Earnings release
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- - 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 representations 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. Tan Chong International Limited 陳唱國際有限公司 (Incorporated in Bermuda with limited liability) (Stock Code: 693) INTERIM RESULTS The board of directors (the “Board”) of Tan Chong International Limited (the “Company”) wishes to announce the following unaudited results of the Company and its subsidiaries (the “Group”) for the six months ended 30 June 2026. Consolidated Statement of Profit or Loss (Unaudited) for the six months ended 30 June 2026 Six months ended 30 June Note 2026 2025 HK$’000 HK$’000 (Unaudited) (Unaudited) Revenue 3 6,158,422 6,507,897 Cost of sales (4,934,783) (5,280,452) Gross profit 1,223,639 1,227,445 Other net income 92,905 73,772 Distribution costs (404,198) (463,273) Administrative expenses (499,770) (494,616) Other operating expenses (27,106) (13,560) Profit from operations 385,470 329,768 Finance costs (74,515) (96,042) Share of profits of an associate 1,084 544 Profit before taxation 4 312,039 234,270 Income tax expense 5 (131,309) (126,557) Profit for the period 180,730 107,713 Attributable to: Equity shareholders of the Company 81,941 11,683 Non-controlling interests 98,789 96,030 Profit for the period 180,730 107,713 Earnings per share Basic and diluted (cents) 7 4.07 0.58
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- - 2 - Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) for the six months ended 30 June 2026 Six months ended 30 June 2026 2025 HK$’000 HK$’000 (Unaudited) (Unaudited) Profit for the period 180,730 107,713 Other comprehensive income for the period (after tax and reclassification adjustments) Items that will not be reclassified to profit or loss: Remeasurement of net defined benefit retirement obligations (3,101) 5,799 Equity investments designated at fair value through other comprehensive income - net movement in fair value reserves (non-recycling) during the period (511,838) (37,153) (514,939) (31,354) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of financial statements of: - subsidiaries outside Hong Kong (58,152) 716,249 - an associate outside Hong Kong 115 (159) (58,037) 716,090 Other comprehensive income for the period (572,976) 684,736 Total comprehensive income for the period (392,246) 792,449 Attributable to: Equity shareholders of the Company (456,166) 589,615 Non-controlling interests 63,920 202,834 Total comprehensive income for the period (392,246) 792,449
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- - 3 - Consolidated Statement of Financial Position (Unaudited) at 30 June 2026 At At 30 June 31 December Note 2026 2025 HK$'000 HK$'000 (Unaudited) (Audited) Non-current assets Investment properties 4,926,737 4,935,162 Property, plant and equipment 5,288,314 5,448,000 Intangible assets 155,906 166,843 Goodwill 45,478 46,485 Interest in an associate 60,746 59,547 Investments designated as at fair value through other comprehensive income 8 1,153,574 1,668,935 Loans and advances 2,770,687 2,472,014 Receivables, deposits and prepayments 186,178 192,675 Deferred tax assets 96,648 78,580 14,684,268 15,068,241 Current assets Inventories 1,083,096 1,512,885 Trade debtors 9 1,069,482 871,567 Loans and advances 3,084,410 3,024,926 Other debtors, deposits and prepayments 782,585 701,290 Amounts due from related companies 7 117 Cash and bank balances 2,572,908 2,517,101 8,592,488 8,627,886 Non-current assets held for sale - 77,259 8,592,488 8,705,145 Current liabilities Unsecured bank overdrafts 318,907 186,375 Borrowings 5,953,177 5,565,237 Trade creditors 10 544,547 758,015 Other creditors and accruals 931,957 1,032,797 Amounts due to related companies 3,001 1,177 Lease liabilities 190,318 197,916 Current taxation 118,286 110,869 Provisions 12,606 12,294 8,072,799 7,864,680 Net current assets 519,689 840,465 Total assets less current liabilities 15,203,957 15,908,706
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- - 4 - Consolidated Statement of Financial Position (Unaudited) (continued) at 30 June 2026 At At 30 June 31 December 2026 2025 HK$'000 HK$'000 (Unaudited) (Audited) Non-current liabilities Borrowings 2,130,117 2,142,311 Lease liabilities 241,024 371,767 Defined benefit plan obligations 48,417 49,606 Deferred tax liabilities 287,037 288,649 Provisions 36,873 42,071 2,743,468 2,894,404 NET ASSETS 12,460,489 13,014,302 CAPITAL AND RESERVES Share capital 1,006,655 1,006,655 Reserves 10,187,540 10,763,330 Total equity attributable to equity shareholders of the Company 11,194,195 11,769,985 Non-controlling interests 1,266,294 1,244,317 TOTAL EQUITY 12,460,489 13,014,302
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- - 5 - Notes: 1. Basis of preparation The unaudited consolidated interim financial statements have been prepared in accordance with the requirements of the Listing Rules of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"), including compliance with International Accounting Standard 34, Interim Financial Reporting, issued by the International Accounting Standards Board. The unaudited consolidated interim financial statements have been prepared in accordance with the same accounting policies adopted in the 2025 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2026 annual financial statements. 2. Changes in accounting policies The International Accounting Standards Board (“IASB”) has issued a number of amendments to IFRS Accounting Standards that are first effective for the current accounting period. None of these developments have had a material effect on these financial statements. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.
