Earnings release
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– 1 – * For identification purposes only 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 liabilities whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (Incorporated in the Cayman Islands and its members’ liability is limited) * (Stock Code: 2314) INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2025 FINANCIAL HIGHLIGHTS – Revenue decreased by 2.2% to HK$12.2 billion as compared to the last corresponding period. – Profit for the pe riod increased by 0.7% to HK$811 million as compared to the last corresponding period. – Earnings per share was HK18.88 cents. – Declared interim dividend of HK6.6 cents per share.
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– 2 – INTERIM RESULTS The board of directors of Lee & Man Paper Manufacturing Limited (the “Company”) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (the “Group”) for the six months ended 30 June 2025 together with the comparative figures as follows: CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the six months ended 30 June 2025 2025 2024 (unaudited) (unaudited) Notes HK$’000 HK$’000 Revenue 3 12,236,271 12,505,338 Cost of sales (10,503,670) (10,877,045) Gross profit 1,732,601 1,628,293 Other income 4 235,656 344,279 Impairment losses on trade receivables, net of reversal 34 – Other gains and losses, net 5 255 23,457 Distribution and selling expenses (307,331) (306,135) General and administrative expenses (589,559) (604,621) Share of result of an associate 3,814 711 Share of result of a joint venture 12 (32) Finance costs 6 (116,322) (178,268) Profit before tax 959,160 907,684 Income tax expense 7 (148,261) (102,160) Profit for the period 8 810,899 805,524 Other comprehensive income/(expense) Item that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operations 223,040 (263,282) Total comprehensive income for the period 1,033,939 542,242 Profit/(loss) for the period attributable to: Owners of the Company: – Ordinary shareholders 811,096 760,212 – Perpetual capital securities holders 9 – 45,473 Non-controlling interests (197) (161) 810,899 805,524
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– 3 – 2025 2024 (unaudited) (unaudited) Notes HK$’000 HK$’000 Total comprehensive income/(expense) attributable to: Owners of the Company: – Ordinary shareholders 1,033,903 496,943 – Perpetual capital securities holders 9 – 45,473 Non-controlling interests 36 (174) 1,033,939 542,242 Dividends: 9 – Dividend paid 193,275 262,015 – Interim dividend declared 283,470 266,290 HK cents HK cents Earnings per share 10 18.88 17.69
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– 4 – CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30 June 2025 30 June 31 December 2025 2024 (unaudited) (audited) Notes HK$’000 HK$’000 NON-CURRENT ASSETS Property, plant and equipment 11 40,540,261 39,604,313 Right-of-use assets 1,201,889 1,221,275 Investment properties 557,971 559,745 Deposits paid for acquisition of property, plant and equipment 711,077 943,363 Interest in an associate 124,045 120,208 Interest in a joint venture 80,437 80,426 Trade and other receivables and prepayments 13 268,000 268,000 43,483,680 42,797,330 CURRENT ASSETS Inventories 12 4,565,677 4,419,341 Loan to a joint venture 53,779 54,612 Trade and other receivables and prepayments 13 6,001,423 6,553,937 Amounts due from related companies 19,631 3,960 Bank balances and cash 1,656,830 1,521,179 12,297,340 12,553,029 CURRENT LIABILITIES Trade and other payables 14 3,088,332 3,492,581 Amounts due to related companies 14,003 14,468 Tax payable 67,045 45,441 Lease liabilities 12,343 14,730 Contract liabilities 92,395 84,757 Bank borrowings 9,008,450 8,931,380 12,282,568 12,583,357 NET CURRENT ASSETS/(LIABILITIES) 14,772 (30,328) TOTAL ASSETS LESS CURRENT LIABILITIES 43,498,452 42,767,002
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– 5 – 30 June 31 December 2025 2024 (unaudited) (audited) HK$’000 HK$’000 NON-CURRENT LIABILITIES Bank borrowings 12,915,366 13,050,914 Lease liabilities 46,619 52,683 Deferred tax liabilities 1,682,628 1,650,230 14,644,613 14,753,827 28,853,839 28,013,175 CAPITAL AND RESERVES Share capital 107,375 107,375 Reserves 28,737,355 27,896,727 Equity attributable to owners of the Company 28,844,730 28,004,102 Non-controlling interests 9,109 9,073 28,853,839 28,013,175
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– 6 – Notes: 1. BASIS OF PREPARATION The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities (“Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). 2. PRINCIPAL ACCOUNTING POLICIES The condensed consolidated financial statements have been prepared on the historical cost basis. Other than additional accounting policies resulting from application of amendments to HKFRS Accounting Standards and application of certain accounting policies which became relevant to the Group, 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 HKFRS Accounting Standards 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.
