[Performance Summary](index=1&type=section&id=Performance%20Summary) [Key Performance Indicators](index=1&type=section&id=Key%20Performance%20Indicators) In H1 2024, SOHO China's revenue slightly decreased to RMB 799 million, leading to a net loss attributable to owners of the parent of RMB 108 million, despite stable gross margins and net gearing Key Performance Indicators | Indicator | H1 2024 | | :--- | :--- | | Revenue | Approx. RMB 799 million | | Gross Profit Margin from Leasing Business | Approx. 82% | | Average Occupancy Rate of Investment Properties | Approx. 76% | | Net Loss Attributable to Owners of the Parent | Approx. RMB 108 million | | Net Gearing Ratio | Approx. 41% | | Average Borrowing Cost | Approx. 4.5% | - The company's performance shifted from profit to loss, with a **net loss attributable to owners of the parent of RMB 108 million** in H1 2024, compared to a net profit of **RMB 13.61 million** in the same period of 2023[4](index=4&type=chunk) [Financial Statements and Notes](index=2&type=section&id=Financial%20Statements%20and%20Notes) [Consolidated Income Statement Analysis](index=2&type=section&id=Consolidated%20Income%20Statement%20Analysis) In H1 2024, revenue decreased by 2.7% to RMB 799 million, with gross profit at RMB 648 million and a stable 82% gross margin, but expanded fair value losses on investment properties and increased income tax expenses led to a net loss of RMB 109 million, a shift from profit in the prior year Consolidated Income Statement | Item (RMB in thousands) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 799,362 | 821,503 | | Gross Profit | 648,418 | 678,214 | | Fair Value Changes of Investment Properties | (88,086) | (48,997) | | Operating Profit | 380,332 | 490,220 | | Net (Loss)/Profit for the Period | (109,169) | 14,700 | | Net (Loss)/Profit Attributable to Owners of the Parent | (107,546) | 13,613 | - The decrease in revenue is primarily due to weak demand in the office and commercial property leasing market[42](index=42&type=chunk) [Consolidated Balance Sheet Analysis](index=4&type=section&id=Consolidated%20Balance%20Sheet%20Analysis) As of June 30, 2024, total assets were RMB 68.19 billion and total liabilities were RMB 31.12 billion, with the net gearing ratio stable at 41%, but the company faces significant short-term repayment pressure due to RMB 9.92 billion in net current liabilities and potential cross-default risks from unpaid land appreciation tax Consolidated Balance Sheet | Item (RMB in thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 68,191,601 | 68,617,556 | | Total Liabilities | 31,120,093 | 31,422,532 | | Total Equity | 37,071,508 | 37,195,024 | | Total Current Liabilities | 12,941,140 | 10,451,535 | | Net Current Liabilities | 9,923,293 | - | - The **net gearing ratio** is approximately **41%**, consistent with December 31, 2023[46](index=46&type=chunk) - Total borrowings are approximately **RMB 15.691 billion**, with the current portion due within one year being approximately **RMB 7.749 billion**[46](index=46&type=chunk) [Material Uncertainty Related to Going Concern](index=6&type=section&id=Material%20Uncertainty%20Related%20to%20Going%20Concern) The company faces severe going concern challenges due to a subsidiary's unpaid land appreciation tax and surcharges totaling RMB 2.17 billion, which triggers potential cross-defaults on RMB 4.19 billion in bank borrowings, resulting in RMB 9.92 billion in net current liabilities and significant doubt about the group's ability to continue as a going concern - A subsidiary has approximately **RMB 2.17 billion** in unpaid land appreciation tax and related surcharges[9](index=9&type=chunk) - The unpaid taxes could lead to cross-defaults on approximately **RMB 4.19 billion** in bank borrowings, which have been reclassified as current liabilities[9](index=9&type=chunk)[27](index=27&type=chunk) - As of June 30, 2024, the group's **net current liabilities** were **RMB 9.92 billion**, with cash and cash equivalents of only **RMB 768 million**, indicating significant liquidity pressure[9](index=9&type=chunk) - Management is taking measures to mitigate liquidity pressure, including ongoing communication with tax authorities on repayment plans, disposal of commercial properties, negotiation with financial institutions for repayment adjustments, and cost control[11](index=11&type=chunk) - The ability to continue as a going concern depends on tax authorities not taking enforcement actions, banks not demanding early repayment, successful financing restructuring, and improved operating cash flow, all of which involve significant uncertainty[13](index=13&type=chunk) [Operations and Business Review](index=14&type=section&id=Operations%20and%20Business%20Review) [Market Review and Outlook](index=14&type=section&id=Market%20Review%20and%20Outlook) In H1 2024, China's commercial leasing market remained under pressure with weak demand and declining rents, primarily adopting a "price-for-volume" strategy, and the outlook for H2 anticipates increased vacancy rates due to significant new supply in Beijing and Shanghai Grade A office markets - In H1 2024, the office and commercial leasing market experienced weak demand and declining rents, with a continued "price-for-volume" leasing strategy[31](index=31&type=chunk) - Beijing and Shanghai Grade A office markets are expected to see approximately **425,000 sqm** and **709,000 sqm** of new supply respectively in H2, which will further increase vacancy rates and maintain market pressure[31](index=31&type=chunk) [Business Strategy and Progress](index=14&type=section&id=Business%20Strategy%20and%20Progress) SOHO China maintains prudent operations, focusing on cost control and risk management, implementing differentiated strategies like customized fit-out services, strengthening safety production, and advancing ESG practices with SBTi-approved science-based carbon targets - The company implements a differentiated strategy of customized fit-out delivery, offering "ready-to-move-in" office spaces to address client pain points[31](index=31&type=chunk) - The company prioritizes safety in daily management, establishing a safety management committee and enhancing emergency response capabilities[32](index=32&type=chunk) - The company continues to promote ESG development, achieving a **20% energy saving rate** across 24 managed properties, and its submitted science-based carbon targets have been approved by SBTi[32](index=32&type=chunk) [Leasing Property Portfolio Performance](index=16&type=section&id=Leasing%20Property%20Portfolio%20Performance) As of June 30, 2024, the group's average occupancy rate for investment properties remained stable at approximately 76%, with varying performance across core projects in Beijing and Shanghai, where Gubei SOHO achieved the highest occupancy at 91% - As of June 30, 2024, the group's average occupancy rate for investment properties remained stable at approximately **76%**[3](index=3&type=chunk) Leasing Property Portfolio Performance | Project | H1 2024 Rental Income (RMB in thousands) | Occupancy Rate as of June 30, 2024 | Occupancy Rate as of December 31, 2023 | | :--- | :--- | :--- | :--- | | **Beijing** | | | | | Qianmen Avenue | 48,118 | 63% | 67% | | Wangjing SOHO | 99,084 | 57% | 60% | | Guanghualu SOHO II | 96,346 | 83% | 85% | | Lize SOHO | 87,491 | 89% | 88% | | Galaxy and Chaoyangmen SOHO | 23,379 | 54% | 56% | | **Shanghai** | | | | | SOHO Fuxing Plaza | 111,129 | 85% | 87% | | Bund SOHO | 93,903 | 80% | 84% | | SOHO Tianshan Plaza | 85,205 | 79% | 79% | | Gubei SOHO | 120,691 | 91% | 89% | [Other Important Information](index=21&type=section&id=Other%20Important%20Information) [Dividends and Share Capital](index=21&type=section&id=Dividends%20and%20Share%20Capital) The Board resolved not to declare an interim dividend for 2024, and as of the reporting period end, the total number of issued shares remained unchanged with no purchases, sales, or redemptions of listed securities during the period - The Board resolved not to declare an interim dividend for the current period[30](index=30&type=chunk)[49](index=49&type=chunk) - As of June 30, 2024, the total number of issued shares was **5,199,524,031**, consistent with the end of 2023, with no share repurchases or sales during the period[49](index=49&type=chunk)[50](index=50&type=chunk) [Auditor's Review Opinion](index=22&type=section&id=Auditor%27s%20Review%20Opinion) PricewaterhouseCoopers issued a review report on the interim financial information, highlighting a "material uncertainty related to going concern" due to the group's net current liabilities, substantial borrowings, and tax-related cross-default risks, without modifying their conclusion on this matter - The auditor's review report includes a section on "material uncertainty related to going concern," raising significant doubt about the company's ability to continue as a going concern[52](index=52&type=chunk) - The auditor noted the group's current liabilities exceeding current assets by **RMB 9.92 billion**, substantial borrowings, and low cash levels, but their review conclusion was not modified on this basis[52](index=52&type=chunk)