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- - 6 - 3. Revenue and Segment Reporting Revenue represents the sales value of goods sold, services provided to customers, rental income, interest income on loans and advances, management service fees, agency commission and handling fees and warranty income, net of goods and services taxes where applicable, is analysed as follows: (a) Disaggregation of revenue Disaggregation of revenue from contracts with customers by major products or service lines is as follows: Six months ended 30 June 2026 HK$’000 2025 HK$’000 (Unaudited) (Unaudited) Revenue from contracts with customers within the scope of IFRS 15 Disaggregated by major products or service lines - Sale of goods - Rendering of services - Agency commission and handling fees - Warranty income 1,227,827 4,366,980 19,351 1,315 1,616,714 4,374,302 25,672 1,620 Revenue from other sources - Gross rentals from investment properties that are fixed 74,076 67,399 - Interest income on loans and advances 262,588 237,987 - Rental income for motor vehicles held for leasing 206,285 184,203 6,158,422 6,507,897 Disaggregation of revenue from contracts with customers by geographic markets is as follows: Six months ended 30 June 2026 HK$’000 2025 HK$’000 (Unaudited) (Unaudited) Disaggregated by geographical location of customers - Singapore - PRC - Thailand - Japan - Taiwan - Others 1,002,487 208,336 81,291 4,190,461 244,439 431,408 1,109,908 187,228 225,597 4,167,682 336,782 480,700 6,158,422 6,507,897
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- - 7 - 3. Revenue and Segment Reporting (continued) (b) Segment results Disaggregation of revenue from contracts with customers by timing of revenue recognition, as well as information regarding the Group’s reportable segments as provided to the Group’s most senior executive management for the purposes of resource allocation and assessment of segment performance for the periods ended 30 June 2026 and 2025 is set out below. Motor vehicle distribution and dealership business Heavy commercial vehicle, industrial equipment distribution and dealership business Property rentals and development Transportation Other operations Consolidated Six months ended 30 June Six months ended 30 June Six months ended 30 June Six months ended 30 June Six months ended 30 June Six months ended 30 June 2026 2025 2026 2025 2026 2025 2026 2025 2026 2025 2026 2025 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Disaggregated by timing of revenue recognition Point in time 1,145,720 1,538,894 24,697 25,063 - - - - 76,761 78,429 1,247,178 1,642,386 Over time 116,106 139,203 33,406 34,155 62,940 58,870 4,190,461 4,167,682 508,331 465,601 4,911,244 4,865,511 Revenue from external customers 1,261,826 1,678,097 58,103 59,218 62,940 58,870 4,190,461 4,167,682 585,092 544,030 6,158,422 6,507,897 EBITDA (44,323) (87,886) 5,933 5,331 51,507 86,326 429,353 416,402 296,257 253,461 738,727 673,634
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- - 8 - 3. Revenue and Segment Reporting (continued) (c) Reconciliation of reportable segment profit or loss Six months ended 30 June 2026 2025 HK$’000 HK$’000 (Unaudited) (Unaudited) Total segment EBITDA 738,727 673,634 Depreciation and amortisation (361,713) (356,653) Interest income 8,456 12,787 Finance costs (74,515) (96,042) Share of profits of an associate 1,084 544 Consolidated profit before taxation 312,039 234,270 4. Profit before taxation Profit before taxation is arrived at after charging/(crediting): Six months ended 30 June 2026 2025 HK$’000 HK$’000 (Unaudited) (Unaudited) Finance costs 74,515 96,042 Depreciation - owned property, plant and equipment 203,859 198,774 - right-of-use assets 144,563 146,074 Amortisation of intangible assets 13,291 11,805 Dividend income (25,204) (38,373) Gain on disposal of property, plant and equipment (45,984) (5,817) 5. Income tax expense The analysis of income tax expense is as follows: Six months ended 30 June 2026 2025 HK$’000 HK$’000 (Unaudited) (Unaudited) Hong Kong 1,129 784 Singapore 23,584 22,478 Others 106,596 103,295 131,309 126,557 The Group’s applicable tax rate represents the weighted average of the statutory corporate income tax rates, which mainly range between 16.5% (2025: 16.5%) and 31.52% (2025: 31.52%), in the tax jurisdictions in which the Group operates. 6. Dividends Six months ended 30 June 2026 2025 HK$’000 HK$’000 (Unaudited) (Unaudited) Interim dividend declared of HK$0.025 (2025: HK$0.02) per ordinary share 50,333 40,266
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- - 9 - 7. Earnings per share The calculation of basic earnings per share for the six months ended 30 June 2026 is based on the profit attributable to equity shareholders of the Company of HK$81,941,000 (2025: HK$11,683,000) and the number of 2,013,309,000 ordinary shares (2025: 2,013,309,000) in issue during the period. Diluted earnings per share for the periods ended 30 June 2026 and 2025 is the same as the basic earnings per share as there were no dilutive securities outstanding during the periods presented. 8. Investments designated as at fair value through other comprehensive income At 30 June At 31 December 2026 2025 HK$’000 HK$’000 (Unaudited) (Audited) Listed equity securities outside Hong Kong 1,146,980 1,662,053 Unlisted equity securities 6,594 6,882 1,153,574 1,668,935 The Group designated its investments in equity securities at fair value through other comprehensive income under IFRS 9 as listed below. This designation was chosen as the investments are held for strategic purposes. Fair value Dividend income recognised At 30 June At 31 December Six months ended 30 June 2026 2025 2026 2025 HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Audited) (Unaudited) (Unaudited) Investments in Subaru Corporation (Note) 1,100,894 1,608,517 23,969 37,483 Others 52,680 60,418 1,235 890 1,153,574 1,668,935 25,204 38,373 Note: Fair value loss of HK$507,624,000 (2025: HK$35,622,000) was recognised in other comprehensive income for the six months ended 30 June 2026. Subaru Corporation is mainly operating in two businesses, the Automotive business and the Aerospace business. In the area of Automotive, it is in the business of manufacture, repair and sales of passenger cars and their components. In the area of Aerospace, it is in the business of manufacture, repair and sales of airplanes, aerospace-related machinery and their components. The number of shares and percentage held of this investment are 9,533,000 shares and 1.3% of Subaru Corporation’s issued shares respectively. The investment cost is JPY6.2 billion. This investment represents 4.7% of the Groups’ total assets. There were no transfers of any cumulative gain or loss within equity during the period.