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– 7 – 3. REVENUE AND SEGMENT INFORMATION Segment revenue and results The following is an analysis of the Group’s revenue and results by reportable segment: Six months ended 30 June 2025 Packaging paper Tissue paper Pulp Segment total Eliminations Consolidated HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 REVENUE External sales 9,138,766 2,792,312 305,193 12,236,271 – 12,236,271 Inter-segment sales – – 1,183,940 1,183,940 (1,183,940) – 9,138,766 2,792,312 1,489,133 13,420,211 (1,183,940) 12,236,271 SEGMENT PROFIT 463,261 509,524 72,336 1,045,121 – 1,045,121 Net gain from fair value changes of derivative financial instruments 600 Unallocated income 51,816 Unallocated expenses (25,881) Share of result of an associate 3,814 Share of result of a joint venture 12 Finance costs (116,322) Profit before tax 959,160 Six months ended 30 June 2024 Packaging paper Tissue paper Pulp Segment total Eliminations Consolidated HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 REVENUE External sales 9,547,090 2,515,580 442,668 12,505,338 – 12,505,338 Inter-segment sales – – 1,323,187 1,323,187 (1,323,187) – 9,547,090 2,515,580 1,765,855 13,828,525 (1,323,187) 12,505,338 SEGMENT PROFIT 464,368 465,176 113,777 1,043,321 – 1,043,321 Net gain from fair value changes of derivative financial instruments 116 Unallocated income 64,588 Unallocated expenses (22,752) Share of result of an associate 711 Share of result of a joint venture (32) Finance costs (178,268) Profit before tax 907,684
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– 8 – 4. OTHER INCOME Six months ended 30 June 2025 2024 HK$’000 HK$’000 Value added tax and other tax refund 67,771 72,660 Income from supply of steam and electricity, net 18,158 12,387 Income from wharf cargo handling, net 12,429 13,872 Interest income from banks 7,117 6,268 Government subsidy income 57,090 133,648 Rental income 33,439 26,765 Write-back of trade and other payables 1,166 – Others 38,486 78,679 235,656 344,279 5. OTHER GAINS AND LOSSES, NET Six months ended 30 June 2025 2024 HK$’000 HK$’000 Loss on disposal of property, plant and equipment, net (7,762) (8,204) Net foreign exchange differences 7,417 31,545 Net gain from fair value changes of derivative financial instruments 600 116 255 23,457 6. FINANCE COSTS Six months ended 30 June 2025 2024 HK$’000 HK$’000 Interest on bank borrowings and bills discounted 387,453 460,748 Interest expense on lease liabilities 1,384 1,654 Less: amounts capitalised to property, plant and equipment (272,515) (284,134) 116,322 178,268
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– 9 – 7. INCOME TAX EXPENSE Six months ended 30 June 2025 2024 HK$’000 HK$’000 Income tax recognised in profit or loss: Current tax – The PRC Enterprise Income Tax (“EIT”) 46,195 31,121 – PRC withholding tax on dividend distribution 44,659 91,324 – Other jurisdictions 26,488 20,564 117,342 143,009 (Over)/under provision in previous years – The PRC EIT (495) 2,448 Deferred tax – Charge/(credit) to profit or loss 31,414 (43,297) 148,261 102,160 The Group’s profit is subject to taxation from the place of its operations where its profit is generated and is calculated at the rate prevailing in the relevant jurisdictions. The PRC The Group’s subsidiaries in the PRC are subject to corporate income tax at the rate of 25% except that eight (2024: seven) of these subsidiaries are entitled to preferential rate of 15% for the Group’s financial year ending 31 December 2025. Hong Kong Hong Kong profits tax is calculated at 16.5% of the estimated assessable profit for both periods. Macau Macau Complementary Tax are calculated at 12% on the estimated assessable profits for both periods. Vietnam The Vietnam subsidiaries are subjected to Vietnam Corporate Income Tax at a rate of 10%. They are entitled to a corporate income tax exemption for four years from the first profit-making year and a reduction of 50% for the following nine years. The Vietnam subsidiaries are entitled a reduction of 50% of Vietnam Corporate Income Tax rate of 10% for both periods.
