On behalf of the board (the “Board”) of directors (the “Directors”) of Dynamic Holdings Limited (the “Company”), I hereby present to the shareholders the management statement regarding the unaudited interim results of the Company and its subsidiaries (the “Group”) for the six months ended 31 December 2025, which have been reviewed by external auditor of the Company, Deloitte Touche Tohmatsu.

Interim Results

For the six months ended 31 December 2025 (the “period”), the Group reported a total revenue of HK$29,471,000 (2024: HK$33,784,000) and gross profit of HK$18,099,000 (2024: HK$22,196,000). This represents a decrease in revenue and gross profit of 13% and 18% respectively, as compared with the previous corresponding period (the “last period”). The gross profit margin was 61% (2024: 66%). These results were primarily due to a continued decrease in rental income from the Group’s investment properties in Chinese Mainland, which was denominated in Renminbi yuan (“RMB”).

During the period, the Group accounted for other income and gains amounting to HK$3,802,000 (2024: HK$4,503,000), mainly from bank interest income of HK$3,129,000 (2024: HK$4,074,000) with net exchange loss of HK$258,000 (2024: net exchange gain of HK$236,000).

Amid persistently subdued market sentiment particularly in the office sector in the period, the fair value of investment properties of the Group recorded a significant decline of HK$88,060,000 (2024: HK$64,162,000).

Taking into account the decrease in fair value of investment properties and related effect of deferred taxation, the Group recorded a loss for the period attributable to shareholders of the Company of HK$57,614,000 (2024: HK$42,182,000), translating to a basic loss per share of HK$0.2424 (2024: HK$0.1775). Excluding the effects of change in fair value and related tax effect in the period, the Group recorded an underlying profit of HK$10,429,000 for the period.

Additionally, due to exchange difference on translation to presentation currency in HKD from functional currency in RMB, and given that RMB appreciated against Hong Kong dollar (“HKD”) by 0.96% (2024: devalued by 1.46%), the Group recorded other comprehensive income amounted to HK$70,948,000 (2024: other comprehensive expense of HK$106,986,000). As a result, total comprehensive income attributable to shareholders of the Company amounted to HK$12,951,000 (2024: total comprehensive expense of HK$148,591,000).

Interim Dividend

The Directors have declared an interim dividend of 0.45 Hong Kong cents (six months ended 31 December 2024: 0.5 Hong Kong cents) per share for the six months ended 31 December 2025 to the shareholders of the Company whose names appear on the register of members on Thursday, 2 April 2026. The warrants for the interim dividend are expected to be despatched to those entitled on or about Friday, 24 April 2026.

Business Review

During the period, the overall revenue and segment result of the Group were derived from segment of property rental (the revenue of which was denominated in RMB) principally from its investment properties in Chinese Mainland. The segment result also included those from segments of (i) property rental from its investment properties and (ii) property under development in Chinese Mainland. The performance of rental segment of the Group was adversely affected by the ongoing downtrend of the property market, leading to reduced rental income and occupancy rates as well as the downward pressure in fair value of investment properties as compared with the last period.

Rental income from its investment properties of the Group in Shanghai and Beijing totaled RMB26,822,000 (2024: RMB30,933,000), a decrease of 13% income as compared with the last period. This revenue, reported as HK$29,471,000 (2024: HK$33,784,000) in the financial statements, constituted all (2024: all) consolidated revenue of the Group. The fair value of the Group’s investment properties, including shopping malls, car parks and other properties in Beijing; and office units in Shanghai, decreased by RMB80,145,000 (equivalent to HK$88,060,000) (2024: RMB58,748,000 (equivalent to HK$64,162,000)). As a result, the property rental segment recorded a loss of RMB63,799,000 (equivalent to HK$70,099,000) (2024: RMB38,563,000 (equivalent to HK$42,117,000)).

Excluding the effects of the change in fair value of these investment properties and related tax effect, the underlying segment result was a profit of RMB16,346,000 (equivalent to HK$17,961,000) (2024: RMB20,185,000 (equivalent to HK$22,045,000)).