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- - 10 - 9. Trade debtors As of the end of the reporting period, the ageing analysis of trade debtors, based on invoice date and net of loss allowances, is as follows: At 30 June At 31 December 2026 2025 HK$’000 HK$’000 (Unaudited) (Audited) 0 - 30 days 917,209 718,263 31 - 90 days 138,751 129,701 Over 90 days 13,522 23,603 1,069,482 871,567 The Group allows credit periods ranging from seven days to six months. 10. Trade creditors As of the end of the reporting period, the ageing analysis of trade creditors, based on the invoice date, is as follows: At 30 June At 31 December 2026 2025 HK$’000 HK$’000 (Unaudited) (Audited) 0 - 30 days 400,622 446,025 31 - 90 days 42,372 108,218 91 - 180 days 29,956 82,367 Over 180 days 71,597 121,405 544,547 758,015 11. Share based transactions (a) Share based transactions – 2015 Program The Group has a stock compensation program (the “2015 Program”) which was adopted on 26 November 2015. The 2015 Program is operated through a trustee which is independent of the Group. This is a performance-based scheme whereby on 18 December 2015, shares of a listed subsidiary are acquired by the trustee using funds contributed by the subsidiary. The shares are distributed by the trustee in accordance with the Rules on Distributions of Board Benefits of the subsidiary based on points given to each of the entitled directors and executive officers of the subsidiaries in view of their positions, performance and length of services; and to each of the entitled corporate auditors in view of their length of services only. Incidentally, the shares of the subsidiary shall be distributed to the entitled employees as a general rule when they leave their positions. Each point granted can be converted into one share of the subsidiary at distribution. No vesting condition is required after the points are granted. The first grant date is 26 November 2015, in the years after, point is granted to the eligible recipient annually on 1 July. However, if the eligible recipient retires during the fiscal year, the point will be granted on the date of retirement in proportion. The initial period of the 2015 Program covered five-year period ended 30 June 2020. The subsidiary made an initial contribution of JPY499,940,000 (equivalent to HK$32,040,000) to acquire 357,100 points which were expected to be awarded to employees for the initial period. For each subsequent five-year period following the expiry of the initial period, the subsidiary will, in principle, make additional contributions to the trust to fund the acquisition of points reasonably expected to be required under the program. Such contributions are made in advance, after taking into consideration the number of points remaining in the trust. Further contribution to the trust fund is subject to approval by the board of the subsidiary.
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- - 11 - 11. Share based transactions (continued) (a) Share based transactions – 2015 Program (continued) In August 2025, the subsidiary made a further contribution of JPY50,700,000 (equivalent to HK$2,641,000) to acquire 15,000 points, the maximum number of points to be awarded for the five- year period ending 30 June 2030. (i) The terms and conditions of the grants are as follows: Number of points Points granted to employees: On 26 November 2015 71,420 On 1 July 2016 60,000 On 1 July 2017 57,500 On 1 July 2018 63,000 On 1 July 2019 81,200 On 1 July 2020 81,200 On 1 July 2021 49,200 On 1 July 2022 6,000 On 1 July 2023 3,000 On 1 July 2024 3,000 On 1 July 2025 3,000 (ii) The movements of number of points granted are as follows: 2026 2025 Number of points Number of points Outstanding at the beginning of the period 188,000 185,000 Forfeited during the period - - Exercised during the period - - Granted during the period - 3,000 Outstanding at the end of the period 188,000 188,000 Exercisable at the end of the period 188,000 188,000 (iii) Fair value of points and assumptions The fair value of services received in return for points granted is measured by reference to the fair value of points granted. The estimate of the fair value of the points granted is measured based on the Black-Scholes model. 1 July 2025 1 July 2024 Fair value of points and assumptions Fair value at measurement date JPY2,389 JPY1,636 Share price JPY3,060 JPY1,854 Expected volatility (expressed as weighted average volatility used in the modelling under Black-Scholes model) 32.3% 24.5% Expected option life (expressed as weighted average life used in the modelling under Black-Scholes model) 5.9 years 3.0 years Expected dividends 4.2% 4.2% Risk-free interest rate (based on the yield of Japanese government bonds) 1.04% 0.39%
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- - 12 - 11. Share based transactions (continued) (a) Share based transactions – 2015 Program (continued) (iii) Fair value of points and assumptions (continued) The expected volatility is based on the historic volatility (calculated based on the historical daily stock price of the period corresponding to the expected remaining period), adjusted for any expected changes to future volatility based on publicly available information. Changes in the subjective input assumptions could materially affect the fair value estimate. The closing prices of the subsidiary’s shares immediately before the grant of the points on 1 July 2024 and 1 July 2025 were JPY1,854 (equivalent to HK$92) and JPY3,060 (equivalent to HK$152) per share respectively. During the period ended 30 June 2026, the Group recognised a net expense of HK$177,000 (2025: HK$130,000) as equity settled share based payments in relation to the 2015 Program. (b) Share based transactions – 2022 Program The Group has a stock compensation program which was adopted on 1 October 2022 (the “2022 Program”). The 2022 Program is operated through a trustee which is independent of the Group. This is a scheme whereby on 12 December 2022, shares of a listed subsidiary are acquired by the trustee using funds contributed by the subsidiary. The shares are distributed by the trustee in accordance with the Rules on Distributions of Board Benefits of the subsidiary based on points given to each of the entitled directors and executive officers of the subsidiaries in view of their positions, with restriction of transfer. For certain directors, 75% of the points granted can be converted into shares (one point per one share) and 25% of the points can be converted into cash based on prevailing market rate. For employees other than the certain directors, each point granted can be converted into one share of the subsidiary at distribution. For the equity portion, shares are granted at a fixed time each year and are subject to transfer restrictions until the eligible recipients are retired. The cash portion is settled based on the prevailing market price of the shares when the employees leave their positions. The first grant date is 1 October 2022, in the years after, point is granted to the eligible recipient annually on 1 October. However, if the eligible recipient retires within 6 months of the benefit date, no share will be granted, in otherwise, the points will be granted on the date of retirement in proportion if they retire later than 6 months of the benefit date. The initial period of the 2022 Program covered the three-year period ended 30 June 2025. The subsidiary made an initial contribution of JPY292,824,000 (equivalent to HK$17,506,000) to acquire 252,000 points, which were expected to be awarded to employees for the initial period. For each subsequent five-year period following the expiry of the initial period, the subsidiary will, in principle, make additional contributions to the trust to fund the acquisition of points reasonably expected to be required under the program. Such contributions are made in advance, after taking into consideration the number of points remaining in the trust. Further contribution to the trust fund is subject to approval by the board of the subsidiary. In August 2025, the subsidiary made a further contribution of JPY947,752,000 (equivalent to HK$49,364,000) to acquire 280,400 points, the maximum number of points to be awarded for the five- year period ending 30 June 2030. (i) The terms and conditions of the grants are as follows: Equity-settled portion Cash-settled portion Number of points Number of points On 1 October 2022 35,000 8,500 On 1 October 2023 36,200 8,800 On 1 October 2024 34,000 8,000 On 1 October 2025 35,000 8,000
