A：The process of this performance meeting includes Mr. Liu Zhengyu giving a speech on behalf of the management team, Vice President Hou Shenghai introducing the company's interim performance, and finally an interactive Q&A session with analysts.

A：Against the complex and severe global economic situation in the first half of 2025, Deep International has achieved significant results through the work focus on stability, quality improvement, and overcoming challenges. Core achievements include: deepening of nationwide layout in the logistics main business, breakthroughs in key projects, and becoming the seventh in the industry in terms of market share in high standard warehousing market; consolidation of advantages in the core area of Shenzhen, a successful start in the strategic layout in Beijing, optimization of nationwide layout model, new progress in cold chain business, solid advancement in the port main business networking strategy, and new progress in major projects. The strategic focus for the second half of the year will revolve around main business development, operational management, innovation in business models, and capacity building. Efforts will be made to ensure the delivery of major strategic projects, ensure high-quality drafting of the Fourteenth Five-Year Plan, deepen the effectiveness of investment promotion, accurately promote investment, continuously tap into operational efficiency, accelerate the implementation of new tracks, and continue to excel in financial management. The group's revenue in the first half of the year was approximately HK$6.67 billion, an increase of 1% compared to the previous year. In this period, revenue from logistics parks and logistics services increased by approximately HK$1 billion, revenue from toll roads and environmental protection business increased by HK$160 million, while revenue from port operations decreased by approximately HK$210 million. Shareholders' net profit was about HK$490 million, a 25% decrease compared to the previous year, mainly due to the absence of similar income from public offering races in the same period last year. Additionally, new investment projects are in the nurturing stage, which increased depreciation and interest expenses, impacting profitability.

A：The main logistics business continued to make steady progress in the first half of the year, achieving a 12% year-on-year increase in logistics business revenue in the face of market competition by increasing investment attraction, stabilizing rent, maintaining occupancy rates, and stabilizing customers. The overall occupancy rate reached 87% and the operating area reached 6.71 million square meters. However, the net profit attributable to shareholders decreased year-on-year, mainly due to one-time gains in the same period last year, which were not present in the first half of this year, as well as increased depreciation, amortization, and interest expenses due to new investment projects in the incubation period.

A：In the first half of the year, the net profit attributable to shareholders of the port sector decreased compared to the same period last year, mainly due to intense competition in the domestic port industry and a slowdown in the macro economy leading to insufficient cargo sources and a decline in gross profit margin. In particular, the depreciation and amortization costs of the Jiangsu Jingjiang Port project have significantly increased, squeezing profit margins. However, despite the short-term pressure on profits, Xinjiang Port has demonstrated strong growth potential, with throughput increasing by a large margin of 72% year-on-year.

A：The group holds 49% equity in Shenzhen Airlines. In the first half of this year, Shenzhen Airlines recorded a net loss of RMB 834 million, but due to the use of the equity method, the group no longer recognizes further losses related to Shenzhen Airlines. The group holds equity in Industrial and Commercial Bank of China (ICBC), with a stake of 8.76%. China Airlines successfully went public this year, further boosting the group's asset value.

A：As of the first half of 25 years, the group's total assets reached HK$144.3 billion, with shareholders' equity amounting to HK$33.2 billion, equivalent to HK$13.6 per share. The asset-liability ratio has remained stable in the range of 55% to 60% in recent years.

A：The group has optimized the debt maturity structure, making the long-term to short-term debt ratio around 70:30. In addition, by adjusting the currency structure of debt, the group achieved exchange gains of HKD 15 million in the first half of this year, compared to exchange losses of HKD 26 million in the same period last year. Currently, the group has mostly completed the replacement of overseas foreign currency loans, converting high-interest rate overseas foreign currency loans into overseas RMB loans.

A：Actual capital expenditure in the first half of the year was about 4.7 billion yuan, mainly concentrated on the expansion and construction of logistics parks and the Pinghunan project on Shenzhen Expressway. The budgeted capital expenditure for the second half of the year is about 7.7 billion yuan, including approximately 3.7 billion yuan for the Shenzhen Expressway project, 2.1 billion yuan for the logistics park project, and 1.5 billion yuan for the Pinghunan project. The plan is to stabilize and maintain funding balance through various channels such as own funds, bank loans, and medium-term notes.

A：In the future, the company will focus on improving the quality and efficiency of its core business, enhance its comprehensive logistics service capabilities, actively promote research on new businesses such as multimodal transport, low-altitude logistics, and energy storage charging, and accelerate the transformation into a modern comprehensive logistics service provider. At the same time, the company will continuously optimize its business model, dynamically adjust its investment strategy, strengthen innovation drive, and continuously enhance its value creation capabilities, maintaining a stable and competitive dividend policy to create sustainable value for investors.

A：The company is advancing the preparatory work for the second and third plots of the South China Logistics Park, involving demolition, land price assessment, and adjustment of planning indicators. Among them, Plot 04 has signed a land contract and entered the development stage. It is expected that pre-sales and cash flow recovery can be achieved in the second half of the year after two years. Regarding the rental rate of the logistics park, although it has dropped due to the impact of new projects at the beginning of the year, the rental rate has now rebounded to around 87% through strengthening investment promotion efforts. The company will continue to strive to improve the rental rate and maintain high-quality customer resources.