Besides, the Group continued to develop a piece of land situated in Shenzhen for residential and commercial use with ancillary facilities, which was distributed to the Group in the prior year as mentioned below. This property was under development and did not generate any revenue (2024: nil) in the period. The segment recorded a loss of HK$528,000 (2024: HK$788,000) for the period.

Beijing

In Beijing, the rental income from the well-established community mall of the Group in Chaoyang District dropped, with average occupancy rate of 84% (2024: 87%) during the period. The rental income was RMB11,898,000 (2024: RMB12,913,000), representing a decline of 8%, as compared with the last period. This translated into HK$13,073,000 (2024: HK$14,103,000), accounting for 44% (2024: 42%) of the total revenue of the Group. The decline in both occupancy rate and rental income was primarily attributable to cautious consumption and retail sentiment compounded by a significant influx of new supply. The fair value of these investment properties decreased by RMB21,215,000 (equivalent to HK$23,310,000) (2024: RMB11,734,000 (equivalent to HK$12,815,000)), resulting in a segment loss of RMB15,419,000 (equivalent to HK$16,942,000) (2024: RMB5,051,000 (equivalent to HK$5,517,000)).

Excluding the effects of the change in fair value of these investment properties and related tax effect, the underlying segment result was a profit of RMB5,796,000 (equivalent to HK$6,368,000) (2024: RMB6,682,000 (equivalent to HK$7,298,000)).

Shanghai

In Shanghai, the quality office building known as “Eton Place” located in core financial district of Little Lujiazui in Pudong recorded an average occupancy rate of 68% (2024: 71%) during the period and rental income of RMB14,924,000 (2024: RMB18,020,000), representing a decrease of 17% as compared with the last period. This translated into HK$16,398,000 (2024: HK$19,681,000), accounting for 56% (2024: 58%) of the total revenue of the Group. The decline was primarily due to the oversupply of office space, aggressive rental reductions and tenant incentives by landlords amid weak leasing sentiment, and tenant default on rental payments. These factors collectively resulted in low net take-up rate and downward pressure on rentals, occupancy and fair value. The fair value of these investment properties decreased by RMB58,930,000 (equivalent to HK$64,750,000) (2024: RMB47,014,000 (equivalent to HK$51,347,000)), leading to a segment loss of RMB48,380,000 (equivalent to HK$53,157,000) (2024: RMB33,512,000 (equivalent to HK$36,600,000)).

Excluding the effects of the change in fair value of these investment properties and related tax effect, the underlying segment result was a profit of RMB10,550,000 (equivalent to HK$11,593,000) (2024: RMB13,502,000 (equivalent to HK$14,747,000)).

Shenzhen

During the period, the Group continued to develop a plot of land known as Land No. K709-0003 located in Tung Kok Tau, Shekou, Nanshan District, Shenzhen (the “Land”). The Land was granted to the Group by 深圳市規劃和自然資源局南山管理局 (Nanshan Administration of Shenzhen Municipal Bureau of Planning and Natural Resources) in the prior year.

The Land is strategically located to the east of 後海大道 (Hou Hai Avenue), to the south of 蛇口新街 (Shekou New Street), to the north of 望海路 (Wang Hai Road) and to the west of 後海濱路 (Hou Hai Bin Road) within the premier waterfront cultural and leisure region in Tung Kok Tau, Nanshan District. It covers a site area of approximately 65,000 square metres for multi-purpose development, with a developable gross floor area of approximately 179,000 square metres. This comprises about 143,000 square metres for residential use and 29,000 square metres for commercial use and other supporting ancillary facilities.

During the period, the Group commenced construction of the Land, having obtained a construction permit for the foundation pit support and earthwork project from 深圳市住房和建设局 (Shenzhen Municipal Housing and Construction Bureau). Concurrently, the Group continued to work closely with various relevant government authorities and relevant parties to refine the development options and master planning of the Land. These plans are aligned with the city planning and infrastructure, including development of metro line and station, to support cultural and leisure amenities in the region as well as the nearby opera house.