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- - 13 - 11. Share based transactions (continued) (b) Share based transactions – 2022 Program (continued) (ii) The movements of number of points and cash granted are as follows: 2026 2025 Equity- settled portion Cash- settled portion Equity- settled portion Cash- settled portion Number of points Number of points Number of points Number of points Outstanding at the beginning of the period - 27,300 - 19,300 Exercised during the period - - (35,000) - Granted during the period - - 35,000 8,000 Outstanding at the end of the period - 27,300 - 27,300 Exercisable at the end of the period - 27,300 - 27,300 (iii) Fair value of points and assumptions The fair value of services received in return for points granted is measured by reference to the fair value of points granted. The estimate of the fair value of the points granted is measured based on the Black-Scholes model. 1 October 2025 1 October 2024 Fair value of points and assumptions Fair value at measurement date JPY2,387 JPY1,948 Share price JPY3,110 JPY2,415 Expected volatility (expressed as weighted average volatility used in the modelling under Black-Scholes model) 32.0% 27.4% Expected option life (expressed as weighted average life used in the modelling under Black-Scholes model) 5.7 years 5.1 years Expected dividends 4.7% 4.2% Risk-free interest rate (based on the yield of Japanese government bonds) 1.29% 0.49% The expected volatility is based on the historic volatility (calculated based on the historical daily stock price of the period corresponding to the expected remaining period), adjusted for any expected changes to future volatility based on publicly available information. Changes in the subjective input assumptions could materially affect the fair value estimate. The closing prices of the subsidiary’s shares immediately before the grant of the points on 1 October 2024 and 1 October 2025 were JPY2,415 (equivalent to HK$120) and JPY3,110 (equivalent to HK$150) per share respectively. During the period ended 30 June 2026, the Group recognised a net expense of HK$2,064,000 (2025: HK$1,736,000) for the equity-settled share based payment and HK$8,000 (2025: HK$683,000) was recorded for the cash-settled share based payments in relation to the 2022 Program.
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- - 14 - INTERIM DIVIDEND The Board is pleased to declare an interim dividend of HK$0.025 (2025: HK$0.02) per ordinary share on the shares in issue amounting to a total of HK$50,333,000 (2025: HK$40,266,000), which will be payable on 24 September 2026 to shareholders of the Company whose names appear on the register of members of the Company on 11 September 2026. Dividend warrants will be sent to shareholders of the Company on 24 September 2026. CLOSURE OF REGISTER OF MEMBERS The register of members of the Company will be closed on 11 September 2026 on which day, no transfer of shares will be effected and registered. In order to qualify for the entitlement of the interim dividend, all transfer forms accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on 10 September 2026. MANAGEMENT REVIEW RESULTS The first half of 2026 played out against an increasingly volatile external backdrop, as the escalation of the Middle East conflict drove sustained energy price volatility and renewed inflationary pressure, while elevated trade tensions and policy uncertainty across major economies weighed on global growth. Within this environment, the Group delivered a markedly improved profit performance, with after-tax profit rising 68% even as revenue eased 5%, reflecting the combined effect of a softer automotive performance and continued strength from ETHOZ Group Limited and its subsidiaries ("ETHOZ Group") and ZERO Co., Ltd. and its subsidiaries ("ZERO Group"). The Group's revenue for the first half of 2026 was HK$6.16 billion, a 5% decline from HK$6.51 billion in the corresponding period of 2025. After-tax profit for the first half of 2026 was HK$180.7 million, a 68% increase compared to HK$107.7 million in the corresponding period of 2025. The Group recorded robust EBITDA and positive operating cash flow during the first half of 2026, underscoring the strength of its underlying operating performance and cash-generating capability. EBITDA grew by 10% to HK$738.7 million in the first half of 2026, up from HK$673.6 million in the same period of 2025. Profit from operations was HK$385.5 million for the first half of 2026 compared to HK$329.8 million in the corresponding period of 2025, with an operating profit margin of 6.3% as compared to the 5.1% registered in the corresponding period of the previous year. The decline in Group revenue was driven primarily by the automotive division, with Nissan sales in Singapore down 24% and Subaru sales down 48% across the Group's markets, amid a series of regulatory changes and ongoing supply constraints. Group profit, by contrast, was underpinned by continued strength at ETHOZ Group and ZERO Group. The impact of the automotive sales decline on Group profitability was also partially offset by continued discipline in managing distribution and administrative costs, alongside a higher-margin new vehicle sales mix. Excluding ZERO Group and ETHOZ Group, distribution costs fell by 22% and administrative expenses by 8% year- on-year, reflecting the ongoing right-sizing of the Group's automotive operations in response to a rapidly evolving industry landscape shaped by intensifying competition, new market entrants and shifting consumer preferences. This has positioned the business to compete from a leaner, more efficient base. In the first half of 2026, a major strategic milestone was the launch of Subaru’s battery electric vehicle (“BEV”) portfolio - the Solterra XT and E-Outback. Both models debuted in Singapore and Hong Kong, while Taiwan introduced the Solterra XT in the first half, with the E-Outback scheduled to follow in the second half of 2026. The launches received strong critical acclaim and positive media reviews across all markets. Rather than competing on price in segments driven primarily by consumer technology features, Subaru BEVs are positioned around driving performance and engineering quality, with brand value anchored in safety, reliability and its signature Symmetrical All-Wheel Drive system. This positioning matters more as government support for BEVs grows less uniform across the Group's markets.
