Zhong Ji Longevity Science Group Limited (HKEX: 767) 2025 Annual Report – Key Highlights and Shareholder Updates

1. Capital Restructuring and Fundraising Activities

• Major Share Placement: On 25 June 2025, the Company successfully issued 90,124,751 new shares under a general mandate granted at the 2024 AGM. The net proceeds raised were approximately HK\$30.44 million.
• Use of Proceeds:
  • 36.3% allocated to Hong Kong longevity science business operations.
  • 13.2% to support longevity science sales channels in Shenzhen.
  • 17.5% for legal fees and associated costs in recovering home loans tied to the money lending and financial advisory businesses.
  • 33.0% for general working capital.
• Share Placement Price: The shares were placed at HK\$0.34 per share, with a net subscription price of approximately HK\$0.338, compared to the then market price of HK\$0.335.
• Investor Profile: All placees were independent third parties, which may enhance the company’s independence and broaden the shareholder base.
• Potential Impact: The successful fundraising and clear allocation of proceeds towards business development, legal recovery, and working capital reflect the Company’s active management of financial resources and future growth focus. The dilution effect and the strategic allocation may be price-sensitive for shareholders.

2. Business Strategy and Outlook

• Transition to Light Asset Model: In response to an unpredictable market environment, the Group will operate under a light asset model to reduce operational pressure and risk, aiming to maximize shareholder returns.
• Expansion Plans: The Group intends to continue expanding its core longevity science business, including forming joint ventures with strategic partners when opportunities arise.
• Management Confidence: The Board is confident in delivering operational efficiency and enhancing shareholder value through these strategies.
• Price Sensitive: The proactive shift in strategy and explicit plans for expansion and risk reduction could significantly affect market sentiment and share price.

3. Securities and Investments Update

• Divestment of Listed Equities: The Group disposed of all remaining listed equity investments during the year, booking a net gain (excluding unrealized gains/losses) of approximately HK\$122,000 (FY2024: HK\$7,539,000).
• No Long-Term Equity Holdings: As of 31 December 2025, the Group held no long-term investments in equity securities listed on the Stock Exchange (vs. HK\$2,158,000 as of 31 December 2024).
• Investment Policy: The Group focuses on liquid, large-cap securities and maintains strict risk controls. Investments are closely monitored, and any portfolio loss exceeding 30% triggers a management review and potential divestment to minimize losses.
• Price Sensitivity: The shift away from equity holdings and emphasis on liquidity and risk control could reduce investment-related volatility in earnings but may also limit upside from capital market rallies.

4. Money Lending and Financial Advisory Business

• Loan Approval Process: The Group maintains a robust loan approval system, including due diligence, external legal and credit checks, and strict default risk assessment, in line with HKFRS 9 requirements.
• Default Definition: Loans are considered in default if 180 days past due or if the borrower is unlikely to pay in full.
• Legal Recovery Efforts: Significant proceeds from the recent fundraising are earmarked for legal costs related to recovering secured loans, indicating an active approach to managing non-performing assets.
• Price Sensitivity: The focus on legal recovery and risk management in the lending portfolio is critical for asset quality and may affect future earnings and valuations.

5. Corporate Governance, Risk Management & ESG

• ESG Commitment: The Company will continue to enhance ESG practices and will publish a separate ESG report by April 2026.
• Governance: The Board confirms compliance with major regulations (Money Lenders Ordinance, Listing Rules, SFO, Bermuda Companies Act) with no material non-compliance during the year.
• Risk Management: The Group has a comprehensive risk management and internal control system, with regular reviews and outsourced internal audit. No significant deficiencies were reported.
• Dividend Policy: No dividend was declared for FY2025. The Board will consider dividends subject to profitability, liquidity, and business needs.
• Public Float: The Company maintains sufficient public float as per the Listing Rules.
• Price Sensitivity: The absence of a dividend and emphasis on reinvestment may impact shareholder returns in the near term, while strong governance may support long-term confidence.

6. Legal and Post-Year-End Events

• Lawsuit Exposure: On 24 July 2025, Harmony Delight Holdings Limited filed a claim (HCA No. 534 of 2025) against the Company, seeking specific performance on convertible notes of HK\$220 million or the alternative payment of HK\$220 million. The outcome may have a material impact on the Company’s financial position and is considered price-sensitive.
• Planned Acquisition: The Company announced an acquisition (1 December 2025) involving a non-cash consideration (issuance of up to HK\$300 million in convertible notes), expected to contribute positively to cash flow in FY2026 under profit guarantees. Circular dispatch was delayed to April 2026.
• Price Sensitivity: Both the litigation and the acquisition are highly material and could significantly affect the Company’s share price depending on outcomes, success in court, and post-acquisition performance.

7. Share Schemes and Director Interests

• Share Option and Award Schemes: The Company maintains an active share option scheme (with 38.7 million shares available for grant) and a share award scheme to incentivize employees and partners, aligning interests with shareholders.
• Director Holdings: As of 31 December 2025, Mr. Yan Li (Chairman & CEO) holds 94,655,145 shares. No directors have undisclosed relationships with substantial shareholders.
• Price Sensitivity: Share-based incentives can dilute existing shareholders but may support long-term growth and retention of talent.

8. Financial Performance and Audit

• Results: Full financial results are detailed on pages 93–94. No dividend was declared.
• Audit Opinion: The auditor (CCTH CPA Limited) issued an unqualified opinion for FY2025, confirming the reliability of the financial statements.
• Key Financial Risks: The Group’s main risks are interest rate risk, equity price risk (now reduced), credit risk (especially in money lending), and liquidity risk. Management believes policies in place are adequate to mitigate these risks.
• Price Sensitivity: Stable audit opinion and transparent risk management support market confidence.

Conclusion for Investors

Investors should take note of several price-sensitive developments:

• The large share placement and the Company’s active use of proceeds for business development and risk management.
• The strategic pivot towards a light asset model and expansion via joint ventures.
• The complete exit from listed equity investments and focus on liquidity and risk control.
• The significant lawsuit regarding convertible notes, which could have a material impact on the Company’s financials.
• The planned acquisition funded by convertible notes, with expected cash flow benefits under written profit guarantees.

Shareholders should closely monitor updates regarding the litigation outcome, progress of the acquisition, and ongoing business developments, as these could materially influence the Company’s valuation and share price.

Disclaimer: This article is for informational purposes only, summarizing key points from the 2025 Annual Report of Zhong Ji Longevity Science Group Limited. It does not constitute investment advice. Investors should review the full annual report and consult professional advisers before making investment decisions. The Company’s future performance is subject to risks and uncertainties, including potential litigation outcomes and the success of its expansion strategies.

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