Good morning, afternoon, welcome to the 2025 interim results conference call of Anton Oilfield Services Group. First, I will report on the overall performance for the first half. Revenue for the first half reached approximately RMB 2.63 billion, representing a 20.9% increase compared to the same period last year. Profit attributable to equity holders reached approximately RMB 117 million, a significant increase of 55.9% year-on-year. Free cash flow was approximately RMB 117 million, down 12.3% year-on-year, maintaining a healthy level. The key highlights of the first half of 2025 include, first, lean operations, sustained business expansion, accelerated profit growth. Two, build a new service company business model. Three, global market expansion to growth. Fourth, the expanding global management, accelerating digital intelligence opportunities.
So let's see, in the first half of the year, we successfully reduced our total U.S. dollar debt to zero at the end of 2024, fundamentally optimizing our financial structure. Business performance also showed strong results. Revenue grew 20.9% year-on-year to RMB 2.63 billion. Reported net profit surged 55.9% to RMB 165 million. This fully demonstrates the effectiveness of our strategic execution and the comprehensive improvement in operational quality. Here, I'd like to share the latest progress in building our business model in the mature business segment, Oilfield Technical Services. We continued to enhance reserve efficiency, further highlighting our highlighted technical service model. In new business ventures, we have expanded into oil and gas development, natural gas utilization, and AI-enabled operations. Following sustained business model upgrades, we have stabilized a preliminary integrated service model that integrates technical service providers.
Technical service operator represents an integrated service model that combines technical expertise with operational capabilities. Unlike oil companies that acquire oil and gas operating rights through capital investment, we secure field operating rights by deploying technical services. Unlike traditional oil company investment models, this approach of securing oil and gas field operating rights through technical investment is more asset-light, lowering costs, higher efficiency, and better equipped to withstand market cycles. Only through the close integration of technical services and oil and gas production can these resources achieve significant deployment and maximize asset value. Regarding market expansion, in Iraq, we have achieved comprehensive coverage, establishing a business ecosystem where technical services, oil field management, and oil and gas development advance together. This has further enhanced our market influence and driven scale deployment. In Kuwait, our completion to successfully pass pre-qualification, leveraging its first-ever opportunity to fully open the technical service market.
We are preparing this for various projects to create new business growth points. In Malaysia, our customized natural gas commercialization project secured a contract, successfully entering the local market and achieving a successful start in Southeast Asia. Meanwhile, we will continue to deepen its presence in global markets, including the Middle East, Africa, Central Asia, and Southeast Asia, continuously expanding its business footprint. As for our global expansion, which has made significant progress, moving forward, we will establish Dubai as our global headquarters and operational hub, with Egypt served as our human resource center, India as our supply chain procurement center, mainland China as our technical and raw material resource center, and Hong Kong, China as our financial center. Leveraging the strengths of each location, we will support our global deployment.
In June 2025, our Hong Kong office relocated to new premises, coinciding with the inauguration ceremony with our internal treasury company. This September, our new Dubai global headquarters office will commence operations, further enhancing our global operational efficiency. Anton's commitment to practicing excellence in digital and intelligent management will also advance AI applications across industries, enabling both our own and our clients' digital and intelligent transformation. Anton remains committed to delivering long-term beyond continuously improving performance. Stable returns for shareholders, we have adopted a dual strategy of dividend distribution and share buybacks. In the first half of this year, we completed the final dividend payment for 2024, totaling RMB 73 million. Concurrently, we executed share buybacks exceeding 17 million shares, further enhancing shareholder value. We remain committed to setting an industry benchmark for sustainable development.
In 2025, Anton was again honored as a China Best Managed Companies and selected for the S&P Sustainability Yearbook, China Edition 2025. This honor not only recognizes our management capabilities but also affirms our sustainability efforts. Okay, so let's have an outlook for the second half. Looking ahead to the second half of 2025, our key highlights include: first, building a leading global green energy technology services company. Two, driving long-term growth through early indicator management. Three, maintaining focus on Iraq's core market opportunities to drive scaled growth. Fourth, expanding global vision and continuously entering new markets. Five, boost profitability through efficient operational systems, generate healthy cash flow, and continuously enhance shareholder returns, so our long-term goal is to build a leading global green energy technology services company, currently positioned as an integrated service provider and technical service operator.