Office Rental Business Performance - The company's office rental business faced challenges with both rental rates and occupancy rates declining, but managed to stabilize the occupancy rate at 77.6% by the end of 2023[3] Cost Reduction Measures - The company significantly reduced costs, including cutting entertainment expenses to almost zero and implementing a company-wide salary reduction at the end of 2023[3] Corporate Social Responsibility and Sustainability - The company actively participated in charity and public welfare activities, including the completion of the "Yangzheng Library" in April 2023, which is one of China's first truly zero-carbon buildings[4] - The company received a five-star rating, the highest possible, from the international rating agency GRESB[4] Technology and Innovation - The company emphasized the importance of embracing new technologies, particularly artificial intelligence, as a key driver for future growth and transformation[4] Real Estate Industry Trends - The company highlighted the significant changes in the real estate industry over the past few decades, driven by societal demand and the collective efforts of multiple industries[5] Market Confidence and Ethical Practices - The company stressed the importance of confidence in the face of market uncertainty, advocating for action over words and aligning thoughts with actions[6] - The company reiterated its commitment to legal and ethical use of funds, emphasizing that every penny must be used lawfully[6] Property Portfolio Details - Beijing Wangjing SOHO has a total construction area of approximately 510,000 square meters, with a rentable area of 133,766 square meters, including 123,568 square meters of office space and 10,198 square meters of retail space[10] - Shanghai SOHO Fuxing Plaza has a total construction area of approximately 124,068 square meters, with a rentable area of 88,234 square meters, including 46,344 square meters of office space and 41,890 square meters of retail space[18] - Beijing Guanghua Road SOHO II has a total construction area of approximately 117,179 square meters, with a rentable area of 94,279 square meters, including 63,308 square meters of office space and 30,971 square meters of retail space[12] - Beijing Lize SOHO has a total construction area of approximately 158,434 square meters, with a rentable area of 135,637 square meters[16] - Shanghai SOHO Tianshan Plaza has a total construction area of approximately 155,827 square meters, with a rentable area of 97,751 square meters, including 74,498 square meters of office space and 23,253 square meters of retail space[22] - Shanghai Gubei SOHO has a total construction area of approximately 156,654 square meters, with a rentable area of 112,541 square meters[24] Financial Performance - The company's annual operating revenue for 2023 was approximately RMB 1.679 billion, a decrease of 5.4% compared to RMB 1.775 billion in 2022[26] - The company's gross profit for 2023 was approximately RMB 1.379 billion, a decrease of 4.1% compared to RMB 1.438 billion in 2022[26] - The company's gross profit margin for 2023 was 82%, compared to 81% in 2022[26] - Sales expenses decreased to RMB 0.33 billion in 2023 from RMB 0.50 billion in 2022, a reduction of RMB 0.17 billion[27] - Administrative expenses decreased to RMB 1.36 billion in 2023 from RMB 1.81 billion in 2022, a reduction of RMB 0.45 billion[27] - Financial income increased to RMB 0.12 billion in 2023 from RMB 0.03 billion in 2022, an increase of RMB 0.09 billion[28] - Financial expenses decreased to RMB 7.78 billion in 2023 from RMB 8.02 billion in 2022, a reduction of RMB 0.24 billion[28] - Income tax expenses decreased to RMB 2.26 billion in 2023 from RMB 4.43 billion in 2022, a reduction of RMB 2.17 billion[29] - Total borrowings as of December 31, 2023, amounted to RMB 158.85 billion, with a net gearing ratio of 41%[30] - Foreign currency debt as of December 31, 2023, was RMB 3.58 billion, accounting for 2.3% of total borrowings[31] - The company's average financing cost remained at a low level of 4.7% as of December 31, 2023[31] - The company's capital commitments as of December 31, 2023, were RMB 0.02 billion, down from RMB 0.17 billion in 2022[33] - The company reported a net loss of RMB 180.07 million in 2023, compared to a net profit of RMB 64.51 million in 2022[38] - Non-current assets decreased to RMB 65,536,289 thousand in 2023 from RMB 65,940,695 thousand in 2022[39] - Current assets increased to RMB 3,081,267 thousand in 2023 from RMB 2,906,414 thousand in 2022[39] - Current liabilities decreased significantly to RMB 10,451,535 thousand in 2023 from RMB 18,583,179 thousand in 2022[39] - Non-current liabilities increased to RMB 20,970,997 thousand in 2023 from RMB 12,895,409 thousand in 2022[39] - Total equity remained stable at RMB 37,195,024 thousand in 2023 compared to RMB 37,368,521 thousand in 2022[39] - The company's total issued shares remained unchanged at 5,199,524,031 shares as of December 31, 2023[41] - The company's reserves and equity details are disclosed in the audited consolidated statement of changes in equity[42] Executive Leadership and Governance - Key executives, including Pan Shiyi and Zhang Xin, have service agreements effective from January 1, 2024, for a term of 3 years[43] - Pan Shiyi and Huang Jingsheng are required to retire by rotation at the Annual General Meeting and are eligible for re-election[44] - Pan Shiyi and Zhang Xin co-founded SOHO China in 1995, leading the company to become one of China's most experienced office developers with over 5 million square meters developed in Beijing and Shanghai[45][46] - SOHO China Foundation was established in 2005 by Ms. Zhang Xin and her husband Mr. Pan Shiyi, focusing on education in China[47] - The SOHO China Scholarship Program was launched in 2014, supporting Chinese undergraduate students to study at world-class universities[47] - Ms. Xu Jin, aged 52, is the Chairman and Co-CEO of the company, with over 20 years of experience in China's real estate development industry[48] - Mr. Qian Ting, aged 47, is the Co-CEO of the company, with over 20 years of experience in China's real estate sales and leasing[49] - Mr. Huang Jingsheng, aged 66, is an Independent Non-Executive Director with extensive experience in venture capital and private equity investments[50] - Mr. Xiong Minghua, aged 59, is an Independent Non-Executive Director and founder of Qihai Capital, with a background in technology innovation and investment[51] - Mr. Zhang Mingeng, aged 72, is an Independent Non-Executive Director with deep expertise in macroeconomic operations and real estate development trends[52] - Mr. Zhu Enlei, aged 43, is the CFO of the company, responsible for financial and investor relations management, with over a decade of experience in finance and auditing[53] - Ms. Huang Hongyu, aged 53, is the Vice President of the company, responsible for platform information management, design, and procurement, with over 20 years of experience in design and platform management[54] - Mr. Yan Guangping, aged 43, is the Vice President of the company, responsible for asset and property management, with extensive experience in these areas[55] - Total compensation for directors in 2023 amounted to RMB 11,304 thousand, with executive directors receiving the majority, including RMB 4,310 thousand for Pan Shiyi and RMB 3,182 thousand for Xu Jin[59] - Pan Shiyi holds a 63.9309% equity stake in the company through family and trust interests, representing 3,324,100,000 shares[64][66] - Senior management compensation for 2023 included one individual earning between HKD 1,000,001–2,000,000 and another earning between HKD 2,000,001–3,000,000[62] - Pan Shiyi also holds equity interests in affiliated companies, including 4.25% in Beijing Redstone Jianwai Real Estate Development Co., Ltd. and 5.00% in Beijing SOHO Real Estate Co., Ltd.[67] - Cititrust Private Trust (Cayman) Limited holds 3,324,100,000 shares, representing 63.9309% of the company's issued share capital[70] - Capevale Cayman and its wholly-owned subsidiaries, Boyce Limited and Capevale BVI, each hold 1,662,050,000 shares, representing 31.9654% of the company's issued share capital[70][71] Customer and Supplier Relationships - The top five customers accounted for approximately 13% of the company's total sales revenue for the year ended December 31, 2023[80] - The top five suppliers accounted for approximately 15% of the company's total procurement for the year ended December 31, 2023, with the largest supplier accounting for 5%[80] Charitable Donations - The company made charitable donations of approximately RMB 16,000,000 in 2023, compared to RMB 15,000,000 in 2022[78] Corporate Governance and Compliance - The company's public shareholding is at least 25% of the total issued share capital as of the annual report date[82] - The company has complied with the "Corporate Governance Code" as outlined in Appendix C1 of the Listing Rules[83] - No significant legal proceedings were reported during the year[84] - The company has established compliance procedures to ensure adherence to relevant laws and regulations in China[85] - The consolidated financial statements for the year were audited by PricewaterhouseCoopers (PwC), with no change in auditors over the past three years[86] - The company has adopted and continuously improved corporate governance and disclosure practices, emphasizing a culture of integrity and innovation[87] - The Board of Directors consists of seven members, including four executive directors and three independent non-executive directors[89] - The Board holds at least four regular meetings annually, with a 14-day notice period and materials provided at least three days in advance[89] - The company has three independent non-executive directors, accounting for more than one-third of the board, ensuring independent perspectives and opinions[93] - The board held 4 regular meetings and the 2023 Annual General Meeting during the year, with all directors attending all board meetings[94][95] - The audit committee is composed of three independent non-executive directors, responsible for evaluating financial statements and providing recommendations[97] - The board chairman is