Earnings release
Page 1
– 1 – Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. TIANNENG POWER INTERNATIONAL LIMITED ʮ ̡ (Incorporated in the Cayman Islands with limited liability) (Stock Code: 00819) INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2025 INTERIM RESULTS The board (the “Board”) of directors (the “Directors”) of Tianneng Power International Limited (the “Company”) announces the unaudited interim results of the Company and its subsidiaries (collectively, the “Group” or “ Tianneng”) for the six months ended 30 June 2025, together with the comparative figures for the same period in 2024. These condensed consolidated interim financial statements have not been audited, but have been reviewed by the Company’s independent external auditors and the audit committee of the Company (the “Audit Committee”).
Page 2
– 2 – CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the six months ended 30 June 2025 Six months ended 30 June 2025 2024 Notes RMB’000 RMB’000 (unaudited) (unaudited) Revenue 3 24,191,916 49,914,629 Cost of sales (21,655,008) (47,368,947) Gross profit 2,536,908 2,545,682 Other income 5 889,227 1,241,994 Other gains and losses 6 4,059 134,110 Impairment losses under expected credit loss model, net of reversal 10,762 (35,850) Distribution and selling expenses (592,053) (643,409) Administrative expenses (561,364) (650,672) Research and development costs (941,991) (942,157) Share of results of associates (6,272) (620) Finance costs (235,375) (282,162) Profit before tax 1,103,901 1,366,916 Income tax expense 7 (181,423) (301,309) Profit for the period 8 922,478 1,065,607
Page 3
– 3 – CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Continued) For the six months ended 30 June 2025 Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) Other comprehensive expense: Item that will not be reclassified to profit or loss: Fair value loss on investments in equity instruments at fair value through other comprehensive income (“FVTOCI”), net of income tax (18,139) (25,224) Item that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations (431) – Other comprehensive expense for the period, net of income tax (18,570) (25,224) Total comprehensive income for the period 903,908 1,040,383 Profit for the period attributable to: Owners of the Company 819,768 928,222 Non-controlling interests 102,710 137,385 922,478 1,065,607
Page 4
– 4 – CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Continued) For the six months ended 30 June 2025 Six months ended 30 June 2025 2024 Note RMB’000 RMB’000 (unaudited) (unaudited) Total comprehensive income for the period attributable to: Owners of the Company 801,198 902,998 Non-controlling interests 102,710 137,385 903,908 1,040,383 Earnings per share 10 – Basic (RMB cents) 72.80 82.43 – Diluted (RMB cents) 72.80 81.24
Page 5
– 5 – CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30 June 2025 30/06/2025 31/12/2024 Note RMB’000 RMB’000 (unaudited) (audited) Non-current Assets Property, plant and equipment 13,983,175 14,223,807 Right-of-use assets 1,313,229 1,338,989 Goodwill 499 499 Interests in associates 346,483 315,515 Equity instruments at FVTOCI 215,584 246,553 Deferred tax assets 996,979 917,023 Prepayments for acquisition of property, plant and equipment 315,152 252,118 Loan receivables 82,827 122,452 Pledged/restricted bank deposits 4,091,090 4,645,820 21,345,018 22,062,776 Current Assets Inventories 8,295,490 8,283,938 Properties under development for sale/properties for sale 1,070,069 1,009,158 Bills, trade and other receivables 11 5,738,203 4,581,076 Loan receivables 522,017 658,540 Amounts due from related parties 19,227 13,728 Debt instruments at FVTOCI 329,160 397,042 Financial assets at fair value through profit or loss (“FVTPL”) 3,294,036 1,510,436 Pledged/restricted bank deposits 5,203,066 7,624,484 Cash and cash equivalents 9,304,289 9,139,377 33,775,557 33,217,779
Page 6
– 6 – CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued) At 30 June 2025 30/06/2025 31/12/2024 Note RMB’000 RMB’000 (unaudited) (audited) Current liabilities Bills, trade and other payables 12 13,369,973 13,292,894 Amounts due to related parties 152,468 114,969 Derivative financial instruments 11,308 – Taxation liabilities 199,869 383,422 Borrowings – current portion 12,030,207 12,720,516 Lease liabilities 3,826 5,427 Provisions 499,614 500,550 Contract liabilities 2,565,033 2,254,577 28,832,298 29,272,355 Net Current Assets 4,943,259 3,945,424 Total Assets less Current Liabilities 26,288,277 26,008,200 Non-current liabilities Deferred tax liabilities 56,167 80,769 Borrowings – non-current portion 5,234,804 5,800,964 Lease liabilities 21,994 21,884 Deferred government grants 1,465,805 1,195,660 6,778,770 7,099,277 Net assets 19,509,507 18,908,923
Page 7
– 7 – CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued) At 30 June 2025 30/06/2025 31/12/2024 Note RMB’000 RMB’000 (unaudited) (audited) Capital and reserves Share capital 13 109,850 109,850 Share premium and reserves 16,675,508 16,050,716 Equity attributable to owners of the Company 16,785,358 16,160,566 Non-controlling interests 2,724,149 2,748,357 Total Equity 19,509,507 18,908,923
Page 8
– 8 – 1. BASIS OF PREPARATION The Company was incorporated and registered as an exempted company with limited liability in the Cayman Islands under the Companies Law of the Cayman Islands on 16 November 2004 and its shares are listed on The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) with effect from 11 June 2007. The Group’s condensed consolidated financial statements are presented in Renminbi (“RMB”), which is also the functional currency of the Company. The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 “Interim Financial Reporting ” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) as well as the applicable disclosure requirements of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange. 2. ACCOUNTING POLICIES The condensed consolidated financial statements have been prepared on the historical cost basis, except for certain financial instruments, which are measured at fair values. Other than additional accounting policies resulting from application of amendments to HKFRS Accounting Standards, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2025 are the same as those presented in the Group’s annual consolidated financial statements for the year ended 31 December 2024. Application of amendments to HKFRS Accounting Standards In the current interim period, the Group has applied the following amendments to a HKFRS Accounting Standard issued by the HKICPA, for the first time, which are mandatorily effective for the Group’s annual period beginning on 1 January 2025 for the preparation of the Group’s condensed consolidated financial statements: Amendments to HKAS 21 Lack of Exchangeability The application of the amendments to a HKFRS Accounting Standard in the current interim period has had no material impact on the Group’s financial positions and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.
Page 9
– 9 – 3. REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of revenue from contracts with customers Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) An analysis of revenue is as follows: Manufacturing business Lead-acid battery products 18,292,243 19,252,492 Renewable resources product 1,800,192 1,554,325 Lithium-ion battery products 501,247 182,549 Others 574,554 221,601 Trading 3,023,680 28,703,662 24,191,916 49,914,629 Geographical markets Mainland China 23,966,127 49,785,894 Others 225,789 128,735 24,191,916 49,914,629 Timing of revenue recognition A point in time 24,162,283 49,858,818 Over time 29,633 55,811 24,191,916 49,914,629
Page 10
– 10 – 4. SEGMENT INFORMATION The operation of the Group constitutes two operating and reportable segments, (1) manufacturing business and (2) trading, which are the same as those presented in the Group’s annual consolidated financial statements for the year ended 31 December 2024. The following is an analysis of the Group’s revenue and results by operating and reportable segments for the period: Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) Segment revenue Manufacturing business – external sales 21,168,236 21,210,967 – inter-segment sales – 21 Trading – external sales 3,023,680 28,703,662 – inter-segment sales 1,054,562 3,642,188 Segment revenue 25,246,478 53,556,838 Eliminations (1,054,562) (3,642,209) Group revenue 24,191,916 49,914,629 Segment result Manufacturing business 925,629 1,115,429 Trading 12,596 (37,282) 938,225 1,078,147 Unallocated Other gains and losses 4,059 (6,506) Share of results of associates (6,272) (620) Corporate administrative expenses (3,899) (3,259) Financial costs (9,635) (2,155) Profit for the period 922,478 1,065,607
Page 11
– 11 – 5. OTHER INCOME Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) Government grants – grants related to income (note i) 675,669 850,730 – grants related to assets (note ii) 43,378 33,786 Interest income 120,080 296,844 Income from sales of scrap materials 47,059 59,989 Dividend income 3,041 645 889,227 1,241,994 Notes: i. The government grants related to income mainly represent unconditional government subsidies received from relevant government bodies to encourage the operations of certain subsidiaries. The government grants are accounted for as immediate financial support with no future related costs expected to be incurred and are not related to any assets. ii. The government grants related to assets mainly represent government subsidies obtained in relation to the acquisition of land use right or equipment of certain subsidiaries of the Group, which were included in the condensed consolidated statement of financial position as deferred government grants and credited to profit or loss on a straight-line basis over the lease term of the land use right or the useful life of the equipment.