It is anticipated that the construction and development costs of the Land will be funded through internal resources, bank financing and other applicable means. Several major banks have positively indicated suitable financing terms for the property development of the Land, and the Group will procure the most favorable financing for the project.

Regarding the joint venture known as Shenzhen Zhen Wah Harbour Enterprises Ltd. (“Zhen Wah”), in which the Company holds 49% of equity interests and whose license expired in 2014, the Group and the JV partner (the “JV Partner”) continued its liquidation. Following the land swap in the prior year whereby Zhen Wah surrendered its interest in a piece of land located in Tung Kok Tau, Nanshan District, Shenzhen (the “Previous Land”) in the prior year, Zhen Wah no longer holds any significant assets. The Group did not record any share of profit from the JV during the period (2024: nil).

Meanwhile, as previously disclosed, an ex-tenant has objected to the relocation compensation agreement previously entered into between the relevant official authorities (the “Authorities”) and Zhen Wah concerning demolition, relocation and compensation for those buildings, erections and equipment on the Previous Land; and claimed additional compensation. In the prior year, the court ordered the Authorities to reconsider the ex-tenant’s compensation claim. The Authorities (including Zhen Wah as third party) have since been in negotiation with the ex-tenant about the compensation claim. The Group and the JV Partner are monitoring the situation and will take appropriate actions as and when necessary, based on the advice of their PRC legal advisers.

Based on the PRC legal advice received by the Group regarding historical disputes over Zhen Wah between the Group and JV Partner, including the change of equity interests from 80% to 49% in Zhen Wah in prior years (the “Historical Disputes”), the Group was entitled to the distribution of the relevant income and profit from the Previous Land held by Zhen Wah before re-development, as supported in the arbitral award made in 2010 after arbitration between the Group and JV Partner in respect of the Historical Disputes. The Group continued to act and to seek PRC legal advice and to take expedient actions (including but not limited to litigation and/or arbitration) to safeguard the best interest of the Group in Zhen Wah and its assets in respect of the Historical Disputes.

Financial Review

Capital Structure

The financial position of the Group remains sound and liquid, and its financing and treasury policies are managed and controlled at the corporate level and in a prudent manner during the period. The main objective is to utilise the Group’s funds efficiently and to manage the financial risks effectively. At 31 December 2025, the equity attributable to owners of the Company amounted to RMB6,599,903,000 (30 June 2025: RMB6,652,967,000) with net asset value per share of RMB27.77 (30 June 2025: RMB27.99), translating into HK$7,307,082,000 (30 June 2025: HK$7,295,320,000). As at 31 December 2025, the Group’s total bank borrowings remained nil (30 June 2025: nil), resulting in nil (30 June 2025: nil) gearing ratio of the Group. The exposure to foreign currency fluctuations affected the Group in the period was mainly the fluctuation of RMB against HKD, resulting in the net exchange loss of HK$258,000 (six months ended 31 December 2024: net exchange gain of HK$236,000) and exchange difference on translation from functional currency in RMB to presentation currency in HKD, amounting to other comprehensive income of HK$70,948,000 (six months ended 31 December 2024: other comprehensive expense of HK$106,986,000). No financial instruments were used for hedging purposes in the period. The Group will continue to closely monitor the impact of RMB fluctuations in order to minimise its adverse impact.

Financial Resources and Liquidity

The Group generated sufficient cash flow from rental income of investment properties and interest income. As at 31 December 2025, the bank balance and cash and fixed bank deposits of the Group stood at HK$432,647,000 (30 June 2025: HK$438,327,000) in aggregate and denominated mostly in RMB. With sufficient cash flow, the Group maintained unutilised credit facilities of HK$1,000,000 (30 June 2025: HK$1,000,000) as working capital at floating interest rate. As at 31 December 2025, the Group’s net current assets amounted to HK$13,214,987,000 (30 June 2025: HK$13,082,332,000) with a current ratio of 74.28 (30 June 2025: 72.77).