We deliver efficiency solutions for oil and gas development, leveraging China's unique advantages and global footprint. We aim for growth to build an industry innovation leader. In the market context, by 2029, Iraq's crude oil production capability will exceed 6 million barrels per day, representing an increase of nearly 50% from the current 4 million barrels per day. This positions Iraq as the world's largest incremental market. To this end, we shall maintain our focus on Iraq. Key priorities include sustainably increasing production at the marginal oilfield, supporting sustained output growth, while advancing deployment of the marginal oilfield and our management at Dhufriya oilfield we are developing. Our business model has fundamentally from traditional oilfield service company. To achieve our long-term vision, we have implemented early-stage indicator management, driving sustainable corporate growth through data-driven approaches.
Through this management of early-stage indicators, our orders and revenue will exhibit enhanced predictability alongside greater safeguards for market opportunities and commercial future. So we manage early indicators through six key steps, ensuring revenue realization becomes a natural progress. So we shall continue strengthening localized operations with management, operational, personnel, full stationing in Iraq to empower our activities there, thereby seizing the historic opportunity. To this end, we will continuously conduct global benchmarking, a benchmarking against global leaders, learning across all business segments, innovative business models, and comprehensively entering new spheres of influence. Simultaneously, we will enhance our core technologies and integrated solution capabilities through global talent system upgrades, sustained investment in core competency deployment, and expanding global technical and strategic partnerships to meet diverse customers' needs. We will position efficient operations to continuously enhance profitability and generate healthy cash flow through platform-based, ecosystem-driven, and innovative business models.
We will achieve asset-light growth, laying a solid foundation for returns of shareholders. Dear investors, Anton has evolved into a new entity for the new era. We will remain customer-centric, continuously innovate our business model, and expand into global markets to achieve faster and better development. Ladies and gentlemen, this concludes our brief overview of Anton. Thank you.
[Foreign language]. The Q&A session is now open. Investors participating via telephone, to register your question, please press the one on your telephone keypad. Should you wish to cancel your question, please press the two. Investors participating via livestream, if you wish to ask questions, you can type your question in the chat box in the right corner. Your question will be read out later by the moderator and forwarded to the management to answer. [Foreign language]. The Q&A session is now open.
Investors participating via telephone, to register your question, please press the one on your telephone keypad. Should you wish to cancel your question, please press the two. Investors participating via livestream, if you wish to ask questions, you can type your question in the chat box in the right corner. Your question will be read out later by the moderator and forwarded to the management to answer. [Foreign language].
[Foreign language].
Okay, the first question is about the company's 10-year growth strategy. The investors see that we have very large growth guidelines for our target. So whether the management can give a detailed introduction about our blueprint for this strategy, how about the segment structure as well as the business different regions?
[Foreign language].
Okay, first of all, we issued our strategy, that is a five-year growth plan. Yes, we have a five-year growth tenfold our strategy plan.
That is a strategy and growing direction for directing our internal business lines growing targets, so first of all, it is kind of a large target, and it is for five years growing plan.
[Foreign language].
Okay, so under our strategic growing targets, we have promoted our solution, our oil and gas general development and utilization efficiency enhancement solution, so our core target is to help our customers to improve their development and utilization efficiency because that is a core demand from our customers, so along our targets and solutions, our business model here consists of two kinds of business models. On one hand, it is our general service, our integrated technical service providing, and the second one is that we just newly promoted out to this our model of technical service operator.
[Foreign language].
So our business model will be put into four different scenarios of our businesses.
The first scenario is the most familiar one that everybody knows, that is for the upstream development, which includes our technical services and our oil field management services. These two kinds of services will just include our technology and our management for our customers. And then here we also have another business that is for the oil and gas development businesses. For these businesses, we will do it using our just a newly mentioned technical service operator model. So under this model, we just input our technology instead of input cash to get these resources and develop these resources. So through our input of technology, we help this oil field to improve the efficiency of this development and improve the return. And this is the one which I mentioned that we want to provide extremely great integrated services for the customer.
