Financial Performance - The Group achieved record-high contracted sales of RMB 75.2 billion, representing an increase of approximately 18% year-on-year[20]. - Profits attributable to shareholders reached a record high of RMB 4.35 billion, reflecting a year-on-year growth of 15%[21]. - The core profit attributable to shareholders amounted to RMB 4.59 billion, representing a year-on-year increase of 14%[21]. - Revenue for the year ended 31 December 2020 increased to RMB16,321.7 million, up from RMB11,710.2 million in 2019, primarily due to a RMB4,498.3 million increase in property sales revenue[41][45]. - Profit attributable to owners of the Company for 2020 was RMB4,354.5 million, compared to RMB3,799.6 million in 2019, reflecting a strong performance[37]. - Core profit attributable to owners of the Company rose to RMB4,678.4 million from RMB4,100.8 million in the previous year[37]. - Profit for the year increased to RMB 4,834,849,000 in 2020 from RMB 4,503,651,000 in 2019, reflecting a growth of about 7.3%[87]. - The Group's profit before tax for 2020 was RMB 7,266,147,000, slightly down from RMB 7,428,965,000 in 2019, a decrease of about 2.2%[87]. - Non-controlling interests in profit for the year were RMB 480,301,000, down from RMB 704,023,000 in 2019, a decline of approximately 31.8%[87]. Revenue and Sales - The cash collection ratio from contracted sales for the current year was over 79%, providing solid cash flow[20]. - The total contracted sales area was 3,387,600 square meters, reflecting an 8% increase from the previous year[118]. - The average selling price in 2020 was approximately RMB 22,200 per square meter, a year-on-year increase of 9%[118]. - Total rental/management fees revenue reached approximately RMB 795 million in 2020, representing an 18% increase compared to 2019[121]. - Revenue from the property investment and management segment increased to RMB795.0 million, representing 5% of total revenue, compared to RMB671.4 million, which was 6% of total revenue[61]. Assets and Liabilities - Total assets as of 31 December 2020 were RMB64,407.1 million, compared to RMB63,169.6 million in 2019[38]. - Total liabilities decreased to RMB43,308.1 million in 2020 from RMB45,272.2 million in 2019[38]. - The gearing ratio increased to 87% in 2020 from 57% in 2019, indicating higher leverage[38]. - The Group's total shareholders' equity increased from RMB15,047.2 million as of December 31, 2019, to RMB18,888.2 million as of December 31, 2020[64]. - The net debt increased by RMB 6,387.8 million to RMB 11,037.6 million as of December 31, 2020, resulting in a net debt ratio of 52%, up from 26% as of December 31, 2019[71]. Investments and Development - The Group has approximately 2 million square meters of business park properties under management and 1.3 million square meters of commercial properties[22]. - The Group's land bank totaled 18.63 million square meters as of December 31, 2020, with 21% located in first-tier cities[93]. - The Group acquired 34 new development sites with a total GFA of approximately 5.58 million square meters at a total cost of RMB24.1 billion, averaging RMB8,300 per square meter[24][25]. - The Group's expansion in investment and development of business parks was aggressive during the year[22]. - The Group acquired 34 land projects in 2020, with a total planned GFA of approximately 5,576,800 square meters at a total consideration of RMB 44.16 billion[115]. Corporate Governance - The Company has maintained compliance with the Corporate Governance Code throughout FY2020, with some deviations due to the COVID-19 pandemic[146]. - The Board of Directors consists of four executive Directors, two non-executive Directors, and three independent non-executive Directors[154]. - The Company has established three board committees: audit, remuneration, and nomination, each with specific written terms of reference[193]. - The Audit Committee held 2 meetings with senior management during the year, with all members attending both meetings[198]. - The Company Secretary attends all regular board meetings to advise on corporate governance and statutory compliance[170]. Management and Leadership - Mr. Huang has been the Executive Director and Chairman of the Group since November 2012, overseeing the overall operation of Gemdale Corporation[126]. - Mr. Xu has served as the Executive Director and CEO since January 2013, responsible for capital management and strategic planning[128]. - The company has extensive experience in property investment, design, construction, marketing, and corporate management, with key personnel holding advanced degrees in relevant fields[126][128][130]. - The management team has been recognized for their excellence, with Mr. Xu receiving awards for being the "Best Board Secretary" in 2011 and 2012[128]. - The Company encourages Directors to enroll in professional development courses related to corporate governance practices[181]. Market Conditions - The Chinese real estate market showed strong recovery in the second quarter of 2020 after the initial impact of the COVID-19 pandemic[16]. - The central government implemented policies to promote healthy development in the real estate market, including the "Three Red Lines Rules" introduced in August 2020[18]. - The Group's foreign currency risk exposure is considered acceptable, with most transactions conducted in RMB, and it will continue to monitor and hedge currency risks as appropriate[74]. Future Development Plans - Future development plans include a mix of residential, commercial, and industrial projects, reflecting a balanced approach to market demands[103]. - The company is actively expanding its portfolio with multiple projects in key urban areas, indicating a strategic focus on urban development[99]. - The total GFA of remaining unrecognized for sale is 3,000,000 square meters across various projects in cities like Xuzhou, Suzhou, and Kunshan[104].