responsible for leading the board in formulating overall strategy and business direction, while the co-CEOs manage daily operations[91] - The company has purchased liability insurance for directors and senior executives to cover potential legal liabilities[90] - The nomination committee annually assesses the independence of each independent non-executive director, and any reappointment requires approval at the AGM[93] - Directors are entitled to consult independent professional opinions at the company's expense when necessary[96] - The audit committee is responsible for recommending the appointment, reappointment, or removal of external auditors and ensuring their independence[98] - The company has established policies and procedures to avoid potential conflicts of interest, requiring directors with significant interests to abstain from voting[93] - The board and its committees have the authority to seek independent professional advice from external consultants when deemed necessary[93] - The Audit Committee held two meetings in 2023, with all members attending both sessions[101] - The Audit Committee reviewed the company's financial reporting system, risk management, and internal control systems, ensuring compliance with accounting standards and regulations[102] - The Remuneration Committee held one meeting in 2023, with all members attending the session[104] - The Remuneration Committee reviewed the company's remuneration policy and found the compensation levels for executives to be fair and reasonable[105] - The Nomination Committee held one meeting in 2023, with all members attending the session[107] - The Nomination Committee reviewed the company's board structure, size, and composition, and discussed succession planning for key positions[106] Financial Position and Liabilities - The company's current liabilities exceeded its current assets by RMB 7,370 million as of December 31, 2023[117] - The company's total bank borrowings and other borrowings amounted to RMB 15,885 million as of December 31, 2023, including RMB 5,178 million in current portion[117] - The company's unrestricted cash and cash equivalents were RMB 769 million as of December 31, 2023[117] - The company's board of directors consists of 7 members, with 2 being female, representing 28.6% of the board[112] - The company's employee gender ratio as of December 31, 2023, was 28% female and 72% male, including senior management[112] - The company established an Environmental, Social, and Governance (ESG) Committee on November 16, 2021, consisting of 3 members[114] - The ESG Committee held one meeting during the year, with all members attending[115] - The company's nomination committee follows a policy of diversity, considering factors such as gender, age, cultural and educational background, and professional experience[113] - The company's board of directors is responsible for preparing the consolidated financial statements for the year ended December 31, 2023[116] - The company's nomination process for directors includes evaluating candidates based on character, integrity, relevant experience, and ability to contribute to the board[109] - The board of directors is responsible for overseeing the group's risk management and internal control systems, with the audit committee reviewing their effectiveness at least annually[118] - The group has established a clear organizational structure with defined levels of responsibility and reporting procedures for risk management and compliance[118] - The risk management and compliance department coordinates enterprise risk management activities and reports major risks to the audit committee during regular meetings[120] - Operational units within the group are responsible for identifying, assessing, mitigating, and monitoring their own risks, reporting to the risk management and compliance department every six months[120] - The group's internal audit department adopts a risk-based audit approach and reports its findings to the audit committee regularly[120] - The internal audit department provides independent assurance to the board, audit committee, and senior management regarding the adequacy and effectiveness of internal controls[121] - The group follows ISO 31000:2009 principles and guidelines for managing business and operational risks[121] - Business units are required to identify risks that may affect business objectives, assess their significance, and evaluate the adequacy of existing control measures[122] - The risk management and compliance department monitors the progress of risk mitigation measures and shares risk information with business units to enhance the group's risk management level[122] - The group has implemented policies and procedures to evaluate and improve the effectiveness of risk management and internal control systems, with senior management required to verify their proper operation at least annually[122] - The company has integrated its risk management system into core business operations, with ongoing reviews and assessments of potential risks that could impact business objectives[123] - The audit committee has established a whistleblowing policy and procedures to handle reports of actual or suspected misconduct, ensuring transparency and immediate investigation[123] - The company has standardized the handling and disclosure of insider information to ensure confidentiality and consistent release of information[123] - The risk management and compliance department has increased training and workshops, standardized risk reporting, and enhanced communication with designated directors regarding risk management[124] - The internal audit department conducted a review of the risk management and internal control systems, covering financial, operational, and compliance aspects, with no significant issues identified[125] - External auditors evaluated key risk management and internal controls, with their recommendations adopted to improve systems[125] - The company paid a total of RMB 3.35 million in audit and non-audit fees, including RMB 2.0 million for audit services and RMB 1.35 million for non-audit services such as interim financial reviews[126] - The company emphasizes effective communication with investors through regular updates, emails, calls, and participation in global investment conferences[127] - The company appointed Ms. Wu Xiuwei as company secretary, who completed over 15 hours of professional training to comply with listing rules[128] - Shareholders holding at least 1/10 of the company's paid-up share capital can request a special general meeting and propose resolutions[129] - The company's amended and restated articles of association were adopted and became effective on May 24, 2023[131] - The company provides comprehensive and tailored induction for newly appointed directors to ensure they understand the business and regulatory responsibilities[132] - The company's board of directors includes Pan Shiyi, Pan Zhangxin, Xu Jin (Chairman and Co-CEO), Qian Ting (Co-CEO), Huang Jingsheng, Xiong Minghua, Sun Qiang, and Zhang Mingeng[133] - The company's registered office is located in Grand Cayman, Cayman Islands, and its headquarters is in Beijing, China[133] - The company's major banks include Agricultural Bank of China, Bank of China, China Communications Bank, China Everbright Bank, China Merchants Bank, Industrial and Commercial Bank of China, Standard Chartered Bank (Hong Kong), and HSBC[134] - The company's independent auditor is PricewaterhouseCoopers, and the audit report confirms the financial statements comply with Hong Kong Financial Reporting Standards[135][136] - The company's current liabilities exceeded current assets by RMB 7,370 million as of December 31, 2023, indicating significant uncertainty regarding its ability to continue as a going concern[139] - The company's total bank and other borrowings amounted to RMB 15,885 million as of December 31, 2023, with RMB 5,178 million classified as current[139] - The company's unrestricted cash and cash equivalents were RMB 769 million as of December 31, 2023[139] - Investment properties measured at fair value reached RMB 63,421 million as of December 31, 2023, with an annual fair value loss of RMB 191 million[141] - The

Financial Performance - For the year ended December 31, 2023, the group's operating revenue was approximately RMB 1.679 billion, a decrease from RMB 1.775 billion in the previous year, representing a decline of about 5.4%[5] - The group reported a net loss attributable to shareholders of RMB 179,899,000 for 2023, compared to a net profit of RMB 61,208,000 in 2022[20] - Basic and diluted loss per share for 2023 was RMB (0.03), compared to earnings of RMB 0.01 per share in 2022[22] - The group reported a pre-tax profit of RMB 46.2 million for the year, down from RMB 507.8 million in the previous year[5] - The gross profit for the year was approximately RMB 1.379 billion, down about 4.1% from RMB 1.438 billion in 2022, with a gross profit margin of approximately 82%[46] - Rental income for 2023 was RMB 1,671,863,000, down from RMB 1,744,538,000 in 2022, reflecting a decline of 4.2%[17] - Financial income increased significantly to RMB 11,636,000 in 2023 from RMB 3,197,000 in 2022, marking a growth of 264.5%[18] - Total financial expenses decreased slightly to RMB 778,190,000 in 2023 from RMB 802,215,000 in 2022, a reduction of 3.0%[18] - Income tax expenses for the year were approximately RMB 226 million, significantly lower than RMB 443 million in 2022[49] Assets and Liabilities - The total assets of the group as of December 31, 2023, were RMB 68.618 billion, a slight decrease from RMB 68.847 billion in the previous year[8] - The total liabilities of the group