[Foreign language].
And so our second large scenario, that is for the natural gas utilization. So under this scenario, it not only covers the upstream of the natural gas development, but also considers the utilization of natural gas and also the commercialization of the natural gas resources. So for this scenario, it covers the natural gas development for the midstream and downstream. So we combine the upstream, midstream, and downstream businesses under our scenario of this natural gas development. And we call it using the covering the whole supply chain for low-efficient natural gas, and that consists of our business line of natural gas utilization. This is our second large business scenario.
[Foreign language].
And for the third and fourth scenario, it is our artificial intelligence utilization scenario, as well as our online platform, which would facilitate the transactions of this industry.
These two scenarios cover the efficient enhancement scenarios during the oil and gas field daily operation. We name it as the AI- empowered and online platform collaborative utilization scenario.
[Foreign language].
The above introduction is for our product line. For our markets, we just mentioned that we will continue to focus on the Iraqi market because nowadays for the company, we think the Iraqi oil and gas industry would be the largest incremental market along the global market. We need to face this great historical opportunity on developing the Iraqi market and to promoting our incremental market growing trends.
[Foreign language].
And so if we put it for a longer time, even longer time, I mean for the next five years, after five years growing, we will focus on the emerging markets along the globe, which includes the Gulf countries, Central Asia, the Southeast Asia, including African countries. So we will focus on a wider emerging markets around the globe for our oil and gas development and the utilization. And we have already started to actively cultivate this kind of new global markets for preparing for larger growth in the future. And of course, our strategy still covers our China markets. For China markets, it is still a very important market for us. And in the China markets, we will continue and actively develop our businesses with a new model. So that will be all along with our integrated solutions.
Anyway, we hope we can face the industry's future and utilize our enhanced integrated solutions to provide our core services to our customers. And we will make our large efforts first in the Iraq countries and then globally. We're actively deploying these global markets and preparing for our long-term development to achieve our long-term goals. Okay, thanks for the question. [Foreign language].
So can we start it now? Okay. Investors' participation will transfer to register your question. Please press that one on your telephone keypad. Should you wish to cancel your question, please press that two. Investors' participation will last you. If you wish to ask questions, you can type your question in the chat box in the right corner. Your question will be read out later by the moderator and forwarded to the management to answer.
[Foreign language].
So the question is about our input and the timeline for the return of our new businesses。
[Foreign language].
Okay, so for our new businesses first, for the natural gas utilization, here we just mentioned our big principle. Our first principle is that we will still strictly follow our asset-light development strategy. So we develop our businesses using the technology input instead of the input of funds. So for this natural gas utilization, the main input would be our technology. So we can see that on one hand, our return would be for the oil and gas development, for the resources. And then the second return would be our technical services providing because the resources development would also drive our traditional technology services return. So first about this oil and gas development businesses, our return would be higher than the traditional investment of the resources.
And, okay, that's for the oil and gas development. And then, for the natural gas utilization, we will more adapt into the platform model. And that would also be using the platform model, combining our strengths of our technical cooperators as well as our equipment suppliers. So, during this process, we are more using our advantage of this business model design, the EPC design, as well as our integration of the resources. So, within this natural gas utilization region, the return would also be higher than the traditional and common power plants or other EPC projects. So, we will also choose the projects like the natural gas utilization and natural gas treatment projects. So, our core focus would be deploying our innovative business model to integrate resources and help our customers improve their efficiency to get higher return and faster return.
[Foreign language].
So the next question is about the orders for the second half of this year, and according to the execution of our orders on hand, whether there's guidelines for the revenue for the second half.
[Foreign language].
Okay, first of all, now for the company, we are more focusing for a long-term development and long-term growth. So we didn't provide detailed guidelines, like the numbers for the guidelines for the capital markets. But of course, we hope our businesses can grow with the faster trend before the pandemic. And also I can share with our investors that through our early indicators management, we can see that our orders currently have some of the features. On one hand, the scale is larger than our orders in the previous years. And then the orders are also longer.