Revenue and Profitability - The Group's revenue increased from RMB3,062.1 million for the six months ended June 30, 2019, to RMB5,670.2 million for the same period in 2020, representing an increase of 85.2%[21] - Revenue from property development segment was RMB5,150.4 million, accounting for 91% of total revenue, compared to RMB2,588.7 million (85% of total revenue) in the corresponding period of 2019[27] - Profit attributable to owners of the Company for the six months ended June 30, 2020, was RMB1,608.3 million, an increase of 38.8% from RMB1,158.3 million in the same period of 2019[25] - Basic earnings per share increased by 38% to RMB0.1004 for the six months ended June 30, 2020, compared to RMB0.0729 for the corresponding period in 2019[26] - The segment result for property development recorded a profit of RMB2,522.3 million, an increase of RMB732.9 million from RMB1,789.4 million in the corresponding period[27] - The increase in revenue was primarily driven by a significant increase in revenue recognized from property sales, amounting to RMB2,561.7 million[21] - The Group achieved aggregated contracted sales of RMB 31,180 million for the six months ended 30 June 2020, representing a 17% increase compared to the same period in 2019[56] - The total contracted sales area was 1.34 million square meters, reflecting an 8% increase from the corresponding period in 2019[56] - The average selling price was approximately RMB 23,200 per square meter, which is an 8% increase compared to the same period in 2019[56] Expenses and Costs - Direct operating expenses rose from RMB605.8 million in the first half of 2019 to RMB692.1 million in 2020, reflecting an increase of approximately 14.3%[22] - Profit before tax increased to RMB 2,289,737, representing a 36.7% rise from RMB 1,674,990 in 2019[71] - Profit before tax was impacted by a significant increase in the cost of properties sold, which surged to RMB 3,493,486,000 from RMB 1,496,531,000, reflecting a year-over-year increase of about 133.4%[151] - The total employees benefits expenses increased to RMB 277,207,000 from RMB 254,587,000, marking a rise of approximately 8.9%[151] Financial Position and Assets - Total shareholders' funds increased from RMB 15,047.2 million as of December 31, 2019, to RMB 15,717.3 million as of June 30, 2020, driven by a profit of RMB 1,608.3 million[34] - Total assets as of June 30, 2020, amounted to RMB 61,375,637,000, while total liabilities were RMB 42,692,925,000[135] - Total non-current assets as of June 30, 2020, amounted to RMB 34,422,576, an increase from RMB 31,613,870 at the end of 2019[74] - Current assets totaled RMB 26,953,061, down from RMB 31,555,777 at the end of 2019[74] - The Group's land bank totaled 17.20 million square meters as of June 30, 2020, with approximately 20% located in first-tier cities[52] - The Group's investments in joint ventures totaled RMB 14,139,215,000[135] Cash Flow and Financing - The Group's cash and bank balances rose by RMB 1,140.9 million (23%) to RMB 6,115.5 million as of June 30, 2020, primarily due to proceeds from property sales and new borrowings[36] - The net cash from financing activities for the six months ended June 30, 2020, was RMB 1,072,944,000, a decrease from RMB 8,213,444,000 in the same period of 2019[83] - New bank and other borrowings for the period totaled RMB 1,196,354,000, compared to RMB 1,965,112,000 in the previous period[83] - The Group recorded net current liabilities of RMB 5,141,017,000 as of June 30, 2020, compared to RMB 4,384,828,000 as of December 31, 2019[90] Borrowings and Debt - Total borrowings amounted to RMB 4,167.2 million as of June 30, 2020, with interest rates ranging from 1.0% to 4.6% per annum[38] - Net debt increased by RMB 385.0 million to RMB 5,034.8 million, resulting in a net debt ratio of 27%, up from 26% at the end of 2019[38] - The Group's outstanding guarantees amounted to RMB 3,337,431,000 as of June 30, 2020, significantly up from RMB 1,623,164,000 as of December 31, 2019[47] - The Group's maximum guarantee to financial institutions for facilities granted to joint ventures was US$ 71,500,000 (equivalent to RMB 506,184,000) as of June 30, 2020[48] Market Conditions and Strategic