Page 12
– 12 – 6. OTHER GAINS AND LOSSES Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) Gains (losses) from changes in fair value of financial assets at FVTPL – structured bank deposits 34,417 8,301 – investments in listed equity securities 2,944 (7,865) – foreign currency forward contracts (15,811) (1,747) – commodity derivative contracts (21,544) 173,292 Loss on disposal of property, plant and equipment (8,659) (15,671) Net foreign exchange losses (2,382) (35,983) Others 15,094 13,783 4,059 134,110 7. INCOME TAX EXPENSE Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) People’s Republic of China (the “PRC”) Enterprise Income Tax (“EIT”) – Current tax 264,300 175,863 Deferred tax Current period (82,877) 125,446 181,423 301,309
Page 13
– 13 – 7. INCOME TAX EXPENSE (Continued) The Company was incorporated in the Cayman Islands and Tianneng International Investment Holdings Limited was incorporated in the British Virgin Islands (the “BVI”) and as such are tax exempted as no business carried out in the Cayman Islands and the BVI under the tax laws of the Cayman Islands and the BVI, respectively. The subsidiaries of the Company operating in Hong Kong did not have tax assessable profit during both periods. The income tax expense of the Group is recognised based on the PRC EIT rate of 25% during both periods. Certain subsidiaries of the Group were accredited as High-tech companies and enjoyed a tax rate of 15%. 8. PROFIT FOR THE PERIOD Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) Profit for the period has been arrived at after charging: Depreciation of property, plant and equipment 611,529 521,925 Depreciation of right-of-use assets 17,635 17,252 Total depreciation 629,164 539,177 Capitalised in inventories (454,387) (391,294) 174,777 147,883 Impairment losses recognised on property, plant and equipment included in cost of sales – 138,086 Write-down of inventories (included in cost of sales) 72,562 44,963
Page 14
– 14 – 9. DIVIDENDS Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) Dividends declared during the period: 2024 final dividend of Hong Kong dollar (“HK$”) 17.00 cents (equivalent to RMB15.66 cents) per ordinary share 176,406 – 2023 final dividend of HK$43.00 cents (equivalent to RMB39.15 cents) per ordinary share – 440,832 176,406 440,832 The directors did not recommend the payment of an interim dividend for the six months ended 30 June 2025 and 30 June 2024. 10. EARNINGS PER SHARE Six months ended 30 June 2025 2024 RMB’000 RMB’000 (unaudited) (unaudited) Earnings: Earnings for the purposes of calculating basic and diluted earnings per share – attributable to owners of the Company 819,768 928,222 Six months ended 30 June 2025 2024 (unaudited) (unaudited) Number of shares: Weighted average number of ordinary shares for the purpose of calculating basic earnings per share 1,126,124,500 1,126,124,500 Effect of dilutive potential ordinary shares – share options – 16,399,613 Weighted average number of ordinary shares for the purpose of calculating diluted earnings per share 1,126,124,500 1,142,524,113
Page 15
– 15 – 11. BILLS, TRADE AND OTHER RECEIV ABLES 30/06/2025 31/12/2024 RMB’000 RMB’000 (unaudited) (audited) Bills receivables* 1,974,827 1,929,737 Trade receivables 2,418,790 1,769,237 Less: Allowance for credit losses (245,960) (233,315) 2,172,830 1,535,922 Other receivables 194,850 158,681 Less: Allowance for credit losses (51,440) (51,020) 143,410 107,661 Prepayments for materials 312,705 217,938 PRC value added tax and EIT recoverable 1,134,431 789,818 5,738,203 4,581,076 * The balance represents bills receivables held by the Group which is measured at amortised cost since the bills are held within a business model whose objective is to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest on the principal amount outstanding. Bills receivables held by the Group as at 30 June 2025 will mature within 1 year. For manufacturing business, the normal credit term is 45 to 90 days upon delivery. For trading business, customers are normally required to make full prepayment before goods delivery. The following is an aged analysis of trade receivables net of allowance for credit losses presented based on the invoice date.
Page 16
– 16 – 11. BILLS, TRADE AND OTHER RECEIV ABLES (Continued) 30/06/2025 31/12/2024 RMB’000 RMB’000 (unaudited) (audited) 0 to 45 days 1,524,032 916,782 46 to 90 days 481,035 389,176 91 to 180 days 42,846 57,194 181 to 365 days 48,932 22,401 1 year to 2 years 53,121 141,784 Over 2 years 22,864 8,585 2,172,830 1,535,922 12. BILLS, TRADE AND OTHER PAYABLES 30/06/2025 31/12/2024 RMB’000 RMB’000 (unaudited) (audited) Trade payables 2,650,968 2,398,507 Bills payables 6,526,363 6,808,120 Value added tax payables and other tax payables 753,056 663,854 Staff salaries and welfare payables 423,311 519,600 Payables for purchase of property, plant and equipment 1,472,018 1,759,105 Accrued charges 661,786 567,859 Deposits payables 612,180 363,335 Other payables 270,291 212,514 13,369,973 13,292,894
Page 17
– 17 – 12. BILLS, TRADE AND OTHER PAYABLES (Continued) The following is an aged analysis of trade payables, presented based on invoice date at the end of the reporting period: 30/06/2025 31/12/2024 RMB’000 RMB’000 (unaudited) (audited) 0 – 90 days 2,182,338 1,970,491 91 – 180 days 235,786 162,061 181 – 365 days 100,914 148,593 1 – 2 years 39,918 35,861 Over 2 years 92,012 81,501 2,650,968 2,398,507 The following is an aged analysis of bills payables from issue date at the end of the reporting period: 30/06/2025 31/12/2024 RMB’000 RMB’000 (unaudited) (audited) 0 – 180 days 6,525,317 6,808,120 181 – 365 days 1,046 – 6,526,363 6,808,120
Page 18
– 18 – 13. SHARE CAPITAL Number of shares Amount RMB’000 Ordinary shares of the Company with nominal value of HK$0.10 each Authorised: At 1 January 2024 (audited), 30 June 2024 (unaudited), 1 January 2025 (audited) and 30 June 2025 (unaudited) 2,000,000,000 212,780 Issued and fully paid: At 1 January 2024 (audited), 30 June 2024 (unaudited), 1 January 2025 (audited) and 30 June 2025 (unaudited) 1,126,124,500 109,850 14. SHARE-BASED PAYMENTS Share options scheme The Company has a share options scheme (the “Scheme”) for eligible directors of the Company, eligible employees of the Group and other selected participants which was expired during the six months ended 30 June 2024. No options were exercised during the six months ended 30 June 2024. During the six months ended 30 June 2024, no expense was recognised in relation to share options granted by the Company under the Scheme.
