Core Viewpoint - Export stocks are generally underperforming due to the announcement of additional tariffs on Chinese goods by the U.S. starting November 1, which may lead to stock volatility in the affected companies [1] Group 1: Stock Performance - Companies such as Techtronic Industries (00669) saw a decline of 3.64%, trading at HKD 91.3; Haier Smart Home (06690) dropped 3.38% to HKD 24.56; Shenzhou International (02313) fell 1.71% to HKD 63.15; and QuanFeng Holdings (02285) decreased by 1.04% to HKD 20.84 [1] Group 2: Policy Impact - On October 10, former President Trump announced that the U.S. would impose an additional 100% tariff on Chinese goods starting November 1, along with export controls on key software [1] - Citigroup's report indicates uncertainty regarding the duration of this policy, but suggests that stock volatility during this period may be lower than during the retaliatory tariffs implemented in Q2 2025, as the new tariffs will only apply to manufacturers exporting directly from China to the U.S. [1] Group 3: Stock Preferences - Citigroup's preference order among Chinese exporters is Techtronic Industries > Shenzhou International > JiuXing, considering the Federal Reserve's interest rate cut cycle and the low proportion of Chinese imports in their U.S. sales [1]

Core Insights - The introduction of RTK technology has led to rapid upgrades in lawn mowing robots, resulting in a surge in demand for boundary-less lawn mowers and wireless pool cleaning robots [1][2] - The global lawn mower market is projected to reach $10 billion by 2024, with a compound annual growth rate (CAGR) of 2% from 2013 to 2023, driven by strong demand in Europe and the US [1] - The penetration rate of boundary-less lawn mowers is expected to increase significantly, with sales projected to reach approximately 6 million units, accounting for 30% of total lawn mower sales [2] Lawn Mower Industry - The global lawn mower market is characterized by a strong demand for outdoor power tools, with private gardens in Europe and the US totaling 180 million, making lawn maintenance a frequent necessity [1] - The sales of lawn mowing robots saw a year-on-year increase of 327% in the first half of 2025, with boundary-less models accounting for 65% of total sales [2] - Domestic companies are rapidly iterating products and enhancing their competitive edge, with firms like Ninebot, Ecovacs, and others leading in technology integration [3] Pool Cleaning Robot Industry - The global pool robot market is expected to grow significantly, with retail sales projected to reach $2.5 billion by 2024, reflecting a CAGR of 16% from 2019 to 2024 [4] - The penetration rate of pool cleaning robots is anticipated to rise from 18% in 2019 to 26% in 2024, with expectations to reach 34% by 2029 [4] - Wireless pool cleaning robots are becoming mainstream, with expected sales of 2 million units in 2024, representing a CAGR of 81% from 2019 to 2024 [4] Company Insights - Wangyuan Technology, a leader in the wireless pool robot market, holds a 20% market share and is positioned to strengthen its market presence through continuous innovation and expansion of its product matrix [5] - The company has a high revenue contribution from wireless products, with 89% of its income coming from this segment, and a significant online sales presence [5] - The introduction of advanced navigation technologies, such as underwater laser radar, is expected to enhance the performance of pool robots and drive market growth [6]

Investment Rating - The report maintains an "Outperform" rating for the industry [1] Core Insights - The demand for lawn and pool robots is surging due to technological upgrades, with domestic companies competing vigorously [5] - The global lawn mower market is projected to reach $10 billion by 2024, with a compound annual growth rate (CAGR) of 2% from 2013 to 2023 [3] - The penetration rate of robotic lawn mowers is expected to increase significantly, driven by advancements in technology [3][29] Summary by Sections 1. Overseas Lawn Demand and Market Size - The lawn care culture in Europe and the U.S. has led to a substantial market for lawn mowers, with 180 million private gardens [3][12] - The global lawn mower market is expected to reach approximately $10.8 billion in 2024, with a CAGR of 2.1% from 2013 to 2023 [13][15] 2. Rapid Iteration of Boundaryless Smart Lawn Mowers - The introduction of RTK satellite differential positioning technology has significantly improved the performance of robotic lawn mowers, leading to a sales explosion [3][30] - By the first half of 2025, global sales of robotic lawn mowers are expected to grow by 327% year-on-year, reaching 2.34 million units [29] 3. Competitive Landscape of the Robotic Lawn Mower Industry - Traditional leaders like Husqvarna and Worx still hold significant market share, but domestic companies such as Ninebot, Ecovacs, and Mamotion are rapidly gaining ground [40][42] - Domestic companies are leveraging technological advantages and innovative product iterations to capture market share in overseas markets [42] 4. Pool Robot Market Dynamics - The global pool robot market is projected to reach $2.5 billion by 2024, with a CAGR of 16% from 2019 to 2024 [6] - The penetration rate of pool robots is expected to rise from 18% in 2019 to 26% in 2024, with further growth anticipated by 2029 [6] 5. Investment Recommendations - The report suggests focusing on companies like Stone Technology, Guangfeng Technology, and Ecovacs, which are well-positioned to benefit from the technological advancements in the industry [5]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年9月30日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 泉峰控股有限公司（於香港註冊成立之有限公司） 呈交日期: 2025年10月8日 I. 法定/註冊股本變動 不適用 FF301 第 1 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 02285 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 511,053,811 | | 0 | | 511,053,811 | | 增加 / 減少 (-) | | | | | | | | | 本月底結存 | | | 511,053,811 | | 0 | | 511,053, ...

Investment Rating - The report maintains an "Outperform" rating for the industry [1] Core Insights - The demand for lawn and pool robots is surging due to technological upgrades, with domestic companies competing vigorously [5] - The global lawn mower market is projected to reach $10 billion by 2024, with a compound annual growth rate (CAGR) of 2% from 2013 to 2023 [3] - The penetration rate of robotic lawn mowers is expected to increase significantly, driven by advancements in technology [3][29] Summary by Sections 1. Overseas Lawn Demand and Market Size - The lawn culture in Europe and the U.S. is robust, with approximately 180 million private gardens, creating a high demand for lawn maintenance tools [3][12] - The global lawn mower market is expected to reach $10.8 billion in 2024, with a CAGR of 2.1% from 2013 to 2023 [13][15] 2. Rapid Iteration of Boundaryless Smart Lawn Mowers - Robotic lawn mowers have seen a sales explosion, with a 327% year-on-year increase in sales in the first half of 2025, reaching 2.34 million units [3][29] - The share of boundaryless robotic lawn mowers is projected to rise from 35% in 2024 to 65% in 2025 [29] 3. Competitive Landscape of the Lawn Mower Industry - Traditional lawn mower leaders like Husqvarna and Worx still hold significant market share, but domestic companies like Ninebot, Ecovacs, and Mamotion are rapidly gaining ground through technological innovation [3][42] - Domestic companies are expected to lead the industry due to their advantages in navigation, algorithms, and supply chains [3][38] 4. Pool Robot Market Growth - The global number of pools is projected to reach 32.9 million by 2024, with related spending expected to hit $12.9 billion [6] - The retail scale of the pool robot industry is anticipated to reach $2.5 billion by 2024, with a CAGR of 16% from 2019 to 2024 [6] 5. Investment Recommendations - The report suggests focusing on companies like Stone Technology, Guangfeng Technology, and Ecovacs, which are well-positioned to benefit from the technological upgrades in the lawn and pool robot markets [5]

Group 1 - The core viewpoint of the article highlights the ongoing decline in exports to the US, particularly in the consumer goods sector, while the engineering machinery category maintains a high level of export growth [4] Group 2 - In the consumer goods sector, which includes electric tools, hand tools, and lawn mowers, the US retail data for August showed a month-on-month growth rate of +0.6%, exceeding the expected +0.2%. However, from January to August, China's exports of electric tools and lawn mowers to North America decreased by 16% and 2% year-on-year, respectively, indicating a significant negative impact from tariffs [4] - In the capital goods sector, particularly industrial machinery, the global manufacturing PMI for August was 49.9%, an increase of 0.6 percentage points from the previous month, approaching the neutral line of 50. Manufacturing in Asia continues to show moderate growth, while Africa's manufacturing recovery has weakened slightly but remains in the expansion zone. Exports to emerging regions like Africa and Latin America from China have seen rapid growth [4] - In the capital goods sector focused on engineering machinery, the cumulative export growth rate for major engineering machinery from January to August remained in double digits, with excavators, tractors, and mining machinery showing year-on-year export growth rates of 25%, 30%, and 23%, respectively [4]

国元证券近日发布机械行业周报：2025年9月15日至9月19日，上证综指上涨-1.30%，深 证成指上涨1.14%，创业板指上涨2.34%。其中申万机械设备上涨2.23%，相较沪深300指数 跑赢2.67pct，在31个申万一级行业中排名第5。细分子行业来看，申万通用设备/专用设备/ 轨交设备Ⅱ/工程机械/自动化设备分别涨1.56%/1.14%/-1.56%/6.10%/2.93%。 以下为研究报告摘要： 报告要点： 机械设备板块：当前时点，出口端我们认为无论从供给端还是需求端看国内龙头企业仍 具备较强竞争优势。据中国工程机械工业协会对叉车主要制造企业统计，2025年8月当月销 售各类叉车118087台，同比增长19.4%。其中国内销量70174台，同比增长19.3%；出口量 47913台，同比增长19.6%。2025年1—8月，共销售叉车976026台，同比增长12.9%；其中国 内销量616256台，同比增长11.3%；出口359770台，同比增长15.7%。我们看好后续工程机 械行业仍将维持稳步增长态势。 投资建议 低空经济：基建方面，我们建议关注深城交、苏交科、华设集团及纳睿雷达；整机方 面，建议关注 ...