Outlook - The outbreak of COVID-19 is anticipated to adversely impact the Chinese economy, including the real estate sector, prompting various monetary and fiscal policies from the PRC government[60] - The Group expects continued impacts from COVID-19 on the retail industry, leading to a conservative valuation approach for its right-of-use assets[30] - The demand for better housing and living environments is seen as an opportunity for companies providing green health and quality property management[60] - The Group plans to actively seek M&A opportunities to enhance scale and maximize shareholder value due to its low-gearing financial structure[60] Accounting Policies and Financial Reporting - The unaudited interim financial information is prepared in accordance with HKAS 34 Interim Financial Reporting[86] - The Group has applied revised Hong Kong Financial Reporting Standards effective from January 1, 2020, for the first time in this reporting period[91] - The Group assesses the impairment of assets based on whether an event affecting asset value has occurred and whether the carrying value can be supported by the net present value of future cash flows[108] - The Group's financial reporting is based on historical experience and expectations of future events, with significant estimates and assumptions discussed in the financial information[103] Joint Ventures and Associates - The Group's share of results from joint ventures and associates reported a profit of RMB982.8 million, up from RMB825.7 million in the same period of 2019, representing an increase of 19%[25] - The share of profits and losses of joint ventures resulted in a loss of RMB (1,020,801), compared to a loss of RMB (589,865) in the previous year, reflecting a deterioration in joint venture performance[80] Property Development and Management - The property investment and management segment's revenue increased to RMB 372.8 million, representing 7% of total revenue, compared to RMB 280.0 million (9%) in the prior year[30] - The property investment and management segment recorded a loss of RMB 56.6 million, an improvement from a loss of RMB 66.6 million in the prior year[30] - The commercial properties portfolio is expected to generate an additional RMB 1.5 billion in rental income upon completion of ongoing projects[59]

Financial Performance - The Group achieved a record high in contracted sales of RMB 63.66 billion, representing an increase of approximately 30% year-on-year[11]. - Profits attributable to shareholders reached a record high of RMB 3.8 billion, reflecting a year-on-year growth of 69%[11]. - Core profit attributable to shareholders amounted to RMB 4.01 billion, representing a year-on-year increase of 76%[11]. - The gross profit margin for the Group was 53%, a slight decrease from 58% in the previous year, but still higher than most industry players[11]. - The Group's revenue for the year ended December 31, 2019, increased to RMB 11,710.2 million, up from RMB 7,079.1 million in 2018, representing a growth of approximately 65.5%[20]. - Profit attributable to owners of the Company rose to RMB 3,799.6 million in 2019, compared to RMB 2,252.6 million in 2018, marking an increase of about 68.6%[20]. - Core profit attributable to owners of the Company reached RMB 4,010.0 million, up from RMB 2,273.0 million in the previous year, reflecting a growth of approximately 76.5%[20]. - Basic earnings per share increased by 69% to RMB0.2392 in 2019, compared to RMB0.1419 in 2018[34]. - Profit before tax for 2019 was RMB 7,428,965,000, up from RMB 4,787,694,000 in 2018, indicating a growth of about 55.4%[64]. - The profit for the year attributable to owners of the company was RMB 3,799,628,000, compared to RMB 2,252,622,000 in 2018, reflecting an increase of approximately 68.7%[64]. Dividends and Shareholder Returns - The Board proposed a final dividend of RMB 7.18 cents per ordinary share, a significant increase of 160% compared to the previous year's final dividend[12]. - Proposed final dividend is RMB0.0718 per share for 2019, up from RMB0.0275 per share in 2018, pending shareholder approval[35]. - Total shareholders' funds rose from RMB11,835.2 million as of December 31, 2018, to RMB15,047.2 