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– 10 – Malaysia The Malaysia subsidiaries are subjected to Malaysia Corporate Income Tax at a rate of 24% for both periods. Others Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions. 8. PROFIT FOR THE PERIOD Six months ended 30 June 2025 2024 HK$’000 HK$’000 Profit for the period has been arrived at after charging/(crediting): Directors’ emoluments 25,275 25,275 Staff salaries and other benefits, excluding those of directors 740,258 757,948 Contributions to retirement benefit schemes, excluding those of directors 88,061 85,007 Total employee benefit expense 853,594 868,230 Capitalised in inventories (610,510) (604,804) 243,084 263,426 Cost of inventories recognised as expense 10,503,670 10,877,045 Depreciation of property, plant and equipment 695,195 677,675 Depreciation of investment properties 13,442 12,026 Depreciation of right-of-use assets 21,131 21,211 Total depreciation 729,768 710,912 Capitalised in inventories (602,744) (587,841) 127,024 123,071 Gross rental income from investment properties (18,371) (17,159) Less: – di rect operation expenses incurred for investment properties that generated rental income during the period 395 240 (17,976) (16,919)
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– 11 – 9. DIVIDENDS/DISTRIBUTION TO PERPETUAL CAPITAL SECURITIES A final dividend of HK$0.045 per share was paid in respect of the year ended 31 December 2024 (2024: a final dividend of HK$0.061 per share was paid for the year ended 31 December 2023) to shareholders during the current period. The directors determined that an interim dividend of HK $0.066 (2024: HK$0.062) per share should be paid to the shareholders of the Company whose names appear on the Register of Members on 25 August 2025. In addition, the Company had made a distribution on perpetual capital securities of HK$45,473,000 to the securities holders during the six months ended 30 June 2024. 10. EARNINGS PER SHARE The calculation of earnings per share is based on the profit for the period attributable to the owners of the Company approximately of HK$811,096,000 (2024: HK$760,212,000), ordinary shareholders for the period, and weighted average number of 4,295,000,000 (2024: 4,296,699,297) ordinary shares in issue during the period No diluted earnings per share in both periods was presented as there were no potential ordinary shares outstanding during both periods. 11. ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT During the period, there were additions of HK$1,426 million (2024: HK$1,536 million) to property, plant and equipment to expand its operations. 12. INVENTORIES 30 June 31 December 2025 2024 HK$’000 HK$’000 Raw materials 2,880,663 2,985,670 Finished goods 1,685,014 1,433,671 4,565,677 4,419,341