Group 1: Bond Market Analysis - As of the end of August 2025, the total bond custody amount in China reached 174.54 trillion yuan, with a net increase of 1.51 trillion yuan month-on-month, which is a decrease of 0.24 trillion yuan compared to the end of July [1] Group 2: High-end Manufacturing Industry - In the first eight months of 2025, the export growth rates for electric tools, hand tools, and lawn mowers were 1%, -5%, and 45% respectively, while forklifts, machine tools, and industrial sewing machines saw growth rates of 1%, 14%, and 16% respectively [2] - The export growth rates for major engineering machinery categories such as excavators, tractors, and mining machinery were 14%, 25%, 30%, and 23% respectively [2] - The trend of declining exports to the U.S. continues, but the engineering machinery category remains in a high prosperity phase, with significant adverse impacts from tariffs on exports to North America [2] Group 3: Brain-Computer Interface Industry - The brain-computer interface market is projected to reach 7.63 billion USD by 2029, driven by policy support and demand from conditions like stroke and ALS [3] - A joint policy from seven departments outlines development goals for the industry, creating a "policy-research-application" closed loop, with a clearer commercialization path [3] - Recommended companies to watch include Xiangyu Medical, Weisi Medical, Chengyitong, Mailande, Aipeng Medical, and Sanbo Brain Science [3]

[Company Introduction](index=4&type=section&id=Company%20Introduction) The company is a leading global supplier of power tools and outdoor power equipment, focusing on lithium-ion battery technology innovation [Overview](index=4&type=section&id=Overview) Chervon Holdings Limited is a global leader in power tools and outdoor power equipment, driven by lithium-ion battery system technology innovation and a portfolio of renowned brands - The company is a global supplier of power tools and outdoor power equipment (OPE), specializing in lithium-ion battery system technology innovation[6](index=6&type=chunk)[10](index=10&type=chunk) - It owns five differentiated brands: EGO, FLEX, SKIL, DEVON, and X-TRON, covering major regions and market segments[6](index=6&type=chunk)[10](index=10&type=chunk) - Product lines include industrial/professional and consumer power tools, as well as high-end and mass-market OPE products[6](index=6&type=chunk)[10](index=10&type=chunk) [Our Vision](index=4&type=section&id=Our%20Vision) The company's vision is to "make great tools to empower the world" - Vision: Make great tools to empower the world[8](index=8&type=chunk)[12](index=12&type=chunk) [Our Mission](index=4&type=section&id=Our%20Mission) The company's mission is to be an innovation-driven leader in the power tool and OPE industry through continuous innovation, providing superior products to global users in the era of electrification, intelligence, and digitalization - Mission: Through continuous innovation, provide superior products to global users, becoming an innovation-driven leader in the power tool and outdoor power equipment industry in the era of electrification, intelligence, and digitalization[9](index=9&type=chunk)[13](index=13&type=chunk) [Corporate Information](index=5&type=section&id=Corporate%20Information) This section details the company's board, key personnel, and advisors, including recent changes in committee appointments and joint company secretary [Board of Directors and Committees](index=5&type=section&id=Board%20of%20Directors%20and%20Committees) This section outlines the composition of the Board of Directors and its committees, detailing changes in committee appointments effective June 30, 2025 - Mr. Pan Longquan resigned as a member of the Nomination Committee and was appointed as a member of the Remuneration Committee, effective June 30, 2025[15](index=15&type=chunk)[163](index=163&type=chunk) - Ms. Zhang Tong resigned as a member of the Remuneration Committee and was appointed as a member of the Nomination Committee, effective June 30, 2025[15](index=15&type=chunk)[163](index=163&type=chunk) [Key Personnel and Advisors](index=5&type=section&id=Key%20Personnel%20and%20Advisors) This section provides key information on the company's joint company secretaries, authorized representatives, auditor, legal counsel, and other essential corporate details, including recent changes - Ms. Lam Wing Chi resigned as Joint Company Secretary on June 30, 2025, and Ms. Lai Siu Kuen was appointed[16](index=16&type=chunk) - The auditor is KPMG[16](index=16&type=chunk)[17](index=17&type=chunk) - The company's stock code is 2285, listed on The Stock Exchange of Hong Kong Limited, with a listing date of December 30, 2021[19](index=19&type=chunk)[20](index=20&type=chunk) [Financial Summary](index=7&type=section&id=Financial%20Summary) This section provides a high-level overview of the company's financial performance and position, highlighting key results and balance sheet metrics [Results](index=7&type=section&id=Results) For the six months ended June 30, 2025, revenue grew by **11.9%** to **$912.4 million**, gross margin increased by **40 basis points** to **33.3%**, profit for the period surged by **54.6%** to **$95.3 million**, and net cash from operating activities doubled Overview of Results for the Six Months Ended June 30, 2025 | Metric | 2025 (USD '000) | 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 912,437 | 815,745 | 11.9% | | Gross Margin | 33.3% | 32.9% | +40 bps | | Profit Before Tax | 113,163 | 71,814 | 57.6% | | Profit for the Period | 95,271 | 61,619 | 54.6% | | Adjusted Net Profit | 76,031 | 61,619 | 23.4% | | Net Cash Generated from Operating Activities | 256,652 | 119,138 | 115.4% | | Basic Earnings Per Share (USD) | 0.19 | 0.12 | 58.3% | [Assets, Liabilities and Equity](index=7&type=section&id=Assets%2C%20Liabilities%20and%20Equity) As of June 30, 2025, total assets and liabilities decreased, total equity slightly reduced, while the gearing ratio remained stable Overview of Assets, Liabilities and Equity as of June 30, 2025 | Metric | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 1,823,202 | 1,992,297 | -8.5% | | Total Equity | 1,005,237 | 1,036,693 | -3.0% | | Total Liabilities | 817,965 | 955,604 | -14.4% | | Total Equity and Liabilities | 1,823,202 | 1,992,297 | -8.5% | [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational and financial performance, strategic initiatives, and future outlook [Business Review and Outlook](index=8&type=section&id=Business%20Review%20and%20Outlook) The Group achieved strong performance with **11.9%** revenue growth to **$912.4 million** and **54.6%** net profit growth, driven by own-brand products, strong EGO gross margins, favorable exchange rates, and a one-off gain from subsidiary disposal, while accelerating capacity transfer to Vietnam - **Revenue** grew by **11.9%** to **$912.4 million** in the first half of 2025, with **net profit** increasing by **54.6%**[25](index=25&type=chunk) - OPE segment revenue increased by **22.8%**, while power tools segment revenue decreased by **2.5%**; OBM business revenue grew by **16.2%**, accounting for **77.5%** of total revenue[26](index=26&type=chunk)[29](index=29&type=chunk) - Gross margin rose by **40 basis points** to **33.3%**, primarily due to an increased sales contribution from high-margin EGO products[27](index=27&type=chunk)[30](index=30&type=chunk) - Approximately **100 new products** were launched during the reporting period, with over **90%** being lithium-ion battery products[28](index=28&type=chunk)[30](index=30&type=chunk) - The Group will accelerate the transfer of production capacity from Nanjing to Vietnam, with a significant increase in Vietnam's capacity expected in the second half of 2025, to mitigate US-China tariff impacts and enhance efficiency[44](index=44&type=chunk)[46](index=46&type=chunk) - The Group remains optimistic about the growth prospects of lithium-ion battery technology and will manage challenges proactively and cautiously[49](index=49&type=chunk)[51](index=51&type=chunk) [Brand