Page 19
– 19 – 14. SHARE-BASED PAYMENTS (Continued) Share award scheme of a subsidiary of the Company Pursuant to the shareholders’ resolution approved on 23 May 2019, Tianneng Share adopted a share award scheme for eligible senior management and eligible employees of Tianneng Share and its subsidiaries (the “Selected Employees”) (the “Share Award Scheme”). The objective of the Share Award Scheme is to recognise the contribution by the Selected Employees and to provide them with incentives in order to retain them for the continuing operation and development of Tianneng Share and its subsidiaries. According to the Share Award Scheme, 41,200,000 shares of Tianneng Share were granted to certain limited partnerships (the “Limited Partnership”), which were legally owned by Zhejiang Tianneng Commercial Management Co., Ltd. (“Tianneng Commercial”), a wholly owned subsidiary of the Group, and the Selected Employees and for the purpose of facilitating the purchasing, holding and selling of shares of Tianneng Share for the benefit of the Selected Employees. 13,959,000 shares have been subscribed at a price of RMB7.69 per share. These shares are restricted for sale until the fourth anniversary date after the initial public offering of Tianneng Share in A-share market (the “Qualified IPO”) which was completed in January 2021. Upon the expiry of the sale restriction of the awarded shares, the Limited Partnership shall dispose of the awarded shares at the prevailing market price and transfer the proceeds in relation to the awarded shares to the respective Selected Employees. If the Selected Employees resigned before the expiry of restriction of the awarded shares, they are required to sell back the awarded shares at a share price of RMB7.69 plus interest at 115% of the benchmark lending rate of peer loan issued by the People’s Bank of China. The fair value of restricted shares granted on 23 May 2019 amounted to approximately RMB71,367,000. During the current interim period, an expense of approximately RMB750,000 (six months ended 30 June 2024: RMB2,107,000) was recognised by the Group in relation to restricted shares granted by Tianneng Share under the Share Award Scheme.
Page 20
– 20 – MANAGEMENT DISCUSSION AND ANALYSIS COMPANY PROFILE Tianneng Power International Limited (the “Company”, together with its subsidiaries, collectively referred to as the “Group” or “Tianneng“), founded in 1986 and headquartered in the People’s Republic of China (the “PRC” or “China”), has become a leading company in the new-energy battery industry and electric two-wheelers battery industry with its comprehensive manufacturing system and technological advantages. In 2007, the Company was listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) (Stock Code: 00819.HK). After nearly four decades of development, the Group has established lead-acid batteries as its core business, deeply engaging in the motive battery market for light electric vehicles while expanding into diverse fields such as uninterruptible power supply (“ UPS”), automotive batteries, and industrial motive batteries. To comprehensively build a future-oriented new energy ecosystem, the Group, while maintaining its core business advantages, actively advances the research and development (“R&D”), production, and sales of lithium-ion (“Li-ion”) batteries, solid-state batteries, hydrogen fuel cells, and sodium-ion batteries, leveraging a multi-technology product matrix to cover diverse new energy application scenarios. Concurrently, the Group is developing a circular economy industry chain, relying on the recycling of waste lead-acid batteries and waste Li-ion batteries to promote efficient resource regeneration. OPERATION REVIEW During the six-month period ended 30 June 2025 (the “Reporting Period”), the Group, focusing on the characteristics of the new development phase, proactively adapted to changes in the international environment and industrial landscape adjustments. It consistently adhered to the core development philosophy of strategic guidance, reform breakthrough, coordinating the three-pronged approach of “industry, technology, and capital”. While reinforcing the core competitiveness of its lead-acid battery business, the Group accelerated the layout of its new energy business, deepened the construction of its circular economy system, and simultaneously expanded its overseas markets, driving comprehensive and sustainable business development. Through the deep integration of strategic initiatives and structural reforms, the Group significantly enhanced its market competitiveness and industry influence, laying a solid foundation for long- term development resilience.
Page 21
– 21 – The lead-acid battery business remains the strategic cornerstone and stable pillar of the Group’s ongoing operations. Leveraging its core business advantages, the Group has advanced its intelligent manufacturing upgrade, refined its operational management system, and strengthened its sales network, driving continuous improvements in product quality and overall market competitiveness, thereby reinforcing the resilience of the lead-acid battery business in a complex market environment. Building on iterative advancements in battery technology, the Group has enhanced its adaptability in the light electric vehicle market while expanding into sub-segments such as UPS, automotive batteries, and industrial motive batteries. This systematic approach has established a differentiated market layout and multi-dimensional competitive barriers, creating broader value space for future growth. The new energy technology matrix serves as the Group’s growth momentum and innovation engine in response to the energy transition. The Group actively expands the application of diversified technology routes, promoting key technological breakthroughs and targeted market expansion for Li-ion batteries. Through strengthened technological innovation, enriched product matrices and scenario-based solutions, the Group has achieved application expansion in sub-segments such as UPS and energy storage systems (“ESS”), low-speed motive batteries and motive batteries for special industrial vehicles, while simultaneously advancing the R&D, and industrialization of solid-state batteries, hydrogen fuel cells and sodium-ion batteries. Through the promotion of key projects, the Group has accumulated valuable experience in the integration of new energy battery technologies and multi-scenario collaborative applications, enhancing its business scalability and implementation capabilities. The circular economy is a key pillar in the Group’s efforts to build a sustainable value system. As a leading enterprise in China’s recycling industry, the Group has established a standardized recycling and processing system. Leveraging its large-scale processing capabilities and business synergy advantages, the Group promotes the efficient utilization of waste battery resources, achieving industry-leading recovery rates for key materials. The Group has developed an efficient and intensive circular economy industry chain, successfully creating a national-level circular economy demonstration project. The Group has delivered replicable circular economy models and practical standards, thereby deeply fulfilling its corporate social responsibility.
Page 22
– 22 – The internationalization strategy is a critical pivot for the Group to enhance its global competitiveness and achieve incremental growth. During the Reporting Period, the Group, guided by local market demands, accelerated its international market expansion by leveraging domestic and overseas industrial resources. The Group has deployed localized operational teams in Thailand, Vietnam, Turkey, and other countries, developed dozens of authorized distributors, and expanded its sales network to cover major countries in Asia-Pacific, Europe, America, the Middle East and Africa. The construction of the production base in Vietnam progressed steadily, with the assembly base’s capacity fully unleashed. Through a tailored “one country, one strategy” market approach, the Group systematically built a distributor network and after-sales system covering key global markets. Based on its deep technological expertise and extensive industry experience in the sustainable energy sector, the Group maintains strong confidence in the growth of its international business. INDUSTRY DEVELOPMENT AND OPERATION During the Reporting Period, the Group’s manufacturing business recorded an operating income of approximately RMB21,168 million. The industry development and operating conditions for each main business are as follows: (1) High-end Eco-friendly Batteries High-end eco-friendly batteries are sealed, maintenance-free lead-acid battery products developed by the Group through R&D and technological innovation, including a series of products such as eco-friendly motive batteries, UPS, automotive batteries, and motive batteries for special industrial vehicles. During the Reporting Period, the Group’s high-end eco-friendly battery business recorded an operating income of approximately RMB18,292 million. 1. Eco-friendly Motive Batteries Eco-friendly motive batteries are one of the key products of the Group’s lead-acid battery business, widely applied in fields such as light electric vehicles, and represented a significant source of the Group’s revenue.