With the longer terms, it also can make our profits more predictable in the future, and also, just as I had introduced, that for some of the new orders, our returns will be higher than our traditional ones because we are facing a better business model, a larger scale business model with our asset-like business strategy. So the investment returns will be higher, and so we hope we can have a more certain trend for directing our long-term growth during this early indicators management.
[Foreign language].
So the next question is about the gross margin. We can see that there is a little bit drop in the decrease of the gross margin. Whether there's any outlook for the large projects in the future.
[Foreign language].
Okay, so for the gross margin, first of all, yes, we have noticed that in the first half of this year, our gross margin has shown a little bit decrease compared with the same period last year. So on one hand, it is because that our revenue from the overseas markets are still expanding, especially when we're entering into a new market, for example, in Kuwait, Algeria, and some other new countries. When we're entering this new market, firstly, our strategy is to enter the market first so that we would have a little bit of impact on our gross margin.
[Foreign language].
On the other hand, for the Iraqi market, because we are currently still expanding our businesses in the Iraqi market, and some of our business lines are newly entered into this market.
So the services providing these markets are more than half a year, especially for the recent terms. Some of these businesses like oil testing, the workover services, including some drilling and equipment services, our market share are still expanding. So for these kinds of services, comparing with our traditional technical services, which have a higher return, this kind of services line has a little bit lower gross margin. So that drives our overall gross margin a little bit decreased. But I should say that for our newly entered projects and for the projects which are still expanding their skills, the cash flow is very stable. And the contract terms and predictability and their overall service terms are fixed and relatively have good requirements under the contract. So we think the decrease in the gross margin is just temporary.
Along our expanding of businesses and along with our stable operation in the new markets, we believe that our growth margin will return to a relatively better and more suitable position.
[Foreign language].
So the question is about our five-year tenfold growth strategy. It is on the revenue side or on the profit side? And also for the new businesses, it's related to the sales of the oil and gas resources, whether it has high revenue but with lower margin. Please give more detailed introduction.
[Foreign language].
So first of all, for our long-term target, it is for our revenue because revenue represents our scale. Only when we have large scale, we have larger profits. So for us, first of all, I should also say it is an internal requirement for our team.
It is not a guideline for our capital markets because for our internal teams, we need to meet our requirements, our targets to be easily executed.
[Foreign language].
[Foreign language].
[Foreign language].
[Foreign language].
Okay. So first of all, the target is for our internal requirements for the revenue because only revenue can be easily quantified and easy to be followed increments. This is our first point.
[Foreign language].
The second point that the profit is also very important for us because currently we are more focusing on our long-term development. So we would also consider the indicators like the investment return metrics. So we need to combine these two indicators because we find some situations that maybe in the earlier time our revenue would grow fast, and then following the profit scale would show a more obvious growth.
Just like the performance of our first half of 2025, you can see that comparing with the revenue and profit, it seems that our revenue growth is a little bit slower than our profit growth. That is also because our previous accumulation. This is my second point.
[Foreign language].
Then the third point is that no matter we provide the services like the resources sales or some other services etc., it is included in our integrated solution providing. This solution is facing the whole industry. So our target is to help our customers to improve their efficiency. This kind of efficiency includes the resources, the development, and the utilization etc. So all of these factors might be included into our integrated solutions providing to our customers. And maybe we will have some services to help our customers to settle some of their terminal transactions.
So for this kind of services, this will be depending on the contract, on the nature of the businesses. So maybe it can form some of the contribution to our financial performance, but also it may just provide some platform businesses, and that result will not affect our financial performance just like the online internet platforms. So we just mentioned that our businesses will be driven by our core efficiency enhancement general solutions providing, facing the whole industry and help our customers to achieve their returns, and that would contribute to our long-term development.
[Foreign language].
Okay. Thank you. All the questions. We will now invite our chairman, Mr. Luo, to give conclusion.