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- - 15 - RESULTS (continued) Singapore, Malaysia, Thailand, and Hong Kong have each scaled back or ended BEV purchase and taxation incentives in 2026, narrowing the price advantage BEVs held over internal combustion engine (“ICE”) and hybrid electric vehicle (“HEV”) models. As these incentives are reduced or removed, the Group expects some of the novelty that drove BEV adoption to fade, supporting renewed interest in proven HEV models. Vietnam has expanded its preferential special consumption tax treatment to include self-charging HEVs, extending a benefit that was previously limited to plug-in HEVs. The Philippines has maintained its supportive policy stance toward HEVs, with import tariff exemptions and reduced excise tax treatment. These measures are well aligned with Subaru’s strong HEV line-up and should support greater sales opportunities for the Forester 2.5 Strong Hybrid and Crosstrek 2.0 e-BOXER Hybrid. Among the Group’s subsidiaries, ETHOZ Group recorded a 9% revenue growth and a 91% growth in after-tax profit compared to the same period in 2025. ZERO Group reported marginal revenue growth and 6% increase in after-tax profit for the first half of 2026, compared to the same period in 2025. Together, this growth underscores the resilience the Group's diversified business model provides against sector- specific headwinds. The Group’s net gearing ratio, which is computed by dividing the net debt with the total equity, was 46.8% as at 30 June 2026. The net debt recorded was HK$5,829.3 million, as compared to HK$5,376.8 million as of 31 December 2025. Net debt is comprised of borrowings of HK$8,083.3 million and unsecured overdrafts of HK$318.9 million, less cash and bank balances of HK$2,572.9 million. ROCE (Return on Capital Employed), calculated by dividing earnings before interest and taxes (EBIT) by the sum of total equity and non-current liabilities, improved to 2.5% in the first half of 2026, compared to 1.9% for the first half of 2025. Net Asset Per Share as of 30 June 2026 was HK$6.19, a decrease from the HK$6.46 recorded at the end of December 2025, mainly due to the unrealised fair value loss on the Group’s listed investments, recognised through other comprehensive income and deducted from the reserve balance. The directors have declared an interim dividend of HK2.5 cents per share for the first half of 2026, compared to HK2 cents per share for the first half of 2025. SIGNIFICANT INVESTMENTS As of 30 June 2026, the Group had investments designated at fair value through other comprehensive income of HK$1.15 billion. The investments consist of both listed and unlisted equity securities. Most of these investments are equity securities listed on the Tokyo Stock Exchange that were accumulated over the years as strategic long-term investments. The Group recorded an unrealised loss on its investments designated as at fair value through other comprehensive income of HK$512 million, as compared to the unrealised loss of HK$37 million for the corresponding six-month period in 2025. The loss is due to share price changes of its listed investments, which were marked to market and reported in the other comprehensive income statement for the period. Such unrealised fair value loss on its investments was not reclassified to the Group’s consolidated statement of profit or loss. SINGAPORE In Singapore, total industry volume (“TIV”) expanded by 10% year-on-year in the first half of 2026 on the back of a recovery in the supply of Certificates of Entitlement (“COE”). TIV for passenger cars expanded by 13%, while that for commercial vehicles contracted by 9% amid regulatory changes affecting the segment. Nissan Nissan sales volume for the first half of 2026 declined 24% year-on-year compared to the first half of 2025, as the market absorbed a series of regulatory changes. Sales nonetheless improved 3% compared to the second half of 2025, pointing to a recovering trend through the year. Passenger car sales declined by 11% year-on-year. This was largely due to changes in the Vehicular Emission Scheme (“VES”) that took effect from 1 January 2026, which saw HEV models like Nissan e-POWER models either losing incentives or attracting penalties. Moreover, changes to the Preferential Additional Registration Fee ("PARF") rebate policy announced and implemented almost immediately in February 2026 also impacted Nissan sales further. While the new PARF rebate policy impacts all passenger cars, its impact is more significant to HEV models, which form the bulk of Nissan’s current lineup.