Page 23
– 23 – Lead-acid batteries are deeply tailored to meet the demands of the light electric vehicle market, serving as the mainstream power solution in this sector. According to the 2025 China Two-Wheeled Electric Vehicle Industry Research Report by iResearch, the ownership of two-wheeled electric vehicles in China reached over 420 million units, with stable replacement demand. The implementation of the Safety Technical Specification for Electric Bicycle (GB 17761-2024) in 2025 has driven the phase-out of outdated production capacity through upgraded technical standards, further reinforcing the scale barriers and technological first-mover advantages of leading enterprises. During the Reporting Period, the Group focused on the synergistic advancement of production efficiency enhancement, technological iteration, and market strategy deployment, laying a solid foundation for the high-quality development of its lead-acid battery business. Through the comprehensive adoption of the intelligent manufacturing system across all production bases and the upgrading of equipment technology, the Group effectively enhanced manufacturing efficiency and supply chain assurance capabilities, with cost control benefits gradually becoming evident and product cost competitiveness continuously strengthening. During the Reporting Period, the Group fully advanced the construction of intelligent factories at production bases in Zhejiang, Jiangsu, and Henan provinces, deeply integrating 5G, Internet of Things, and artificial intelligence technologies to achieve end-to-end digital and intelligent upgrades. Leveraging its independently developed intelligent manufacturing cloud platform and multi-scenario intelligent solutions, the Group established and promoted an industry-leading standard system for intelligent factories. Notably, the production base in Puyang City, Henan Province, was successfully recognized as a national level “5G Factory”, demonstrating significant competitive advantages. In response to the diversified evolution of consumption scenarios, the Group established an R&D strategy of “consolidating core strengths, enhancing technological iteration, and refining cutting-edge pre-research”. The Group fully leveraged the synergistic capabilities of top-tier innovation platforms, including the “National Level Enterprise Technology Center”, “National Level Postdoctoral Research Workstation”, “National Demonstration Academician and Expert Workstation”, and “Provincial Key Enterprise Research Institute”, to drive iterative upgrades in product performance. Meanwhile, the Group innovated around user needs to develop multiple product series, building a differentiated product matrix covering scenarios such as two-wheeled electric vehicles, three-wheeled electric vehicles, and low-speed four-wheeled vehicles.
Page 24
– 24 – At the market level, the Group capitalized on its leading brand advantage in the industry, reinforcing product leadership and driving upgrades to a user-value-centered service system, deeply integrating traditional distribution networks with innovative digital ecosystems. By the end of the Reporting Period, the Group had over 3,000 distributors, covering more than 400,000 end-user stores and serving hundreds of millions of light electric vehicle users. In the realm of marketing model innovation, the Group pioneered the industry by establishing the online-offline integrated user service platform, connecting scenarios such as maintenance, repair, testing and evaluation. By leveraging digital tools to empower marketing, the Group supported its partners in achieving refined operations, successfully creating an efficient value chain. This enabled effective synergy across products, sales, and services, significantly enhancing channel efficiency and market competitiveness. In terms of global expansion, the Group actively embraced the rapid growth opportunities in the global energy market, accelerating the development of the international business network covering Southeast Asia, Europe, Africa, and other regions. During the Reporting Period, overseas business achieved breakthrough growth, with consistent positive market feedback. The construction of the Vietnam base progressed in an orderly manner, laying the foundation for regional penetration. The Group focused on tailoring localized products to meet diverse demands, developing localized channels and operational teams. Concurrently, the Group advanced its “service globalization” strategy, systematically building localized service standard systems, optimizing the global supply chain, and unleashing growth momentum. 2. Other High-End Eco-Friendly Batteries Lead-acid batteries, leveraging their comprehensive cost and performance advantages, are widely applied across multiple fields, including UPS, automotive batteries, and motive batteries for special industrial vehicles. (1) UPS In the first half of 2025, driven by multiple factors such as the energy structure transition and accelerated development of computing infrastructure, the UPS market has rapidly expanded. Lead-acid batteries, with their significant cost advantages and operational stability, have deeply penetrated scenarios such as telecommunications base stations and data centers. The Group seized industry opportunities, steadily expanding the application depth of lead-acid batteries in the UPS sector.
Page 25
– 25 – During the Reporting Period, benefiting from orderly capacity release and refined operational management, the UPS business exhibited stronger-than- expected growth. The Group continuously optimized material formulations and manufacturing processes, driving comprehensive improvements in product performance and forming a product matrix tailored to multiple application scenarios. Market expansion efforts yielded significant results, with key order deliveries completed. Internationalization efforts also accelerated, actively engaging with leading overseas enterprises to build a global cooperation network. (2) Others The Group’s automotive battery business focuses on vehicle power system solutions, encompassing the R&D, manufacturing, and marketing of core product categories such as starter batteries and start-stop batteries. Driven by the core principles of “new technology development, new material applications, and new product innovation”, the Group has achieved breakthroughs in multiple key performance indicators, positioning its key technologies at a leading level in China. During the Reporting Period, the Group made significant strides in business expansion, establishing deep strategic partnerships with existing and new clients, and continuously deepening supply chain penetration. Concurrently, the Group optimized its nationwide service network around the full product lifecycle, adding over 100 secondary distributors. Meanwhile, the Group deepened its dual strategy of “product iteration” and “horizontal market expansion”, progressively expanding its industrial battery portfolio. In terms of product iteration, the Group leveraged industry-leading technological upgrades to develop batteries featuring core advantages such as “high energy density, long cycle life, and fast charging-discharging”, fulfilling the needs of forklifts, automated guided vehicles (hereinafter referred to as “AGVs”), and intelligent warehousing equipments. In terms of market expansion, the Group served leading enterprises in the construction machinery industry while accelerating its globalization strategy, partnering with international collaborators to jointly explore markets in Europe and Asia and injecting new momentum into business growth.
Page 26
– 26 – (2) New Energy Batteries The Group is firmly committed to the direction of new energy development, systematically advancing R&D, intelligent manufacturing, and application scenario expansion across diverse technology roadmaps, including Li-ion batteries, solid-state batteries, hydrogen fuel cells, and sodium-ion batteries, to accelerate the cultivation of new growth momentum for its business. 1. Li-ion Batteries The Group’s Li-ion battery business primarily focuses on the fields including ESS and low-speed motive. In the ESS field, the Group has gradually established a project delivery system covering power generation-side, grid-side, and user-side energy storage, building on its capabilities in cell manufacturing and system integration. In the low-speed motive and other fields, the Group serves niche markets such as low- speed electric vehicles and motive batteries for special industrial vehicles, expanding product adaptability and solutions. During the Reporting Period, the Group enhanced its technological foundation and project execution capabilities, significantly improving the operational quality and efficiency of its Li-ion battery business, achieving an operating income of approximately RMB501 million. In the first half of 2025, the Group proactively integrated into the broader trend of energy transformation, steadfastly implementing its “high-technology, multi-scenario, full-ecosystem” development strategy. The Group coordinated advancements in technological innovation, scenario expansion, and overseas market development, unleashing the growth momentum of its Li-ion battery business. During the Reporting Period, the ESS and low-speed motive segments achieved both quantitative leaps and qualitative improvements. Meanwhile, the Group expanded incremental market space in sub-segments such as industrial motive batteries and in-vehicle air conditioning batteries, driving significant overall revenue growth and markedly improving capacity utilization. Facing challenges such as manufacturing cost fluctuations and accelerated delivery schedules, the Group anchored its efforts on the four-dimensional goals of “ensuring supply, reducing costs, improving quality, and controlling risks”. Through optimized resource allocation and lean process management, the Group enhanced its operational resilience and delivery capabilities in complex environments.
