On behalf of the board of directors (the “Board” or “Directors”), I present to the shareholders the annual report of Dynamic Holdings Limited (the “Company”) and its subsidiaries (the “Group”) for the financial year ended 30 June 2025.

Final Results

For the year ended 30 June 2025 (the “year”), the Group reported total revenue of HK$64,952,000 (2024: HK$71,573,000) and gross profit of HK$41,362,000 (2024: HK$44,965,000), representing a decrease in revenue and gross profit about 9% and 8% respectively, as compared with the corresponding figures for the previous year (the “last year”). The gross profit margin was about 64% (2024: 63%). These results were primarily attributable to the reduced rental revenue from investment properties of the Group in Chinese Mainland as denominated in Renminbi yuan (“RMB”) during the year.

During the year under review, the Group recognised other income and gains amounting to HK$9,039,000 (2024: HK$3,083,000), which arose mainly from bank interest income of HK$7,588,000 (2024: HK$7,032,000) and net exchange gain of HK$562,000 (2024: HK$4,297,000) in the year. There was no reversal of interest income as the amount due from a joint venture of the Group (the “JV”) in the Chinese Mainland was fully repaid in last year.

Furthermore, the Group recorded a significant decrease in the fair value of investment properties, amounting to HK$114,974,000 (2024: HK$23,927,000) under stagnant property sentiment particularly in the office sector in the year. Administrative expenses were reduced to HK$27,100,000 (2024: HK$47,566,000) mainly due to reduced expenses related to the JV.

The Group did not record any share of profit from the JV during the year. The recognition of a profit of HK$12,635,773,000 in last year was a one-off fair value gain on a piece of land distributed to the Group by the JV.

Taking all factors into account, including the non-cash decrease in fair value of investment properties and the related deferred tax effect, the Group recorded a loss for the year attributable to shareholders of the Company in the sum of HK$62,594,000 (2024: profit of HK$5,353,955,000), with basic loss per share of HK$0.263 (2024: basic earnings per share of HK$22.52). The significant decrease in earnings per share between the two years was mainly due to the above-mentioned one-off fair value gain and related tax effect in last year. Excluding the effects of such one-off gain and related tax effect, the Group recorded an underlying basic loss per share of HK$0.0738 in last year.

In addition, due to an exchange difference arising from the translation of the presentation currency in Hong Kong dollars (“HKD”) from functional currency in RMB, which marginally appreciated against HKD by 0.08% (2024: 1%) as at the end of the year, other comprehensive income was HK$5,620,000 (2024: HK$18,460,000), and the total comprehensive expense attributable to shareholders of the Company amounted to HK$57,007,000 (2024: total comprehensive income of HK$5,372,015,000) for the year.

Dividends

The Board has resolved to recommend the payment of a final dividend of 0.5 Hong Kong cents (2024: 0.5 Hong Kong cents) per share to the shareholders of the Company whose names appear on the register of members of the Company on Friday, 19 December 2025. Together with the interim dividend of 0.5 Hong Kong cents per share which were paid to the shareholders of the Company during the year, the total dividend for the year amounts to a total of 1 Hong Kong cent per share. Subject to approval by the shareholders at the forthcoming annual general meeting of the Company to be held on Friday, 12 December 2025, the warrants for the final dividend are expected to be despatched to those entitled on or about Tuesday, 6 January 2026.

Business Review

In the year under review, the overall revenue and segment results 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, whereas segment results of the Group were derived from segments of property rental from its investment properties and property development in Chinese Mainland. The performance of rental segment of the Group was adversely affected by the prolonged downturn of the property market, leading to reduced rental income and the downward pressure in fair value of investment properties as compared with those of the last year.

The rental income of the Group generated from its investment properties located in Shanghai and Beijing, amounted to RMB59,626,000 (2024: RMB65,215,000), representing a decrease of about 9% revenue as compared with that of last year. Such rental income, as presented in the financial statements, amounted to HK$64,952,000 (2024: HK$71,573,000), which accounted for all (2024: all) of the consolidated revenue of the Group for the year. The fair value of the investment properties of the Group, including shopping malls, car parks and other properties in Beijing and office units in Shanghai, recorded a decrease of RMB105,547,000 (equivalent to HK$114,974,000) (2024: RMB21,802,000 (equivalent to HK$23,927,000)). The decline in rental income and fair value was mainly due to stagnant property sentiment, particularly on office sector during the year. As such, the property rental segment recorded a loss of RMB67,969,000 (equivalent to HK$74,039,000) (2024: a profit of RMB18,326,000 (equivalent to HK$20,113,000)).

Excluding the effects of the changes in non-cash fair value of these investment properties and the related tax effect, the underlying segment results recorded a profit of RMB37,578,000 (equivalent to HK $40,935,000) (2024: RMB40,128,000 (equivalent to HK$44,040,000)).

Besides, the Group was developing a piece of land situated in Shenzhen for residential and commercial use with ancillary facilities, which was distributed to the Group last year as mentioned below. This property was under development and had not yet generated any revenue (2024: nil), and accordingly the segment recorded a loss of HK$4,988,000 (2024: HK$939,000) for the year.