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- - 16 - SINGAPORE (continued) Nissan (continued) Commercial vehicle sales declined 48% year-on-year, impacted by the phase-out of various incentives for the segment. The slowdown was largely due to the discontinuation of the incentives for Band B light commercial vehicles under the Commercial Vehicle Emission Scheme (“CVES”), as well as the discontinuation of the Early Turnover Scheme (“ETS”) for light commercial vehicles. Both schemes took effect from 1 April 2025, which impacted the sales of its best-seller, the NV200 panel van. A record-high COE environment for commercial vehicles through the first half further exacerbated the situation, with light commercial vehicle sales as a segment falling 10%. Looking to the second half of 2026, Nissan will introduce two significant model launches - the Model Year 2027 Serena e-POWER, its most popular model, and the Model Year 2027 X-Trail e-POWER towards the end of the third quarter of 2026. These launches position Nissan to capture a share of the expected continued TIV expansion, even as new brand entrants intensify competition. The Group remains cautiously optimistic while being mindful of the headwinds going forward. Subaru Subaru sales recorded a decline of 39% in the first half of 2026 compared with the first half of 2025, primarily due to unexpected and persistent delays in shipments and supply constraints affecting the Forester 2.5 Strong Hybrid, for which demand continued to exceed supply. During the period, the Group was able to fulfil only 74% of customer orders for the model. However, the Group anticipates some easing of the backlog in the second half of 2026. Looking ahead, it remains optimistic about its sales prospects, supported by the expected stabilisation of Forester 2.5 Strong Hybrid inventory and sustained consumer demand for newly launched BEV models, the Solterra XT and E-Outback. ETHOZ Group ETHOZ Group registered a 91% increase in net profit in the first half of 2026 that included an exceptional property disposal gain. On a like-for-like basis, adjusted net profit increased by 17.7% year-on-year. This growth was driven primarily by higher rental and interest income as well as lower finance costs. Total revenue increased 9% to HK$483.4 million in the first half of 2026 from HK$445.4 million in the corresponding period in 2025, largely due to a growth in receivables contributing to higher interest income and a rise in vehicle and equipment rental income, partially offset by a reduction in disposal of used vehicles. The gradual decline in interest rates over the first half of 2026 has boosted profitability for ETHOZ Group with finance costs falling by 22.5%. However, recent developments in the Middle East and global supply disruptions have created persistent inflationary pressures that are causing rates to inch up towards the second half of the year, signalling headwinds for future borrowing costs. Despite expectations of a challenging second half of 2026, marked by turbulent economic and geopolitical uncertainties with an unpredictable interest rate landscape, ETHOZ Group nonetheless remains resilient in driving stable and robust growth while navigating market adversities with prudence. ETHOZ Group remains confident in the long-term potential of its core businesses and regional markets, reaffirming its commitment to sustainable growth in Singapore and across the region while strategically positioning itself to capitalise on emerging opportunities, with a new Thailand subsidiary incorporated in September 2025. GREATER CHINA Hong Kong’s TIV increased by 81% in the first half of 2026 compared with the first half of 2025. The growth was primarily driven by strong market demand in the first quarter of 2026, as customers accelerated BEV purchases to benefit from the Government’s First Registration Tax concession for BEVs traded in against non-BEV vehicles, which expired on 31 March 2026. Consequently, BEVs accounted for 92% of TIV in the first half of 2026, up from 84% in the first half of 2025, with BEV volumes nearly doubling year-on-year while non-BEV volumes declined, underscoring the extent to which the tax concession deadline concentrated demand into BEVs specifically.
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- - 17 - GREATER CHINA (continued) The Group's Subaru operations recorded sales volume growth of 4% in the first half of 2026, as limited BEV supply constrained the Group's ability to capture the BEV-driven surge in demand during the peak purchasing window. While the Group expects TIV growth to moderate in the second half of 2026 following the tax concession expiry, it maintains a cautiously optimistic outlook supported by a diversified product portfolio comprising ICE vehicles, HEVs, and BEVs. The Group’s operations in China continued to face a challenging market environment in the first half of 2026 amidst elevated industry inventory levels and intensifying price competition. Against this backdrop, the Group’s Subaru sales volume declined by 48% compared with the first half of 2025. In response, the Group remains focused on improving operational efficiency, preserving brand equity, and maintaining high service standards, rather than engaging in value-diluting price competition. These measures are intended to strengthen China’s operational resilience and position the business to benefit from eventual market stabilisation. TAIWAN AND PHILIPPINES Taiwan TIV expanded by 8% in the first half of 2026 compared with the first half of 2025, while the Group’s Subaru sales volume decreased by 46%, mainly due to short supply for the Forester 2.5 and Crosstrek 2.0 during the period. Looking ahead, the Group expects sales performance to improve in the second half of 2026 as vehicle supply normalises and the product portfolio is strengthened with the planned launch of the Subaru E-Outback in the fourth quarter of 2026. In the Philippines, the Group successfully launched the Subaru Crosstrek 2.0 e-BOXER Hybrid at the Philippine International Motor Show in June 2026, further expanding its HEV lineup in line with growing market preference for fuel-efficient and environmentally friendly vehicles. However, despite strong demand for HEV models, supply constraints, including the fulfilment of only 39.5% of customer orders for the popular Forester model, limited overall order fulfilment, resulting in a 41% year-on-year decline in sales volume for the first half of 2026. Looking ahead, the Group remains optimistic about its sales outlook for the remainder of 2026, supported by the expected normalisation of HEV supply and the scheduled launch of the All-New Subaru Outback in the fourth quarter of 2026. MALAYSIA, THAILAND, VIETNAM, AND CAMBODIA Across other ASEAN territories, the Group continues to execute a pivotal strategic transition from Completely Knocked-Down (“CKD”) to Completely Built-Up (“CBU”) operations. The transition is to further elevate the Subaru brand into a premium positioning through a broader and higher-specification product lineup. In Malaysia, TIV saw slight growth of 4% in the first half of 2026 compared with the first half of 2025, while Subaru operations registered a 27% drop in sales volume, reflecting intensifying competition following the entry of multiple new brands and the adoption of aggressive pricing strategies across the market. Looking ahead, sales momentum is expected to improve in the second half of 2026, driven by strategic initiatives to support the CKD inventory sell-out as the market transitions towards CBU operations. In Thailand, Subaru sales declined 97% year-on-year in the first half of 2026, against a 24% increase in TIV, following an unusually high base in the first half of 2025 when the Group sold out its remaining CKD inventory. This reflects a temporary supply gap as the market transitions to CBU operations, rather than a shift in underlying demand. The market preference has continued to shift towards HEVs and BEVs. The Group remains optimistic about its long- term growth prospects, supported by the launch of the Forester 2.5 Strong Hybrid in the fourth quarter of 2026. Vietnam’s TIV grew by 32% year-on-year in the first half of 2026, with the sole national automotive brand accounting for more than half of the volume increase. Despite stiff market competition, the Group achieved 18% sales growth in the first half of 2026, supported by strong demand across CKD and CBU Subaru Forester variants. The Group expects this positive momentum to continue into the second half of 2026, following the debut of the Forester 2.5 Strong Hybrid in the fourth quarter of the year. Cambodia’s TIV increased by 63% in the first half of 2026, propelled by new market entrants and preferential tax policies for vehicles manufactured in the United States. Facing unfavourable market dynamics for Japanese CBU vehicles, the Group’s Subaru sales volume decreased by 64% year-on-year.