Page 27
– 27 – The Group consistently regards technological innovation as the core engine for driving sustainable business growth and strengthening the full-chain innovation of Li-ion batteries-encompassing materials, cells, systems, and applications-to build a technological system that supports diverse scenarios, thereby further enhancing product performance, adaptability and safety and steadily reinforcing its technological barriers. Focusing on application scenarios such as green mobility, new energy storage, industrial and commercial applications, and low-altitude economy, the Group delivered reliable solutions. In the ESS field, the Group led the construction of multiple industrial, commercial, and user-side projects, achieving end-to-end independent R&D from project development to operation and maintenance. In the commercial vehicle field, Li-ion air conditioning batteries for trucks, covering starter, start-stop and in-vehicle air conditioning systems, gained strong market recognition. In the field of motive batteries for special industrial vehicles, the Group’s battery products, with advantages such as high-rate performance and high energy density, significantly enhanced the single-charge endurance of equipment like electric forklifts and AGVs. During the Reporting Period, the Group deepened its core market layout, achieving sales breakthroughs in multiple niche market segments. In the ESS and UPS sectors, the Group successfully delivered multiple projects and engaged in cooperative partnerships with several key clients, gradually expanding market opportunities. In the low-speed power sector, the Group served certain vehicle manufacturers and battery- swapping platforms while leveraging its existing sales channels to drive tangible sales. In terms of internationalization, the Group advanced its brand and ecosystem globalization, leveraging international professional exhibition platforms to promote core products and accelerate entry into overseas markets. Concurrently, the Group deepened strategic collaborations with international research institutions and industry associations, focusing on building a global ecosystem encompassing technical standards, service networks, and industrial synergies. Adhering to a long-term development philosophy, the Group forges robust capabilities through innovation and builds team expertise through practical experience, accumulating valuable insights in product iteration, project construction and market expansion to strengthen its foundation. The Group maintains firm confidence in the long-term value of its Li-ion battery business, adopting a strategically focused perspective to plan for the future, setting clear growth targets, creating value for customers, and injecting momentum into the industry.
Page 28
– 28 – 2. Solid-State Batteries As the global market demand for high-performance batteries continues to rise, solid- state batteries are expediting the industrialization process with their significant technological advantages. The Group has led and participated in the formulation of multiple international, national, and industry standards in the technological R&D of solid-state batteries. The Group achieved significant breakthroughs in three key product directions, namely high specific energy, long cycle life, and high-rate performance. During the Reporting Period, the Group made significant strides in the industrialization process of the solid-state battery. The new-generation battery, launched for the light electric vehicle sector, has garnered widespread industry attention due to its superior safety and high energy density. The low-temperature performance of the new- generation battery was significantly improved compared to traditional solutions, and when paired with a fast-charging system, it effectively reduced charging time. The Group has established strategic partnerships with leading two-wheeled vehicle enterprises. Concurrently, the Group introduced solid-state batteries for low-altitude sector. The Group collaborated with drone and robotics companies to advance scenario-based solution validation. Additionally, the Group actively participated in the 2025 China International Battery Fair (“CIBF”) and other exhibitions and forums, conducting thematic exchanges and completing product launches, steadily enhancing its industry influence. 3. Hydrogen Fuel Cells In the first half of 2025, the global hydrogen energy industry entered a critical development phase. The China Hydrogen Energy Development Report (2025) designated this year as a pivotal year for achieving an “economic inflection point”. With a full-chain, forward-looking R&D system and led by a team of over 100 experts, including national-level talents and seasoned fuel cell industry professionals, the Group has adopted “technological excellence and scenario innovation” as its driving force. During the industry’s incubation period, the Group has built substantial development momentum.
Page 29
– 29 – On the technological front, the Group’s 80kW/130kW fuel cell systems and 100kW graphite bipolar plate stack have achieved domestically advanced performance levels. It demonstrated strong performance advantages in zero-carbon transportation scenarios such as public buses and logistics, serving as an exemplary case of technological breakthroughs in the industry. On the product front, the Group steadily advanced the deployment of core products, achieving small-batch delivery of various critical components and initiating iterative development of high-power systems and fuel cell stacks. On the market front, the Group’s customer ecosystem was steadily optimized, with the Group actively expanding its cooperation network with vehicle manufacturers, logistics companies, and shared mobility platforms, significantly enhancing the breadth and depth of market coverage. The Group has secured orders for fuel cell buses in multiple regions and bulk orders for hydrogen-powered two-wheelers. The Group focused on application demonstrations and actual operating conditions verifications in scenarios involving heavy-duty trucks and special construction machinery. 4. Sodium-ion Batteries With its wide temperature adaptability and resource endowment advantages, sodium- ion battery is seen as a potential supplement to the new energy system. During the Reporting Period, the Group seized policy and market opportunities and adhered to a dual-track approach of “technological breakthroughs” and “scenario implementation”, continuously deepening the strategic R&D and application layout of sodium-ion battery. The Group followed a strategy of “technological reserve, scenario validation, and steady advancement”, focusing on technological breakthroughs in respect of the cell, module, and system. Building on the technological foundation and product experience accumulated in the motive and ESS field, the Group further concentrated on the automotive starter and start-stop system. Leveraging the broad channel network, it deepened various application demonstrations and marketing promotions. During the Reporting Period, the R&D of new products, such as square cells for sodium- ion batteries, has been accelerated, providing solid technical support for expanding applications across multiple scenarios. The sodium-ion automotive battery products were showcased at exhibitions like CIBF, receiving positive market feedback for their excellent low-temperature performance.
Page 30
– 30 – Currently, the Group has been continuously solidifying the foundation for the development of sodium-ion battery business in line with industry principles, aiming to build a strategic ecosystem of diversified technological synergy that provides strong support and growth momentum for the sustainable and steady development of its business. (3) Recycling Industry The Group focuses on the battery industry, systematically building a full lifecycle industry chain that integrates production, recycling, and reuse. It has established a dual-track recycling system for lead-acid batteries and lithium-ion batteries, achieving efficient resource regeneration and utilization. During the Reporting Period, the Group’s recycling industry recorded an external operating income of approximately RMB1,800 million. 1. Recycling of High-End Eco-Friendly Batteries As a globally leading manufacturer of lead-acid batteries and one of the recyclers of waste lead-acid batteries in terms of scale, the Group remains committed to the effective utilization of resources, continuously refining the systematic layout of its lead-acid battery recycling business and strengthening the synergistic linkage between resource recycling and its core operations. Despite industry challenges such as overcapacity and profitability pressures, the Group’s recycling business maintained strong resilience in capacity organization, network coverage, and internal synergies, providing robust support for achieving sustainable development goals. During the Reporting Period, the Group’s lead-acid battery recycling business achieved an external operating income of approximately RMB1,375 million. Against the backdrop of the deepening “Dual Carbon” goals and the systematic upgrading of the resource recycling strategy, the Group’s lead-acid battery recycling business demonstrated efficient operations, leveraging its four circular economy industrial bases and over 15 years of industry expertise. The Group has established an annual recycling and processing capacity of over a million tonnes for waste lead-acid batteries, positioning it at a relatively leading level in the industry. Benefiting from close synergy with the Group’s battery manufacturing business and efficient linkage with its existing channel system, capacity utilization remained at a high level.