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– 12 – 13. TRADE AND OTHER RECEIVABLES AND PREPAYMENTS 30 June 31 December 2025 2024 HK$’000 HK$’000 Trade receivables 2,928,175 3,333,420 Less: allowance for credit losses (12,880) (12,880) 2,915,295 3,320,540 Trade receivables backed by bills 410,854 531,635 3,326,149 3,852,175 Prepayments and deposits for purchase of raw materials 724,159 710,121 Other deposits and prepayments 574,064 545,884 Value-added tax receivables 858,000 863,578 Other receivables 787,051 850,179 6,269,423 6,821,937 Less: A mount expected to be received after 12 months shown under non-current assets (268,000) (268,000) Amount expected to be received within 12 months shown under current assets 6,001,423 6,553,937 The Group allows its customers an average credit period of 45 to 90 days (2024: 45 to 90 days). The following is an aged analysis of trade receivables (excluding those backed by bills) presented based on the invoice date at the end of the reporting period. 30 June 31 December 2025 2024 HK$’000 HK$’000 Aged: Not exceeding 30 days 1,687,242 2,178,694 31–60 days 793,627 723,112 61–90 days 139,205 151,083 91–120 days 74,075 59,485 Over 120 days 221,146 208,166 2,915,295 3,320,540
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– 13 – 14. TRADE AND OTHER PAYABLES 30 June 31 December 2025 2024 HK$’000 HK$’000 Trade payables 2,246,066 2,374,317 Construction fee payable 279,178 500,593 Accruals 350,262 394,331 Other payables 212,826 223,340 3,088,332 3,492,581 The average credit period taken for trade purchases ranges from 30 to 90 days (2024: 30 to 90 days). The following is an aged analysis of the above trade payables presented based on the invoice date at the end of the reporting period. 30 June 31 December 2025 2024 HK$’000 HK$’000 Aged: Not exceeding 30 days 879,451 868,458 31–60 days 391,841 469,654 61–90 days 320,799 153,893 91–120 days 268,027 180,783 Over 120 days 385,948 701,529 2,246,066 2,374,317 15. PERPETUAL CAPITAL SECURITIES On 29 May 2019, the Company (the “Issuer”) issued US $300 million 5.50% senior perpetual capital securities (the “Securities”) at an issue price of 100 per cent which are listed on the Stock Exchange. Distribution is payable semi-annually in arrears based on a fixed rate of 5.5 per cent per annum. Distribution by the Issuer may be deferred at its sole discretion. The Securities have no fixed maturity and are redeemable in whole, but not in part, at the Issuer’s option on 29 May 2024, or any distribution payment date falling thereafter at their principal amounts together with any accrued, unpaid or deferred distributions. While any distributions are unpaid or deferred, the Company will not declare, pay dividends or make distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower rank. On 27 March 2024 and 9 A pril 2024, the a ggregate principal amount of the Securities of US $300,000 (approximately of HK $2,354,000) and US$6,500,000 (approximately of HK $50,993,000), respectively, was subsequently repurchased in the open market and redeemed by the Issuer and cancelled pursuant to the terms and conditions of the Securities. On 29 May 2024, US$206,300,000 (approximately of HK$1,587,737,000) in aggregate principal amount of the outstanding Securities was fully redeemed by the Issuer and cancelled pursuant to the terms and conditions of the Securities. There were no Securities in issue as at 30 June 2025 and 31 December 2024. 16. REVIEW OF INTERIM ACCOUNTS The condensed consolidated interim financial statements are unaudited, but have been reviewed by the Audit Committee.