[Foreign language].
Okay.
First of all, I want to give an introduction and positioning in my eyes through my communication with our global customers and our communication with globalized technical service providers, as well as our daily communications with our Chinese peers and some other companies. We have made a lot of communications with them, so we have very clear positioning of what Anton is like currently. So I should say that Anton has already become a leading globalized service provider with a solid footprint in China. So we have very obvious Chinese features, but we have grown to be a globalized leading service technical provider.
[Foreign language].
We have already been the sole company which has been successfully developed in the globalized market. I mean, with a very typical Chinese feature company, we are the only one that has already been developed successfully in the globalized market.
So comparing with some of the international technical services companies, I think one of the very obvious features is that comparing with them, they are typically providing some single technical services model. They are just developing their businesses with the model of pure technical services. But for us, we have a more integrated service providing to our customers. And the following year, we will further expand our integrated services to a more extreme level. So we call it a technical service operator, or we can call it technical service oil company because the operator in our industry, it is kind of a typical term referring to oil company. So it is 80% just like oil company. So we call it technical service oil company nowadays.
[Foreign language].
Okay. Currently, for Anton, we are deploying three things.
The first thing is that we are providing, we are constructing, or we are establishing our integrated solutions facing the globalized oil and gas industry, facing the whole industry. So for our integrated solution, that is based on our Chinese system. This Chinese system, including talent, including technology, as well as the resources. So we are constructing our system using our Chinese system and also integrating the globalized advantage on the resources, including our Middle East, Egypt, the resources from Middle East, the talent resources from Egypt, as well as the raw material resources in India, etc. So we had already established our solution combining our Chinese systematic advantages as well as our globalized deployment. So we have very obvious features of integrated solution providing because we also are comparing with the two different ecosystems, compare our system of Chinese system and American system.
Obviously, Anton is adopting an ecosystem based on Chinese system and combining our globalized deployment advantages. So we think using this kind of system and advantages, our integrated advantages, we will have very strong competitive advantage in our globalized market.
[Foreign language].
Okay. So the second effort we are doing is the landing our globalization strategy, especially for the third quarter of this year. We call our team to focus on the Iraqi market, and we call our team to go to the Iraqi first and then globalization because I think for the Iraqi market opportunity, we haven't seen enough. And at the same time, we think Iraq is a good place for cultivating our globalized sales and our people. It is a very stable market and a very important market for us.
So I requested our team, especially for our headquarters management and some of the function departments, to go to Iraq first in the third quarter and to stay there for at least one month to support the businesses. So we are focusing on the Iraqi market to seek more opportunities and to cultivate our people first, and then we have a better space for further globalization development. So also for myself and for people, we are all in Iraq now. So we start our presentation, this meeting from 5:30 A.M. in Iraqi time, and it is already over 6:30 A.M. So what I mean is that for the whole company, we are making our effort to further deploy our Iraqi market.
So we believe for Iraq, we will have a very near-term and high-growing trend, and we are accumulating our talent, our manpower, and our globalized experiences in this market. And for the long term, of course, the other emerging countries will be our focus for supporting our longer-term growth in the future.
[Foreign language].
Okay. Then the first effort we are making is that we are making our efficient management system. We are contracting our high-efficiency management system, which is including our new form of platform-based ecosystem and our asset-light operating model. And also we had just promoted our early indicators management. That means we will not only manage our businesses based on the performances, based on our financial performances. We need to manage some earlier efforts, like we need to closely monitor our early indicators for the different stages during our growing management processes.
For example, the growing market space management is metrics. We hope for the overall process at different stages, we can have quantitative and clear indicators that we can manage for the whole processes. So I also mentioned that I hope following meeting for our disclosures, we can also give some quantitative early indicators to help our investors know the business developing processes during different stages. That would make a clear view for our long-term growth, and it would be better for the management, for our internal management as well.
[Foreign language].
Okay. Then last for our new operating centers in Dubai, the new office opening time we had a little bit delayed till the mid-September. So I also invite our investors to come to Dubai to make communication with us. Thanks.