Page 31
– 31 – In terms of channel, the Group deepened its waste lead-acid battery recycling network. By the end of the Reporting Period, the Group held recycling pilot qualifications in provinces including Zhejiang, Jiangsu and Anhui and cooperated with over 300 recycling outlets covering a number of provinces nationwide. Through a dual-driven model of socialized recycling network and digital management platform, the Group further densified its resource acquisition network. By leveraging its battery sales network and after-sales system, the Group actively developed a sustainable circular economy industry chain. This layout not only enhanced raw material acquisition capabilities but also improved service response efficiency and regional coordination. Technological innovation remains the Group’s core competitive strength. The Group has established a relatively comprehensive recycling and processing workflow, covering pretreatment, crushing and sorting, smelting and purification, exhaust gas treatment, and wastewater purification, with a high level of automation. Through the application of proprietary technologies, such as side-blown furnace processes for capacity enhancement and cost reduction, and refining lead and tellurium removal, the Group achieved dual breakthroughs in production efficiency and cost optimization. Through years of technological upgrades and process iterations, the metal recovery rate and energy utilization rate of the Group’s lead-acid battery recycling business reached relatively superior levels in the industry. As industry standards rise and regulatory oversight intensifies, inefficient production capacities will face elimination pressures, while enterprises with scale, channel networks, and environmental compliance capabilities are poised to maintain a relative advantage in the new round of competition. The Group will continue to leverage its business synergies, technological foundation, and network system advantages, deepen front-end channel development, steadily advance production line optimization, prudently respond to external market changes, and expand the value integration space of the industry chain.
Page 32
– 32 – 2. Recycling of Li-ion Batteries The Group places importance on the development of the Li-ion battery recycling and utilization system, actively responding to waste battery management policies and steadily transitioning its resource recycling system from “orderly layout” to “high- quality operations”. During the Reporting Period, the Group made systematic progress in its Li-ion battery recycling business, advancing process improvements, production line enhancements, channel development, and customer expansion. This has led to the establishment of the operational system with processing capabilities and exemplary value, achieving an operating income of approximately RMB425 million. In February 2025, the State Council Executive Meeting of the PRC reviewed and approved the Action Plan for Improving the New Energy Vehicle Power Battery Recycling and Utilization System. In June 2025, the General Office of the Ministry of Ecology and Environment of the PRC issued the Notice on Regulating the Import Management of Recycled Black Masses and Recycled Steel Raw Materials for Lithium-ion Batteries, marking the first time imports of recycled black masses were permitted. According to forecasts by Zhongshang Industry Research Institute, the scale of retired motive batteries in China is expected to reach 1.04 million tonnes by 2025, with a minor peak in retirements expected between 2025 and 2027, and will reach 3.50 million tonnes by 2030. The systematic policy support and vast market growth potential provide strong momentum for the sustainable development of the Group’s Li- ion battery recycling industry. In terms of the recycling technology system, the Group has established a comprehensive technical framework, covering retired Li-ion batteries performance testing, crushing and sorting, pyrolysis enrichment, deep reduction, and high-efficiency separation. This system achieves recovery rates of over 98.5% for cobalt, nickel, and manganese, and over 92% for lithium, placing it at an industry-leading level. During the Reporting Period, the Group’s independently developed “Method and Device for Copper- Aluminum Sorting of Waste Li-ion Batteries” received national patent authorization, achieving a qualitative leap in copper-aluminum sorting efficiency and precision, setting a new industry benchmark for intelligent sorting. Through collaboration with research institutions such as the Institute of Process Engineering of the Chinese Academy of Sciences and Central South University, the Group deepened industry- academia-research joint efforts to tackle key technologies. The project “Key Technologies and Applications for High-Value Clean Recycling of Retired Ternary Power Batteries” received the Zhejiang Science and Technology Progress Award. Additionally, the Group was recognized as the “National Patent Industrialization Sample Enterprise” and the “Green Factory”.
Page 33
– 33 – In terms of recycling capacity development, the Group focused on standardization, scale, and environmental compliance, promoting the orderly implementation of base projects and has achieved a processing capacity of more than 70,000 tonnes, with capacity utilization exceeding the industry average and operational efficiency continuing to improve steadily. The Group independently developed multiple targeted processing pathways for different battery types, achieving breakthroughs in hydrometallurgical methods. Its products meet the requirements of mainstream customers, demonstrating stable batch delivery capabilities. The Group has passed the system certification of several key customers and established preliminary cooperation with them, enhancing market recognition. Regarding recycling channel development, the Group continued to strengthen full-chain resource synergy and deepen channel expansion, efficiently integrating upstream and downstream resources. In 2025, the Group actively advanced its urban mining project strategy, establishing integrated wet and dry processing bases, regional recycling bases, and recycling outlets to build a comprehensive recycling network covering key regions. In terms of channel expansion, the Group explored diverse models such as reverse recycling through outlets, collaboration with ride- hailing platforms, and integration with battery-swapping networks to enhance end- point recycling efficiency. Concurrently, the Group actively pursued cooperative engagements with vehicle manufacturers, battery dismantling enterprises, and insurance institutions, exploring feasible pathways for targeted recycling mechanisms to broaden recycling sources and strengthen front-end resource acquisition capabilities, thereby building momentum for the development of its Li-ion battery recycling business. Facing the early-stage development of the Li-ion battery recycling industry and its overall profitability pressures, the Group maintains strategic focus, prioritizing foundational capacity building. It strives to gradually unleash the environmental value and economic value of its recycling business as the industry moves toward standardization, policy refinement, and economies of scale.
Page 34
– 34 – STRATEGIC PLANNING AND DEVELOPMENT DIRECTION The Group will steadfastly implement its development philosophy of strategic guidance, reform breakthrough, anchoring on the three-pronged approach of “industry, technology, and capital” to build a four-dimensional development system encompassing “technological innovation leadership, intelligent manufacturing upgrades, circular ecological synergy, and global market expansion”. The Group aims to consolidate the core business advantages of its lead-acid battery business, accelerate the R&D, application, and market expansion of new energy battery technologies such as Li-ion batteries and solid-state batteries, advance battery recycling and resource regeneration capabilities, and enhance the integration and synergy efficiency of the industry chain. Concurrently, the Group accelerates its overseas market layout and localized operational capacity building, extending toward manufacturing and service systems, and develops into a company that is competitive with a global vision. Multi-technology synergy, building an innovation engine for leading change. The Group will focus on the synergistic development of multiple technology roadmaps, including “lead, lithium, solid- state, hydrogen, and sodium”, systematically strengthening independent innovation capabilities across “materials, cells, systems, and scenarios”. It will prioritize key technological directions such as solid-state batteries and hydrogen fuel cell stacks, steadily advancing the R&D reserves, and application transformation of these technologies. Simultaneously, the Group will deepen industry-academia-research collaborations with top-tier research institutions, actively participate in the formulation of core technical standards, strengthen its innovation foundation, and enhance the forward-looking and systematic nature of its technology system to support the long-term development of emerging businesses. Digital and intelligent upgrades, solidifying the core pillar for high-quality development. The Group will regard intelligent manufacturing as a key strategic direction, steadily advancing the upgrading of full-process digital management systems. It will apply new manufacturing models such as “5G factories” to achieve improvements in production efficiency and energy utilization. The Group will also promote the application of clean power and the development of a carbon asset management system, optimizing the environmental performance of manufacturing processes. The integrated application of cutting-edge technologies and business processes will drive the enhancement of supply chain synergy and operational improvement, providing robust support for the sustainable development of the manufacturing system.