Highlights](index=9&type=section&id=Brand%20Highlights) This section details the market performance and strategic advancements of the EGO, FLEX, SKIL, and DEVON brands, highlighting market share growth, technological breakthroughs, and channel expansion - EGO continues to grow its market share, ranking first in multiple product categories, including walk-behind lawn mowers, snow blowers, and ride-on lawn mowers, in the North American lithium-ion OPE market[32](index=32&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk) - EGO achieved breakthroughs in IoT, AI recognition, visual positioning, and multi-sensor navigation, with smart features to be integrated in 2025 and beyond[37](index=37&type=chunk)[40](index=40&type=chunk) - FLEX was honored as the "Number One Professional Trade Partner" and successfully launched its 24V series in Australia, accelerating lithium-ion platform adoption[38](index=38&type=chunk)[40](index=40&type=chunk) - SKIL's brushless series gained high recognition in Europe and has entered major mainstream retail channels[39](index=39&type=chunk)[41](index=41&type=chunk) - DEVON outperformed the overall market in the high-end segment and received the "Annual Trend New Product Award" from TikTok e-commerce and the "2025 Strategic Lighthouse Award" from JD.com[43](index=43&type=chunk)[45](index=45&type=chunk) [Supply Chain and Manufacturing](index=11&type=section&id=Supply%20Chain%20and%20Manufacturing) The Group is actively reconfiguring its global manufacturing footprint, accelerating capacity transfer from Nanjing to Vietnam to address US-China tariffs and enhance long-term efficiency, while relocating German production to Nanjing for cost reduction - Accelerating the transfer of some production capacity from Nanjing to Vietnam, with a significant increase in Vietnam's capacity expected in the second half of 2025[44](index=44&type=chunk)[46](index=46&type=chunk) - Production at the Steinheim factory in Germany is expected to be relocated to Nanjing by the end of 2025 to reduce manufacturing costs and enhance long-term competitiveness[44](index=44&type=chunk)[46](index=46&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance, covering revenue, gross profit, expenses, taxation, net profit, adjusted net profit, liquidity, financial resources, borrowings, working capital, capital expenditure, capital commitments, and pledged assets Key Financial Data for the First Half of 2025 | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 912,437 | 815,745 | 11.9% | | Gross Profit | 303,936 | 268,676 | 13.1% | | Gross Margin | 33.3% | 32.9% | +0.4% | | Profit Before Tax | 113,163 | 71,814 | 57.6% | | Profit for the Period | 95,271 | 61,619 | 54.6% | | Net Profit Margin | 10.4% | 7.6% | +2.8% | | Adjusted Net Profit | 76,031 | 61,619 | 23.4% | - Adjusted net profit excludes a one-off gain of **$19.2 million** from the disposal of Chervon (China) Investment[80](index=80&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [Revenue by Product Category](index=13&type=section&id=Revenue%20by%20Product%20Category) Outdoor Power Equipment (OPE) product sales revenue increased by **22.8%**, driven by the EGO brand, while power tool sales revenue decreased by **2.5%** due to lower OEM business and a weak Chinese market Revenue by Product Category | Product Category | H1 2025 (USD '000) | H1 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | OPE Products | 602,000 | 490,400 | 22.8% | | Power Tools | 305,800 | 313,500 | -2.5% | [Revenue by Geographic Location](index=13&type=section&id=Revenue%20by%20Geographic%20Location) Revenue in North America and Europe grew by **17.9%** and **4.0%** respectively, while revenue in China and other regions decreased by **8.4%** and **13.2%** respectively Revenue by Geographic Location | Region | H1 2025 (USD '000) | H1 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | North America | 651,100 | 552,400 | 17.9% | | Europe | 179,200 | 172,300 | 4.0% | | China | 58,700 | 64,100 | -8.4% | | Rest of the World | 23,400 | 27,000 | -13.2% | [Other Net Gain](index=14&type=section&id=Other%20Net%20Gain) Other net gain significantly increased to **$31.3 million** from **$2.3 million** in the prior period, primarily due to **$12.4 million** in net foreign exchange gains and **$19.2 million** from the disposal of a subsidiary Other Net Gain | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Other Net Gain | 31,316 | 2,336 | | Of which: Net Foreign Exchange Gain | 12,400 | -700 | | Of which: Net Gain on Disposal of a Subsidiary | 19,200 | - | [Expenses and Profit](index=14&type=section&id=Expenses%20and%20Profit) Sales and distribution expenses, administrative and other operating expenses, and R&D costs all increased, while net finance costs slightly rose, and share of loss of an associate significantly decreased, collectively driving substantial growth in profit before tax and profit for the period Key Expenses and Profit Changes | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Sales and Distribution Expenses | 129,200 | 106,700 | 21.1% | | Administrative and Other Operating Expenses | 47,300 | 42,300 | 12.0% | | R&D Costs | 40,000 | 37,400 | 6.8% | | Net Finance Costs | 2,700 | 2,000 | 35.0% | | Share of Loss of an Associate | 3,900 | 13,600 | -71.3% | | Income Tax Expense | 17,900 | 10,200 | 75.5% | - Share of loss of an associate significantly decreased, primarily because the equity interest in Chervon Auto Precision Technology is no longer accounted for as an associate after the disposal of Chervon (China) Investment[72](index=72&type=chunk)[76](index=76&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a strong financial position with significantly increased cash and cash equivalents, stable gearing ratio despite slightly higher total borrowings, improved inventory and trade receivables turnover days, and substantially increased capital expenditure and commitments for Vietnam factory expansion Liquidity and Financial Position | Metric | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 487,700 | 328,800 | 48.3% | | Total Bank Loans | 311,700 | 295,600 | 5.4% | | Gearing Ratio | 0.3 | 0.3 | 0% | | Inventory Turnover Days | 161 days | 178 days | -17 days | | Trade and Bills Receivables Turnover Days | 83 days | 89 days | -6 days | | Capital Expenditure | 56,300 | 22,100 | 154.7% | | Capital Commitments | 138,300 | 63,700 | 117.1% | | Total Pledged Assets | 143,559 | 46,998 | 205.4% | - Capital expenditure and capital commitments significantly increased, primarily for land acquisition costs and capacity expansion at the Vietnam factory[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - For contingent liabilities, the Group provided guarantees for certain debts of independent third-party customers in mainland China, up to **$21.7 million**[108](index=108&type=chunk)[111](index=111&type=chunk) [Material Acquisitions, Disposals of Subsidiaries and Associates](index=20&type=section&id=Material%20Acquisitions%2C%20Disposals%20of%20Subsidiaries%20and%20Associates) The company disposed of its wholly-owned subsidiary, Chervon (China) Investment Co., Ltd., on June 25, 2025, generating a net gain of **$19.2 million**, resulting in the derecognition of its equity interest in Chervon Auto Precision Technology and a proposed special dividend of **HK$1.1905** per share - The company disposed of its entire equity interest in its wholly-owned subsidiary, Chervon (China) Investment Co., Ltd., for a cash consideration of RMB **570 million** (approximately **$79.5 million** USD)[110](index=110&type=chunk)[113](index=113&type=chunk) - The disposal was completed on June 25, 2025, generating a net gain of **$19.2 million**[62](index=62&type=chunk)[67](index=67&type=chunk)[115](index=115&type=chunk) - Following the disposal, the company's equity interest in Chervon Auto Precision Technology is no longer accounted for as an associate[72](index=72&type=chunk)[76](index=76&type=chunk)[115](index=115&type=chunk) - The Board recommended a special dividend of **HK$1.1905** (approximately **$0.1526** USD) per ordinary share[110](index=110&type=chunk)[113](index=113&type=chunk)[334](index=334&type=chunk) [Major