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– 14 – BUSINESS REVIEW AND OUTLOOK During the first half of 2025, although the paper manufacturing industry in the PRC showed “moderate recovery” driven by strong consumption stimulus, there are also multiple challenges including capacity expansion, price fluctuations in raw materials and changes in export markets. Benefitting from its pulp and paper integration, world-wide presence, and digital transformation strategy, the Group demonstrated its competitive edges despite heightening geopolitical tensions, achieving sustained profit recovery and stable growth during the period. The Group’s total revenue for the six months ended 30 June 2025 decreased by 2.2% to HK$12.2 billion as compared with the same period last year. Net profit increased by 0.7% to HK$811 million. Earnings per share for the period were H K18.88 cents (2024: HK17.69 cents). The board of directors has declared an interim dividend of H K6.6 cents per share for 2025 (2024: HK6.2 cents). The aggregate sales of the Group for the six months ended 30 June 2025 amounted to 3.49 million tons, with net profit per ton of HK$232. INDUSTRY AND BUSINESS REVIEW During the period under review, changes in tariff policy further exacerbated the supply- demand imbalance in the PRC’s pulp market, resulting in a fluctuating and downward trend for the prices of pulp. The persistent pressure resulting from the release of production capacity in the paper manufacturing industry has slowed down the growth rate of newly-added production capacity. Benefitted from the accelerated growth of exports during the second quarter driven by uncertainties of tariff policy, coupled with the anticipation of introduction of policies to boost consumption, the sector had demonstrated its resilience with a gradual recovery in demand. Meanwhile, its competitive landscape was being reshuffled at an accelerated pace due to various internal and external factors. The Group remained vigilant to market changes and made timely adjustments to its production strategies. By strengthening the integration of its industrial chain, the Group flexibly redeployed the production capacity of pulp and paper, thereby mitigating its exposure to fluctuation in raw materials. In addition, to further capitalise on economies of scale and reduce costs, the Group actively optimized its production layout and enhanced vertical integration of its production. During the period, the Group also advanced and upgraded its technologies, so to improve overall efficiency and realise effective cost reduction. International trade conflicts and tariff policies have brought significant uncertainties to business operations. The Group had previously set up factories in Vietnam and Malaysia to diversify operational risks with presence in overseas markets. In order to explore new export markets, the Group accelerated its expansion along the “Belt and Road” regions and European markets, aiming to achieve a diversified industrial presence and greater profitability.
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– 15 – BUSINESS PROSPECTS Packaging paper remains the Group’s core business. A series of national policies promoting green packaging and circular economy, including Opinion on Further Strengthening Plastic Pollution Control (จԈ ), the Notice on Further Strengthening the Control of Excessive Packaging of Commodities (ۜ ) and the Issued Circular of the General Office of the State Council on the Development Plan for Modern Logistics during the 14th Five-Year Plan Period ( ਕ ), have explicitly restricted plastic packaging and supported the development of the packaging paper sector. Furthermore, the Central Economic Work Conference emphasized “boosting consumption” at the end of 2024, which would stimulate the demand on packaging paper amid the expansion of e-commerce logistics. With its integrated and intelligent production capabilities, the Group’s packaging paper business is well-positioned to further unlock its potential in profit growth. Regarding overseas markets, the Group continues to strengthen its presence along the “Belt and Road” regions and keeps exploring new export markets. Leveraging digital and smart technology, the Group aims to provide more competitive industrial chain services. Moreover, the geographical advantages of the Group’s production bases in Vietnam and Malaysia have enhanced overall operational efficiency, strengthening its industrial chain integration and world-wide presence. Regarding its tissue paper business, the Group continues to honour its commitment on high- quality and green development. It has researched, developed and produced premium and environmentally friendly consumer tissue paper in response to consumer demand. The wide range of our tissue paper products, including natural bamboo unbleached tissues, has been compelling to consumers and won their support. The Group strives to enhance its product competitiveness and regularly introduces new products with softer texture to meet the evolving consumer demand. Currently, the consumption of consumer tissue paper per capita in the PRC is still far below that of developed markets such as Europe and the USA. With the sustained economy growth and improving living standards in the PRC, the rising demand for consumer tissue paper will continue to unlock the growth potential of the Group’s tissue paper business. Despite the anticipated uncertainties and challenges in the second half of the year, the domestic economy is expected to stabilise and rebound under a series of stimulus policies. The Group will uphold the principle of pursuing progress while maintaining stability, proactively respond to consumer demand and leverage its industrial chain advantages to capture further market shares of its tissue paper business. The pulp business is an integral part of the Group’s vertically integrated production. The Group will continue to advance its technological upgrades and enhance its pulp production facilities to reduce costs and improve efficiency. At the same time, the Group will further refine its vertical integration to ensure a stable supply of raw materials for higher efficiency and profitability.