million as of December 31, 2019, driven by a profit attributable to owners of RMB3,799.6 million[44]. Property Development and Investment - The Group currently has approximately 1.5 million square meters of commercial properties and plans to launch at least 3 to 4 new operating projects each year for the next three years[11]. - The Group acquired 21 new development sites with a total GFA of approximately 4.94 million square meters, including 738,000 square meters (15%) located in Beijing and Shanghai[15]. - The Group's aggressive expansion in investment and development of business projects is a key strategy moving forward[11]. - The Group anticipates mild growth in contracted sales and net profit, strengthening its market position in the real estate industry[15]. - The Group's commercial properties portfolio is expected to generate an additional RMB1.5 billion in rental income upon completion of ongoing projects[94]. Financial Position and Liabilities - Total assets as of December 31, 2019, amounted to RMB 63,169.6 million, an increase from RMB 51,987.8 million in 2018[21]. - The gearing ratio increased to 57% in 2019 from 44% in 2018, indicating a rise in financial leverage[21]. - The net debt increased by RMB2,689.3 million to RMB4,649.8 million as of December 31, 2019, with a net debt ratio rising to 26% from 14%[49]. - As of December 31, 2019, total borrowings amounted to RMB10,266.6 million, up from RMB6,061.3 million in 2018[51]. - The total liabilities as of December 31, 2019, were RMB 45,272,201,000, compared to RMB 38,117,372,000 in 2018, representing an increase of approximately 18.5%[64]. Corporate Governance - The Company has complied with all applicable code provisions of the Corporate Governance Code throughout FY2019, except for certain deviations regarding attendance at the annual general meeting[113]. - The Board of Directors consists of four executive directors, two non-executive directors, and three independent non-executive directors, ensuring a balanced composition for effective decision-making[118]. - The Company emphasizes high standards of corporate governance to optimize returns for shareholders and enhance overall performance[112]. - The Company has adopted the Model Code for Securities Transactions by Directors, and all directors complied with the required standards throughout the year[117]. - The Company has established three board committees: audit, remuneration, and nomination, each with specific written terms of reference[149]. Risk Management and Internal Control - The Group has applied appropriate accounting policies consistently and made reasonable judgments in preparing financial statements[146]. - The Audit Committee assists the Board in ensuring objectivity and credibility of financial reporting, including interim and final results[152]. - The Group's internal control systems are designed to provide reasonable assurance against material misstatement or loss[187]. - The Company engages independent consultants to review its risk management and internal control systems as necessary[185]. - The Board conducts an annual review of risk management and internal control measures, ensuring compliance and effectiveness[188]. Market Trends and Challenges - The overall property sales market in China saw slight growth in 2019, but challenges remain due to higher funding costs and tighter supply[9]. - Large-scale national players have adopted different marketing strategies to maintain sales growth amid a shrinking market for small and medium-sized players[9]. - The demand for improved housing and living environments is expected to create opportunities for the Group in the property management sector[16]. Management and Leadership - The Group's strategic planning and management are overseen by experienced executives with extensive backgrounds in property development and corporate management[96][97][98][99]. - Mr. Wei Chuanjun has been the Executive Director and CFO since October 2012, with extensive experience in property development and financial management[100]. - The Company Secretary has over 22 years of experience in accounting, treasury, finance, and mergers and acquisitions, contributing to effective corporate governance[110].

