting for **13.1% of total revenue**, making them a major customer[89](index=89&type=chunk)[90](index=90&type=chunk) [Other Information](index=37&type=section&id=Other%20Information) This section covers the company's corporate governance, compliance, and the utilization of IPO proceeds, confirming adherence to governance codes and the review of interim financial statements by auditors [Corporate Governance and Compliance](index=37&type=section&id=Corporate%20Governance%20and%20Compliance) The company maintains high corporate governance standards, complying with all applicable code provisions of the Listing Rules, with its interim financial statements reviewed by Deloitte Touche Tohmatsu - The company complied with the applicable code provisions of the Corporate Governance Code for the six months ended June 30, 2025[103](index=103&type=chunk) - The Group's interim financial statements have been reviewed by its auditor, Deloitte Touche Tohmatsu, in accordance with Hong Kong Standard on Review Engagements 2410[105](index=105&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[108](index=108&type=chunk) [Use of Proceeds from Listing](index=39&type=section&id=Use%20of%20Proceeds%20from%20Listing) The company, listed in December 2024, had net IPO proceeds of approximately HKD 507.1 million, with HKD 75.7 million utilized for operations, R&D, and product upgrades, and the remaining HKD 431.4 million planned for use by end of 2026 Use of Proceeds from Listing and Utilization (HKD Million) | Item | Planned Percentage | Utilized During Reporting Period | Unutilized at Period End | | :--- | :--- | :--- | :--- | | Investment in R&D, Strengthening Core Capabilities | 32.3% | 12.0 | 152.0 | | Upgrading and Developing Products | 26.6% | 9.1 | 125.9 | | Strengthening Commercialization Capabilities | 24.7% | 5.5 | 119.6 | | Potential Acquisitions | 6.4% | — | 32.3 | | Working Capital and Others | 10.0% | 49.1 | 1.6 | | **Total** | **100%** | **75.7** | **431.4** |

[H1 2025 Performance Highlights](index=2&type=section&id=H1%202025%20Performance%20Highlights) The company achieved its first adjusted EBITDA and net profit turnaround since 2022 and 2021 respectively, driven by AI technology and improved gross margin H1 2025 Financial Performance Summary (RMB Million) | Indicator | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 775.5 | 867.4 | (10.6%) | | Adjusted Revenue | 775.5 | 719.1 | 7.8% | | Gross Profit | 582.3 | 575.9 | 1.1% | | Adjusted Gross Profit | 583.2 | 428.5 | 36.1% | | Operating Profit / (Loss) | 0.3 | (287.3) | (100.1%) | | Loss Before Income Tax | (29.7) | (547.1) | (94.6%) | | Loss for the Period | (47.2) | (569.8) | (91.7%) | | Adjusted EBITDA / (Loss) | 71.8 | (176.3) | (140.7%) | | Adjusted Net Profit / (Loss) | 16.9 | (187.4) | (109.0%) | - The company firmly positions AI technology as its core driver, continuously deepening its SaaS and precision marketing business layout, and promoting the widespread application and implementation of AI Agent technology in key scenarios like e-commerce and retail[5](index=5&type=chunk) - Gross margin increased from **66.4% to 75.1%**, indicating continuous improvement in revenue quality, achieving the first adjusted EBITDA turnaround since 2022 and the first adjusted net profit turnaround since 2021[6](index=6&type=chunk) - AI-related revenue achieved a breakthrough, reaching **RMB 34 million** in H1 2025, contributing to the quarter-over-quarter stabilization and rebound of subscription solutions revenue[5](index=5&type=chunk)[7](index=7&type=chunk)[9](index=9&type=chunk) - As of June 30, 2025, the Group's cash and bank balances were approximately **RMB 1.574 billion**, indicating a healthy cash and financial position[6](index=6&type=chunk) [I. Subscription Solutions](index=5&type=section&id=I.%20Subscription%20Solutions) Subscription solutions revenue declined due to macro factors and business adjustments, but AI-related income is emerging as a new growth driver Subscription Solutions Key Data (H1 2025 vs H1 2024) | Indicator | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (RMB Million) | 438.0 | 487.0 | (10.1%) | | Number of Paying Merchants | 59,149 | 68,725 | (13.9%) | | Average Revenue Per User (ARPU) (RMB) | 7,402 | 7,083 | 4.5% | - Revenue decline was primarily due to the reduction of low-quality subscription businesses in 2024 and a temporary delay in demand caused by existing customers' business contraction amidst the external macro environment[7](index=7&type=chunk)[13](index=13&type=chunk) - AI-related revenue contributed **RMB 34 million** in H1 2025, helping subscription solutions revenue stabilize and rebound quarter-over-quarter[7](index=7&type=chunk)[13](index=13&type=chunk) - Smart retail customer GMV increased by **13.4%** year-on-year, with the number of accounts generating over RMB 100 million in GMV growing by **60%**, and accounts generating over RMB 1 million in GMV growing by **34%**[14](index=14&type=chunk) - Actively exploring internationalization, the one-stop e-commerce growth solution Markivo has become a Shopify app service provider, and its Haiding business is expanding into Southeast Asian and European and American markets[15](index=15&type=chunk) [II. Merchant Solutions](index=6&type=section&id=II.%20Merchant%20Solutions) Merchant solutions achieved significant adjusted revenue growth and improved gross margin, driven by business restructuring and multi-platform expansion Merchant Solutions Key Data (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 337.6 | 380.6 | (11.3%) | | Adjusted Revenue | 337.6 | 232.3 | 45.3% | | Gross Profit | 308.2 | 283.5 | 8.7% | | Gross Margin | 91.3% | 74.5% | 16.8 ppt | | Gross Advertising Revenue | 8,623.1 | 8,341.8 | 3.4% | | Number of Paying Merchants | 39,281 | 38,706 | 1.5% | | Average Spending Per Paying Merchant (RMB) | 219,523 | 215,434 | 1.9% | - Adjusted revenue significantly increased by **45.3%** year-on-year, and gross margin rose from **74.5% to 91.3%**, primarily due to the reduction of low-margin businesses and customer structure adjustments[8](index=8&type=chunk)[16](index=16&type=chunk) - Consolidated its leading position in Tencent advertising, with video account advertising consumption growing by **46%** year-on-year, and received multiple Tencent advertising service provider honors[17](index=17&type=chunk) - Actively expanded its multi-platform strategy, achieving an **87%** year-on-year increase in annual consumption on Xiaohongshu, and received awards such as Kuaishou Magnet Engine's "2025 Annual Top Ten Benchmark Partner"[17](index=17&type=chunk) - Continuously deepened "AI + Marketing" applications, achieving cost reduction and efficiency improvement, with the average monthly generated content volume being **25 times** that at its 2024 launch[17](index=17&type=chunk) [Business Outlook](index=8&type=section&id=Business%20Outlook) The company plans to deepen AI applications, expand the WeChat e-commerce ecosystem, explore multi-channel opportunities, focus on local life services, and actively pursue internationalization [1. Fully Embrace AI and Promote AI Agent Application](index=8&type=section&id=1.%20Fully%20Embrace%20AI%20and%20Promote%20AI%20Agent%20Application) The company will expand AI technology applications in SaaS and precision marketing, leveraging AI product matrices to enhance merchant capabilities and deploy AI Agents in e-commerce, retail, and local life - Continuously expand AI technology application scenarios in SaaS and precision marketing, utilizing AI product matrices such as WAI SaaS, WAI Pro, and WIME to comprehensively help merchants enhance operational strategy planning, efficiency, business management, and marketing content creation capabilities[18](index=18&type=chunk) - Promote the application and implementation of AI Agent in e-commerce retail, local life, and precision marketing, with WIME also integrating with super applications like WPS to expand commercialization opportunities[18](index=18&type=chunk) [2. Deeply Cultivate WeChat E-commerce Ecosystem](index=8&type=section&id=2.