were RMB 31.423 billion as of December 31, 2023, compared to RMB 31.479 billion in the previous year[8] - The group's net asset liability ratio was approximately 41% as of December 31, 2023, with an average borrowing cost of about 4.7%[3] - As of December 31, 2023, the group's current liabilities exceeded current assets by RMB 7,370,268,000[9] - The total bank borrowings and other borrowings amounted to RMB 15,884,968,000, including a current portion of RMB 5,177,875,000[9] - The group’s total bank loans as of December 31, 2023, were RMB 10,246,278,000, down from RMB 10,434,191,000 in 2022[26] - The company's foreign currency debt totaled approximately RMB 35.8 million, accounting for about 2.3% of total borrowings[51] Cash Flow and Liquidity - Cash and cash equivalents increased to RMB 769 million from RMB 346 million in the previous year, reflecting a significant improvement in liquidity[7] - The company had unrestricted cash and cash equivalents of RMB 769 million as of December 31, 2023[59] Operational Efficiency - The average occupancy rate of investment properties stabilized and recovered to approximately 78% as of December 31, 2023[3] - The rental rate for the company's properties stabilized at 78% by the end of 2023, despite a challenging market environment[32] - The rental rates for key properties as of December 31, 2023, included 67% for Qianmen Street Project and 60% for Wangjing SOHO[36] - The company reduced entertainment expenses to nearly zero and implemented salary cuts for all employees as a cost-saving measure[32] - The group is taking measures to control costs and save capital expenditures to improve operating cash flow[11] Tax and Compliance - The group has potential cross-default borrowings totaling RMB 4,203,000,000, with interest of RMB 14,179,000 due to unpaid land value-added tax[10] - The group has paid RMB 126,600,000 of the land value-added tax, with an outstanding amount of RMB 2,043,215,000 remaining[11] - The management is actively communicating with local tax authorities regarding the unpaid land value-added tax and related penalties[11] - The board believes that the group will have sufficient operating funds to meet its financial obligations over the next 12 months[12] - The company emphasizes the importance of maintaining legal and responsible financial practices during challenging economic times[35] Corporate Governance - The company has adhered to the corporate governance code throughout the year[56] - The audit committee reviewed the audited consolidated financial results for the year ended December 31, 2023, confirming compliance with applicable accounting standards[56] - The company has adopted several revised accounting standards effective from January 1, 2023, impacting financial reporting[15] Social Responsibility and Innovation - The company aims to leverage new technologies, particularly artificial intelligence, to enhance operational efficiency and market opportunities[33] - The company is committed to social responsibility through charitable activities and reducing carbon emissions[33] - The company received a five-star rating from GRESB for its zero-carbon building project completed in April 2023[33] Staff and Shareholder Information - The company employed 1,646 staff members, including 1,492 in property management[53] - The company did not declare a final dividend for the year 2023, consistent with 2022[31] - As of December 31, 2023, the total number of issued shares was 5,199,524,031, unchanged from December 31, 2022[54] - There were no significant post-reporting period events that would impact the group[54] - The company did not engage in any purchase, sale, or redemption of its listed securities during the year[54] - The company has adopted the standard code for directors' securities transactions and confirmed compliance by all directors for the year[55]

Financial Performance - For the first half of 2023, SOHO China reported a net absorption of -0.5 million square meters for Grade A office space in Beijing and 168,000 square meters in Shanghai, indicating a significant decline compared to historical averages[6]. - The average vacancy rates for Grade A office buildings reached historical peaks of 16.9% in Beijing and 18.6% in Shanghai, the highest since 2011[6]. - The rental income for the first half of 2023 showed varying occupancy rates across key projects, with the Wangjing SOHO at 64% and Guanghua Road SOHO II at 84%[9][10]. - The company achieved operating revenue of approximately RMB 822 million for the period, a decrease of about 8% compared to RMB 896 million in the same period of 2022, primarily due to weak demand in the office and retail leasing market[19]. - Gross profit for the period was approximately RMB 678 million, down about 9% from RMB 742 million in the same period of 2022, with a gross profit margin for leasing business remaining stable at 83%[19]. - The company reported a profit of RMB 13,613,000 for the first half of 2023, a significant decrease from RMB 190,568,000 in the same period of 2022[56]. - The total comprehensive income for the first half of 2023 was RMB 33,038,000, compared to RMB 223,955,000 in the first half of 2022[56]. - The company’s current income tax expense for the six months ended June 30, 2023, is RMB 27,391,000, an increase from RMB 24,260,000 for the same period in 2022, representing a growth of 8.4%[87]. - The basic and diluted earnings per share for the six months ended June 30, 2023, is RMB 13,613,000, a significant decrease from RMB 190,568,000 for the same period in 2022, indicating a decline of 92.8%[89]. Debt and Liabilities - Total borrowings amounted to approximately RMB 16.047 billion as of June 30, 2023, with a net debt-to-equity ratio of approximately 42%, slightly down from 43% at the end of 2022[23]. - The company reported financial expenses of approximately RMB 387 million, a reduction of about RMB 34 million compared to RMB 421 million in the same period of 2022, mainly due to a decrease in average borrowings[21]. - As of June 30, 2023, the current liabilities exceeded current assets by RMB 7,170,391,000, indicating significant liquidity concerns[50]. - The total liabilities increased to RMB 31,519,064,000 from RMB 31,478,588,000 at the end of 2022, reflecting a rise in financial obligations[54]. - The company reported a potential cross-default on bank loans totaling RMB 4,232,000,000 due to overdue land value-added tax, with interest amounting to RMB 10,576,000[99]. - The company’s total liabilities as of June 30, 2023, included a significant portion classified as current liabilities due to potential immediate repayment requests from lenders[99]. Cash Flow and Liquidity - The net cash flow from operating activities for the first half of 2023 was RMB 334,223,000, compared to a negative cash flow of RMB (334,433,000) in the same period of 2022[57]. - Cash and cash equivalents stood at RMB 627,252,000, an increase from RMB 345,725,000 at the end of 2022, indicating improved liquidity[53]. - The company paid RMB 54,659,000 in income taxes during the first half of 2023, compared to RMB 27,012,000 in the same period of 2022[57]. - The company’s cash flow from investing activities was RMB 94,546,000 in the first half of 2023, a decrease from RMB 1,330,704,000 in the same period of 2022[58]. - The company’s cash flow management remains critical, with ongoing monitoring of loan agreements to avoid potential defaults[99]. Strategic Initiatives - The company has implemented a strategy to enhance asset value through high-quality services, including offering fully furnished office spaces, which received positive market feedback with an initial signing of 2,800 square meters[6]. - The company continues to focus on environmental, social, and governance (ESG) initiatives, including the launch of China's first zero-carbon "Yangzheng Library" in April 2023[7]. - The company plans to leverage government policies aimed at economic recovery to boost market activity and support the office rental market[7]. - The company is committed to developing the Qianmen Street project into a tourist attraction, capitalizing on the area's high visitor traffic to attract quality tenants[13]. - The management has implemented measures to control administrative costs and save capital expenditures to improve operational cash flow[63]. Corporate Governance - The company has adhered to the Corporate Governance Code as per the listing rules throughout the reporting period[42]. - The board of directors consists of two executive directors and three independent non-executive directors, ensuring a balanced core competency for effective leadership[43]. - The audit committee has confirmed compliance with applicable accounting standards and regulations for the interim financial results[44]. - The company has purchased liability insurance for directors and senior executives to protect against legal liabilities incurred in the performance of their duties[43]. - The board meets at least four times a year to oversee the company's overall strategy and performance[42]. Market Conditions - SOHO China anticipates ongoing challenges and opportunities in the second half of 2023, aiming to stabilize overall property rental rates and operational cash flow[7]. - The company highlighted ongoing uncertainties regarding its ability to continue as a going concern due to its financial position[50]. - The group has been actively communicating with local tax authorities to negotiate payment plans for overdue taxes and related penalties[62]. - There is significant uncertainty regarding the group's ability to continue as a going concern, depending on various factors including tax authority actions and lender demands[64].