Page 35
– 35 – Circular economy system, driving intrinsic momentum for value reshaping. The Group is committed to establishing an efficient recycling network with robust front-end reach and back- end processing efficiency, promoting the dual-track operation of lead-acid battery and Li-ion battery recycling. It aims to streamline the full process from collection, processing, and reuse, enhancing the integration and operational precision of lead-acid battery recycling channels while strengthening differentiated pathway layouts for Li-ion battery recycling, deepening core regions and key scenarios for resource synergy. By tapping into technological potential and optimizing system performance, the Group will gradually unlock the scale advantages and economic value of its circular system, injecting lasting momentum into the industry. Globalization strategy, expanding the boundaries of sustained growth. The Group positions globalization as a driving force for growth, focusing on the penetration and implementation of its competitive industries in key regions. The Group is accelerating the development of localized manufacturing, service, and operational systems in strategic markets such as Vietnam, systematically advancing product adaptation, channel development, and brand penetration to steadily enhance global resource allocation capabilities and service response efficiency. Simultaneously, the Group is committed to promoting its proprietary technologies and competitive products to international markets and gradually integrating into the global industry system. Leveraging its deep engineering capabilities and industry expertise, the Group will accelerate the refinement of its overseas layout to enhance global competitiveness. The Group firmly believes that it will consolidate its leading edge in the fiercely competitive industry. Upholding its core philosophy of “providing sustainable solutions for global green energy”, the Group will drive industry upgrades through technology innovation, enhance operational efficiency through digitalization and intelligence, reshape value chains through ecosystem synergy, and unlock incremental growth through global expansion. This approach will foster the deep integration and mutual growth of corporate and societal value, thereby creating an innovative paradigm for sustainable, high-quality growth. FINANCIAL REVIEW Turnover The Group’s turnover for the Reporting Period was approximately RMB24,192 million, representing a decrease of approximately 51.53% as compared with the same period last year, mainly due to the decrease in turnover of trading business. Specifically, turnover from the manufacturing industry was RMB21,168 million, representing a decrease of approximately 0.20% as compared with the same period last year; turnover from trading was RMB3,024 million, representing a decrease of approximately 89.47% as compared with the same period last year.
Page 36
– 36 – Gross profit The gross profit for the Reporting Period was approximately RMB2,537 million, representing a decrease of approximately 0.34% as compared with the same period last year. Specifically, the gross profit margin of the manufacturing industry was approximately 11.93%, representing a decrease of approximately 0.20 percentage points as compared with the same period last year. It was mainly attributable to the decrease in gross profit margin of low-speed power batteries and industrial batteries. Other income The Group’s other income for the Reporting Period was approximately RMB889 million (for the six months ended 30 June 2024: approximately RMB1,242 million), representing a decrease of approximately 28.40% as compared with the same period last year. It was mainly attributable to the decrease in government subsidies and interest income. Distribution and selling expenses Distribution and selling expenses decreased to approximately RMB592 million for the Reporting Period from approximately RMB643 million in the same period last year, which was mainly attributable to the decrease in travelling fees and transportation fees. Administrative expenses Administrative expenses decreased to approximately RMB561 million for the Reporting Period from approximately RMB651 million in the same period last year, which was mainly attributable to the decrease in staff remuneration and office expenses. Research and development costs R&D costs remained substantially unchanged at approximately RMB942 million for the Reporting Period from approximately RMB942 million in the same period last year, which was mainly attributable to the Company’s continued investment in research and development to maintain its industry-leading technological position and support the launch of new products.
Page 37
– 37 – Finance costs Finance costs decreased to approximately RMB235 million for the Reporting Period from approximately RMB282 million in the same period last year, which was mainly due to the decrease in loan size and loan interest. Operating activities cash flow The net cash flow generated from operating activities of the Group changed to net cash inflow of approximately RMB891 million for the Reporting Period from net cash outflow of approximately RMB162 million in the same period last year. It was mainly attributable to the increase in the inventory scale and receivable management of the Group. As at 30 June 2025, the equity attributable to the owners of the Company amounted to approximately RMB16,785 million (31 December 2024: approximately RMB16,161 million). The Group’s capital structure is equity attributable to owners of the Company, comprising issued share capital, reserves and accumulated profits. As at 30 June 2025, the Group had total assets of approximately RMB55,121 million, which decreased by approximately 0.29% as compared with approximately RMB55,281 million as at 31 December 2024. Among them, the total current assets increased by approximately 1.68% to approximately RMB33,776 million and the total non-current assets decreased by approximately 3.25% to approximately RMB21,345 million as compared with the amount as at 31 December 2024. The increase in the current assets was mainly due to the increase in account receivables and value added tax received. The decrease in the non-current assets was mainly due to the decrease in restricted bank deposits. As at 30 June 2025, the total liabilities of the Group were approximately RMB35,611 million, which decreased by approximately 2.09% as compared with approximately RMB36,372 million as at 31 December 2024. Among them, the total current liabilities decreased by approximately 1.50% to approximately RMB28,832 million and the total non-current liabilities decreased by approximately 4.51% to approximately RMB6,779 million as at 31 December 2024. The decrease in the current liabilities was mainly due to the decrease in bills payable and short-term loans held by the Group. The decrease in the non-current liabilities was mainly due to the decrease in long- term borrowings.
Page 38
– 38 – As at 30 June 2025, the cash and bank balances of the Group (including pledged bank deposits and bank deposits) were approximately RMB18,598 million (31 December 2024: approximately RMB21,410 million), of which approximately RMB225 million and approximately RMB18 million are denominated in US dollars and Hong Kong dollars, respectively. As at 30 June 2025, the interest bearing borrowings and loan notes (together, “interest bearing loans”) of the Group with maturity of within one year amounted to approximately RMB12,030 million (31 December 2024: approximately RMB12,726 million). The interest bearing loans with maturity of more than one year amounted to approximately RMB5,235 million (31 December 2024: approximately RMB5,823 million). The interest bearing loans were approximately RMB17,265 million. The loans denominated in RMB had fixed interest rates ranging from approximately 2.11% to 5.50% (2024: approximately 2.22% to 5.50%) per annum. In conclusion, the borrowings of the Group as at 30 June 2025 remained at a healthy and controllable level. With unutilised credit facilities of approximately RMB25,215 million, the Group will take a cautious stance and maximise the interests of the shareholders and the Company in striking a balance between borrowings and funding utilisation. Moreover, with continuously improving the fund structure as its financial objective in the long run, the Group will optimise its loan structure with further use of long term loans. Pledge of assets As at 30 June 2025, the bank facilities and bank borrowings of the Group were secured by its bank deposits, bills receivables, property, plant and equipment, and land use rights. The aggregate net book value of the assets pledged amounted to approximately RMB11,085 million (31 December 2024: approximately RMB14,039 million). Gearing ratio As at 30 June 2025, the Group’s gearing ratio, defined as the percentage of the sum of current and non-current portions of interest bearing loans against the total assets, was approximately 31.32% (31 December 2024: approximately 33.55%). Exposure to exchange rate fluctuations As the Group’s operations were mainly conducted in China and the majority of its businesses were transacted in RMB, the Board is of the view that the Company’s operating cash flow and liquidity are not subject to significant foreign exchange rate risk.
