Financials

Condensed Consolidated Financial Statements For The Six Months And Full Year Ended 31 December 2025

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Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

Condensed Statements of Financial Position

Review of Performance

Review of performance of the Group

Condensed consolidated statement of profit or loss and other comprehensive income

For twelve months ended 31 December 2025 ("FY2025") vs twelve months ended 31 December 2024 ("FY2024").

Revenue

Revenue from LPG sector decreased by 18.5% or RMB494.5 million from RMB2,658.6 million in FY2024 to RMB2,164.2 million in FY2025 due to fierce competition in FY2025 in the liquefied petroleum gas ("LPG") market. Sales volume of LPG fell from 572,967 tons in FY2024 to 489,414 tons in FY2025 primarily attributable to an unexpected supply chain disruption in November, when raw materials procured from overseas could not be discharged at the port due to the supplier's contracted vessel's non-compliant documentation.

Gross Profit

Gross profit decreased by RMB8.0 million or 22.7% from RMB35.3 million in FY2024 to RMB27.3 million in FY2025 due to the price fluctuation of LPG. Meanwhile, the price fluctuation of LPG also impacted on our cost of sales, which brought down our gross profit margin from 1.33% in FY2024 to 1.26% in FY2025.

Other operating income

Other operating income increased from RMB6.4 million in FY2024 to RMB6.7 million in FY2025. The increase of RMB0.3 million or 5.9% was mainly attributed to the increase in government subsidy of RMB1.2 million, which was offset by the decrease in warehouse rental income of RMB0.6 million and income of RMB0.2 million.

Selling and distribution expenses

Selling and distribution expenses decreased by RMB13.9 million or 25.6% from RMB54.5 million in FY2024 to RMB40.6 million in FY2025 due mainly to the decrease in marine freight of RMB14 million, which was partly offset by increase in land freight of RMB 2.3 million.

Administrative expenses

Administrative expenses decreased by RMB3.5 million, or 17.4%, from RMB20.2 million in FY2024 to RMB16.7 million in FY2025, mainly due to the Group's cost control measures to eliminate non-value-added activities and the voluntary reduction of the CEO's remuneration by RMB1.0 million in 2025.

Other operating expenses

Other operating expenses decreased by RMB3.4 million or 15.6% from RMB22.1 million in FY2024 to RMB18.7 million in FY2025 primarily due to lower bank charges and foreign exchange, which were partly offset by higher PPE write-off losses.

Finance costs

Finance costs decreased by approximately RMB4.1 million, or 19.0%, from RMB21.4 million in FY2024 to RMB17.4 million in FY2025, mainly due to lower bank borrowings in FY2025.

Loss attributable to equity holders

As a result of the above, the Group recorded a net loss attributable to equity holders of RMB59.3 million in FY2025 compared with a net loss of RMB69.5 million in FY2024.

Condensed statements of financial position

Non-current assets

Non-current assets decreased by RMB29.8 million or 13.9% from RMB215.8 million as at 31 December 2024 to RMB186.0 million as at 31 December 2024 mainly due to the depreciation of fixed assets and amortization of right-of-use assets.

Current assets

Current assets decreased by RMB220.2 million or 29.2% from RMB755.0 million as at 31 December 2024 to RMB534.8 million as at 31 December 2025 mainly due to the decrease in cash and cash equivalents of RMB152.7 million and the decrease in inventories of RMB71.5 million.

Current liabilities

Current liabilities decreased by approximately RMB176.2 million, or 26.2%, from RMB671.9 million as at 31 December 2024 to RMB495.7 million as at 31 December 2025, mainly due to decreases in bank borrowings of RMB120.7 million and trade and other payables of RMB47.6 million.

Non-current liabilities

Non-current liabilities decreased by RMB14.4 million or 23.2% from RMB62.1 million as at 31 December 2024 to RMB47.7 million as at 31 December 2025 due to the decrease in long-term loans of RMB4.4 million and non-current lease liabilities of RMB10.0 million.

Condensed consolidated statement of cash flows

Cash and cash equivalents amounted to RMB21.4 million as at 31 December 2025, representing a decrease of RMB152.2 million from RMB173.9 million as at 31 December 2024. The decrease was due to decrease in cash flows from financing activities and from operating activities.

Net cash used in operating activities was RMB22.8 million for FY2025, compared with net cash generated of RMB0.7 million for FY2024. The decrease was primarily attributable to higher advance deposits for inventory purchases at year-end 2025 as management anticipated rising LPG demand and sought to secure supply and pricing.

Net cash used in investing activities was RMB1.7 million mainly due to acquisition of property, plant and equipment.

Net cash used in financing activities was RMB127.7 million mainly due to net repayment of bank borrowing of RMB140.7 million, partly offset by decrease in pledged fixed deposit of RMB 26.0 million.

Commentary

The global LPG" market has experienced heightened volatility stemming from escalating geopolitical tensions in the Middle East. Military operations conducted by the United States and Israel against Iran have intensified regional instability, given that a substantial portion of global LPG supply originates from the Middle East. This development has introduced significant uncertainty into raw material pricing and supply chain dynamics across the global energy sector. The Group's management has conducted as follows a comprehensive assessment of the potential impact of these developments on the Group's operations and financial performance for the next twelve months:

1. Limited Direct Exposure. The Group's production facilities, operational base, and core customer base are primarily located in mainland China. Accordingly, the Group has limited direct exposure to the conflict zones. Domestic demand for the Group's products has remained stable.
2. Raw Material Procurement. Over 80 percent of the Group's raw material suppliers are based in the Middle East region. Sustained conflict may result in global petroleum supply chain disruptions and continued escalation in crude oil prices, which could increase the difficulty and cost of raw material procurement in subsequent periods.
3. Pricing Mechanism. Management notes that LPG pricing is inherently linked to market conditions. Management anticipates that product selling prices can be adjusted in response to market movements, which should effectively offset any increase in raw material costs.
4. Inventory Position. As at 31 December 2025, the Group had placed advance deposits for inventory purchases, and the related inventory was delivered prior to the onset of the Middle East crisis. These inventory reserves are expected to cushion the impact of any sudden increase in LPG prices.

Given the inherent uncertainty surrounding the evolving geopolitical situation, the full extent and duration of potential impacts on the global LPG supply chain and pricing dynamics remain uncertain and cannot be reasonably quantified at this juncture. The Group will continue to monitor developments closely and will provide further updates as and when there are material changes to the assessment, in compliance with applicable disclosure requirements under the Listing Rules.