Financial Performance - The group achieved operating revenue of approximately RMB 822 million during the period, despite ongoing pressure in the office and retail leasing market due to a weak macroeconomic environment[2]. - The total revenue for the period was approximately RMB 822 million, a decrease of about 8% compared to RMB 896 million in the same period of 2022[39]. - Gross profit for the period was approximately RMB 678 million, down about 9% from RMB 742 million in the same period of 2022[39]. - The gross profit margin remained stable at approximately 83% during the period[2]. - The gross profit margin for leasing business remained stable at approximately 83%[39]. - The total comprehensive income for the period was RMB 33.038 million, a decrease from RMB 223.955 million in the same period of 2022[5]. - The group reported a net profit of RMB 14.7 million for the period, down from RMB 193.651 million in the same period of 2022[4]. - The net profit attributable to the shareholders of the parent company, excluding changes in the valuation of investment properties and one-off tax and administrative expenses, was approximately RMB 207 million[2]. - The basic and diluted earnings per share for the period were both RMB 0.00, compared to RMB 0.04 for the same period in 2022[3]. - Basic and diluted earnings per share for the six months ended June 30, 2023, were RMB 13,613,000, a significant decrease from RMB 190,568,000 for the same period in 2022[19]. Assets and Liabilities - The total assets as of June 30, 2023, amounted to RMB 68.921 billion, compared to RMB 68.847 billion as of December 31, 2022[6]. - The total liabilities were RMB 31.519 billion as of June 30, 2023, slightly increased from RMB 31.479 billion at the end of 2022[7]. - As of June 30, 2023, the group's net asset liability ratio was approximately 42%, with an average borrowing cost of about 4.7%[2]. - The group's unrestricted cash and cash equivalents were RMB 627,252,000 as of June 30, 2023[49]. - As of June 30, 2023, the group's current liabilities exceeded its current assets by RMB 7,170,391,000[49]. - The total bank borrowings and other loans reached RMB 16,047,348,000, including a current portion of RMB 5,041,723,000[8]. - The company’s total borrowings decreased from RMB 16,729,841,000 at the end of 2022 to RMB 15,971,013,000 as of June 30, 2023, reflecting a repayment of RMB 148,276,000 during the period[23]. - The group has unpaid land appreciation tax and related penalties totaling RMB 1,986,243,000 as of June 30, 2023[9]. - The group has reclassified RMB 4,232,000,000 of bank borrowings as current liabilities due to potential cross-default risks[9]. - The company has a potential cross-default risk on bank loans totaling RMB 4,232,000,000 due to overdue land value-added tax[24]. Operational Highlights - As of June 30, 2023, the average occupancy rate of the group's investment properties stabilized and recovered to approximately 79%[2]. - Rental income for the six months ended June 30, 2023, was RMB 819,127,000, a decrease of 8.6% from RMB 896,040,000 for the same period in 2022[15]. - The rental income for the Beijing Qianmen project was RMB 34.652 million with a leasing rate of 62%, up from 48% in the previous year[30]. - The leasing rate for Wangjing SOHO improved to 64% in 2023 from 62% in 2022, with rental income of RMB 113.667 million[30]. - The Shanghai Bund SOHO project reported a leasing rate of 95% in 2023, significantly up from 80% in 2022, with rental income of RMB 94.172 million[30]. - In the first half of 2023, Beijing's Grade A office net absorption dropped to -5,000 square meters, while Shanghai's was only 168,000 square meters, significantly lower than historical averages[28]. - The average vacancy rates for Grade A offices in Beijing and Shanghai reached historical peaks of 16.9% and 18.6%, respectively, the highest since 2011[28]. - The company is focusing on providing high-quality services to enhance asset value and core competitiveness amid weak demand and strong supply pressures[28]. - The company plans to enhance overall property leasing rates and operational cash flow stability in the second half of 2023 to better face external challenges[29]. Financial Management and Strategy - The management has initiated discussions with tax authorities regarding payment plans for outstanding taxes to mitigate further negative impacts[10]. - A supplementary agreement was signed with a bank to extend the repayment period for borrowings amounting to RMB 359,572,000[10]. - The group aims to control administrative costs and reduce capital expenditures to improve operational cash flow[10]. - The board believes that the group will have sufficient working capital to meet its operational and financial obligations over the next 12 months[11]. - Financial income increased to RMB 2,479,000 from RMB 1,979,000, while financial expenses decreased to RMB 386,724,000 from RMB 420,703,000, resulting in a net improvement in financial performance[16]. - Current income tax expense for the period was RMB 27,391,000, up from RMB 24,260,000 in the previous year, while deferred tax expense decreased to RMB 58,506,000 from RMB 94,966,000[17]. - Income tax expenses for the period were approximately RMB 91 million, down from RMB 119 million in the same period of 2022[42]. Compliance and Governance - The company has adopted revised accounting standards effective from January 1, 2023, with no significant impact on its financial performance[13]. - The company has adhered to all applicable accounting standards and regulations, ensuring sufficient disclosure[48]. - There is a significant uncertainty regarding the company's ability to continue as a going concern due to the financial situation[49]. - The interim financial results have been published on the Hong Kong Stock Exchange and the company's website[49]. - The board approved the unaudited interim results for the six months ended June 30, 2023, on August 17, 2023[48]. - The company has not declared any interim dividends for the period[45]. Social Responsibility and Sustainability - The company has committed to continuous investment in social responsibility projects, including the establishment of China's first zero-carbon "Yangzheng Library" in April 2023[29]. - The company achieved a 24.2% energy saving rate across 24 managed properties, resulting in a carbon reduction of 37,000 tons[29]. - The company anticipates that government policies to promote economic development will gradually revive market activity, laying the foundation for the recovery of the office market in the second half of 2023[29].