%20Deeply%20Cultivate%20WeChat%20E-commerce%20Ecosystem) The company will optimize its integrated WeChat e-commerce solutions, enhance merchant operational efficiency, and drive traffic and sales growth through social commerce features and video account MCN business - Long-term comprehensive layout of the WeChat e-commerce ecosystem, continuously optimizing Weimob x WeChat Mini-Store integrated solutions to improve merchant operational efficiency and user experience[19](index=19&type=chunk) - Layout the "Tuike" section to leverage social distribution coverage, enhancing conversion efficiency and user stickiness; combining "Group Buy" and "Send Gifts" social e-commerce features to help merchants acquire traffic at low cost and precisely convert customers[19](index=19&type=chunk) - Focus on video account MCN business, driving brand exposure and sales growth for merchants through live streaming, short video content, and influencer recommendations and interactions[19](index=19&type=chunk) [3. Expand Multi-Channel Business Opportunities](index=8&type=section&id=3.%20Expand%20Multi-Channel%20Business%20Opportunities) The company will deepen multi-platform cooperation in SaaS and actively expand into new advertising channels like Douyin for merchant solutions, integrating public domain platforms with mini-program businesses - In SaaS, beyond existing WeChat channels, continue to deepen multi-platform business opportunities with Douyin, Huawei HarmonyOS, Meituan, Xiaohongshu, and Alipay, building integrated capabilities between public domain platforms and mini-program businesses[20](index=20&type=chunk) - In precision marketing, new channels like Xiaohongshu and Kuaishou have achieved rapid growth in the past two years, and active expansion into Douyin channels is planned for Q4 2025 and next year, expected to bring new growth momentum for merchant solutions[20](index=20&type=chunk) [4. Focus on Local Life Services Market](index=9&type=section&id=4.%20Focus%20on%20Local%20Life%20Services%20Market) The company will strengthen its support for offline local services, integrate multi-channel traffic, and provide comprehensive capabilities to merchants, accelerating digital transformation and business growth in the local life sector - Focus on the local life sector, increasing system support capabilities for offline local "product, store service, and experience" business scenarios[21](index=21&type=chunk) - Integrate resources through industry empowerment and ecosystem cooperation, connecting multi-channel traffic and providing merchants with multi-dimensional capabilities including membership operations and precision marketing, to accelerate digital transformation and business growth in the local life sector[21](index=21&type=chunk) [5. Actively Explore Internationalization](index=9&type=section&id=5.%20Actively%20Explore%20Internationalization) The company will expand into mature overseas markets like North America with AI applications, help Chinese brands go global, and grow its Haiding business internationally by researching localized operational strategies - Further expand into mature overseas markets like North America, with Markivo becoming a Shopify app service provider, leveraging deep industry accumulation and technical experience to promote AI application capabilities overseas[22](index=22&type=chunk) - Weimob International launched its "Weimob Go Global" business, dedicated to helping Chinese brands expand globally, offering AI-powered rapid website building, multi-channel traffic acquisition, and brand consulting services[22](index=22&type=chunk) - Further promote the expansion and growth of its Haiding business in overseas markets, using the overseas expansion of high-quality new consumer merchants in China as a foundation, gradually penetrating and expanding to local overseas merchants[22](index=22&type=chunk) [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the company's financial and operational performance, highlighting key trends, drivers, and strategic initiatives for the period [Comparison of the Six Months Ended June 30, 2025, and June 30, 2024](index=10&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%2C%20and%20June%2030%2C%202024) This section compares the financial performance for H1 2025 and H1 2024, showing a decrease in total revenue but growth in adjusted revenue, significant improvements in gross profit, and a substantial reduction in operating loss Condensed Consolidated Statement of Comprehensive Loss Summary (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 775,467 | 867,434 | | Cost of Sales | (193,211) | (291,529) | | Gross Profit | 582,256 | 575,905 | | Selling and Distribution Expenses | (389,495) | (565,260) | | General and Administrative Expenses | (216,605) | (287,008) | | Operating Profit / (Loss) | 270 | (287,323) | | Loss for the Period | (47,242) | (569,842) | Key Operating Data (H1 2025 vs H1 2024) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | New Paying Merchants for Subscription Solutions | 4,793 | 8,515 | | Number of Paying Merchants for Subscription Solutions | 59,149 | 68,725 | | Churn Rate for Subscription Solutions | 13.6% | 9.2% | | ARPU for Subscription Solutions (RMB) | 7,402 | 7,083 | | Number of Paying Merchants for Merchant Solutions | 39,281 | 38,706 | | Revenue for Merchant Solutions (RMB Million) | 337.6 | 232.4 | | ARPU for Merchant Solutions (RMB) | 8,595 | 6,003 | | Gross Revenue for Merchant Solutions (RMB Million) | 8,623.1 | 8,341.8 | Key Financial Ratios (H1 2025 vs H1 2024) | Indicator | 2025 (%) | 2024 (%) | | :--- | :--- | :--- | | Total Adjusted Revenue Growth | 7.8 | (37.3) | | Adjusted Gross Margin | 75.2 | 59.6 | | Adjusted EBITDA Margin | 9.3 | (24.5) | | Net Margin Attributable to Equity Holders of the Company | (4.3) | (63.5) | | Adjusted Net Margin Attributable to Equity Holders of the Company | 3.1 | (24.4) | [Revenue](index=12&type=section&id=Revenue) Total revenue decreased by 10.6% to RMB 775.5 million, while adjusted total revenue increased by 7.8% to RMB 775.5 million, primarily driven by strong growth in adjusted merchant solutions revenue Revenue Breakdown (H1 2025 vs H1 2024) | Revenue Category | 2025 (RMB Million) | Share (%) | 2024 (RMB Million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 437.9 | 56.5 | 486.8 | 56.1 | | Merchant Solutions | 337.6 | 43.5 | 380.6 | 43.9 | | **Total** | **775.5** | **100.0** | **867.4** | **100.0** | Adjusted Revenue Breakdown (H1 2025 vs H1 2024) | Revenue Category | 2025 (RMB Million) | Share (%) | 2024 (RMB Million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 437.9 | 56.5 | 486.8 | 67.7 | | Merchant Solutions | 337.6 | 43.5 | 232.3 | 32.3 | | **Total** | **775.5** | **100.0** | **719.1** | **100.0** | [Subscription Solutions](index=13&type=section&id=Subscription%20Solutions_Revenue) Subscription solutions revenue decreased by 10.1% to RMB 437.9 million, impacted by a weak macro economy and small merchant churn, though AI-related business is an emerging revenue stream - Subscription solutions revenue decreased by **10.1%** from **RMB 486.8 million** in H1 2024 to **RMB 437.9 million** in H1 2025[31](index=31&type=chunk) - The revenue decrease was primarily due to the negative impact of a weak macro economy and sluggish consumption on the churn rate of small merchants; persistent deflationary pressure hindering new brand merchant expansion; and new revenue channels like AI-related businesses still being in early development stages[31](index=31&type=chunk) - In H1 2025, AI-related business revenue was approximately **RMB 30 million to RMB 40 million**[31](index=31&type=chunk) [Merchant Solutions](index=13&type=section&id=Merchant%20Solutions_Revenue) Merchant solutions gross revenue increased by 3.4% to RMB 8.6231 billion, with adjusted revenue significantly growing by 45.3% to RMB 337.6 million due to increased advertising platform rebates and business restructuring Merchant Solutions Gross Revenue and Revenue (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | | Gross