Customers and Suppliers](index=22&type=section&id=Major%20Customers%20and%20Suppliers) During the reporting period, the Group's largest customer and top five customers accounted for **34.3%** and **60.0%** of total revenue respectively, an increase from the prior period, while the largest supplier and top five suppliers accounted for **6.4%** and **13.7%** of total purchases respectively, a decrease from the prior period Customer and Supplier Concentration | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Largest Customer as % of Total Revenue | 34.3% | 30.1% | | Top Five Customers as % of Total Revenue | 60.0% | 57.7% | | Largest Supplier as % of Total Purchases | 6.4% | 14.9% | | Top Five Suppliers as % of Total Purchases | 13.7% | 28.6% | - None of the directors, their associates, or shareholders holding **5%** or more of the company's share capital had any interest in the top five customers or suppliers[126](index=126&type=chunk)[130](index=130&type=chunk) [Human Resources](index=23&type=section&id=Human%20Resources) As of June 30, 2025, the Group's total employees increased to **6,731**, with total staff costs of **$138.2 million**, while maintaining competitive remuneration, training, and share schemes to attract and retain talent, with a gender ratio of approximately **1.50 to 1** Human Resources Overview | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of Employees | 6,731 people | 6,133 people | | Total Staff Costs | 138.2 million USD | 110.0 million USD | - The Group offers competitive remuneration packages, performance bonuses, and long-term incentive plans, along with regular and professional training[132](index=132&type=chunk)[134](index=134&type=chunk) - As of June 30, 2025, the employee gender ratio was approximately **1.50 to 1**, which is in line with industry norms, and the Group will strive for a relatively balanced ratio in the future[133](index=133&type=chunk)[134](index=134&type=chunk) [Corporate Governance and Other Information](index=24&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's corporate governance practices, directors' and shareholders' interests, dividends, and other relevant disclosures [Directors' and Chief Executive's Interests in Shares, Underlying Shares and Debentures](index=24&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) This section discloses the interests of the company's directors and chief executive in shares of the company and its associated corporations as of June 30, 2025, primarily held through controlled corporations, detailing the shareholding percentages of Mr. Pan Longquan, Ms. Zhang Tong, and Mr. Ke Zuqian Directors' Interests in the Company's Shares (as of June 30, 2025) | Name of Director | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Pan Longquan | Interest of Controlled Corporation | 260,226,344 (L) | 50.92% | | Ms. Zhang Tong | Interest of Controlled Corporation | 98,010,850 (L) | 19.18% | | Mr. Ke Zuqian | Interest of Controlled Corporation | 27,118,822 (L) | 5.31% | - As of June 30, 2025, the total number of issued shares was **511,053,811** shares[140](index=140&type=chunk) [Substantial Shareholders' and Other Persons' Interests in Shares and Underlying Shares](index=29&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20in%20Shares%20and%20Underlying%20Shares) This section lists the interests of substantial shareholders and other persons, excluding directors and the chief executive, in the company's shares as of June 30, 2025, including Panmercy, Green Hope, China Minsheng Banking Corp., Ltd., and Klamm Substantial Shareholders' Interests in the Company's Shares (as of June 30, 2025) | Name of Shareholder | Nature of Interest | Number of Shares | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Panmercy | Beneficial Owner | 260,226,344 (L) | 50.92% | | Green Hope | Beneficial Owner | 97,637,750 (L) | 19.18% | | China Minsheng Banking Corp., Ltd. | Interest of Controlled Corporation | 41,940,000 (L) | 8.21% | | Klamm | Beneficial Owner | 27,118,822 (L) | 5.31% | [Interim Dividend](index=30&type=section&id=Interim%20Dividend) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025[153](index=153&type=chunk)[156](index=156&type=chunk) [Purchase, Sale or Redemption of the Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Listed%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities, except for share purchases under the share award scheme - During the reporting period, neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities, except for share purchases under the share award scheme[154](index=154&type=chunk)[157](index=157&type=chunk) [Changes to Directors' and Senior Management's Information](index=31&type=section&id=Changes%20to%20Directors%27%20and%20Senior%20Management%27s%20Information) This section discloses changes to directors' information since the publication of the 2024 annual report, primarily concerning adjustments to Mr. Pan Longquan's and Ms. Zhang Tong's roles in the Nomination and Remuneration Committees - Mr. Pan Longquan resigned as a member of the Nomination Committee and was appointed as a member of the Remuneration Committee, effective June 30, 2025[159](index=159&type=chunk)[163](index=163&type=chunk) - Ms. Zhang Tong resigned as a member of the Remuneration Committee and was appointed as a member of the Nomination Committee, effective June 30, 2025[159](index=159&type=chunk)[163](index=163&type=chunk) [Public Float](index=31&type=section&id=Public%20Float) The company has been granted a waiver from strict compliance with the public float requirement by the Stock Exchange, with at least **18.43%** of its issued share capital held by the public as of the reporting date, meeting the minimum public float under the waiver - The company has been granted a waiver from strict compliance with the public float requirement under Note 2 to Rule 8.08(1) of the Listing Rules by the Stock Exchange[160](index=160&type=chunk)[162](index=162&type=chunk) - As of the reporting date, at least **18.43%** of the company's issued share capital was held by the public, meeting the minimum public float required by the waiver[160](index=160&type=chunk)[162](index=162&type=chunk) [2024 Share Scheme](index=32&type=section&id=2024%20Share%20Scheme) The 2024 Share Scheme, adopted on January 29, 2024, aims to align interests, drive performance, and attract and retain talent, with **2,117,600 shares** (approximately **0.4%** of total share capital) purchased by the trustee during the reporting period - The 2024 Share Scheme aims to align the interests of shareholders, the company, and employees, drive performance growth, and improve long-term incentive mechanisms to attract and retain outstanding talent[164](index=164&type=chunk)[167](index=167&type=chunk) - Between June 11 and 19, 2025, the trustee of the 2024 Share Scheme purchased a total of **2,117,600 shares** in the market, representing approximately **0.4%** of the company's total shares[165](index=165&type=chunk)[168](index=168&type=chunk) - As of the reporting date, the total number of shares available for grant under the 2024 Share Scheme was **51,105,381** shares, representing **10%** of the issued shares on the adoption date[164](index=164&type=chunk)[167](index=167&type=chunk) [Event After the Reporting Period](index=33&type=section&id=Event%20After%20the%20Reporting%20Period) No material disclosable events occurred after the reporting period and up to the date of this report, other than those already disclosed - No material events occurred after the reporting period, other than those already disclosed[170](index=170&type=chunk)[174](index=174&type=chunk) [Audit Committee](index=33&type=section&id=Audit%20Committee) The Board has established an Audit Committee, comprising three independent non-executive directors, responsible for reviewing accounting principles, internal controls, and financial reporting matters, including the interim financial information for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors: Dr. Li Minghui (Chairman), Mr. Tian Ming, and Mr. Jiang