Financial Performance - SOHO China achieved a revenue of approximately RMB 1.775 billion in 2022, representing a growth of about 1.9% compared to 2021[5]. - The gross profit for SOHO China in 2022 was approximately RMB 1.438 billion, reflecting a growth of 2.7% year-on-year[5]. - The total rental income for the year was approximately RMB 1.775 billion, representing a year-on-year increase of about 1.9% from RMB 1.742 billion in 2021[30]. - Gross profit for the year was approximately RMB 1.438 billion, up about 2.7% from RMB 1.400 billion in 2021, with a gross margin of approximately 81% compared to 80% in the previous year[30]. - The group reported a revenue of RMB 1,775,090,000 for 2022, a slight increase from RMB 1,741,739,000 in 2021, representing a growth of approximately 1.9%[42]. - The group achieved a profit before tax of RMB 507,821,000 in 2022, compared to RMB 264,792,000 in 2021, indicating a significant increase of approximately 92%[42]. - The net profit attributable to shareholders was RMB 61,208,000 in 2022, recovering from a loss of RMB 131,098,000 in 2021[42]. - The company reported a net profit of RMB 64,505 thousand for 2022, a significant recovery from a net loss of RMB 123,952 thousand in 2021[153]. - Basic earnings per share for 2022 was RMB 0.01, compared to a loss per share of RMB 0.03 in the previous year[152]. Assets and Liabilities - As of December 31, 2022, the total borrowings of the group amounted to approximately RMB 16.185 billion, with a net debt-to-equity ratio of approximately 43%[34]. - The total non-current assets stood at RMB 65,940,695,000 as of December 31, 2022, showing a marginal increase from RMB 65,824,792,000 in 2021[43]. - Current assets decreased to RMB 2,906,414,000 in 2022 from RMB 4,621,723,000 in 2021, reflecting a decline of approximately 37%[43]. - The group’s total liabilities increased significantly, with current liabilities rising to RMB 18,583,179,000 in 2022 from RMB 6,960,706,000 in 2021[43]. - The total equity attributable to the owners of the company was RMB 36,440,619,000 as of December 31, 2022, slightly up from RMB 36,174,144,000 in 2021[43]. - The group reported overdue borrowings totaling RMB 59,682,000, with a total outstanding amount of RMB 668,315,000[121]. - As of December 31, 2022, the group's net current liabilities amounted to RMB 15,676,765,000[121]. - The group's bank borrowings and other borrowings totaled RMB 16,184,982,000, including current borrowings of RMB 13,453,099,000[121]. - The group had unrestricted cash and cash equivalents of RMB 345,725,000 as of December 31, 2022[147]. - The group experienced a default on borrowings totaling RMB 59,682,000 due to overdue payments, triggering cross-default on other borrowings amounting to RMB 6,551,258,000[147]. Corporate Governance - The board has decided not to declare a final dividend for the year, maintaining the same policy as in 2021[40]. - The company has adopted high standards of corporate governance, believing it is crucial for development and protecting shareholder interests[89]. - The board of directors consists of seven members, including four executive directors and three independent non-executive directors[91]. - The company’s independent non-executive directors are confirmed to be independent and provide independent opinions on strategy and risk management[94]. - The audit committee is responsible for recommending the appointment, reappointment, and removal of external auditors, ensuring their independence and effectiveness[101]. - The company has implemented a strict insider trading policy to regulate employees with access to insider information[90]. - The board meets at least four times a year, ensuring timely communication and decision-making[91]. - The company has established a policy to avoid potential conflicts of interest, requiring directors with significant interests in transactions to abstain from voting[99]. - The company has implemented internal audit and control functions across its business operations to monitor financial reporting and risk management systems[103]. Environmental, Social, and Governance (ESG) Initiatives - SOHO China was upgraded to an AA rating by MSCI for its ESG efforts, the highest rating for a real estate company in mainland China[5]. - The company emphasizes its commitment to social responsibility through various charitable initiatives, including building kindergartens and libraries in northwest China[50]. - The Environment, Social, and Governance Committee held one meeting this year, focusing on governance structure and exceeding annual carbon reduction targets[119]. - The group made charitable donations of approximately RMB 15,000,000 in the current year, compared to RMB 10,010,000 in 2021[81]. - SOHO China's total energy consumption savings compared to national standards reached 135 million kWh, with an energy-saving rate of 34% and a carbon reduction of 110,000 tons[5]. Market and Strategic Outlook - The company is optimistic about the outlook for 2023 and plans to continue improving service quality and property management[6]. - Future outlook indicates a projected revenue growth of 15% for the next fiscal year, driven by new product launches and market expansion strategies[57]. - The company aims to leverage its strong brand and market position to explore new business opportunities and technological advancements in property development[48]. - The company has completed two strategic acquisitions in the past year, enhancing its competitive position in the technology sector[60]. - The company is investing approximately $50 million in research and development for new technologies aimed at enhancing platform capabilities[58]. Employee and Management Information - The company organized over 1,500 professional training sessions in 2022 to enhance employee skills[6]. - The group employed a total of 1,721 employees as of December 31, 2022, including 1,555 in property management[38]. - Total annual compensation for senior management was RMB 7,227,000, with the highest individual compensation being RMB 4,156,000 for Pan Shiyi[62]. - The company provides comprehensive training for newly appointed directors to ensure understanding of business operations and regulatory responsibilities[143]. Risk Management - The group has established a clear organizational structure with defined responsibilities and reporting procedures for risk management and internal control[130]. - The audit committee reviews the effectiveness of the group's risk management and internal control systems at least annually[130]. - The group employs a risk control-based audit approach, with the internal audit department reporting its findings to the audit committee regularly[133]. - The group has implemented various policies and procedures to enhance the effectiveness of its risk management and internal control systems[134]. - The risk management framework follows the "three lines of defense" model to guide the group's risk management activities[132]. Financial Reporting and Compliance - The consolidated financial statements for the year have been audited by PricewaterhouseCoopers[88]. - The independent auditor was unable to express an opinion on the consolidated financial statements due to multiple uncertainties[146]. - The company confirmed compliance with applicable disclosure requirements regarding related party transactions as per Listing Rules Chapter 14A[82]. - The company has not reported any significant changes in shareholdings among directors or senior management as of December 31, 2022[72].

Financial Performance - The company achieved operating revenue of approximately RMB 1.775 billion for the year ended December 31, 2022, representing a stable growth of about 1.9% compared to RMB 1.742 billion in 2021[3]. - The gross profit margin for the year was approximately 81%, an increase from 80% in 2021[3]. - The net profit attributable to equity shareholders for the year was approximately RMB 61.21 million, a significant recovery from a loss of RMB 131.1 million in 2021[5]. - The company reported a pre-tax profit of RMB 507.82 million for the year, compared to RMB 264.79 million in 2021[5]. - The company recorded a total comprehensive income of RMB 268.76 million for the year, compared to a loss of RMB 173.89 million in 2021[6]. - The basic earnings per share for the year was RMB 0.01, recovering from a loss of RMB 0.03 per share in 2021[5]. - The group's operating revenue for 2022 was RMB 1,775,090,000, a slight increase from RMB 1,741,739,000 in 2021, primarily driven by rental income of RMB 1,744,538,000[16]. - The group reported a net profit attributable to shareholders of RMB 61,208,000 for 2022, compared to a net loss of RMB 131,098,000 in 2021, resulting in basic and diluted earnings per share of RMB 0.01[19][20]. - Gross profit for the year was approximately RMB 1.438 billion, an increase of about 2.7% from RMB 1.400 billion in 2021[43]. Assets and Liabilities - The total assets of the company as of December 31, 2022, were RMB 68.85 billion, a decrease from RMB 70.45 billion in 2021[8]. - The company's total liabilities decreased to RMB 31.48 billion as of December 31, 2022, down from RMB 33.35 billion in 2021[8]. - The net asset liability ratio was approximately 43% as of December 31, 2022, with an average borrowing cost of about 4.7%[3]. - As of December 31, 2022, the group's net current liabilities amounted to RMB 15,676,765,000[9]. - The group's bank borrowings and other borrowings totaled RMB 16,184,982,000, with RMB 13,453,099,000 classified as current liabilities[9]. - The total amount of accounts receivable as of December 31, 2022, was RMB 505,663,000, an increase from RMB 253,726,000 in 2021, with overdue amounts rising to RMB 204,039,000[22][23]. - The group's total liabilities decreased to RMB 16,184,982,000 in 2022 from RMB 17,997,608,000 in 2021, indicating improved financial stability[25]. - As of December 31, 2022, the total borrowings amounted to approximately RMB 16.185 billion, with RMB 15.827 billion secured against investment properties[47]. Tax and Financial Obligations - A tax payment notice for RMB 1,733,334,000 related to the Wangjing SOHO project was issued, with RMB 1,851,271,000 still outstanding as of December 31, 2022[10]. - The group incurred current income tax expenses of RMB 45,187,000 for corporate income tax and RMB 213,804,000 for land appreciation tax in 2022[18]. - The group faced a tax payment notice for land value-added tax amounting to RMB 1.73 billion related to the Wangjing SOHO project, with RMB 1.85 billion still outstanding as of December 31, 2022[59]. - The group reported cross-defaults on loans totaling RMB 2.38 billion due to unpaid land value-added tax and related penalties[59]. Operational Challenges and Strategies - The average occupancy rate of the group's investment properties decreased to approximately 76% as of December 31, 2022, due to the impact of COVID-19 and market sentiment[3]. - The group has initiated plans to sell several commercial properties to alleviate cash flow pressure[11]. - Management is actively negotiating with financial institutions for the restructuring of existing borrowings and new financing[12]. - The group aims to control administrative costs and reduce capital expenditures to improve operational cash flow[12]. - The group is facing significant uncertainty regarding its ability to continue as a going concern due to potential immediate repayment demands from lenders[12]. - The group has reclassified all borrowings due after December 31, 2023, as current liabilities due to potential immediate repayment requests[11]. - The group is actively implementing plans to improve liquidity and financial conditions, including restructuring existing loans[59]. - Due to multiple uncertainties and potential interactions, the company cannot form an opinion on the appropriateness of the going concern basis[60]. - If the company fails to implement the aforementioned plans and measures, it may not be able to continue operating on a going concern basis, necessitating adjustments to asset values[60]. Employee and Corporate Governance - The group had a total employee count of 1,722 as of December 31, 2022, including 1,555 employees in property management[50]. - The company received an AA rating from MSCI for its environmental, social, and governance practices, the highest rating for real estate companies in mainland China[32]. - The company did not declare a final dividend for the year, consistent with the previous year[52]. Miscellaneous - The group has not adopted any new accounting standards that would have a significant impact on its financial performance or position in the foreseeable future[15]. - There were no significant post-reporting date events that would impact the group[54]. - The group has not engaged in any purchase, sale, or redemption of its listed securities during the year[54].