Revenue Growth - The Group's revenue increased from RMB1,726.9 million for the six months ended 30 June 2018 to RMB3,062.1 million for the six months ended 30 June 2019, representing an increase of 77.3%[9] - Revenue from property sales recognized increased by RMB1,261.8 million, contributing significantly to the overall revenue growth[9] - Revenue from the property development segment was RMB2,588.7 million, accounting for 85% of total revenue, up from RMB1,326.9 million or 77% in the same period last year[17] - The increase in revenue and profit was mainly driven by higher sales from property developments in key cities such as Suzhou, Shanghai, Wuhan, and Tianjin[13] - The Group achieved aggregated contracted sales of RMB26,168 million for the six months ended June 30, 2019, representing a 64% increase compared to the same period in 2018[47] Profitability - Profit attributable to owners of the Company rose to RMB1,158.3 million, up 93.4% from RMB598.8 million for the corresponding period in 2018[13] - Share of results from joint ventures and associates reported a profit of RMB825.7 million, an increase of 76.6% compared to RMB467.3 million in the previous year[13] - Profit in the property development segment increased to RMB1,790.0 million, compared to RMB851.3 million for the corresponding period, driven by a significant increase in property sales area delivered[17] - Profit before tax for the six months ended June 30, 2019, was RMB1,674,990, compared to RMB861,942 for the same period in 2018, representing a significant increase of 94.3%[73] - Total comprehensive income for the period was RMB1,237,668, an increase of 92.3% from RMB643,454 in the same period of 2018[63] Expenses and Costs - Direct operating expenses rose from RMB410.3 million to RMB638.2 million, an increase of 55.5%, due to expanded business operations[10] - Finance costs increased to RMB185.3 million from RMB128.0 million, reflecting higher bank borrowings and loans from related parties[12] - Administrative expenses slightly increased from RMB19.8 million to RMB22.0 million, reflecting a modest rise in operational costs[10] - The increase in financial expenses was primarily due to higher bank loans and interest payments, rising from RMB128 million to RMB185.3 million[14] - The cost of properties sold was RMB1,496,531 for the six months ended June 30, 2019, up from RMB886,274 in 2018, indicating a significant increase of 68.9%[152] Financial Position - Total shareholders' funds increased from RMB11,835.2 million as of 31 December 2018 to RMB12,564.2 million as of 30 June 2019, driven by profit attributable to owners of the Company[23] - The Group's deposits, bank, and cash balances increased by RMB1,881.0 million or 58% to RMB5,118.9 million as of 30 June 2019[24] - The net debt increased by RMB7,357.7 million to RMB9,318.2 million as of 30 June 2019, resulting in a net debt ratio of 64%, up from 14% at the end of 2018[26] - Total assets as of June 30, 2019, amounted to RMB65,760,400,000, up from RMB51,987,757,000 at the end of 2018, showing a growth of approximately 26.5%[141] - Total liabilities were reported at RMB51,130,430,000, compared to RMB38,117,372,000 at the end of 2018, indicating an increase of about 34.1%[141] Cash Flow - Net cash used in operating activities for the first half of 2019 was RMB4,573,521, a substantial increase from RMB47,447 in the previous year[73] - Net cash from financing activities for the six months ended June 30, 2019, was RMB8,213,444,000, compared to a net cash used of RMB(1,108,550,000) in the same period of 2018[76] - Total cash and cash equivalents at the end of the period reached RMB5,112,619,000, up from RMB2,490,418,000 in the same period of 2018[78] - The company is confident in its ability to meet financial obligations and continue as a going concern based on operational cash inflows[84] Land and Property Development - As of June 30, 2019, the Group's land bank totaled approximately 15.41 million square meters, with 25% in first-tier cities and 65% in second-tier cities[43] - The Group acquired 13 land projects in the first half of 2019, with a total planned GFA of approximately 2.54 million square meters, at a total consideration of approximately RMB25,220 million[45] - The average selling price for properties was approximately RMB21,100 per square meter, reflecting a slight decrease of 2.8% compared to the previous year[47] - The Group plans to focus on expanding contracted sales and land bank accumulation in first-tier and certain second-tier cities with fast economic growth[51] - The Group plans to continue expanding its property development and management segments, leveraging its strong financial performance to explore new market opportunities[141] Accounting Standards and Policies - The Group adopted HKFRS 16 "Leases" for the first time, impacting the financial statements starting from 1 January 2019[8] - The Group's accounting policies remain consistent with those in the annual financial statements for the year ended December 31, 2018, except