Revenue | 8,623.1 | 8,341.8 | 3.4% | | Revenue | 337.6 | 380.6 | (11.3%) | Merchant Solutions Adjusted Revenue (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | | Adjusted Revenue | 337.6 | 232.3 | 45.3% | - Adjusted revenue increased by **45.3%**, primarily due to an increase of approximately **RMB 171.1 million** in net rebates from advertising platforms, and a decrease of approximately **RMB 65.8 million** in TSO service and credit technology service revenue due to business restructuring[35](index=35&type=chunk) - The increase in merchant solutions gross revenue was mainly due to an increase in the number of paying merchants and average spending per advertiser[34](index=34&type=chunk) [Cost of Sales](index=14&type=section&id=Cost%20of%20Sales) Total cost of sales decreased significantly by 33.7% to RMB 193.2 million, mainly due to reduced intangible asset amortization after a full impairment of self-developed software in 2024 Cost of Sales Breakdown (By Nature, H1 2025 vs H1 2024) | Cost of Sales | 2025 (RMB Million) | Share (%) | 2024 (RMB Million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Advertising Traffic Costs | – | – | 42.8 | 14.7 | | Staff Costs | 52.9 | 27.4 | 27.1 | 9.3 | | Broadband and Hardware Costs | 58.5 | 30.3 | 13.6 | 4.7 | | Operating Service Costs | 74.1 | 38.3 | 100.0 | 34.3 | | Intangible Asset Amortization | 0.9 | 0.5 | 99.5 | 34.1 | | Taxes and Surcharges | 6.1 | 3.2 | 7.5 | 2.6 | | Depreciation and Amortization | 0.7 | 0.3 | 1.0 | 0.3 | | **Total** | **193.2** | **100.0** | **291.5** | **100.0** | Cost of Sales Breakdown (By Business Segment, H1 2025 vs H1 2024) | Cost of Sales | 2025 (RMB Million) | Share (%) | 2024 (RMB Million) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 163.8 | 84.8 | 194.4 | 66.7 | | Merchant Solutions | 29.4 | 15.2 | 97.1 | 33.3 | | **Total** | **193.2** | **100.0** | **291.5** | **100.0** | - Total cost of sales decreased by **33.7%**, primarily due to a **RMB 98.6 million** reduction in intangible asset amortization[38](index=38&type=chunk) [Subscription Solutions](index=15&type=section&id=Subscription%20Solutions_Cost%20of%20Sales) Subscription solutions cost of sales decreased by 15.8% to RMB 163.8 million, primarily due to reduced intangible asset amortization, despite increased broadband, hardware, and staff costs for new business development - Subscription solutions cost of sales decreased by **15.8%**, mainly due to a **RMB 98.6 million** reduction in intangible asset amortization after the full impairment of self-developed software in 2024; however, broadband and hardware costs and staff costs increased by **RMB 70.7 million** due to new business development[41](index=41&type=chunk) [Merchant Solutions](index=15&type=section&id=Merchant%20Solutions_Cost%20of%20Sales) Merchant solutions cost of sales significantly decreased by 69.7% to RMB 29.4 million, driven by reduced advertising traffic costs and contract operating service costs, aligning with the decline in TSO and credit tech service revenues - Merchant solutions cost of sales decreased by **69.7%**, primarily due to reduced advertising traffic costs and contract operating service costs, which is consistent with the decline in TSO service revenue and credit technology solution sales commission revenue[42](index=42&type=chunk) [Gross Profit and Gross Margin](index=16&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit increased by 1.1% to RMB 582.3 million, with the overall gross margin improving from 66.4% to 75.1%, primarily due to business restructuring in merchant solutions and reduced intangible asset amortization Gross Profit and Gross Margin Breakdown (H1 2025 vs H1 2024) | Business Segment | 2025 Gross Profit (RMB Million) | 2025 Gross Margin (%) | 2024 Gross Profit (RMB Million) | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 274.1 | 62.6 | 292.4 | 60.1 | | Merchant Solutions | 308.2 | 91.3 | 283.5 | 74.5 | | **Total** | **582.3** | **75.1** | **575.9** | **66.4** | Adjusted Gross Profit and Gross Margin Breakdown (H1 2025 vs H1 2024) | Business Segment | 2025 Adjusted Gross Profit (RMB Million) | 2025 Adjusted Gross Margin (%) | 2024 Adjusted Gross Profit (RMB Million) | 2024 Adjusted Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 275.0 | 62.8 | 293.3 | 60.3 | | Merchant Solutions | 308.2 | 91.3 | 135.2 | 58.2 | | **Total** | **583.2** | **75.2** | **428.5** | **59.6** | - Adjusted gross profit increased by **36.1%** year-on-year to **RMB 583.2 million**, with adjusted gross margin rising from **59.6% to 75.2%**[46](index=46&type=chunk) - The adjusted gross margin for merchant solutions significantly increased to **91.3%**, primarily due to a higher percentage of net rebate income from merchant solutions after the restructuring of TSO and credit technology services[46](index=46&type=chunk) [Selling and Distribution Expenses](index=17&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 31.1% to RMB 389.5 million, mainly due to reduced staff costs from organizational optimization, lower contract acquisition costs, and savings in rent and property services - Selling and distribution expenses decreased by **31.1%** to **RMB 389.5 million**[47](index=47&type=chunk) - Staff costs decreased by **RMB 101.9 million**, contract acquisition costs decreased by **RMB 57 million**, and rent and property service expenses decreased by **RMB 10.8 million**[47](index=47&type=chunk) [General and Administrative Expenses](index=17&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses decreased by 24.5% to RMB 216.6 million, primarily due to reduced staff costs and savings in server, network, and communication expenses - General and administrative expenses decreased by **24.5%** to **RMB 216.6 million**[48](index=48&type=chunk) - Staff costs decreased by **RMB 63.3 million**, and server costs, network, and communication expenses decreased by **RMB 4.4 million**[48](index=48&type=chunk) [Research and Development Expenses](index=18&type=section&id=Research%20and%20Development%20Expenses) Total R&D expenses decreased by 41.8% to RMB 136.1 million, mainly due to a significant reduction in R&D expenses capitalized as development costs and intangible assets Total R&D Expenses (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | | :--- | :--- | :--- | | R&D Expenses Capitalized as Development Costs and Intangible Assets | – | 55.4 | | R&D Expenses Included in General and Administrative Expenses | 136.1 | 178.4 | | **Total R&D Expenses** | **136.1** | **233.8** | - Total R&D expenses decreased by **41.8%** to **RMB 136.1 million**[50](index=50&type=chunk) [Net Impairment Loss on Financial Assets](index=18&type=section&id=Net%20Impairment%20Loss%20on%20Financial%20Assets) Net impairment loss on financial assets decreased by RMB 3.2 million to RMB 1.6 million, primarily due to improved collection of trade receivables in the precision marketing business - Net impairment loss on financial assets decreased by **RMB 3.2 million** to **RMB 1.6 million**[51](index=51&type=chunk) - This was primarily due to improved collection of trade receivables in the precision marketing business[51](index=51&type=chunk) [Other Income](index=18&type=section&id=Other%20Income) Other income slightly increased to RMB 22.2 million, primarily driven by an increase in government grants - Other income slightly increased to **RMB 22.2 million**, primarily due to an increase in government grants[52](index=52&type=chunk) [Net Other Gains / (Losses)](index=18&type=section&id=Net%20Other%20Gains%20%2F%20%28Losses%29) The Group recorded a net other gain of RMB 3.5 million, a significant improvement from a loss of RMB 27.19 million in H1 2024, mainly due to fair value changes in financial investments and rental property income - A net other gain of **RMB 3.5 million** was recorded, primarily due to fair value changes in financial investments of **RMB 3.3 million** and rental property income (net of bank charges) of **RMB 1.6 million**[53](index=53&type=chunk) [Operating Profit / (Loss)](index=18&type=section&id=Operating%20Profit%20%2F%20%28Loss%29) The Group achieved an operating profit of RMB 0.3 million in H1 2025, a significant turnaround from an operating loss of RMB 287.3 million in H1 2024 - An operating profit of **RMB 0.3 million** was achieved, compared to an operating loss of **RMB 287.3 million** in H1 2024[54](index=54&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs) Finance costs significantly decreased by RMB 176.6 million to RMB 36.4 million, primarily due to a reduction in amortized interest expenses from the early redemption of 2021 convertible bonds - Finance costs significantly decreased by **RMB 176.6 million** to **RMB 36.4 million**[55](index=55&type=chunk) - This was primarily due to a **RMB 162.2 million** reduction in amortized interest expenses resulting from the early redemption of the 2021 convertible bonds[55](index=55&type=chunk) [Finance Income](index=19&type=section&id=Finance%20Income) Finance income decreased to RMB 2.9 million, primarily due to a reduction in interest income from bank deposits - Finance income decreased to **RMB 2.9 million**, primarily due to a reduction in interest income from bank deposits[56](index=56&type=chunk) [Share of Net Profit / (Loss) of Associates Accounted for Using the Equity Method](index=19&type=section&id=Share%20of%20Net%20Profit%20%2F%20%28Loss%29%20of%20Associates%20Accounted%20for%20Using%20the%20Equity%20Method) The Group recorded a net profit of RMB 3.6 million from associates accounted for using the equity method, representing its share of profit from equity investment funds - A net profit of **RMB 3.6 million** from associates accounted for using the equity method was recorded, representing the share of profit from equity investment funds[57](index=57&type=chunk) [Fair Value Change of Convertible Bonds](index=19&type=section&id=Fair%20Value%20Change%20of%20Convertible%20Bonds) No fair value change of convertible bonds was recorded for H1 2025, as the convertible bonds issued in April 2024 have been settled - No fair value change of convertible bonds was recorded for the six months ended June 30, 2025, as the convertible bonds issued in April 2024 have been settled[58](index=58&type=chunk) [Income Tax Expense](index=19&type=section&id=Income%20Tax%20Expense) Income tax expense was RMB 17.6 million, primarily due to reduced impairment losses on financial assets offsetting decreased taxable income from Chinese subsidiaries, leading to derecognition of deferred tax assets - Income tax expense was **RMB 17.6 million**, primarily due to reduced impairment losses on financial assets offsetting decreased taxable income from Chinese subsidiaries, leading to the derecognition of deferred tax assets, resulting in a reduction in current income tax expense[59](index=59&type=chunk) [Loss for the Period](index=19&type=section&id=Loss%20for%20the%20Period) The Group recorded a loss of RMB 47.2 million for H1 2025, a significant reduction from a loss of RMB 569.8 million in H1 2024 - Loss for the period was **RMB 47.2 million**, compared to a loss of **RMB 569.8 million** in H1 2024[60](index=60&type=chunk) [Non-HKFRS Measures: Adjusted EBITDA and Adjusted Net Loss](index=19&type=section&id=Non-HKFRS%20Measures%3A%20Adjusted%20EBITDA%20and%20Adjusted%20Net%20Loss) The Group utilized non-HKFRS measures, Adjusted EBITDA and Adjusted Net Loss, to better reflect operating performance, showing a significant turnaround to a profit of RMB 71.8 million and RMB 16.9 million respectively in H1 2025 - Adjusted EBITDA significantly improved from a loss of **RMB 176.3 million** in H1 2024 to a profit of **RMB 71.8 million**[63](index=63&type=chunk)[65](index=65&type=chunk) - Adjusted net profit significantly improved from a loss of **RMB 187.4 million** in H1 2024 to a profit of **RMB 16.9 million**[63](index=63&type=chunk)[65](index=65&type=chunk) Adjusted Financial Metrics Reconciliation (H1 2025) | Indicator | As Reported (RMB Million) | As Adjusted (RMB Million) | | :--- | :--- | :--- | | Gross Profit | 582.3 | 583.2 | | Operating Profit / (Loss) | 0.3 | 46.4 | | EBITDA | 49.9 | 71.8 | | Net Loss | (47.2) | 16.9 | | Net (Loss) / Profit Attributable to Equity Holders of the Company | (33.1) | 23.8 | Adjusted Financial Metrics Reconciliation (H1 2024) | Indicator | As Reported (RMB Million) | As Adjusted (RMB Million) | | :--- | :--- | :--- | | Gross Profit | 575.9 | 428.5 | | Operating Profit / (Loss) | (287.3) | (331.4) | | EBITDA | (183.6) | (176.3) | | Net Loss | (569.8) | (187.4) | | Net Loss Attributable to Equity Holders of the Company | (550.8) | (175.4) | [Liquidity and Financial Resources](index=22&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's liquidity is primarily from operations, bank borrowings, and equity injections, with cash and bank balances of RMB 1.5736 billion as of June 30, 2025, despite facing some bank covenant breaches that have received temporary waivers [Cash and Bank Balances](index=22&type=section&id=Cash%20and%20Bank%20Balances) As of June 30, 2025, the Group's total cash and bank balances were approximately RMB 1.5736 billion, including bank wealth management products, restricted cash, and cash and cash equivalents - As of June 30, 2025, the Group's cash and bank balances totaled approximately **RMB 1.5736 billion**[66](index=66&type=chunk) Cash and Bank Balances Breakdown (As of June 30, 2025) | Category | Amount (RMB Million) | | :--- | :--- | | Bank wealth management products at fair value through profit or loss | 35.7 | | Restricted cash* | 532.9 | | Cash and cash equivalents | 1,004.8 | | **Subtotal (Current Assets)** | **1,573.4** | | Non-current restricted cash | 0.2 | | **Total** | **1,573.6** | * Restricted cash primarily refers to cash deposited in offshore banks as collateral for domestic loans denominated in RMB [Net Debt to Equity Ratio](index=22&type=section&id=Net%20Debt%20to%20Equity%20Ratio) The Group's net debt to equity ratio increased to 44.4% as of June 30, 2025, up from 37.8% in the prior year Debt to Equity Ratio (As of June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net Debt | 890,502 | 947,855 | | Total Equity | 2,007,064 | 2,510,642 | | Total Capital | 2,897,566 | 3,458,497 | | **Net Debt to Equity Ratio** | **44.4%** | **37.8%** | - The net debt to equity ratio increased from **37.8%** in 2024 to **44.4%** in 2025[69](index=69&type=chunk) [Bank Borrowings](index=23&type=section&id=Bank%20Borrowings) As of June 30, 2025, the Group's total bank borrowings were approximately RMB 2.1985 billion, with some covenant breaches temporarily waived, and management is confident in refinancing and securing new facilities - As of June 30, 2025, the Group's bank borrowings totaled approximately **RMB 2.1985 billion**[70](index=70&type=chunk) - The Group has breached certain covenants related to bank borrowings totaling **RMB 371.75 million**, but the lenders have granted temporary waivers for the syndicated loan-related breaches[99](index=99&type=chunk) - Management is confident in renewing existing financing and obtaining new financing, and continuously monitors compliance with all bank borrowing and financing covenant requirements[101](index=101&type=chunk) [Capital Expenditures](index=25&type=section&id=Capital%20Expenditures) Total capital expenditures for H1 2025 increased by 13% to RMB 113.7 million, primarily due to increased spending on fixed assets Capital Expenditures (H1 2025 vs H1 2024) | Category | 2025 (RMB Million) | 2024 (RMB Million) | | :--- | :--- | :--- | | Fixed Assets | 113.3 | 45.2 | | Intangible Assets | 0.4 | 55.4 | | **Total** | **113.7** | **100.6** | - Total capital expenditures increased to **RMB 113.7 million**, primarily due to increased expenditures on fixed assets, including computer equipment, office furniture, vehicles, renovation of leased offices, and construction[75](index=75&type=chunk)[77](index=77&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Material Investments or Capital Assets](index=25&type=section&id=Significant%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures%2C%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group