A：Regarding the Phase III replacement project in Qianhai, the Group is making every effort to promote the decision-making process of the municipal government's related meetings, aiming to replace two commercial and office plots within the enclosure net with residential and storage land through land exchange. Currently, consultations on policies and regulations have received confirmation replies from six departments, and concrete progress is expected to be made in the second half of the year.

A：The main reason is that this year is the complete financial year of Jinjiang Port, with a large investment target of 2.2 billion, so depreciation and amortization will be carried out as required by the group headquarters from now on.

A：The first measure is to follow the overall requirements of the group headquarters and adopt a one-to-one approach, utilizing the special customer base of the port (central SOEs) and the natural connection with the inland area to attract lost customers back and reserve new customer resources. The second measure is to strengthen the overall business coordination role of the entire port sector to adapt to the new model of supply chain operation with the addition of four physical port entities during the 14th Five-Year Plan period of the group, ensuring the implementation of unified import and export policies.

A：We are exploring new types of goods, such as grains, groceries, etc., and have targeted projects in place to land as soon as possible to provide the port sector with new profit growth opportunities and enhance risk resistance capabilities.

A：Currently, the total area of the three projects in Foshan exceeds 600,000 square meters. Among them, the Nanhai project and the Shunde project have completed pre-leasing before investment, with a high rental rate. The Gaoming project in Foshan has signed a cooperation agreement with China Pharmaceutical Group and has achieved partial leasing. At the same time, it is in negotiations with two well-known enterprises for full leasing cooperation, with confidence in completing overall leasing before the National Day holiday.

A：We have piloted two operating models in the management of logistics parks: one is physical space management, and the other is virtual space - energy space management. With the increase in the penetration rate of electric vehicles and the increase in electricity demand, we use low-cost clean energy (photovoltaics) to supply cold storage, intelligent warehousing, and other equipment within the park, thus achieving cost reduction, efficiency improvement, increased rental rates, and customer stickiness. Some parks have already been put into operation and have achieved good benefits.

A：We approach the low-altitude economy with a strategic research attitude and act cautiously. The group has arranged special research and formed a strategy, believing that the low-altitude logistics and infrastructure business models are still to be proven, and the principle is low-cost trial and error, actively participating but not rushing for success. Some of the Deep International projects in Shenzhen have been included in the low-altitude cargo transportation infrastructure network planning of Shenzhen City, and will continue to follow up and cooperate with government-related work.

A：Regarding the capital increase of Shenzhen Airlines, the company is currently in close discussions with the Shenzhen municipal government and the major shareholder of Air China, adhering to the principle of maximizing the interests of all shareholders. It is expected that results will be announced soon and simultaneously in the market. As for the Pinghunan project, the current pre-investment progress is smooth, with two major clients already signed. The overall investment promotion work has exceeded expectations, and will continue to push forward the investment promotion. Based on the project's advantages, an integrated business format will be created, believing that the project will bring about new and innovative business formats beyond expectations once operational.

A：Regarding the operating situation and profitability improvement of the summer operation of Shenzhen Airlines, please inquire with Mr. Zhou Zhiwei, former Deputy Governor of the province of Guangdong. At the same time, questions such as whether the company will distribute mid-term dividends this year and the adjustment of the direction of the 15th Five-Year Plan will be further discussed internally and announced after receiving support from professional institutions.

A：Mainly because state-owned enterprises have more restrictions in their core business and investments. For example, control over core business and investments, which makes them relatively more stable during economic fluctuations. Shenzhen International's traditional basic industry is toll roads, especially with monopolistic characteristics and good benefits in the Greater Bay Area. With the increasing penetration rate of e-commerce and the unstoppable trend of cross-border e-commerce development, the logistics real estate industry, especially in high-efficiency, automated warehousing logistics, has broad prospects, and currently, the industry's rental rate level is the best among the four major sectors.

A：Firstly, logistics infrastructure is positioned as a strategic basic industry that requires long-term heavy investment in assets, making it suitable for state-owned enterprises to control. Secondly, state-owned enterprises have advantages in financing costs, brand reputation, and cash flow maintenance, allowing them to take on longer investment recovery periods and higher risks. In addition, state-owned enterprises can achieve project layout and profit adjustments through economies of scale, government support, and flexible mechanisms. Despite the impact of the economic downturn on the industry, the government's willingness to supply logistics properties is not high, and there is still market demand. It is expected that land acquisition will decrease in the next two years, and industry peers will also slow down their expansion pace, but the demand will not disappear. Therefore, in its future five to fifteen year planning, Shenzhen International will continue to focus on logistics real estate as its core business, consolidating its current advantages and exploring transformation in the direction of comprehensive service operators.

A：Shenzhen Airlines' passenger transportation volume and number of passenger flights steadily increased in the first half of this year, but production input growth was at a lower level compared to industry average due to factors such as aircraft engine production suspension. During the summer peak travel season, the addition of flights mainly on international and regional routes led to lower than expected profitability. However, as related work progresses and financial costs decrease, Shenzhen Airlines' performance will continue to improve.

A：Shenzhen Airlines' annual dividend policy has remained relatively stable, with nearly 5 billion Hong Kong dollars in cash dividends distributed over the past five years, with an average dividend rate as high as 51.5%. In the future, the company will continue to adhere to a relatively stable dividend policy and consider implementing interim dividends based on market conditions and investor preferences. At the same time, they will communicate with major shareholders to explore the possibility of adjusting the dividend policy.