Beijing

In Beijing, the rental income generated from the well-established community mall of the Group in Chaoyang District decreased, with an average occupancy rate of about 87% (2024: 86%) throughout the year. The rental income of this segment (including car parks and other certain properties) totaled RMB25,405,000 (2024: RMB26,579,000) for the year, representing a decrease of about 4% compared with that of the last year. It translated into HK$27,675,000 (2024: HK$29,171,000), accounting for 43% (2024: 41%) of the total revenue of the Group. The decline in rental income was mainly due to new supply, suppressed consumption and subdued retailing sentiment in Beijing during the year. The fair value of these investment properties decreased by RMB34,948,000 (equivalent to HK$38,070,000) (2024: RMB11,369,000 (equivalent to HK$12,477,000)), resulting in a loss of HK$23,798,000 (2024: a profit of HK$2,407,000) recorded in the segment results for the year.

Excluding the effects of the changes in fair value of these investment properties and related tax effect, the underlying segment results recorded a profit of RMB13,101,000 (equivalent to HK$14,272,000) (2024: RMB13,562,000 (equivalent to HK$14,884,000)).

Shanghai

In Shanghai, the quality offices of the Group known as “Eton Place”, located in core financial district of Little Lujiazui in Pudong, experienced a downtrend in average occupancy rate to about 70% (2024: 83%) during the year, with the rental income totaling RMB34,221,000 (2024: RMB38,635,000), representing a decrease of about 11% compared with that of the last year. It translated into HK$37,277,000 (2024: HK$42,402,000), accounting for 57% (2024: 59%) of the total revenue of the Group for the year. The decline in rental income and occupancy rate was primarily due to the abundant oversupply of office, sluggish leasing demand and major tenants’ default on rental payments, resulting in low net take-up rate and downward pressure on rental and fair value. During the year, the fair value of these investment properties decreased by RMB70,599,000 (equivalent to HK$76,904,000) (2024: RMB10,433,000 (equivalent to HK$11,450,000)), resulting in a loss of HK$50,241,000 (2024: a profit of HK$17,706,000) recorded in the segment results.

Excluding the effects of the changes in fair value of these investment properties and related tax effect, the underlying segment results recorded a profit of RMB24,477,000 (equivalent to HK$26,663,000) (2024: RMB26,566,000 (equivalent to HK$29,156,000)).

Shenzhen

In the year, the Group developed a plot of land no. K709-0003 located in Tung Kok Tau, Nanshan District, Shenzhen (the “Land”), which 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) (the “Bureau”) last year.

The Land is primely 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), which is at the premier waterfront cultural and leisure region in Tung Kok Tau, Nanshan Distract. 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, comprising about 143,000 square metres for residential use and 29,000 square metres for commercial use and other supporting ancillary facilities.

During the year, the Group commenced development of the Land and had been working closely with various relevant government authorities and stakeholders on development options and master planning of the Land. These plans align with the city planning and infrastructure, including development of metro line and station, to support cultural and leisure facilities in the region and the opera house nearby. As for the construction and development costs of the Land, it is projected that the funding will derive from internal resources, bank financing and other applicable means as appropriates. Various major banks have positively indicated appropriate financing terms for the property development of the Land, and the Group will endeavor to secure the most favorable financing for the project.

Regarding the JV 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. After the land swap that surrendered its interests in a piece of land located in Tung Kok Tau, Nanshan District, Shenzhen (the “Previous Land”) to the Bureau, in return for, among others, the Land granted to the Group. Zhen Wah no longer holds any significant asset following the land swap.

The Group did not record any share of profit from the JV during the year (2024: nil).

Meanwhile, as previously disclosed, an ex-tenant lodged appeals (the “Appeals”) against the previous judgements with the Shenzhen Intermediate People’s Court of Guangdong Province (the “Court”), concerning four administrative proceedings filed by the ex-tenant as plaintiff against the relevant official authorities (the “Authorities”) as defendants, with Zhen Wah joined as a third party, relating to the Previous Lands. The ex-tenant opposed the relocation compensation agreement (the “Compensation Agreement”) previously entered into between the Authorities and Zhen Wah concerning demolition, relocation and compensation for those buildings, erections and equipment on the Previous Land; and claimed additional compensation. During the year, the Court dismissed three of four Appeals and upheld their original judgments. For the remaining Appeal, the Court modified the second ruling of its original judgment to order the Authorities to reconsider the ex-tenant’s compensation request, while upholding other parts of the original judgment. The Group and the JV Partner are monitoring the progress 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 year. The main objective is to utilise the Group’s funds efficiently and manage the financial risks effectively. As at 30 June 2025, the equity attributable to its owners amounted to RMB6,652,967,000 (30 June 2024: RMB6,712,492,000), translating to HK$7,295,320,000 (30 June 2024: HK$7,354,705,000) with a net asset value per share of HK$30.69 (30 June 2024: HK$30.94). As at 30 June 2025, the Group has no bank borrowings (30 June 2024: nil), resulting in a nil gearing ratio (30 June 2024: nil). The exposure to foreign currency fluctuations that affected the Group during the year under review was mainly the fluctuation of RMB against HKD, resulting in a net exchange gain of HK$562,000 (2024: HK$4,297,000) and exchange difference from translating functional currency of RMB to presentation currency of HKD, amounting to other comprehensive income of HK$5,620,000 (2024: HK$18,460,000). No financial instruments were used for hedging purposes during the year and the Group will continue to closely monitor the fluctuation of RMB to minimise any adverse impacts.