for the new standards adopted[88] - The Group recognized an increase in right-of-use assets amounting to RMB78,982,000 as of January 1, 2019[98] - The Group applied short-term lease exemptions for leases with terms ending within 12 months from the date of initial application[96] - Significant judgment is applied in determining the lease term for contracts with renewal options, considering non-cancellable terms and options that are reasonably certain to be exercised[107] Taxation - The Group is subject to Land Appreciation Tax (LAT) in Mainland China, with rates ranging from 30% to 60% on the appreciation of land value[117] - The land appreciation tax (LAT) in Mainland China amounted to RMB230,907,000, up from RMB28,496,000 in the previous year, indicating a significant increase of 709.5%[155] - The corporate income tax expense for Mainland China for the period was RMB298,317,000, compared to RMB153,452,000 in the same period last year, representing an increase of 94.4%[155] Joint Ventures and Investments - The company reported a share of losses from joint ventures amounting to RMB589,865 for the first half of 2019, compared to RMB453,695 in the same period of 2018[73] - Investments in joint ventures totaled RMB8,980,129,000, while investments in associates were RMB3,214,127,000[141] - Capital contributions to joint ventures totaled RMB725,469, indicating a significant investment in joint ventures[75]

[Corporate Information](index=4&type=section&id=Corporate%20Information) The report details core company information including board members, committee structures, company secretary, registered office, principal place of business, share registrar, auditor, legal advisors, and principal bankers - The report details core company information including the board of directors, committee structures, company secretary, registered office, principal place of business, share registrar, auditor, legal advisors, and principal bankers[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) Despite a slowdown in China's real estate market in 2018, the Group achieved record-high contracted sales and profit attributable to shareholders, growing by 8% and 37% respectively, while maintaining a high gross profit margin of 58% and actively expanding its business park segment [Market Overview](index=6&type=section&id=Market%20Overview) In 2018, China's overall real estate market saw record transaction volumes and prices but slower growth, with hot cities maintaining controls while others adjusted policies due to price pressure, and the industry faced rising financing costs and tight capital supply, leading to increased market differentiation - In 2018, China's real estate market was characterized by decelerated growth, differentiated policies across cities, tightening financing environment, and varied performance among market participants[11](index=11&type=chunk)[12](index=12&type=chunk) [Business Overview And Outlook](index=7&type=section&id=Business%20Overview%20And%20Outlook) In 2018, the Group achieved record performance with contracted sales of 49.03 billion RMB (+8% YoY) and profit attributable to shareholders of 2.253 billion RMB (+37% YoY), maintaining a high gross profit margin of 58% and acquiring 24 new land parcels totaling 2.73 million sq.m., while planning to focus on first and second-tier cities and M&A opportunities in 2019 Key Performance Indicators for 2018 | Metric | Amount/Ratio | YoY Change | | :--- | :--- | :--- | | Contracted Sales | 49.03 billion RMB | +8% | | Profit Attributable to Shareholders | 2.253 billion RMB | +37% | | Gross Profit Margin | 58% | - | | Final Dividend | 2.75 RMB cents per share | +10% | - The Group is rapidly expanding in the business park sector, leveraging the success of Shenzhen Vanke Technology Park, now owning over **1 million sq.m.** of business parks in China and attracting world-class tenants like DJI, Amazon, and Intel[16](index=16&type=chunk)[17](index=17&type=chunk) - During the year, the Group successfully acquired **24 new land parcels** in several core cities, including Beijing and Shanghai, adding approximately **2.73 million sq.m.** of gross floor area, laying a foundation for future profit and cash flow growth[17](index=17&type=chunk)[18](index=18&type=chunk) - 2019 Strategic Outlook: The Group will continue to focus on first and second-tier cities with rapid economic growth and high population inflow, expanding contracted sales and land reserves, and actively developing high-end business parks and commercial projects[20](index=20&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) The Group's total revenue increased by 50% to 7.08 billion RMB and profit attributable to shareholders grew by 37% to 2.25 billion RMB, driven by significant property sales and high gross margins, while financial health improved with net gearing significantly reduced from 73% to 44% [Financial Highlights](index=9&type=section&id=Financial%20Highlights) This fiscal year, the Group achieved significant growth in both revenue and profit, with revenue