Li[171](index=171&type=chunk)[175](index=175&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters, including the interim financial information for the six months ended June 30, 2025[172](index=172&type=chunk)[175](index=175&type=chunk) [Independent Review of Auditor](index=33&type=section&id=Independent%20Review%20of%20Auditor) The Group's interim financial report for the six months ended June 30, 2025, is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 - The interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[173](index=173&type=chunk)[176](index=176&type=chunk) [Corporate Governance Practices](index=34&type=section&id=Corporate%20Governance%20Practices) The company is committed to high corporate governance standards, adopting and complying with the Corporate Governance Code in Appendix C1 of the Listing Rules, with the exception of the combined roles of Chairman and CEO, which the Board believes ensures consistent leadership and efficient strategic planning - The company has adopted and complies with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[177](index=177&type=chunk)[178](index=178&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Pan Longquan, which deviates from code provision C.2.1, but the Board believes this arrangement ensures consistent leadership and efficient strategic planning[179](index=179&type=chunk)[181](index=181&type=chunk) - The Board will reassess the division of roles from time to time and may propose to separate the two roles in the future[183](index=183&type=chunk)[184](index=184&type=chunk) [Model Code for Securities Transactions](index=35&type=section&id=Model%20Code%20for%20Securities%20Transactions) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the reporting period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers[185](index=185&type=chunk)[186](index=186&type=chunk) - All directors confirmed compliance with the Model Code during the reporting period, with no instances of non-compliance[185](index=185&type=chunk)[186](index=186&type=chunk) [Independent Auditor's Report](index=36&type=section&id=Independent%20Auditor%27s%20Report) This section presents the independent auditor's review report on the interim financial information, outlining the scope and conclusion of their work [Introduction](index=36&type=section&id=Introduction) KPMG has reviewed Chervon Holdings Limited's interim financial report for the six months ended June 30, 2025, prepared in accordance with Hong Kong Accounting Standard 34, with the Board responsible for its preparation and presentation - KPMG has reviewed the interim financial report for the six months ended June 30, 2025[188](index=188&type=chunk)[191](index=191&type=chunk) - The interim financial report was prepared in accordance with Hong Kong Accounting Standard 34, with the Board responsible for its preparation and presentation[188](index=188&type=chunk)[191](index=191&type=chunk) [Scope of Review](index=36&type=section&id=Scope%20of%20Review) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, which is substantially less in scope than an audit, thus no audit opinion is expressed, only a conclusion based on the review - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, which is substantially less in scope than an audit[190](index=190&type=chunk)[193](index=193&type=chunk) - No audit opinion is expressed, only a conclusion based on the review[190](index=190&type=chunk)[193](index=193&type=chunk) [Conclusion](index=37&type=section&id=Conclusion) Based on the review, the auditor found no matters suggesting that the interim financial report as of June 30, 2025, was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - The auditor found no matters that lead them to believe the interim financial report as of June 30, 2025, was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[195](index=195&type=chunk)[196](index=196&type=chunk) [Consolidated Statement of Profit or Loss](index=38&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the consolidated statement of profit or loss, detailing the company's revenues, expenses, and net profit for the reporting period [Profit or Loss Summary](index=38&type=section&id=Profit%20or%20Loss%20Summary) For the six months ended June 30, 2025, revenue increased by **11.9%** to **$912.4 million**, gross profit grew by **13.1%** to **$303.9 million**, profit for the period surged by **54.6%** to **$95.3 million**, and basic earnings per share were **$0.19** Key Data from Consolidated Statement of Profit or Loss | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Revenue | 912,437 | 815,745 | | Cost of Revenue | (608,501) | (547,069) | | Gross Profit | 303,936 | 268,676 | | Other Income | 1,013 | 2,722 | | Other Net Gain | 31,316 | 2,336 | | Sales and Distribution Expenses | (129,168) | (106,667) | | Administrative and Other Operating Expenses | (47,338) | (42,264) | | R&D Costs | (39,984) | (37,433) | | Operating Profit | 119,775 | 87,370 | | Net Finance Costs | (2,672) | (1,975) | | Share of Loss of an Associate | (3,940) | (13,581) | | Profit Before Tax | 113,163 | 71,814 | | Income Tax Expense | (17,892) | (10,195) | | Profit for the Period | 95,271 | 61,619 | | Basic Earnings Per Share (USD) | 0.19 | 0.12 | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=39&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the consolidated statement of profit or loss and other comprehensive income, providing a complete view of the company's financial performance [Comprehensive Income Summary](index=39&type=section&id=Comprehensive%20Income%20Summary) For the six months ended June 30, 2025, profit for the period was **$95.3 million**, other comprehensive income (net of tax) was **$1.0 million**, mainly from exchange differences on translating financial statements of foreign operations, leading to a total comprehensive income of **$96.3 million**, a significant increase from **$40.8 million** in the prior year Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Profit for the Period | 95,271 | 61,619 | | Other Comprehensive Income (net of tax that may be reclassified to profit or loss) | | | | Remeasurement of Net Defined Benefit Liability | 11 | 10 | | Exchange Differences | 1,005 | (20,834) | | Total Comprehensive Income for the Period | 96,287 | 40,795 | - Exchange differences turned from a loss of **$20.8 million** in the first half of 2024 to a gain of **$1.0 million** in the first half of 2025, positively impacting total comprehensive income[201](index=201&type=chunk) [Consolidated Statement of Financial Position](index=40&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section presents the consolidated statement of financial position, providing a snapshot of the company's assets, liabilities, and equity at the reporting date [Financial Position Summary](index=40&type=section&id=Financial%20Position%20Summary) As of June 30, 2025, total assets were **$1,823.2 million**, a decrease from December 31, 2024, with a slight increase in net current assets, total equity of **$1,005.2 million**, and total liabilities of **$818.0 million** Key Data from Consolidated Statement of Financial Position | Metric | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 284,868 | 282,495 | | Right-of-Use Assets | 62,142 | 57,511 | | Interests in an Associate | – | 67,348 | | Total Non-current Assets | 437,014 | 478,767 | | **Current Assets** | | | | Inventories | 479,065 | 608,304 | | Trade and Bills Receivables | 356,646 | 489,473 | | Cash and Cash Equivalents | 487,686 | 328,758 | | Total Current Assets | 1,386,188 | 1,513,530 | | **Current Liabilities** | | | | Bank Loans | 194,318 | 192,619 | | Trade and Bills Payables | 170,375 | 317,942 | | Total Current Liabilities | 644,021 | 782,968 | | **Non-current Liabilities** | | | | Bank Loans | 117,398 | 102,935 | | Total Non-current Liabilities | 173,944 | 172,636 | | **Total Equity** | | | | Total Equity | 1,005,237 | 1,036,693 | - Interests in an associate decreased to zero, reflecting the impact of the disposal of Chervon (China) Investment Co., Ltd[203](index=203&type=chunk) - Cash and cash equivalents