held no significant investments, nor did it undertake any material acquisitions or disposals, with no board-approved future plans for major investments or capital asset purchases - As of June 30, 2025, the Group held no significant investments, nor did it undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[78](index=78&type=chunk) - As of the date of this announcement, the Group had no board-approved future plans for material investments or purchases of capital assets[78](index=78&type=chunk) [Pledged Assets](index=25&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group pledged land use rights, property, plant and equipment, and investment properties totaling RMB 833.532 million as collateral for long-term bank borrowings - As of June 30, 2025, land use rights of **RMB 301.122 million**, property, plant and equipment of **RMB 507.1 million**, and investment properties of **RMB 25.31 million** were pledged as collateral for the Group's long-term borrowings of **RMB 249.894 million** and long-term bank borrowings repayable within one year of **RMB 47.898 million**[79](index=79&type=chunk) [Foreign Exchange Risk Management](index=26&type=section&id=Foreign%20Exchange%20Risk%20Management) The Group primarily operates in China with most transactions settled in RMB, facing foreign exchange risks mainly related to USD and HKD, without hedging through long-term contracts or currency borrowings in H1 2025 - The Group primarily operates in China, with most transactions settled in RMB, and faces foreign exchange risks from various currencies, mainly related to USD and HKD[80](index=80&type=chunk) - For the six months ended June 30, 2025, the Group did not hedge foreign currency risks through any long-term contracts, currency borrowings, or other means[80](index=80&type=chunk) [Contingent Liabilities](index=26&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[81](index=81&type=chunk) [Employees](index=26&type=section&id=Employees) As of June 30, 2025, the Group had 3,400 full-time employees, with 951 in sales and marketing and 778 in R&D, attracting and retaining talent through competitive compensation and comprehensive training - As of June 30, 2025, the Group had **3,400** full-time employees, including **951** in sales and marketing and **778** in R&D[82](index=82&type=chunk) - The company provides employees with competitive salaries, performance-linked cash incentives, and other motivational measures, along with robust training programs and customized professional development[82](index=82&type=chunk) [Condensed Interim Consolidated Statement of Comprehensive Loss](index=27&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Comprehensive%20Loss) The condensed interim consolidated statement of comprehensive loss shows a significant reduction in loss for the period and loss attributable to equity holders, driven by a turnaround in operating profit and reduced finance costs Condensed Interim Consolidated Statement of Comprehensive Loss (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 775,467 | 867,434 | | Cost of Sales | (193,211) | (291,529) | | Gross Profit | 582,256 | 575,905 | | Selling and Distribution Expenses | (389,495) | (565,260) | | General and Administrative Expenses | (216,605) | (287,008) | | Operating Profit / (Loss) | 270 | (287,323) | | Finance Costs | (36,354) | (212,986) | | Finance Income | 2,873 | 8,097 | | Loss Before Income Tax | (29,654) | (547,145) | | Income Tax Expense | (17,588) | (22,697) | | Loss for the Period | (47,242) | (569,842) | | Loss Attributable to Equity Holders of the Company | (33,056) | (550,784) | | Total Comprehensive Loss for the Period | (48,422) | (570,538) | | Basic Loss Per Share (RMB) | (0.01) | (0.19) | | Diluted Loss Per Share (RMB) | (0.01) | (0.19) | - Loss for the period significantly narrowed by **91.7%** to **RMB 47.242 million**, and loss attributable to equity holders of the Company narrowed by **94%** to **RMB 33.056 million**[83](index=83&type=chunk) - The turnaround from operating loss to profit and a significant decrease in finance costs were the main reasons for the narrowed loss[83](index=83&type=chunk) [Condensed Interim Consolidated Statement of Financial Position](index=29&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Financial%20Position) The condensed interim consolidated statement of financial position indicates a slight decrease in total assets, a reduction in total liabilities, and an increase in total equity, with current liabilities exceeding current assets Condensed Interim Consolidated Statement of Financial Position Summary (As of June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 2,627,719 | 2,553,212 | | Total Current Assets | 4,038,915 | 4,407,424 | | **Total Assets** | **6,666,634** | **6,960,636** | | Total Equity | 2,007,064 | 1,812,756 | | Total Non-current Liabilities | 510,634 | 635,528 | | Total Current Liabilities | 4,148,936 | 4,512,352 | | **Total Liabilities** | **4,659,570** | **5,147,880** | | Total Equity and Liabilities | 6,666,634 | 6,960,636 | - Total assets slightly decreased, total liabilities reduced, and total equity increased[86](index=86&type=chunk)[87](index=87&type=chunk) - Current liabilities exceeded current assets by **RMB 110.021 million**, indicating some short-term liquidity pressure[99](index=99&type=chunk) [Condensed Interim Consolidated Statement of Changes in Equity](index=31&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Changes%20in%20Equity) The condensed interim consolidated statement of changes in equity shows an increase in total equity attributable to equity holders, primarily due to convertible bond conversions and share-based employee compensation expenses Changes in Share Capital and Reserves Attributable to Equity Holders of the Company (H1 2025) | Indicator | January 1, 2025 (RMB Thousand) | June 30, 2025 (RMB Thousand) | | :--- | :--- | :--- | | Share Capital | 2,298 | 2,470 | | Shares Held for Restricted Share Unit Scheme | (144) | (142) | | Share Premium | 9,449,301 | 9,761,217 | | Equity Component of Convertible Bonds | 76,842 | 1,141 | | Other Reserves | (596,843) | (591,453) | | Accumulated Losses | (7,204,478) | (7,237,534) | | **Subtotal** | **1,726,976** | **1,935,699** | | Non-controlling Interests | 85,780 | 71,365 | | **Total Equity** | **1,812,756** | **2,007,064** | - Total equity attributable to equity holders of the Company increased from **RMB 1.727 billion** as of January 1, 2025, to **RMB 1.936 billion** as of June 30, 2025[89](index=89&type=chunk) - The increase in equity was primarily influenced by convertible bond conversions (increasing share capital and share premium) and share-based employee compensation expenses[89](index=89&type=chunk) [Condensed Interim Consolidated Statement of Cash Flows](index=33&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Cash%20Flows) The condensed interim consolidated statement of cash flows reflects a shift to net cash outflow from operating activities, increased net cash outflow from investing activities, and a significant reduction in net cash outflow from financing activities Condensed Interim Consolidated Statement of Cash Flows Summary (H1 2025 vs H1 2024) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net Cash (Used in) / Generated from Operating Activities | (28,061) | 29,498 | | Net Cash (Used in) / Generated from Investing Activities | (125,647) | 92,767 | | Net Cash Used in Financing Activities | (35,796) | (562,499) | | Net Decrease in Cash and Cash Equivalents | (189,504) | (440,234) | | Cash and Cash Equivalents at End of Period | 1,004,853 | 1,213,720 | - Net cash flow from operating activities shifted from a net inflow to a net outflow of **RMB 28.061 million**[92](index=92&type=chunk) - Net cash outflow from investing activities increased to **RMB 125.647 million**, primarily due to increased purchases of property, plant and equipment and loans to related parties[92](index=92&type=chunk) - Net cash outflow from financing activities significantly decreased to **RMB 35.796 million**, mainly due to reduced repurchase of convertible bonds and increased proceeds from bank borrowings[94](index=94&type=chunk) [Notes to the Condensed Interim Financial Information](index=35&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Information) This section provides detailed notes on the basis of preparation, significant accounting policies, segment information, and other financial disclosures for the interim period [1. General Information](index=35&type=section&id=1.