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– 16 – To address market challenges, the Group is currently streamlining its production processes by way of automation and artificial intelligence, and at the same time upgrading the technology of power stations for energy conservation and emission reduction, ultimately lowering its costs. The paper manufacturing industry is expected to maintain a moderate recovery, with some positive developments on both the demand and supply sides. It is anticipated that the government will adopt more robust and targeted measures to stimulate consumption, while the supply side is reaching the end of the capacity cycle with gradual recovery in the profitability of the industry. Looking ahead, the Group will keep a close watch on the evolving domestic and overseas markets, strengthen the integration of pulp and paper and digital transformation, constantly improve its operational efficiency, promote the reconfiguration of the competitive landscape, and actively expand into overseas markets to identify new driver for profit growth, so as to achieve long-term development goals. MANAGEMENT DISCUSSION AND ANALYSIS Results of Operation Revenue, the profit for the period and the profit for the period attributable to owners of the Company, ordinary shareholders for the six months ended 30 June 2025 were HK$12,236 million, HK $811 million and HK $811 million, respectively and that for the corresponding period last year were HK$12,505 million, HK$806 million and HK$760 million, respectively. The earnings per share for the period was HK18.88 cents as compared to HK17.69 cents for the corresponding period last year. The Group’s active promotion of industrial chain integration over the years which allows the Group to flexibly deploy the supply of raw materials and to embody the strengths brought by its business model. However, the Group has also anticipated the global economic uncertainties, particularly those arising from the continued policy uncertainty on tariffs. These marco risk factors have narrowed the upward effect derived from vertical integration. As a result, the profit for the six months ended 30 June 2025 was comparable to that for the corresponding period last year. Distribution and Selling Expenses The Group’s distribution and selling expenses was HK $307 million for the six months ended 30 June 2025 as compared to HK$306 million for the corresponding period last year. It represented about 2.5% of the revenue for the six months ended 30 June 2025 and was comparable to that of 2.4% for the corresponding period last year. General and Administrative Expenses The Group’s general and administrative expenses was HK $590 million for the six months ended 30 June 2025 as compared to HK$605 million for the corresponding period last year. It represented about 4.8% of the revenue for the six months ended 30 June 2025 and was comparable to that of 4.8% for the corresponding period last year.
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– 17 – Finance Costs The Group’s total finance costs (including the interest on lease liabilities and amount capitalised) was HK $389 million for the six months ended 30 June 2025 as compared to HK$462 million for the corresponding period last year. The decrease was mainly due to the decrease in average interest rate on bank borrowings during the period. Inventories, Debtors’ and Creditors’ Turnover The inventory turnover of the Group’s raw materials and finished products were 55 days and 20 days, respectively, for the six months ended 30 June 2025 as compared to 54 days and 14 days, respectively, for the year ended 31 December 2024. The Group’s debtors’ turnover day was 43 days for six months ended 30 June 2025 as compared to 47 days for the year ended 31 December 2024. This is in line with the credit terms granted by the Group to its customers. The Group’s creditors’ turnover days were 43 days for the six months ended 30 June 2025 as compared to 43 days for the year ended 31 December 2024. Liquidity, Financial Resources and Capital Structure The total shareholders’ fund of the Group (comprising of the Company’s ordinary share capital, the Group’s reserves and non-controlling interests) as at 30 June 2025 was HK$28,854 million (31 December 2024: HK$28,013 million). As at 30 June 2025, the Group had current assets of HK$12,297 million (31 December 2024: HK$12,553 million) and current liabilities of HK$12,283 million (31 December 2024: HK$12,583 million). The current ratio was 1.00 as at 30 June 2025, which remains the same as the current ratio as at 31 December 2024. The Group generally finances its operations with internal generated cash flow and credit facilities provided by its principal bankers in Hong Kong, Macau and the PRC. As at 30 June 2025, the Group had outstanding bank borrowings of HK$21,924 million (31 December 2024: HK$21,982 million). These bank loans were secured by corporate guarantees provided by certain subsidiaries of the Company. As at 30 June 2025, the Group maintained bank balances and cash of HK$1,657 million (31 December 2024: HK$1,521 million). The Group’s net debt- to-equity ratio (total borrowings net of cash and cash equivalents over shareholders’ equity) decreased from 0.73 as at 31 December 2024 to 0.70 as at 30 June 2025 as the result of the decrease in the funding request on capital expenditure after commencement of the operation of pulp production lines during the six months ended 30 June 2025. The Group possesses sufficient cash and available banking facilities to meet its commitments and working capital requirements.