significantly increased, while inventories and trade and bills receivables notably decreased[203](index=203&type=chunk) [Consolidated Statement of Changes in Equity](index=43&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the consolidated statement of changes in equity, illustrating movements in the company's equity components over the reporting period [Equity Changes Summary](index=43&type=section&id=Equity%20Changes%20Summary) For the six months ended June 30, 2025, total equity decreased from **$1,036.7 million** to **$1,005.2 million**, with a net reduction primarily due to **$118.7 million** in dividends paid, **$4.0 million** for share purchases under the share award scheme, and **$3.8 million** from the disposal of an associate Key Data from Consolidated Statement of Changes in Equity | Metric | H1 2025 (USD '000) | | :--- | :--- | | Balance at January 1 | 1,036,693 | | Profit for the Period | 95,271 | | Other Comprehensive Income | 1,016 | | Total Comprehensive Income | 96,287 | | Appropriation of Dividends | (118,717) | | Purchase of Shares for Share Award Scheme | (4,049) | | Share of Other Reserves of an Associate | (1,135) | | Disposal of Interest in an Associate | (3,842) | | Balance at June 30 | 1,005,237 | - Dividends paid during the period totaled **$118.7 million**, including a final dividend of **$40.9 million** and a special dividend of **$78.0 million**[214](index=214&type=chunk)[334](index=334&type=chunk) - **$4.0 million** was paid for the purchase of shares under the share award scheme[214](index=214&type=chunk)[339](index=339&type=chunk) [Condensed Consolidated Cash Flow Statement](index=46&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) This section presents the condensed consolidated cash flow statement, summarizing the cash inflows and outflows from operating, investing, and financing activities [Cash Flow Summary](index=46&type=section&id=Cash%20Flow%20Summary) For the six months ended June 30, 2025, net cash from operating activities surged by **115.4%** to **$256.7 million**, investing activities generated **$19.2 million** net cash, primarily from subsidiary and financial asset disposals, while financing activities used **$118.6 million** net cash, mainly for dividends and share purchases, increasing period-end cash and cash equivalents to **$487.7 million** Key Data from Condensed Consolidated Cash Flow Statement | Metric | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 256,652 | 119,138 | | Net Cash Generated from/(Used in) Investing Activities | 19,234 | (22,309) | | Net Cash Used in Financing Activities | (118,632) | (4,439) | | Net Increase in Cash and Cash Equivalents | 157,254 | 92,390 | | Cash and Cash Equivalents at End of Period | 487,686 | 387,090 | - Net cash generated from operating activities significantly increased by **115.4%**, indicating improved operational efficiency[216](index=216&type=chunk) - Investing activities shifted from a net outflow last year to a net inflow, primarily due to proceeds of **$78.5 million** from the disposal of a subsidiary[216](index=216&type=chunk) - Cash outflow from financing activities significantly increased, mainly due to **$118.7 million** in dividends paid[219](index=219&type=chunk) [Notes to the Unaudited Interim Financial Report](index=48&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) This section provides detailed explanatory notes to the unaudited interim financial report, offering further insights into the company's financial figures and accounting policies [General Information](index=48&type=section&id=General%20Information) Chervon Holdings Limited was incorporated in Hong Kong on February 19, 1999, listed on the Main Board of the HKEX on December 30, 2021, and primarily engages in R&D, manufacturing, testing, sales, and after-sales services for power tools, OPE, and related products - The company was incorporated in Hong Kong on February 19, 1999, and listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 30, 2021[221](index=221&type=chunk)[226](index=226&type=chunk) - The Group primarily engages in the research and development, manufacturing, testing, sales, and after-sales services of power tools, outdoor power equipment, and related products[222](index=222&type=chunk)[226](index=226&type=chunk) [Basis of Preparation](index=48&type=section&id=Basis%20of%20Preparation) This interim financial report is prepared in accordance with applicable disclosure requirements of the HKEX Listing Rules and Hong Kong Accounting Standard 34, authorized for issue, and reviewed by KPMG - This interim financial report was prepared in accordance with Hong Kong Accounting Standard 34 and authorized for issue on August 28, 2025[223](index=223&type=chunk)[227](index=227&type=chunk) - The report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[230](index=230&type=chunk)[233](index=233&type=chunk) [Changes in Accounting Policies](index=50&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 due to the absence of relevant foreign currency transactions, and has not yet applied any new standards or interpretations not yet effective - The Group has applied amendments to HKAS 21, "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," but it had no material impact[235](index=235&type=chunk)[238](index=238&type=chunk) - The Group has not yet applied any new standards or interpretations that are not yet effective[236](index=236&type=chunk)[239](index=239&type=chunk) [Revenue and Segment Reporting](index=50&type=section&id=Revenue%20and%20Segment%20Reporting) This section details the Group's revenue by major business line and geographic location, along with gross profit for each reporting segment, highlighting significant growth in outdoor power equipment revenue and strong contributions from North American and European markets Revenue by Major Product Category | Product Category | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Sales of Power Tools | 305,760 | 313,500 | | Sales of Outdoor Power Equipment | 601,999 | 490,421 | | Others | 4,678 | 11,824 | | Total | 912,437 | 815,745 | Revenue by Geographic Location | Region | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | North America | 651,087 | 552,372 | | Europe | 179,233 | 172,296 | | China | 58,693 | 64,091 | | Rest of the World | 23,424 | 26,986 | | Total | 912,437 | 815,745 | - The Group's reporting segments include power tools, outdoor power equipment, and other businesses involving sales of components to home appliance companies[248](index=248&type=chunk) [Other Revenue and Other Net Gain/(Loss)](index=57&type=section&id=Other%20Revenue%20and%20Other%20Net%20Gain%2F%28Loss%29) Other revenue decreased from **$2.7 million** to **$1.0 million** due to reduced scrap sales, while other net gain significantly increased from **$2.3 million** to **$31.3 million**, driven by **$12.4 million** in net foreign exchange gains and **$19.2 million** from the disposal of a subsidiary Other Revenue | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Government Grants | 644 | 382 | | Sales of Scrap Materials | 179 | 2,146 | | Rental Income | 190 | 194 | | Total | 1,013 | 2,722 | Other Net Gain | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Net Foreign Exchange Gain/(Loss) | 12,372 | (741) | | Net Gain on Disposal of a Subsidiary | 19,240 | – | | Total | 31,316 | 2,336 | - A net gain of **$19.2 million** was recognized from the disposal of Chervon (China) Investment Co., Ltd[270](index=270&type=chunk) [Profit Before Taxation](index=59&type=section&id=Profit%20Before%20Taxation) Profit before taxation significantly increased to **$113.2 million** from **$71.8 million** in the prior period, with this section detailing net finance costs and other profit-impacting items such as depreciation, amortization, and inventory write-down provisions Net Finance Costs | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | (2,565) | (3,683) | | Interest on Bank Loans | 4,632 | 5,593 | | Interest on Lease Liabilities | 605 | 65 | | Net Finance Costs | 2,672 | 1,975 | Other Items Affecting Profit | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Depreciation