%20General%20Information) Weimob Inc. incorporated in the Cayman Islands in 2018, provides digital commerce and media services to merchants in China, with its shares listed on the HKEX since January 2019 - Weimob Inc. was incorporated as an exempted company in the Cayman Islands on January 30, 2018, primarily engaged in providing digital commerce and media services to merchants in the People's Republic of China[95](index=95&type=chunk) - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since January 15, 2019[96](index=96&type=chunk) [2. Basis of Preparation](index=35&type=section&id=2.%20Basis%20of%20Preparation) The interim financial information is prepared in accordance with HKAS 34, addressing going concern uncertainties through operational efficiency improvements, refinancing, and potential capital raising - As of June 30, 2025, the Group recorded a net loss of **RMB 47.242 million** and a net cash outflow from operating activities of **RMB 28.061 million**[99](index=99&type=chunk) - The Group's total borrowings amounted to **RMB 2.201659 billion**, of which **RMB 1.951765 billion** is repayable within twelve months, and current liabilities exceeded current assets by **RMB 110.021 million**[99](index=99&type=chunk) - The Group has breached certain bank borrowing covenants totaling **RMB 371.75 million**, but the lenders have granted temporary waivers for the syndicated loan-related breaches[99](index=99&type=chunk) - Management plans to address going concern uncertainties by improving operational efficiency, continuously renewing bank borrowings and obtaining new financing, and raising additional capital through share issuance or convertible bonds if needed[101](index=101&type=chunk) [3. Significant Accounting Policies](index=37&type=section&id=3.%20Significant%20Accounting%20Policies) The accounting policies applied are consistent with the 2024 financial statements, with new and revised standards having no material impact on the Group's policies or financial statements - The accounting policies applied are consistent with those applied in the 2024 financial statements, except for the adoption of new and revised standards[103](index=103&type=chunk) - Certain new or revised standards are applicable but have no impact on the Group's accounting policies and require no retrospective adjustments[104](index=104&type=chunk) - Several new standards and amendments to standards that have been issued but are not yet effective are not expected to have a significant impact on the Group's condensed consolidated financial statements[105](index=105&type=chunk) [4. Segment Information](index=38&type=section&id=4.%20Segment%20Information) The Group operates in two segments: Subscription Solutions (SaaS products, custom software) and Merchant Solutions (value-added services, precision marketing), with performance assessed based on segment revenue and gross profit - The Group's operations are structured into two segments: Subscription Solutions (primarily including standard cloud-hosted SaaS products, customized software, and other software-related services) and Merchant Solutions (primarily including precision marketing services and in-depth operational and marketing services)[107](index=107&type=chunk) - The chief operating decision-makers primarily assess the performance of operating segments based on segment revenue and segment gross profit[107](index=107&type=chunk) Segment Revenue and Gross Profit (H1 2025 vs H1 2024) | Business Segment | 2025 Revenue (RMB Thousand) | 2025 Gross Profit (RMB Thousand) | 2024 Revenue (RMB Thousand) | 2024 Gross Profit (RMB Thousand) | | :--- | :--- | :--- | :--- | :--- | | Subscription Solutions | 437,836 | 274,073 | 486,779 | 292,350 | | Merchant Solutions | 337,631 | 308,183 | 380,655 | 283,555 | | **Total** | **775,467** | **582,256** | **867,434** | **575,905** | [5. Revenue](index=39&type=section&id=5.%20Revenue) The Group's total revenue for H1 2025 was RMB 775.5 million, a 10.6% year-on-year decrease, with subscription solutions accounting for 56.5% and merchant solutions for 43.5% Revenue Analysis by Category (H1 2025 vs H1 2024) | Revenue Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Subscription Solutions | 437,836 | 486,779 | | Merchant Solutions | 337,631 | 380,655 | | **Total Revenue** | **775,467** | **867,434** | [6. Expenses by Nature](index=39&type=section&id=6.%20Expenses%20by%20Nature) Total expenses by nature for H1 2025 decreased by 30% to RMB 799.311 million, primarily due to significant reductions in employee benefit expenses, outsourcing fees, promotional costs, and depreciation and amortization Total Expenses by Nature (H1 2025 vs H1 2024) | Expense Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Employee Benefit Expenses | 492,025 | 631,371 | | Outsourcing Service Fees | 77,961 | 102,676 | | Promotion and Advertising Expenses | 68,514 | 127,653 | | Depreciation and Amortization of Intangible Assets and Property, Plant and Equipment | 27,924 | 128,275 | | Server and SMS Fees Related to Subscription Solutions Revenue | 24,557 | 31,248 | | Utilities and Office Expenses | 21,445 | 28,989 | | Depreciation of Right-of-Use Assets | 15,177 | 22,245 | | Broadband and Hardware Costs | 48,300 | 1,763 | | Travel and Entertainment Expenses | 7,920 | 9,020 | | Other Consulting Fees | 3,097 | 5,675 | | Auditor's Remuneration | 2,700 | 2,700 | | Advertising Traffic Costs | – | 42,818 | | Others | 9,691 | 9,364 | | **Total** | **799,311** | **1,143,797** | - Employee benefit expenses decreased by **RMB 139.346 million**, primarily due to organizational optimization[111](index=111&type=chunk) - Depreciation and amortization of intangible assets and property, plant and equipment decreased by **RMB 100.351 million**[111](index=111&type=chunk) [7. Other Income](index=40&type=section&id=7.%20Other%20Income) Other income for H1 2025 was RMB 22.186 million, a slight increase from H1 2024, primarily due to increased government grants Other Income Breakdown (H1 2025 vs H1 2024) | Income Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest Income from Time Deposits and Loans to Related Parties and Third Parties | 12,203 | 12,904 | | Government Grants | 9,448 | 8,136 | | Operating Lease Income | 535 | – | | **Total** | **22,186** | **21,040** | - Increased government grants were the main reason for the growth in other income[112](index=112&type=chunk) [8. Net Other Gains / (Losses)](index=40&type=section&id=8.%20Net%20Other%20Gains%20%2F%20%28Losses%29) The Group recorded a net other gain of RMB 3.492 million in H1 2025, a significant improvement from a loss of RMB 27.19 million in H1 2024, mainly due to fair value changes in listed equity securities investments and foreign exchange gains Net Other Gains / (Losses) Breakdown (H1 2025 vs H1 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Fair Value Change of Listed Equity Securities Investments | 8,867 | 1,066 | | Net Foreign Exchange Gains / (Losses) | 248 | (19,446) | | Gains from Disposal of Short-term Investments Measured at Fair Value Through Profit or Loss | 147 | 998 | | Loss from Disposal of Financial Assets Measured at Fair Value Through Other Comprehensive Income | – | (890) | | Fair Value Change of Non-current Financial Assets Measured at Fair Value Through Profit or Loss | – | (7,169) | | Fair Value Change of Current Financial Assets Measured at Fair Value Through Profit or Loss | (5,613) | 124 | | Other Net | (157) | (1,873) | | **Total** | **3,492** | **(27,190)** | - The shift from a loss in H1 2024 to a gain in H1 2025 was primarily due to fair value changes in listed equity securities investments and foreign exchange gains[113](index=113&type=chunk) [9. Finance Costs](index=41&type=section&id=9.