reaching 7.08 billion RMB and profit attributable to shareholders at 2.25 billion RMB, while optimizing its financial structure by reducing total loans and significantly lowering net gearing from 73% to 44%, demonstrating stronger financial stability Financial Highlights for FY2018 (vs FY2017) | Metric | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | **Performance** | | | | Revenue (thousand RMB) | 7,079,136 | 4,711,019 | | Profit Attributable to Owners of the Company (thousand RMB) | 2,252,622 | 1,643,529 | | Basic Earnings Per Share (RMB) | 0.1419 | 0.1039 | | **Financial Position** | | | | Total Assets (thousand RMB) | 51,987,757 | 43,668,752 | | Total Liabilities (thousand RMB) | 38,117,372 | 30,621,124 | | Total Loans (thousand RMB) | 6,061,306 | 9,544,591 | | Net Loans (thousand RMB) | 1,960,484 | 2,993,271 | | **Key Ratios** | | | | Gearing Ratio | 44% | 73% | | Net Loans to Total Equity | 14% | 23% | [Financial Review](index=10&type=section&id=Financial%20Review) In FY2018, the Group's revenue increased to 7.08 billion RMB, primarily driven by a significant rise in property sales, with adjusted revenue reaching 12.16 billion RMB if excluding the HKFRS 15 impact, while profit attributable to shareholders grew to 2.25 billion RMB (+37% YoY) due to increased sales and improved gross margins, and the Group's financial structure remained healthy with net gearing decreasing from 23% to 14% [Results for the year ended 31 December 2018](index=10&type=section&id=Results%20for%20the%20year%20ended%2031%20December%202018) This section provides a detailed overview of the Group's financial performance for the year ended December 31, 2018, highlighting key revenue, profit, and earnings per share figures compared to the previous year FY2018 Performance Overview (vs FY2017) | Metric | 2018 (million RMB) | 2017 (million RMB) | | :--- | :--- | :--- | | Revenue | 7,079.1 | 4,711.0 | | Other Income and Gains | 588.2 | 426.0 | | Fair Value Gains on Investment Properties | 324.1 | 545.8 | | Finance Costs | 249.8 | 241.8 | | Profit Attributable to Owners of the Company | 2,252.6 | 1,643.5 | | Basic Earnings Per Share (RMB) | 0.1419 | 0.1039 | - The adoption of new accounting standard HKFRS 15 changed revenue recognition; without this impact, current year revenue would be **12.16 billion RMB**, a significant increase of **7.45 billion RMB** from last year[27](index=27&type=chunk)[30](index=30&type=chunk) - Profit attributable to owners of the Company increased by **37%** year-on-year, primarily due to increased sales revenue and higher gross profit margin[35](index=35&type=chunk) [Business Segments](index=12&type=section&id=Business%20Segments) This section details the financial performance of the Group's key business segments, including property development, property investment and management, and micro-lending, highlighting their respective contributions to overall revenue and profit in 2018 compared to 2017 Revenue and Profit by Business Segment (2018 vs 2017) | Business Segment | 2018 Revenue (million RMB) | 2017 Revenue (million RMB) | 2018 Profit (million RMB) | 2017 Profit (million RMB) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 6,184.3 | 3,995.9 | 4,261.9 | 2,055.3 | | Property Investment and Management | 507.3 | 385.2 | 631.1 | 806.5 | | Micro-lending | 387.5 | 330.0 | 149.3 | 141.0 | - The property development segment accounted for **87%** of total revenue, serving as the Group's core revenue source, with its profit significantly increasing primarily due to higher gross profit from property sales and increased sales revenue[37](index=37&type=chunk)[39](index=39&type=chunk) - The growth in property investment and management segment revenue primarily stemmed from the Hangzhou shopping center opened at the end of last year and newly acquired property leasing companies, while segment profit decreased mainly due to reduced fair value gains on investment properties[38](index=38&type=chunk)[40](index=40&type=chunk) [Financial Resources, Liquidity and Capital Structure](index=13&type=section&id=Financial%20Resources%2C%20Liquidity%20and%20Capital%20Structure) This section analyzes the Group's financial resources, liquidity, and capital structure, detailing changes in cash balances, net debt, and gearing ratios, and providing a breakdown of loan maturities to illustrate the company's financial health and debt management - The Group's cash and bank balances decreased from **5.40 billion RMB** to **3.24 billion RMB**, primarily due to payments for land acquisitions, development costs, and dividends[44](index=44&type=chunk)[48](index=48&type=chunk) - Net debt decreased from **2.99 billion RMB** to **1.96 billion RMB**, and the net gearing ratio (net debt/total equity) significantly declined from **23%** to **14%**, indicating reduced financial leverage[51](index=51&type=chunk) Loan Maturity Profile (thousand RMB) | Repayment Period | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | **Bank and Other Loans** | | | | Within 1 year | 1,310,182 | 1,087,557 | | Within 