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- - 18 - JAPAN ZERO Group, the Group’s vehicle transportation and logistics division, recorded marginal growth in revenue to HK$4.2 billion for the first half of 2026. Net profit after tax for the first half of 2026 increased by 6% from the corresponding period of last year. In terms of ZERO Group’s reporting currency, Japanese Yen, revenue and net profit after tax increased by 8% and 13%, respectively, reflecting stronger underlying operating performance despite the impact of foreign exchange movements during the six-month period. The revenue growth was driven by overall growth across all business segments, namely domestic automotive-related businesses, human resource businesses, general cargo businesses and overseas-related businesses. Revenue from the automotive-related businesses increased primarily due to higher handling volume, the review and optimisation of transport routes, a shift away from marine transport, improved vehicle utilisation efficiency and higher maintenance service revenue following the consolidation of Zero Plus Maintenance Co., Ltd. as a subsidiary in March 2025, as well as the commencement of contracted on-site operations at used vehicle auction sites operated by the USS Group in January 2026. The increase in profit was broadly in line with the revenue growth and was mainly attributable to the improved performance of the automotive-related businesses, despite facing higher costs due to continued strategic investments to support future growth and increased vehicle maintenance and inspection expenses. Looking ahead, ZERO Group will continue to expand its contracted vehicle transportation services by maintaining and increasing transportation capacity through securing and retaining frontline personnel. It also expects further contributions from the on-site operational services at the used vehicle auction sites operated by the USS Group, as well as from the operating results of Auto Carrier (Thailand) Co., Ltd. which became a consolidated subsidiary in April 2026. On the cost side, it expects increases in recruiting and labour costs due to inflationary pressures and labour shortages, as well as higher ocean freight rates. It also anticipates higher vehicle-related expenses and insurance premiums resulting from rising repair costs and parts prices, as well as higher system-related expenses associated with operational efficiency improvements and the replacement of ageing systems. HIRE PURCHASE AND FINANCING BUSINESS The Group provides commercial loans and acts as lessor, under hire purchase contracts and finance lease. a) Hire purchase and finance lease Hire purchase contracts and finance leases primarily relate to equipment financing across Singapore, China and Malaysia, reflecting the Group’s core focus on asset-backed lending within these key markets. As of 30 June 2026, net receivables from hire purchase and finance lease amounted to HK$3.065 billion or 52% of total loans and advances with 8%, 90% and 2% attributable to Singapore, China and Malaysia respectively and accounted for by 7,505 customers. These customers are made up of 97%, 2% and 1% of Small and Medium Enterprises (“SME”), Sole Proprietors/Limited Partnerships and Non-profit or statutory-related organisations respectively. The ageing analysis of hire purchase and finance lease receivables is as follows: (i) balance with maturity of less than one year is HK$1.339 billion; (ii) balance with maturity between one year and five years is HK$1.717 billion; (iii) balance with maturity between five years and seven years is HK$9 million. b) Commercial loans Commercial loans, which are only extended to 357 customers in Singapore, make up 48% of total loans and advances amounting to HK$2.790 billion as of 30 June 2026. These customers are made up of 65% and 35% of SME and Sole Proprietors/Limited Partnerships respectively. The three main types of commercial loans, namely Secured Commercial loans, ESG loans under the Enterprise Financing Scheme granted by Enterprise Singapore (“ESG”) and Unsecured loans make up 95%, 2% and 3% of total portfolio respectively. Secured Commercial loans are mostly secured by properties. Risk is mitigated by a low loan-to-value ratio of not more than 80% of good quality property value.