%20Finance%20Costs) Finance costs for H1 2025 significantly decreased by 82.9% to RMB 36.354 million, primarily due to a substantial reduction in amortized cost adjustments from the early redemption of 2021 convertible bonds Finance Costs Breakdown (H1 2025 vs H1 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest Expense on Borrowings | 34,712 | 35,832 | | Interest Expense on Put Option Liabilities | 3,019 | 2,890 | | Interest Expense on Liability Component of Convertible Bonds | 988 | 25,378 | | Interest Expense on Lease Liabilities | 653 | 1,393 | | Amortized Cost Adjustment Arising from Early Redemption of 2021 Convertible Bonds | – | 137,804 | | Bond Offering Issuance Costs | – | 17,455 | | Less: Interest Capitalized | (3,018) | (7,766) | | **Total** | **36,354** | **212,986** | - Finance costs significantly decreased by **RMB 176.632 million**, primarily due to a **RMB 137.804 million** reduction in amortized cost adjustments resulting from the early redemption of the 2021 convertible bonds[114](index=114&type=chunk) [10. Finance Income](index=41&type=section&id=10.%20Finance%20Income) Finance income for H1 2025 decreased by 64.5% to RMB 2.873 million, primarily due to reduced interest income from bank deposits held for cash management Finance Income Breakdown (H1 2025 vs H1 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest Income from Bank Deposits Held for Cash Management | 2,873 | 8,097 | - Finance income decreased by **RMB 5.224 million**, primarily due to reduced interest income from bank deposits[115](index=115&type=chunk) [11. Taxation](index=41&type=section&id=11.%20Taxation) The Group's taxation includes VAT and income tax, with H1 2025 income tax expense at RMB 17.588 million, and certain Chinese subsidiaries enjoying a preferential 15% corporate income tax rate as high-tech enterprises [Value Added Tax](index=41&type=section&id=Value%20Added%20Tax) The Group primarily pays VAT at rates of 6% and 13%, along with surcharges on VAT payments - The Group primarily pays VAT at **6% and 13%**, along with surcharges on VAT payments[116](index=116&type=chunk) [Income Tax](index=41&type=section&id=Income%20Tax) The Group's H1 2025 income tax expense was RMB 17.588 million, primarily contributed by deferred income tax, with current tax being negative Income Tax Expense (H1 2025 vs H1 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current Tax | (4,096) | (96) | | Deferred Income Tax | 21,684 | 22,793 | | **Income Tax Expense** | **17,588** | **22,697** | [Pillar Two Income Tax](index=41&type=section&id=Pillar%20Two%20Income%20Tax) The Group operates in jurisdictions where Pillar Two regulations have not yet been enacted or substantially enacted, and it does not anticipate significant Pillar Two income tax risks - The Group operates in jurisdictions where Pillar Two regulations have not yet been enacted or substantially enacted, and it does not anticipate significant Pillar Two income tax risks[118](index=118&type=chunk) [Cayman Islands Income Tax](index=42&type=section&id=Cayman%20Islands%20Income%20Tax) The Company, incorporated as an exempted company in the Cayman Islands, is not subject to Cayman Islands income tax - The Company, incorporated as an exempted company in the Cayman Islands under the Companies Act of the Cayman Islands, is not subject to Cayman Islands income tax[119](index=119&type=chunk) [Hong Kong Profits Tax](index=42&type=section&id=Hong%20Kong%20Profits%20Tax) No provision for Hong Kong profits tax was made for H1 2025, as the Group had no assessable income subject to Hong Kong profits tax - No provision for Hong Kong profits tax was made for the six months ended June 30, 2025, as the Group had no assessable income subject to Hong Kong profits tax[120](index=120&type=chunk) [China Corporate Income Tax](index=42&type=section&id=China%20Corporate%20Income%20Tax) The general corporate income tax rate in China is 25%, with certain Chinese subsidiaries enjoying a preferential 15% rate as "High and New Technology Enterprises" for three years - The general corporate income tax rate in China is **25%**[121](index=121&type=chunk) - Certain Chinese subsidiaries of the Group meet the criteria for "High and New Technology Enterprises" and enjoy a preferential corporate income tax rate of **15%** for a period of three years, from 2023 to 2026 or 2024 to 2027[121](index=121&type=chunk) [China Withholding Tax](index=42&type=section&id=China%20Withholding%20Tax) Dividends distributed by Chinese companies to foreign investors are generally subject to a 10% withholding income tax, with no provision made for H1 2024 and H1 2025 due to accumulated losses in most Chinese subsidiaries - Dividends distributed by Chinese companies to foreign investors from profits earned after January 1, 2008, are generally subject to a **10%** withholding income tax, which can be reduced to **5%** for eligible Hong Kong investors[122](index=122&type=chunk) - No provision for withholding tax was made for the six months ended June 30, 2024, and June 30, 2025, as most subsidiaries incorporated in China recorded accumulated losses during these periods[122](index=122&type=chunk) [12. Dividends](index=42&type=section&id=12.%20Dividends) The Company neither paid nor declared any dividends for the six months ended June 30, 2024, and June 30, 2025 - The Company neither paid nor declared any dividends for the six months ended June 30, 2024, and June 30, 2025[123](index=123&type=chunk) [13. Loss Per Share](index=43&type=section&id=13.%20Loss%20Per%20Share) The Group's basic loss per share for H1 2025 was RMB 0.01, a significant improvement from RMB 0.19 in H1 2024, with diluted loss per share being the same due to anti-dilution effects [Basic](index=43&type=section&id=Basic_Loss%20Per%20Share) The net loss attributable to equity holders for H1 2025 was RMB 33.056 million, resulting in a basic loss per share of RMB 0.01 Basic Loss Per Share (H1 2025 vs H1 2024) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Loss Attributable to Equity Holders of the Company (RMB Thousand) | (33,056) | (550,784) | | Weighted Average Number of Ordinary Shares Issued | 3,579,959,455 | 2,862,176,129 | | **Basic Loss Per Share (RMB)** | **(0.01)** | **(0.19)** | [Diluted](index=43&type=section&id=Diluted_Loss%20Per%20Share) Diluted loss per share for H1 2024 and H1 2025 was the same as basic loss per share, as potential ordinary shares from convertible bonds and restricted share units were anti-dilutive due to the Group's loss - Diluted loss per share for the six months ended June 30, 2024, and June 30, 2025, was the same as the basic loss per share for the respective periods, as the inclusion of potential dilutive ordinary shares from convertible bonds and restricted share units would be anti-dilutive[126](index=126&type=chunk) [14. Prepayments, Deposits and Other Assets](index=44&type=section&id=14.%20Prepayments%2C%20Deposits%20and%20Other%20Assets) Total current prepayments, deposits, and other assets amounted to RMB 1.811778 billion as of June 30, 2025, a decrease from year-end 2024, primarily due to a reduction in other receivables collected on behalf of advertisers Prepayments, Deposits and Other Assets Breakdown (As of June 30, 2025 vs December 31, 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Non-current Deposits - Third Parties | 7,289 | 4,900 | | Current Other Receivables Collected on Behalf of Advertisers - Third Parties | 1,432,502 | 1,596,266 | | Current Prepayments for Advertising Traffic Purchases by the Group | 237,167 | 220,871 | | Current Other Receivables from Related Parties | 197,068 | 182,489 | | Current Recoverable VAT | 131,444 | 130,038 | | Current Prepayments to Other Suppliers | 53,621 | 52,334 | | Current Deposits - Third Parties | 46,833 | 50,503 | | Current Contract Fulfillment Costs | 27,531 | 27,993 | | Current Receivables Related to VAT Refunds | 4,218 | 4,731 | | Current Other Loans Receivable from Third Parties | – | 9,506 | | Current Others | 14,805 | 10,810 | | **Less: Impairment Provision for Other Receivables** | **(333,411)** | **(336,168)** | | **Total (Current)** | **1,811,778** | **1,949,373** | - Total current prepayments, deposits, and other assets decreased, primarily due to a **RMB 163.764 million** reduction in other receivables collected on behalf of advertisers[127](index=127&type=chunk) [15. Trade and Bills Receivables](index=45&type=section&id=15.