Expense | 32,325 | 22,305 | | Amortisation of Intangible Assets | 125 | 148 | | Provision for Write-down of Inventories | 8,549 | 320 | | Cost of Inventories Sold | 608,501 | 547,069 | [Income Tax](index=60&type=section&id=Income%20Tax) Income tax expense for the period was **$17.9 million**, a **75.5%** increase from the prior period, with an effective tax rate of **15.8%**, reflecting the application of domestic minimum top-up tax in certain countries since January 1, 2024, and the anticipated application of Pillar Two income tax in Hong Kong and mainland China from January 1, 2025 Income Tax Expense | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Mainland China Corporate Income Tax | 2,423 | 6,144 | | Hong Kong Profits Tax | 14,437 | – | | Tax Jurisdictions Outside Mainland China and Hong Kong | 2,421 | 5,653 | | Deferred Tax | (1,389) | (1,602) | | Total Income Tax Expense | 17,892 | 10,195 | - The effective tax rate for the first half of 2025 was **15.8%**, compared to **14.2%** for the same period in 2024[74](index=74&type=chunk) - From January 1, 2024, the Group's profits in Vietnam, Canada, the UK, and certain European countries are subject to domestic minimum top-up tax[284](index=284&type=chunk)[289](index=289&type=chunk) - From January 1, 2025, the Group's profits in the Hong Kong Special Administrative Region and mainland China will also be subject to Pillar Two income tax under the Hong Kong Inland Revenue (Amendment) Ordinance 2025[285](index=285&type=chunk)[289](index=289&type=chunk) [Earnings Per Share](index=61&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share increased by **58.3%** to **$0.19** from **$0.12** in the prior period, with diluted earnings per share being equal to basic earnings per share due to the absence of potential dilutive ordinary shares Earnings Per Share | Metric | H1 2025 (USD) | H1 2024 (USD) | | :--- | :--- | :--- | | Basic Earnings Per Share | 0.19 | 0.12 | | Diluted Earnings Per Share | 0.19 | 0.12 | - Basic earnings per share are calculated based on profit attributable to ordinary equity shareholders of **$95.2 million** and a weighted average of **509,775,827** ordinary shares[287](index=287&type=chunk)[291](index=291&type=chunk) - There were no potential dilutive ordinary shares for the six months ended June 30, 2025, and 2024, thus diluted earnings per share equal basic earnings per share[288](index=288&type=chunk)[292](index=292&type=chunk) [Property, Plant and Equipment and Intangible Assets](index=62&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) During the reporting period, the Group acquired **$32.2 million** in property, plant, and equipment, disposed of **$1.5 million** net book value of related assets, and increased right-of-use assets by **$8.6 million** due to new capitalized lease payments, with certain property, plant, and equipment and leasehold land pledged as collateral for bank loans as of June 30, 2025 Changes in Property, Plant and Equipment and Right-of-Use Assets | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 32,165 | 23,201 | | Net Book Value of Property, Plant and Equipment Disposed Of | 1,539 | 2,374 | | Additions to Right-of-Use Assets | 8,608 | 3,859 | - As of June 30, 2025, property, plant and equipment with a net book value of **$85.4 million** and leasehold land of **$43.4 million** were pledged as collateral for bank loans[295](index=295&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=63&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's total financial assets at fair value through profit or loss amounted to **$14.1 million**, comprising **$6.7 million** in non-current insurance products and **$7.4 million** in current structured deposits and wealth management products Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Insurance Products (Non-current) | 6,704 | 6,586 | | Structured Deposits and Wealth Management Products (Current) | 7,404 | – | | Total | 14,108 | 6,586 | - Current financial assets primarily consist of structured deposits and wealth management products issued by banks[301](index=301&type=chunk)[303](index=303&type=chunk) [Inventories](index=64&type=section&id=Inventories) As of June 30, 2025, the Group's inventories decreased to **$479.1 million** from **$608.3 million** on December 31, 2024, with **$8.5 million** in inventory write-down provisions and **$2.5 million** in inventory write-offs recognized during the period Composition of Inventories | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Raw Materials | 136,736 | 187,557 | | Consumables | 4,086 | 3,941 | | Work in Progress | 10,229 | 16,167 | | Finished Goods | 368,833 | 435,453 | | Write-down of Inventories | (40,819) | (34,814) | | Total | 479,065 | 608,304 | - During the six months ended June 30, 2025, **$8.5 million** in inventory write-down provisions and **$2.5 million** in inventory write-offs were recognized[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk) [Trade and Bills Receivables](index=65&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables significantly decreased to **$356.6 million** from **$489.5 million** on December 31, 2024, with all receivables expected to be recovered within one year and an improved turnover period of **83 days** Trade and Bills Receivables | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Measured at Amortised Cost | 355,157 | 484,735 | | Measured at Fair Value Through Other Comprehensive Income | 1,489 | 4,738 | | Total | 356,646 | 489,473 | Ageing Analysis of Trade and Bills Receivables | Ageing | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Within 6 Months | 351,131 | 480,763 | | Over 6 Months but Within 12 Months | 3,542 | 3,414 | | Over 12 Months | 484 | 558 | | Total | 355,157 | 484,735 | - Trade and bills receivables turnover days improved to **83 days** from **89 days** in the same period of 2024[95](index=95&type=chunk)[98](index=98&type=chunk) [Prepayments, Deposits and Other Receivables](index=67&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, current prepayments, deposits, and other receivables totaled **$24.6 million**, while non-current amounted to **$27.1 million**, primarily comprising **$21.8 million** in prepayments for leasehold land Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | **Current** | | | | Recoverable VAT | 8,698 | 15,068 | | Prepayments for Materials and Expenses | 6,572 | 16,289 | | Other Deposits and Receivables | 7,068 | 4,505 | | Total Current | 24,604 | 42,122 | | **Non-current** | | | | Prepayments for Leasehold Land | 21,840 | – | | Total Non-current | 27,138 | 7,824 | - Non-current prepayments for leasehold land increased from zero on December 31, 2024, to **$21.8 million**[316](index=316&type=chunk) [Cash and Cash Equivalents and Pledged Deposits](index=68&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Pledged%20Deposits) As of June 30, 2025, cash and cash equivalents totaled **$487.7 million**, with **$411.0 million** located in mainland China, and pledged deposits amounted to **$17.3 million**, primarily for issuing bank financing Cash and Cash Equivalents | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Cash at Bank | 487,619 | 328,688 | | Cash on Hand | 67 | 70 | | Total | 487,686 | 328,758 | - As of the reporting period end, cash and cash equivalents located in mainland China amounted to **$411.0 million**, with fund remittances subject to foreign exchange control regulations[319](index=319&type=chunk) Pledged Deposits | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Issuance of Bills Payable | 2,585 | 4,765 | | Granting of Bank Facilities | 14,688 | 15,424 | | Total | 17,273 | 20,189 | [Bank Loans](index=69&type=section&id=Bank%20Loans) As of June 30, 2025, the Group's total bank loans were **$311.7 million**, with **$194.3 million** due within one year or repayable on demand, primarily denominated in RMB, and split **58.2%** fixed-rate and **41.8%** floating-rate Bank Loan Maturity Profile | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Short-term Bank Loans | 144,777 | 126,599 | | Current Portion of Long-term