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- - 19 - HIRE PURCHASE AND FINANCING BUSINESS (continued) b) Commercial loans (continued) ESG loans are aimed to support the growth of SME sectors in Singapore with a risk sharing ratio of up to 90% to be borne by ESG. Unsecured loans are very selectively offered to high quality clients with a strong ability to repay. The ageing analysis of commercial loan receivables is as follows: (i) balance with maturity of less than one year is HK$1.745 billion; (ii) balance with maturity between one year and three years is HK$1.045 billion. Major terms of loans granted For the six-month period ended 30 June 2026, the hire purchase and lease period under the hire purchase and finance lease business range from one to eight years with interest rates charged ranging from 2.5% p.a. to 9% p.a. Commercial loans are offered over a tenure of one to three years, with interest rates ranging from 6% p.a. to 10% p.a. Risk management policies The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. These policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Group’s customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. The Group is exposed to credit risks if any of the following occurs: A. Change of business model during loan tenure; B. Sudden headwinds specific to the industry; C. Poor management of cash flow during a difficult and uncertain business climate; D. Aggressive expansion plans leading to financial instability; and E. Failure in a greenfield investment. The main ambits of its credit risk framework include: (A) Credit Approval and (B) Credit Monitoring (Existing Live Contracts). (A) Credit Approval Prior to onboarding a new customer, the Group performs screening checks such as Know Your Client, Anti- Money Laundering and Countering the Financing of Terrorism, before a credit proposal is submitted to the Credit Risk department for review. The credit approval team for the Group, which is based at the headquarters in Singapore, adopts a holistic approach to assessing credit risk of the loan. It considers a combination of quantitative and qualitative factors as provided in the table below. These factors are benchmarked against industry norms and reviewed by a competent team with over two decades of industry experience. Quantitative Factors Qualitative Factors Balance Sheet Evaluation Profit & Loss Evaluation Financial Ratios Evaluation Cash Conversion Cycle Evaluation Bank Statement Evaluation New and Existing Projects Cash Flow Loan-to-Value of Collateral Business Model/Modus Operandi Management Team/Owners Profile and Risk Appetite Track Records Based on Operating History Market Positioning of Borrower Major Customers and Suppliers Industry or Sector Outlook
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- - 20 - HIRE PURCHASE AND FINANCING BUSINESS (continued) Risk management policies (continued) (A) Credit Approval (continued) For its commercial loans business in particular, the Group obtains credit enhancements in the form of corporate guarantees, personal guarantees, vendor buyback guarantees and/or property securities. The Credit Risk Policy formalises limits for single obligor/group obligor exposure and for each industry which are reviewed monthly. (B) Credit Monitoring (Existing Live Contracts) The Group reviews its portfolio on a regular basis to ensure that it is serviced promptly, with no deterioration in asset quality. The Credit Control Department is responsible for following up with customers on the following: a. Daily: each Credit Control officer makes at least 55 calls, which are logged into the system and reviewed by the supervisor in charge. b. Daily review of Direct Debit Authorisation rejections, following which the Credit Control officer contacts the customer to arrange the next deduction. c. Monthly review of collection ratio reports and ageing meetings with senior management. d. Site visits where appropriate. e. Issuance of reminders, late payment interest letters and demand letters where required, including to repossess properties where applicable. Loan impairment policies and impairment assessments At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data: Significant financial difficulty of the borrower; A breach of contract such as a default after credit terms are exceeded or being more than 90 days past due; The restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise; and It is probable that the borrower will enter bankruptcy or other financial reorganisation. The gross carrying amount of a financial asset is written off to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. Amounts outstanding from loans and advances are assessed for impairment regularly by reviewing the non- performing amounts. Non-performing customers are identified, discussed, and followed up during the monthly ageing meetings. Management includes the non-performing amounts as part of the IFRS 9 provision requirements. As at 30 June 2026, impairment loss allowance of HK$61.7 million (31 December 2025: HK$60.1 million) has been made for loans and advances and finance lease. Bad debt written off was 0.3% for the first six months ended 30 June 2026. PROSPECTS Looking ahead, the Group expects the operating environment in the second half of 2026 to remain challenging, shaped by an uncertain global interest rate trajectory and persistent inflationary pressure stemming from the ongoing conflict in the Middle East and the resulting energy price volatility. Trade tensions and policy uncertainty across major economies are likely to continue weighing on business and consumer sentiment across the Group's markets.
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- - 21 - PROSPECTS (continued) Against this backdrop, the Group enters the second half of 2026 from a position of relative strength, having taken decisive steps in the first half to control costs, improve operational efficiency, and align its automotive distribution business with a rapidly evolving competitive and regulatory landscape. The Group expects this leaner cost base, together with an improving new vehicle pipeline and easing supply constraints across key markets, to support improved sales performance in the second half. ETHOZ Group and ZERO Group are expected to remain key profit contributors, with both subsidiaries maintaining their positive growth trajectories into the second half. Having delivered improved profitability in the first half despite a challenging market, the Group is confident this momentum can be sustained into the second half, underpinned by the resilience of its diversified business model. PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES There were no purchase, sale or redemption of the Company’s shares (including sales of treasury shares (the “Treasury Shares”) within the meaning under the Listing Rules) by the Company or any of its subsidiaries during the six months ended 30 June 2026. As at 30 June 2026, the Company did not hold any Treasury Shares. AUDIT COMMITTEE The Audit Committee has reviewed with management the unaudited consolidated interim financial statements of the Group for the six months ended 30 June 2026. CHANGES IN DIRECTORS’ INFORMATION Mr. Ng Kim Tuck, an independent non-executive of the Company, was appointed as an independent non-executive director of Lotte Chemical Titan Holding Berhad, a company listed on Bursa Malaysia Securities Berhad, with effect from 26 May 2026. He also serves as the Chairman of the Audit and Risk Management Committee and a member of the Nomination and Remuneration Committee of Lotte Chemical Titan Holding Berhad. CORPORATE GOVERNANCE CODE No Director is aware of any information which would reasonably indicate that the Company is not, or was not, at any time during the six months ended 30 June 2026, acting in compliance with the Corporate Governance Code as set out in Appendix C1 of the Listing Rules of the Stock Exchange, save for the code provision C.2.1 of the Corporate Governance Code. During the six months ended 30 June 2026, Mr. Tan Eng Soon holds the offices of chairman of the Board (the “Chairman”) and the Chief Executive Officer. The Chairman had been instrumental in listing the Group. He has in-depth professional knowledge of, and extensive experience in the automobile industry and full cognizance of the workings of the business operations of the Group. In view of this, the Board would like him to continue with some executive functions. The balance of power and authority is ensured by the participation and input of the other Board members who are highly qualified and experienced professionals. The roles of the respective executive Directors and senior management who are in charge of different disciplinary functions complement the role of the Chairman and Chief Executive Officer. The Board believes that this structure is conducive to strong and consistent leadership enabling the Group to make and implement decisions promptly and efficiently. By Order of the Board Sng Chiew Huat Finance Director Hong Kong, 26 August 2026 Website: http://www.tanchong.com As at the date of this announcement, the executive Directors are Mr. Tan Eng Soon, Mr. Glenn Tan Chun Hong, Mr. Tan Kheng Leong, Mdm. Sng Chiew Huat, Ms. Gillian Tan Tsui Lyn and Mr. Lee Chow Yoke. The independent non- executive Directors are Mr. Ng Kim Tuck, Mr. Prechaya Ebrahim and Mr. Charles Tseng Chia Chun.