As at 31 December 2025, the Group had significant commitments of capital expenditures for property development amounting to HK$170,118,000 (30 June 2025: HK$33,464,000). Meanwhile, the projected construction and development costs of the property development of the Land are substantial (subject to the development plan), which will be funded by internal resources, bank financing and other applicable means as appropriate. Various major banks have positively indicated appropriate financing terms for the property development of the Land, and the Group will endeavour to secure the most favorable financing for the project.

Pledge of Assets and/or Contingent Liabilities

As at 31 December 2025, the Group had not pledged any of its assets, given that there was nil borrowings (30 June 2025: nil). Meanwhile, the contingent liabilities of the Group were nil as at 31 December 2025 (30 June 2025: nil).

Prospects

The Chinese economy continues to demonstrate resilience and signs of steady recovery, despite ongoing challenges from a weak property market, subdued domestic consumption, cautious business sentiment and geopolitical tensions. In response, Chinese Mainland has introduced a range of stimulus measures, including fiscal and monetary easing policies to stabilise the property sector and revitalise consumption. These measures are expected to support sustained high-quality, technology-driven economic growth and positively influence market sentiment, spur domestic demand and bolster business activities, thereby underpinning leasing activities in the retail and office sectors.

In Beijing, the retail market is expected to gradually stabilise, with vacancy rates declining steadily and rentals improving, following a prolonged period of high supply and rising vacancy. In the face of cautious consumer spending and weakened retailer performance, the Group will continue to implement a multifaceted strategy to maintain occupancy and recurring revenue. This will include refining leasing and marketing approaches, optimising tenant mix and redefining retail space operations to better meet local consumer needs. The Group will also adopt competitive, flexible rental strategies to attract new tenants and retain existing ones.

The office market in Shanghai is expected to remain challenging, with persistent rental pressure and high vacancy rates driven by significant oversupply and aggressive rental concessions from landlords. In response, the Group will deploy proactive and flexible leasing strategies, including fitting-out subsidies, value-added services, and more adaptable leasing terms to lower entry barriers for tenants. These initiatives are designed to stabilise occupancy rates and sustain recurring revenue.

Shenzhen is well-positioned to remain a pioneer in economic and digital competitiveness, building on its status as a premier special economic zone and global hub for innovation, entrepreneurship, and advanced technology. With continued official support and stimulus policies, particularly in the high-end, tech-centric Nanshan District, the city is expected to play a pivotal role in driving the sustainable growth and development of the Guangdong-Hong Kong-Macao Greater Bay Area.

The local property market in Shenzhen is showing signs of policy-driven stabilisation, as evidenced by the recent swift sale of new premium residential projects adjacent to the Land at strong prices. In addition, it is anticipated that the hosting of “the 33rd APEC Economic Leaders’ Meeting” in Shenzhen in November this year will significantly boost the city’s global profile and infrastructure through high-quality urban renewal, further supporting property values. A promising outlook for Shenzhen’s property market is further supported by the city’s reputation as a highly liveable destination and ongoing government stimulus policies. Enhanced urban planning around the Land as a quality cultural and leisure zone, together with the development of metro infrastructure near the opera house in Tung Kok Tau will further augment the future development value of the Land.

The Group will continue to act proactively to safeguard the Company’s interests in relation to Zhen Wah and its assets in connection with the Historical Disputes. It will pursue the best available measures and take timely action as appropriate, while continuing to seek PRC legal advice to protect and advance the Group’s position.

At the same time, the Group will maintain close collaboration with relevant authorities and other relevant parties to explore various development options, with the aim of optimising the future development value of the Land in alignment with city planning and adjacent infrastructure projects including the opera house, so as to maximise value for the Company and its shareholders.

Appreciation

The Board would like to thank the shareholders, bankers, customers, suppliers of the Group and other stakeholders who have extended their continued support to the Group and all staff of the Group for their contributions to the Group in the period.

Dr. TAN Lucio C.
Chairman

Hong Kong, 27 February 2026

Interim Report the six months ended 31 December 2025