Page 39
– 39 – Contingent liabilities The Group did not have any significant contingent liabilities as at 30 June 2025 (31 December 2024: Nil). Capital commitments The amount contracted for but not stated in the condensed consolidated financial statements in respect of the acquisition of property, plant and equipment as at 30 June 2025 was approximately RMB1,402 million (31 December 2024: approximately RMB1,592 million). EMPLOYEES AND REMUNERATION POLICIES As at 30 June 2025, the Group employed a total of 20,709 employees (30 June 2024: 21,929). Staff cost of the Group for the Reporting Period was approximately RMB1,335 million (for the six months ended 30 June 2024: approximately RMB1,601 million). The cost included basic salaries and staff benefits such as discretionary bonus, medical and insurance plans, pension scheme, unemployment insurance plan, etc. Competitive remuneration packages were offered to employees by the Group. The Group has adopted incentive programs to encourage employees’ performance and a range of training programs for the development of its staff. INTERIM DIVIDEND The Board does not recommend the payment of any interim dividend for the Reporting Period (for the six months ended 30 June 2024: Nil). SIGNIFICANT INVESTMENTS HELD There were no significant investments held by the Group as at 30 June 2025. FINANCIAL ASSETS AT FAIR V ALUE THROUGH PROFIT OR LOSS As at 30 June 2025, the Group’s financial assets at fair value through profit or loss mainly included unlisted financial products purchased from commercial banks. The following table summarises the Group’s financial assets at fair value through profit or loss as at 30 June 2025:
Page 40
– 40 – Issuer Product category Principal activities Investment cost/nominal value Fair value as at 30 June 2025 Percentage of total assets of the Company as at 30 June 2025 (RMB’000) (RMB’000) Luso International Structured deposit Banking services 300,000.00 300,000.00 0.54% ICBC Structured deposit Banking services 300,000.00 300,000.00 0.54% Guangfa Bank Wealth management product Banking services 300,000.00 300,000.00 0.54% EverGrowing Bank Wealth management product Banking services 200,000.00 200,000.00 0.36% Hua Xia Bank Wealth management product Banking services 100,000.00 100,000.00 0.18% CCB Wealth management product Banking services 200,000.00 200,000.00 0.36% BoCom Wealth management product Banking services 199,000.00 199,000.00 0.36% Bank of Jinhua Wealth management product Banking services 200,000.00 200,000.00 0.36% Minsheng Bank Wealth management product Banking services 100,000.00 100,000.00 0.18% Bank of Ningbo Wealth management product Banking services 200,000.00 200,000.00 0.36% Ping An Bank Wealth management product Banking services 300,000.00 300,000.00 0.54% Pudong Development Bank Wealth management product Banking services 13,000.00 13,000.00 0.02% China Merchants Bank Wealth management product Banking services 32,000.00 32,000.00 0.06% CITIC Bank Wealth management product Banking services 200,000.00 200,000.00 0.36% CITIC Securities Wealth management product Banking services 300,000.00 300,000.00 0.54% BOC Wealth management product Banking services 300,000.00 300,000.00 0.54% Listed company Equity securities listed in China 17,917.49 14,510.26 0.03% Listed company Equity securities listed in Hong Kong 29,035.94 29,526.24 0.05% Changxing Meishan Fumei Equity Investment Partnership (Limited Partnership) Equity investments Equity investments 6,000.00 6,000.00 0.01%
Page 41
– 41 – MATERIAL ACQUISITION AND DISPOSAL The Group has no material acquisition and disposal of subsidiaries, associates and joint ventures during the Reporting Period. DIRECTORS’ RIGHTS TO ACQUIRE SHARES OR DEBENTURES For details, please refer to note 14 to the condensed consolidated financial statements. IMPORTANT EVENT SINCE THE END OF THE REPORTING PERIOD Proposed Issuance of Corporate Bonds and Targeted Debt Financing Instruments by Subsidiaries of the Company in the PRC Tianneng Battery Group Co., Ltd.* (ʮ̡), a company established under the laws of the PRC with limited liability and an indirect subsidiary of the Company which is controlled by the Company as to approximately 86.53% and whose shares are listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange (“SSE”) (SSE stock code: 688819) (“Tianneng Share”), proposed to apply to the SSE for the registration and issuance of the corporate bonds of an aggregate principal amount of up to RMB2 billion (including RMB2 billion) (the “Corporate Bonds”) with a term of up to five years (including five years) from the date of issuance. The Corporate Bonds are proposed to be issued to qualified professional investors in one or more tranches. The proposed issuance of the Corporate Bonds is subject to the finalization of the issuance structure and details and the approval of the shareholders of Tianneng Share at its general meeting(s) and the approvals of the SSE and the relevant regulatory authority(ies). Tianneng Holding Group Co., Ltd.* (ʮ̡), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company (“Tianneng Holding”), proposed to apply to the National Association of Financial Market Institutional Investors (ਠึ) (“NAFMII”) for registration and issuance of targeted debt financing instruments with an aggregate principal amount of up to RMB2 billion (including RMB2 billion) (the “Targeted Debt Financing Instruments”) with a term of up to five years (including five years) from the date of issuance. The Targeted Debt Financing Instruments are proposed to be issued to specialized institutional investors and selected specific institutional investors (if any) in the interbank bond market of the PRC in one or more tranches.
Page 42
– 42 – The proposed issuance of the Targeted Debt Financing Instruments is subject to the finalization of the issuance structure and details and the approval and consent of appropriate body of Tianneng Holding and the approvals of the relevant regulatory authorities (including the NAFMII). For further details, please refer to the Company’s announcement dated 1 August 2025. * For identification purposes only CORPORATE GOVERNANCE The Company is committed to ensuring high standards of corporate governance. The Board believes that good corporate governance practices are increasingly important for maintaining and promoting investors’ confidence. The Company has adopted and complied with the provisions of the Corporate Governance Code (the “CG Code”) as contained in Part 2 of Appendix C1 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) during the Reporting Period, except for the code provision C.2.1 of the CG Code. Dr. Zhang Tianren is both the chairman (“Chairman”) and Chief Executive Officer (“CEO”) of the Company who is responsible for managing the Group’s business. The Board considers that vesting the roles of Chairman and CEO in the same person facilitates the execution of the Company’s business strategies and maximizes the effectiveness of its operation. With the present Board structure and scope of business, the Board considers that there is no imminent need to separate the roles into two individuals. However, the Board will continue to review the effectiveness of the Group’s corporate governance structure to assess whether the separation of the position of the Chairman and CEO is necessary. The primary duties of the Company’s audit committee (inter alia) are to review the financial reporting system, the risk management and internal control systems of the Group, and to make proposals to the Board as to appointment, renewal and resignation of the Company’s independent external auditors and the related remuneration and appointment terms. The Company’s audit committee has reviewed the Company’s 2025 interim report with the management of the Company and the Company’s independent external auditors and recommended its adoption by the Board. The interim financial information of the Group in this announcement has not been audited. However, it has been prepared in accordance with Hong Kong Accounting Standard 34 “Interim Financial Reporting” and has been reviewed by the Company’s independent external auditors, Deloitte Touche Tohmatsu, in accordance with the Hong Kong Standard on Review Engagement 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”.
Page 43
– 43 – The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) contained in Appendix C3 to the Listing Rules. Having made specific enquiry of all Directors, all Directors confirmed that they have complied with the required standard for securities transactions set out in the Model Code throughout the Reporting Period. Other than the above disclosures, the Company has also complied with Rules 3.10(1), 3.10(2) and 3.10A of the Listing Rules and appointed three independent non-executive Directors including one with financial management expertise. PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities (including the sale of treasury shares as defined under the Listing Rules) during the Reporting Period. As at 30 June 2025, the Company did not hold any of such treasury shares. GENERAL INFORMATION As at the date of this announcement, the executive Directors of the Company are Dr. ZHANG Tianren, Mr. ZHANG Aogen, Mr. ZHANG Kaihong, Mr. SHI Borong and Mr. ZHOU Jianzhong; the independent non-executive Directors of the Company are Mr. HUANG Dongliang, Mr. ZHANG Yong, Mr. XIAO Gang and Dr. GUO Yuantao. This announcement will be published on the website of the Stock Exchange at www.hkex.com.hk and on the Company’s website at www.tianneng.com.hk. By order of the Board Zhang Tianren Chairman Hong Kong, 28 August 2025 * For ease of reference, the names of the PRC established companies or entities (if any), the PRC laws and regulations (if any) and the PRC publications (if any) have generally been included in this announcement in both Chinese and English languages and in the event of inconsistency, the Chinese language shall prevail.