%20Trade%20and%20Bills%20Receivables) Total trade and bills receivables amounted to RMB 195.851 million as of June 30, 2025, an increase from year-end 2024, primarily due to increased trade receivables from third parties, with typical credit terms of 30 to 90 days Trade and Bills Receivables Breakdown (As of June 30, 2025 vs December 31, 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Receivables from Third Parties | 243,719 | 210,758 | | Bills Receivable | 4,637 | 3,849 | | Trade Receivables from Related Parties | 4,488 | 3,962 | | **Less: Impairment Provision for Trade and Bills Receivables** | **(56,993)** | **(52,262)** | | **Total** | **195,851** | **166,307** | - Total trade and bills receivables increased, primarily due to a **RMB 32.961 million** increase in trade receivables from third parties[128](index=128&type=chunk) - The Group typically grants credit terms of **30 to 90 days** to its customers[128](index=128&type=chunk) [16. Trade and Other Payables](index=46&type=section&id=16.%20Trade%20and%20Other%20Payables) Total trade and other payables amounted to RMB 1.979296 billion as of June 30, 2025, a decrease from year-end 2024. Current portion primarily includes advertiser advances, trade payables for advertising traffic, and accrued salaries and benefits Trade and Other Payables Breakdown (As of June 30, 2025 vs December 31, 2024) | Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Non-current Payables Related to Property, Plant and Equipment | 23,378 | – | | Non-current Payables Related to Business Acquisitions | 2,906 | 2,906 | | Current Advances from Advertisers - Third Parties | 1,000,999 | 908,179 | | Current Trade Payables for Advertising Traffic Purchases | 315,972 | 485,312 | | Current Accrued Salaries and Benefits | 215,931 | 264,191 | | Current Payables Related to Property, Plant and Equipment | 92,728 | 129,790 | | Current Payables Related to Investments and Business Acquisitions | 85,562 | 84,062 | | Current Commissions Payable | 60,939 | 60,517 | | Current Advances from Subscription Solutions Customers - Third Parties | 56,135 | 50,981 | | Current Other Taxes Payable | 46,870 | 104,077 | | Current Trade Payables Related to Subscription Solutions | 38,252 | 48,882 | | Current Deposits | 11,672 | 11,197 | | Current Accrued Auditor's Remuneration | 2,700 | 3,000 | | Current Payables for Purchase of Non-controlling Interests | 1,500 | – | | Current Amounts Due to Related Parties | 5 | 5 | | Current Other Payables and Accrued Expenses | 23,747 | 37,226 | | **Total** | **1,979,296** | **2,190,325** | - Total current trade and other payables decreased, primarily due to a **RMB 169.34 million** reduction in trade payables for advertising traffic purchases and a **RMB 48.26 million** reduction in accrued salaries and benefits[130](index=130&type=chunk) - The aging of trade payables is all within **3 months**[130](index=130&type=chunk) [Use of Proceeds](index=47&type=section&id=Use%20of%20Proceeds) This section details the utilization of net proceeds from the 2021 convertible bonds and 2023 placing, primarily for enhancing R&D, upgrading marketing systems, and supplementing working capital [Use of Proceeds from 2021 Convertible Bonds](index=47&type=section&id=Use%20of%20Proceeds%20from%202021%20Convertible%20Bonds) As of June 30, 2025, the Company had utilized the net proceeds of USD 275.6 million from the 2021 convertible bonds as planned, focusing on R&D, marketing system upgrades, and working capital - As of June 30, 2025, the Company had utilized the net proceeds of **USD 275.6 million** from the 2021 convertible bonds as planned[131](index=131&type=chunk) Use of Net Proceeds from 2021 Convertible Bonds (As of June 30, 2025) | Purpose | Utilized (USD Million) | Unutilized (USD Million) | Expected Timeframe for Full Utilization | | :--- | :--- | :--- | :--- | | Enhancing the Group's Integrated R&D Capabilities | 128.8 | 18.0 | Before December 31, 2025 | | Upgrading the Group's Marketing System | 44.0 | – | Not Applicable | | Supplementing Funds for Potential Strategic Investments and M&A and Working Capital | 58.8 | – | Not Applicable | | General Corporate Purposes | 44.0 | – | Not Applicable | [Use of Proceeds from 2023 Placing](index=47&type=section&id=Use%20of%20Proceeds%20from%202023%20Placing) As of June 30, 2025, the Company had utilized the net proceeds of HKD 1.4118 billion from the 2023 placing as planned, primarily for marketing system upgrades, working capital, and general corporate purposes, with some R&D funds remaining - As of June 30, 2025, the Company had utilized the net proceeds of **HKD 1.4118 billion** from the 2023 placing as planned[132](index=132&type=chunk) Use of Net Proceeds from 2023 Placing (As of June 30, 2025) | Purpose | Utilized (HKD Million) | Unutilized (HKD Million) | Expected Timeframe for Full Utilization | | :--- | :--- | :--- | :--- | | Enhancing the Group's Integrated R&D Capabilities | – | 156.9 | Before December 31, 2025 | | Upgrading the Group's Marketing System | 313.7 | – | Not Applicable | | Supplementing Working Capital | 470.6 | – | Not Applicable | | General Corporate Purposes | 627.5 | – | Not Applicable | [Corporate Governance](index=48&type=section&id=Corporate%20Governance) The Group maintains high corporate governance standards, adhering to the HKEX Listing Rules' Corporate Governance Code, with a noted deviation regarding the combined roles of Chairman and CEO - The Group is committed to maintaining a high standard of corporate governance and has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[135](index=135&type=chunk) - For the six months ended June 30, 2025, the Company has complied with all applicable code provisions, except for a deviation from code provision C.2.1 (the roles of chairman and chief executive officer should be separate)[135](index=135&type=chunk) - Mr. Sun Taoyong serves concurrently as the Chairman of the Board and Chief Executive Officer, which the Board believes is beneficial to the Company and its shareholders as a whole at the current stage of the Group's development[135](index=135&type=chunk) [Standard Code for Securities Transactions by Directors](index=48&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance for the six months ended June 30, 2025 - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules. Following specific inquiries to all Directors, each Director has confirmed that they have complied with the required standards set out in the Standard Code for the six months ended June 30, 2025[137](index=137&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=48&type=section&id=Purchase%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 for 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[138](index=138&type=chunk) [Post-Balance Sheet Events](index=49&type=section&id=Post-Balance%20Sheet%20Events) A significant post-balance sheet event includes Weimob Global Limited's subscription of new redeemable preference shares in Genstore Inc. for USD 10 million in July 2025 - On July 21, 2025,

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的任何損失承擔任何 責任。 （於開曼群島註冊成立之有限公司） （股份代號：1128及債務股份代號：5280、40102、40259、40357、5754、5877） 截 至 2025 年 6 月 3 0 日止六個月 中期業績公告、 宣派中期股息及暫停辦理股份登記手續 永利澳門有限公司（「本公司」）董事會欣然宣佈本公司及其附屬公司（統稱「本集團」）截 至2025年6月30日止六個月的未經審核綜合業績如下。 財務摘要 截至6月30日止六個月 | | | 2025年 | 2024年 | | --- | --- | --- | --- | | | | 港元 | 港元 | | | | （以千計，每股金額或 | | | | | 另有列明者除外） | | | 娛樂場收益 | | 11,385,785 | 12,089,797 | | 其他收益 | | 2,240,620 | 2,644,337 | | 經調整EBITDA | | 3,466,84 ...