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– 18 – The Group’s transactions and the monetary assets are principally denominated in Hong Kong dollars, Renminbi and United States dollars. The Group has not experienced any material difficulties or effects on its operations or liquidity as a result of fluctuations in currency exchange rates during the six months ended 30 June 2025. The Group has used currency structured instruments, foreign currency borrowings or other means to hedge its foreign currency exposure. EMPLOYEES As at 30 June 2025, the Group had a workforce of more than 10,000 em ployees. Salaries of employees are maintained at a competitive level and are reviewed annually, with close reference to the relevant labour market and economic situation. The Group also provides internal training to staff and provides bonuses based upon staff performance and profits of the Group. The Group has not experienced any significant problems with its employees or disruption to its operations due to labour disputes nor has it experienced any difficulty in the recruitment and retention of experienced staff. The Group maintains a good relationship with its employees. INTERIM DIVIDEND The Board has resolved to declare an interim dividend of HK $0.066 (2024: HK$0.062) per share for the six months ended 30 June 2025 to shareholders whose names appear on the Register of Members on 25 August 2025. It is expected that the interim dividend will be paid around 9 September 2025. CLOSURE OF REGISTER OF MEMBERS The Register of Members will be closed from 21 August 2025 to 25 August 2025, both days inclusive, during which period no transfer of shares can be registered. In order to qualify for the interim dividend, all transfers accomplished by the relevant share certificates must be lodged with the Company’s Branch Share Registrars, Tricor Investor Services Limited, at 17th Floor, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration no later than 4:30 pm on 20 August 2025. PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES AND SALES OF TREASURY SHARES OF THE COMPANY Save as the redemption of the Company’s perpetual capital securities as disclosed in note 15 to the unaudited condensed consolidated results, during the six months ended 30 June 2025, there were no other purchases, sales or redemptions of the Company’s listed securities, and/or sales of any of the Company’s treasury shares by the Company, or any of its subsidiaries. As at 30 June 2025, the Company did not hold any treasury shares.
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– 19 – MODEL CODE FOR SECURITIES TRANSACTIONS The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (“Model Code”) as set out in Appendix C3 of the Listing Rules as a code of conduct regarding directors’ securities transactions. All the members of the board have confirmed, following specific enquiry by the Company that they have complied with the required standard as set out in the Model Code throughout the six months ended 30 June 2025. The Model Code also applies to other specified senior management of the Group. CODE ON CORPORATE GOVERNANCE PRACTICES In the opinion of the directors, the Company has complied with the code provisions on Corporate Governance Practices as set out in part 2 of Appendix C1 of the Listing Rules throughout the six months ended 30 June 2025. AUDIT COMMITTEE The Audit Committee of the Company comprised of three independent non-executive directors namely, Mr. Chau Shing Yim David, Ms. Lo Wing Sze and Mr. Chan Wai Yan, Ronald. The Audit Committee has reviewed with management the accounting principles and practices adopted by the Group and discussed internal control procedures and financial reporting matters including the review of the Group’s unaudited interim financial statements for the six months ended 30 June 2025. On behalf of the Board Lee Man Chun Raymond Chairman Hong Kong, 7 August 2025 As at the date of this announcement, the board of directors of the Company comprises five executive directors, namely Dr. Lee Man Chun Raymond, Mr. Lee Man Bun, Mr. Yip Heong Kan, Mr. Lee Jude Ho Chung and Mr. Li King Wai Ross and three independent non-executive directors, namely Mr. Chau Shing Yim David, Ms. Lo Wing Sze and Mr. Chan Wai Yan, Ronald.