Financial Performance - The group achieved rental income of approximately RMB 896 million for the period, an increase of about 11% compared to RMB 805 million in the same period of 2021, primarily driven by the strong performance of newly completed projects, namely Lize SOHO and Gubei SOHO[20] - Gross profit for the period was approximately RMB 742 million, reflecting a year-on-year increase of about 13% from RMB 659 million in 2021[20] - The rental business gross profit margin was approximately 83%, slightly up from 82% in the same period of 2021[20] - Operating revenue for the six months ended June 30, 2022, was RMB 896,040,000, an increase of 11.3% from RMB 804,992,000 in the same period of 2021[50] - Net profit attributable to shareholders for the period was RMB 190,568,000, compared to a loss of RMB 80,216,000 in the previous year[50] - The company reported a pre-tax profit of RMB 312,877,000, significantly higher than RMB 67,733,000 in the prior year[50] - Other income for the six months ended June 30, 2022, was RMB 281,281 thousand, up 42.3% from RMB 197,504 thousand in the same period of 2021[77] - The total income tax expense for the current period was RMB 119,226,000, a decrease of 17.7% from RMB 144,763,000 in the previous year[80] Assets and Liabilities - Total assets as of June 30, 2022, were RMB 69,193,190,000, a decrease from RMB 70,446,515,000 at the end of 2021[53] - Total liabilities decreased to RMB 31,869,471,000 from RMB 33,346,751,000 at the end of 2021[53] - The company’s cash and cash equivalents amounted to RMB 461,533,000, compared to RMB 734,698,000 at the end of 2021[52] - Total liabilities exceeded current assets by RMB 3,120,566 thousand as of June 30, 2022, raising concerns about liquidity[60] - The group’s total liabilities as of June 30, 2022, were not explicitly stated but can be inferred from the total assets and equity figures[71] - The company’s accounts payable decreased to RMB 973,918,000 from RMB 1,017,607,000, reflecting a decline of about 4.3%[91] - The company’s total liabilities as of June 30, 2022, were RMB 2,921,193,000, a decrease of 10.1% compared to the previous year[91] Cash Flow - The company reported a net cash flow from operating activities of RMB (334,433) thousand for the six months ended June 30, 2022, compared to RMB 68,193 thousand for the same period in 2021, indicating a significant decline[57] - Cash and cash equivalents decreased by RMB 294,571 thousand, with an ending balance of RMB 461,533 thousand as of June 30, 2022, compared to RMB 1,492,098 thousand at the same time in 2021[58] - The company generated RMB 848,063 thousand from sales of properties and services during the first half of 2022, down from RMB 1,024,137 thousand in the same period of 2021, reflecting a decrease of approximately 17.3%[57] - The company’s cash flow from financing activities showed a net outflow of RMB (1,290,842) thousand, compared to an inflow of RMB 58,756 thousand in the previous year[57] Market Conditions - For the first half of 2022, SOHO China's rental income and occupancy rates in major projects showed a decline compared to the end of 2021, with Beijing's occupancy rates dropping from 77% to 69% and Shanghai's from 98% to 92%[9][10] - The net absorption of Grade A office space in Beijing and Shanghai for the first half of 2022 was 444,000 square meters and 301,000 square meters respectively, representing a significant decrease compared to the same period in 2021[6] - The rental market is expected to remain under pressure in the next six months due to a large number of new projects delayed from the first half of the year entering the market[6] - SOHO China believes that the long-term stability and asset scarcity of the Beijing and Shanghai office markets will continue to attract investors as the impact of the pandemic gradually diminishes[7] Environmental and Social Initiatives - The total energy consumption of 24 managed properties decreased by approximately 67.89 million kWh, achieving an energy-saving rate of about 36.5% and a carbon reduction of approximately 55,000 tons in the first half of 2022[7] - SOHO China provided rent deferrals and pandemic subsidies to tenants facing difficulties, maintaining a high level of customer satisfaction during the challenging period[7] - The company emphasizes its commitment to environmental, social, and governance (ESG) initiatives, enhancing corporate governance and environmental protection measures[7] - The company is advancing the construction of China's first "Zero Carbon Library" demonstration building, which is expected to be completed and delivered in the second half of 2022[7] Corporate Governance - The company has confirmed compliance with the Corporate Governance Code during the reporting period[41] - All directors have acknowledged adherence to the standards set forth in the Listing Rules during the reporting period[41] - The board of directors includes two executive directors and three independent non-executive directors, ensuring a balanced core competency structure[43] - The company has purchased liability insurance for directors and senior executives to cover potential legal responsibilities[43] Shareholder Information - As of June 30, 2022, the company has a total of 3,324,100,000 shares held by Pan Shiyi, representing a 63.9309% ownership stake[33] - Boyce Limited and Capevale Limited each hold 1,662,050,000 shares, accounting for 31.9654% of the company's equity[34] - The company did not declare an interim dividend for the period, consistent with the previous year[31][87] Financial Adjustments and Risks - The group reported an adjustment of RMB 693,878,000 in liabilities due to underreported corporate income tax and land value-added tax from previous years[65] - The total amount due for underpaid corporate income tax and land value-added tax is RMB 197,511,000, with related penalties and late fees totaling RMB 514,538,000[65] - The group has not made any significant changes to its risk management policies since the year ended December 31, 2021[68] - The financial risk factors include market risk, credit risk, and liquidity risk, which the group continues to manage[68]

Occupancy and Rental Performance - As of December 31, 2021, SOHO China's average occupancy rate reached 85%, with Shanghai Gubei SOHO achieving full occupancy for the first time[5]. - Beijing Lize SOHO's occupancy rate reached 80%, the highest level since the project's market entry[5]. - The rental income for major investment properties in Shanghai included 98% occupancy for SOHO Fuxing Plaza and 91% for Bund SOHO[9]. Financial Performance - The total rental income for the year was approximately RMB 1,742 million, representing a year-on-year increase of about 13% from RMB 1,538 million in 2020[38]. - The gross profit for the year was approximately RMB 1,400 million, remaining relatively stable compared to 2020[38]. - The rental business gross margin increased to approximately 80% from 76% in 2020[38]. - The investment property valuation gain for the year was approximately RMB 289 million, down from RMB 1,100 million in 2020[39]. - The group reported a net loss of RMB 123,952 million for the year 2021, compared to a profit of RMB 543,466 million in 2020[55]. - Total revenue for the year ended December 31, 2021, was RMB 1,741,739,000, a decrease of 20.5% from RMB 2,191,637,000 in 2020[178]. - The operating profit decreased significantly to RMB 1,123,745,000 from RMB 2,446,035,000, a decline of 54.1%[178]. - Basic and diluted loss per share was RMB (0.03), compared to earnings of RMB 0.10 per share in the previous year[178]. Administrative and Operating Expenses - Administrative expenses for the year were approximately RMB 195 million, a decrease from RMB 214 million in 2020[40]. - Other operating expenses increased to approximately RMB 838 million from RMB 258 million in 2020, primarily due to one-time tax expenses of approximately RMB 439 million[41]. - The income tax expense for the year was approximately RMB 389 million, a decrease from RMB 1,057 million in 2020, mainly due to a reduction in pre-tax profit[43]. Corporate Governance and Management - The company has established an ESG committee to improve governance structure and promote sustainable development initiatives[6]. - The company’s board includes independent non-executive directors, ensuring governance and oversight[59]. - The board of directors consists of five