Financial Resources and Liquidity

During the year under review, sufficient cashflow was generated from rental revenue of investment properties and interest income. As at 30 June 2025, the bank balance and deposits and cash of the Group totaled HK$438,327,000 (30 June 2024: HK$422,338,000), primarily denominated in RMB. With sufficient cashflow, the Group maintained unutilised credit facilities of HK$1,000,000 (30 June 2024: HK$1,000,000) as working capital, subject to floating interest rates, as at 30 June 2025. The Group’s net current assets amounted to HK$13,082,332,000 (30 June 2024: HK$13,057,439,000) with a current ratio of 72.77 (30 June 2024: 74.17) as at 30 June 2025.

As at 30 June 2025, the Group had significant commitments of capital expenditures for property development amounting to HK$33,464,000 (2024: nil). 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 appropriates. Various major banks have positively indicated appropriate financing terms for the property development of the Land, and the Group will endeavor to secure the most favorable financing for the project.

Pledge of Assets and/or Contingent Liabilities

As at 30 June 2025, the borrowing of the Group was nil (30 June 2024: nil) without pledge of assets. Meanwhile, the contingent liabilities of the Group was nil as at 30 June 2025 (30 June 2024: nil).

Prospects

The China economy demonstrates resilience and steady signs of recovery momentum, though it faces headwinds from a prolonged property downturn, subdued domestic consumption, caution business sentiment, geopolitical tensions and imposition of tariffs. A series of ongoing stimulus policies as well as fiscal and monetary easing measures in mainland aim to stabilise the property sector and revitalize the consumption, supporting sustained high-quality steady economic growth in China. These are expected to boost market sentiment, spur domestic demand and bolster business activities, underpinning leasing activities of retail and office sectors.

In Beijing, the retail market is expected to face a downward cycle in leasing demand and rent owing to stalled demand and weakened retailer performance, as consumers remain cautions on non-essential spending. However, supportive policies and efforts are expected to improve consumer spending and gradually unlock consumption potential. In response, the Group will implement a multifaceted strategy to maintain occupancy and recurring revenue. This will include refining leasing and marketing approaches, optimizing tenant mix and redefining retail space operations to better fulfil local consumer needs. The Group will also adopt competitive, flexible rental strategies to attract new retailers/tenants and retain existing retailers/tenants.

In Shanghai, the office market will remain challenging under significant pressure in the face of the ample oversupply and sluggish occupier sentiment, weighing heavily leasing activity. It is anticipated that rental will further decline with rising vacancy rates. To navigate this environment, the Group will deploy aggressive and flexible rental strategies. These will include offering the fitting-out subsidies, value-added services, co-working office spaces and more adoptable leasing terms to lower entry barriers for tenants, in a bid to attract new tenants and retain existing tenants, stabilizing occupancy rate and recurring revenues.

Shenzhen is poised to remain a pioneer in economic and digital competitiveness as premier special economic zone and global hub for innovation, entrepreneurship and advanced technology with high-quality development under official support and stimulus policy, particularly Nanshan District as high-end, tech-centric area. In addition, the development of transportation network and infrastructure projects in Shenzhen stimulates intra-city and intercity connections, solidifying its role as the driving impetus for the sustainable growth and development of Guangdong-Hong Kong Macao Greater Bay Area.

Meanwhile, the local property market shows signs of policy-driven stabilization, evidenced by high-price land auction in key plots and recent swift sales of new premium-quality residential projects. A promising outlook of Shenzhen’s property market is supported by its reputation as a highly livable city and government stimulus policies for property sector. Together with the optimized city planning as quality cultural and leisure area in addition to metro line and station near opera house in Tung Kok Tau, Nanshan District, Shenzhen, this will further enhance the future development value of the Land.

The Group will continue to act proactively for safeguarding the best interests of the Company in relation to Zhen Wah and its assets in respect of Historical Disputes. It will continue to adopt the best available measures and take expedient action to protect the Company’s best interests. The Group will continue to seek PRC legal advice and to further strive for the best interest of the Group in relation to Zhen Wah and its assets.

Simultaneously, the Group will continue to work closely with the relevant authorities and parties to explore various development options to optimise the future development value of the Land in alignment with city planning and the projects of adjacent opera house and infrastructure for the best interests of 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 year.

Dr. TAN Lucio C.
Chairman

Hong Kong, 26 September 2025

Annual Report the year ended 30 June 2025