Bank Loans | 49,541 | 66,020 | | Within 1 Year or On Demand | 194,318 | 192,619 | | After 1 Year but Within 2 Years | 117,398 | 102,935 | | Total | 311,716 | 295,554 | Bank Loan Collateral and Guarantee Status | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Secured | 39,841 | 34,546 | | Secured and Guaranteed | 126,561 | 131,879 | | Guaranteed | 78,212 | 87,488 | | Unsecured and Unguaranteed | 67,102 | 41,641 | | Total | 311,716 | 295,554 | [Trade and Bills Payables](index=70&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables significantly decreased to **$170.4 million** from **$317.9 million** on December 31, 2024, with all payables expected to be settled within one year or on demand Trade and Bills Payables | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Trade Payables | 155,072 | 294,758 | | Bills Payable | 15,303 | 23,184 | | Total | 170,375 | 317,942 | Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Within 3 Months | 169,928 | 253,734 | | Over 3 Months but Within 12 Months | 447 | 64,208 | | Total | 170,375 | 317,942 | [Other Payables and Accruals](index=71&type=section&id=Other%20Payables%20and%20Accruals) As of June 30, 2025, total other payables and accruals were **$193.3 million**, largely consistent with **$196.6 million** on December 31, 2024, primarily comprising marketing and advertising expenses, salaries, wages, bonuses, and benefits Other Payables and Accruals | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Other Payables and Accrued Expenses | 148,166 | 132,312 | | Accrued Salaries, Wages, Bonuses and Benefits | 21,177 | 38,642 | | Payables for Acquisition of Property, Plant and Equipment | 3,166 | 8,190 | | Other Taxes Payable | 20,482 | 17,109 | | Total | 193,304 | 196,600 | [Capital, Reserves and Dividends](index=72&type=section&id=Capital%2C%20Reserves%20and%20Dividends) During the reporting period, the company declared and approved **$118.7 million** in total dividends, comprising final and special dividends, while the Board resolved not to declare an interim dividend for the six months ended June 30, 2025, and the trustee purchased **2,117,600 shares** for the 2024 Share Scheme Dividends Declared and Approved | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Final Dividend for Prior Financial Year | 40,987 | 18,091 | | Special Dividend for Prior Financial Year | 77,986 | – | | Less: Dividends on Repurchased Shares Held by the Company | (256) | – | | Total | 118,717 | 18,091 | - The Board does not recommend an interim dividend for the six months ended June 30, 2025, and 2024[335](index=335&type=chunk) - For the 2024 Share Scheme, the trustee purchased **2,117,600 shares** in the market between June 11 and 19, 2025, for a total of **$4.0 million**, fully appropriated from retained profits[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk) [Material Related Party Transactions](index=74&type=section&id=Material%20Related%20Party%20Transactions) This section discloses material related party transactions, including lease payments, payments on behalf of, and receivables with Nanjing Chervon Auto Precision Technology Co., Ltd., the disposal of a subsidiary to Chervon Precision Technology Holdings Limited, and guarantees provided by Chervon (China) Investment Co., Ltd. for certain bank loans Material Related Party Transactions | Item | H1 2025 (USD '000) | H1 2024 (USD '000) | | :--- | :--- | :--- | | Lease Payments from Nanjing Chervon Auto Precision Technology Co., Ltd. | 180 | 182 | | Payments Made on Behalf of a Related Party (Nanjing Chervon Auto Precision Technology Co., Ltd.) | 475 | 551 | | Disposal of a Subsidiary to Chervon Precision Technology Holdings Limited | 79,533 | – | - As of June 30, 2025, Chervon (China) Investment Co., Ltd. provided guarantees for **$203.4 million** of the Group's bank loans and pledged its equity interest in Nanjing Chervon Auto Precision Technology Co., Ltd[347](index=347&type=chunk)[349](index=349&type=chunk) [Fair Value Measurement of Financial Instruments](index=75&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) This section provides fair value measurement information for the Group's financial instruments, classified into three fair value hierarchy levels as defined by HKFRS 13, primarily including financial assets at fair value through profit or loss (insurance products, structured deposits, and wealth management products) and derivative financial instruments (foreign currency forward contracts, option contracts, and swap contracts) Recurring Fair Value Measurements (as of June 30, 2025) | Item | Fair Value (USD '000) | Level 1 (USD '000) | Level 2 (USD '000) | Level 3 (USD '000) | | :--- | :--- | :--- | :--- | :--- | | **Financial Assets at Fair Value Through Profit or Loss** | | | | | | Insurance Products | 6,704 | – | – | 6,704 | | Structured Deposits and Wealth Management Products | 7,404 | – | – | 7,404 | | **Derivative Financial Instruments (Assets)** | | | | | | Foreign Currency Forward Contracts | 2,531 | – | 2,531 | – | | Foreign Currency Option Contracts | 50 | – | 50 | – | | Foreign Exchange Swap Contracts | 2,141 | – | 2,141 | – | | **Derivative Financial Instruments (Liabilities)** | | | | | | Foreign Currency Forward Contracts | (2,255) | – | (2,255) | – | | Foreign Exchange Swap Contracts | (344) | – | (344) | – | | Trade Receivables | 1,489 | – | – | 1,489 | - Level 2 fair value measurements primarily use the difference between discounted contract forward prices and current forward prices, considering relevant government yield curves and credit spreads[356](index=356&type=chunk)[358](index=358&type=chunk) - Level 3 fair value measurements, such as insurance products, structured deposits and wealth management products, and trade receivables, primarily use cash value or discounted cash flow valuation techniques, positively correlated with expected rates of return[362](index=362&type=chunk)[363](index=363&type=chunk) [Commitments](index=81&type=section&id=Commitments) As of June 30, 2025, the Group's total capital commitments significantly increased to **$138.3 million** from **$63.7 million** on December 31, 2024, primarily for the construction of plant and buildings and acquisition of machinery and equipment, with most authorized but not yet contracted Capital Commitments | Item | June 30, 2025 (USD '000) | December 31, 2024 (USD '000) | | :--- | :--- | :--- | | Contracted | 17,048 | 28,290 | | Authorized but Not Contracted | 121,261 | 35,408 | | Total | 138,309 | 63,698 | | Of which: Construction of Plant and Buildings | 137,276 | 62,540 | | Of which: Acquisition of Machinery and Equipment | 1,033 | 1,158 | - Capital commitments significantly increased, primarily for the expansion of the Vietnam factory[102](index=102&type=chunk)[104](index=104&type=chunk) [Contingent Liabilities](index=82&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group provided guarantees to financial institutions for certain debts of independent third-party customers in mainland China, with a maximum guarantee amount of **$21.7 million** and guarantees issued totaling **$5.2 million** Guarantees Provided to Customers | Bank | Maximum Guarantee Amount as of June 30, 2025 (USD '000) | Guarantees Issued as of June 30, 2025 (USD '000) | | :--- | :--- | :--- | | Bank A | 7,683 | 596 | | Bank B | 13,969 | 4,621 | | Total | 21,652 | 5,217 | - The Group provided guarantees to financial institutions for certain debts of independent third-party customers in mainland China, with the maximum risk limited to the financing granted to individual customers[370](index=370&type=chunk)

Dear Non-Registered Shareholder(1) , Chervon Holdings Limited (the "Company") – Notification of publication of 2025 Interim Report (the "Current Corporate Communications") Chervon Holdings Limited 泉峰控股有限公司 (Incorporated in Hong Kong with limited liability) （於香港註冊成立之有限公司） (Stock Code：2285) (股份代號: 2285) NOTIFICATION LETTER 通知信函 24 September 2025 請注意，當 閣下填寫及寄回申請表格以索取本次公司通訊之印刷本後，即表示確認 閣下收取印刷本之指示將適用於本公司今後所有之公司通訊(2)，直至 閣下 通知本公司之股份過戶登記處另外之安排或停止持有本公司的股份。 The Current Corporate Communication of the Company, in both E ...