members, including two executive directors and three independent non-executive directors[110]. - The company has adopted high standards of corporate governance, which are deemed crucial for its development and shareholder protection[107]. Environmental and Social Responsibility - In 2021, SOHO China managed to achieve energy savings of 116 million kWh, equivalent to a carbon reduction of 96,000 tons, with an energy-saving rate of 28.9%[6]. - The company aims to construct a zero-carbon library in Tianshui, which will be the first of its kind in China upon completion[6]. - The company has committed RMB 30 million to establish a bilingual kindergarten in Northwest China, with an annual investment of RMB 3 million[61]. - The company emphasizes environmental issues and has raised public awareness about air pollution in China[61]. Risk Management and Internal Controls - The group has established a clear organizational structure for risk management and internal control, with regular reviews conducted by the Audit Committee[139]. - The internal audit department adopts a risk-based audit approach to assess the effectiveness of internal controls[141]. - The audit committee is responsible for reviewing the effectiveness of the company's financial reporting system, risk management, and internal control systems[121]. Future Outlook and Strategic Initiatives - The rental market in Beijing and Shanghai is expected to face significant supply challenges in 2022, impacting leasing business dynamics[7]. - SOHO China plans to continue enhancing asset management and property services to create additional value for clients[7]. - The company provided an optimistic outlook for the next quarter, projecting a revenue increase of 20% to $1.44 billion[68]. - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[69]. Shareholder and Equity Information - As of December 31, 2021, Pan Shiyi and Pan Zhangxin each held 3,324,100,000 shares, representing 63.93% of the company's total shares[83]. - The total equity attributable to the owners of the company was RMB 36,174,144 million as of December 31, 2021[56]. - The company maintained at least 25% of its issued share capital held by the public as of the report date[101]. Charitable Contributions - The company donated RMB 10 million to support disaster recovery efforts in Zhengzhou and another RMB 10 million for epidemic prevention in Tianshui[7]. - The group made charitable donations of approximately RMB 10,010,000 during the year[97].

Occupancy and Rental Performance - In the first half of 2021, SOHO China's average occupancy rate for stable investment properties increased to 90%, up from 78% in the same period of 2020[6] - The rental income from the leasing portfolio showed significant recovery, with key projects like Wangjing SOHO achieving a rental rate of 95% compared to 73% in the previous year[9] - The total leasable area of Wangjing SOHO is approximately 510,000 square meters, with a current rental area of about 133,766 square meters[11] - The total leasable area of Lize SOHO is approximately 135,637 square meters, with a current occupancy rate of 74%[14] - The total leasable area of the SOHO Tianshan Plaza is approximately 97,681 square meters, with office space of about 74,428 square meters[17] - The total leasable area of the Bund SOHO is approximately 72,006 square meters, with office space of about 50,347 square meters[16] - The group achieved rental income of approximately RMB 805 million, a year-on-year increase of about 3% compared to RMB 782 million in the same period of 2020[19] - The group's rental income for the six months ended June 30, 2021, was RMB 804,992,000, an increase from RMB 781,568,000 for the same period in 2020, representing a growth of approximately 2.3%[74] Financial Performance - Gross profit for the period was approximately RMB 659 million, a decrease of about 18% from RMB 799 million in the same period of 2020[20] - Net profit for the period was approximately RMB 343 million, an increase of about 67% compared to RMB 205 million in the same period of 2020[20] - Total revenue for the six months ended June 30, 2021, was RMB 804,992,000, an increase from RMB 781,568,000 in the same period of 2020, representing a growth of 2.0%[50] - Operating profit for the period was RMB 914,968,000, compared to RMB 769,095,000 in the previous year, reflecting an increase of 18.9%[50] - Net profit attributable to shareholders for the period was RMB 340,300,000, up from RMB 203,872,000 in 2020, marking a significant increase of 67.0%[50] - Basic earnings per share for the period was RMB 0.07, compared to RMB 0.04 in the same period last year, indicating a 75.0% increase[50] - The company reported a total comprehensive income of RMB 316,578,000 for the period, compared to RMB 199,793,000 in the previous year, an increase of 58.7%[51] Assets and Liabilities - Total assets as of June 30, 2021, amounted to RMB 71,109,770,000, compared to RMB 70,704,235,000 at the end of 2020, showing a slight increase of 0.6%[52] - Total liabilities were RMB 33,246,179,000, a marginal increase from RMB 33,157,222,000 at the end of 2020, reflecting a growth of 0.3%[53] - Cash and cash equivalents increased to RMB 1,492,098,000 from RMB 396,804,000, representing a substantial growth of 275.0%[52] - The total amount of mortgage guarantees provided by the company as of June 30, 2021, was RMB 49,065,000, down from RMB 72,462,000 as of December 31, 2020[93] - The total accounts payable as of June 30, 2021, was RMB 2,824,700,000, down from RMB 3,100,204,000 as of December 31, 2020[90] Corporate Governance and Compliance - The board confirms compliance with the Corporate Governance Code during the reporting period[41] - The board of directors includes two executive directors and three independent non-executive directors, ensuring a balanced core competency structure[43] - The independent non-executive directors constitute at least one-third of the board, ensuring adequate oversight[43] - The audit committee has reviewed the interim financial results and confirmed compliance with applicable accounting standards and disclosure requirements[44] - The company has purchased liability insurance for directors and senior executives to cover potential legal liabilities arising from their duties[43] Shareholder Structure and Dividends - The company has a significant shareholder structure, with Pan Shiyi and Pan Zhangxin collectively holding 3,324,100,000 shares, representing 63.93% of the total equity[32] - Boyce Limited and Capevale BVI each hold 1,662,050,000 shares, accounting for 31.97% of the company's equity[33] - The company did not declare an interim dividend for the period, compared to zero in the same period of 2020[29] - The company’s total issued and paid-up ordinary shares remained at 5,199,524,031 shares as of June 30, 2021, unchanged from the previous year[86] Investment and Financial Assets - The total fair value of investment properties as of June 30, 2021, was RMB 63,656,000,000, compared to RMB 63,367,000,000 as of December 31, 2020, indicating a slight increase[67][69] - The total fair value of financial assets measured at fair value was RMB 65,399,624,000 as of June 30, 2021, up from RMB 66,182,967,000 as of December 31, 2020[67][69] - The group’s financial assets include structured deposits valued at RMB 1,218,731,000 and investments in private equity funds valued at RMB 89,194,000 as of June 30, 2021[67] - The group’s investment properties and office properties are valued at RMB 63,656,000,000 and RMB 435,699,000, respectively, as of June 30, 2021[67] Cash Flow and Financing Activities - For the six months ended June 30, 2021, cash generated from operating activities was RMB 68,193 thousand, a decrease of 84.0% compared to RMB 427,284 thousand for the same period in 2020[57] - The company’s cash flow from financing activities generated RMB 58,756 thousand for the six months ended June 30, 2021, a significant decrease from RMB 1,041,793 thousand in the same period of 2020[57] - New loans raised in the first half of 2021 were RMB 500,000,000, a significant decrease from RMB 2,304,588,000 in the same period of 2020[89] Employee and Operational Metrics - The group had approximately 1,711 employees as of June 30, 2021, including 1,547 in property management[28] - Short-term employee benefits for the first half of 2021 were RMB 7,763,000, a decrease from RMB 9,383,000 in the same period of 2020[95]