2 years | 435,291 | 163,434 | | **Loans from Related Parties** | | | | Within 1 year | 1,396,316 | 5,394,113 | | Within 2 years | 2,604,478 | 2,593,722 | | **Total Loans** | **6,061,306** | **9,544,591** | [Financial Management and Risks](index=15&type=section&id=Financial%20Management%20and%20Risks) This section outlines the Group's approach to financial management and risk, including foreign exchange exposure, interest rate risk, and asset pledges, demonstrating its commitment to monitoring and mitigating potential financial impacts - The Group primarily operates in mainland China, with most transactions denominated in RMB, but still faces foreign exchange risk, which the Group considers acceptable and will continue to monitor[55](index=55&type=chunk)[56](index=56&type=chunk) - As of the end of 2018, **53%** of the Group's loans were at floating rates, a decrease from **72%** in 2017, indicating reduced interest rate exposure[58](index=58&type=chunk)[59](index=59&type=chunk) - Investment properties valued at **543 million RMB** were pledged by the Group as collateral for other borrowings[61](index=61&type=chunk)[64](index=64&type=chunk) [Contingent Liabilities and Proposed Final Dividend](index=16&type=section&id=Contingent%20Liabilities%20and%20Proposed%20Final%20Dividend) This section details the Group's contingent liabilities, including mortgage loan guarantees for property purchasers and financing guarantees for a joint venture, and outlines the board's recommendation for a final dividend payment - The Group provided mortgage loan guarantees of **1.63 billion RMB** for property purchasers and a financing guarantee of **487 million RMB** for a joint venture[62](index=62&type=chunk)[63](index=63&type=chunk)[65](index=65&type=chunk) - The Board recommended a final dividend of **RMB 0.0275** per share, an increase from RMB 0.025 in 2017[67](index=67&type=chunk)[68](index=68&type=chunk) [Five-year Financial Summary](index=18&type=section&id=Five-year%20Financial%20Summary) The report presents five years of financial data from 2014 to 2018, clearly reflecting the Group's continuous growth in total assets, total equity, and annual profit, with total assets expanding rapidly from approximately 14.9 billion RMB in 2014 to nearly 52 billion RMB in 2018 Five-Year Financial Data Summary (2014-2018) | Metric (thousand RMB) | 2018 | 2017 (Restated) | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 7,079,136 | 4,711,019 | 8,706,669 | 4,240,759 | 2,168,450 | | Profit for the Year | 2,752,139 | 1,807,248 | 2,004,369 | 1,375,151 | 645,925 | | Profit Attributable to Owners of the Company | 2,252,622 | 1,643,529 | 1,366,512 | 1,056,202 | 360,884 | | Total Assets | 51,987,757 | 43,668,752 | 32,167,328 | 25,100,925 | 14,899,651 | | Total Equity | 13,870,385 | 13,047,628 | 11,637,397 | 9,850,026 | 6,126,030 | [Review of Operations](index=19&type=section&id=Review%20of%20Operations) As of end-2018, the Group's land bank totaled 13.75 million sq.m., primarily in first and second-tier cities, with 24 new land projects acquired during the year adding 2.733 million sq.m. of GFA, while contracted sales reached 49.03 billion RMB (+8% YoY) with a 19% increase in average selling price, and property leasing revenue grew by 32% to 507 million RMB with core commercial projects achieving nearly 100% occupancy [Land Bank](index=19&type=section&id=Land%20Bank) This section provides an overview of the Group's land bank as of December 31, 2018, detailing its total size and strategic distribution across first, second, and third-tier cities, highlighting the company's focus on core urban areas - As of December 31, 2018, the Group's total land bank reached **13.75 million sq.m.**[73](index=73&type=chunk)[100](index=100&type=chunk) - The land bank is strategically distributed across core cities: approximately **23%** in first-tier cities (Beijing, Guangzhou, Shanghai, Shenzhen), about **66%** in second-tier cities (e.g., Wuhan, Nanjing, Hangzhou), and the remaining **11%** in third-tier cities[72](index=72&type=chunk)[73](index=73&type=chunk) [Land acquisitions in 2018](index=29&type=section&id=Land%20acquisitions%20in%202018) This section details the Group's land acquisition activities in 2018, including the number of projects, total planned gross floor area, the Group's attributable interest, total consideration, and average land acquisition cost, demonstrating its strategic expansion efforts Overview of Land Acquisitions in 2018 | Metric | Value | | :--- | :--- | | Number of Land Projects Acquired | 24 | | Total Planned Gross Floor Area | Approx. 2,733,000 sq.m. | | Group's Attributable Interest Area | 1,415,000 sq.m. | | Total Consideration | Approx. 30.696 billion RMB | | Group's Payable Consideration | 15.723 billion RMB | | Average Land Acquisition Cost | Approx. 11,200 RMB/sq.m. | [Segment Information](index=30&type=section&id=Segment%20Information) This section provides operational data for the Group's key segments, including property sales and development, highlighting contracted sales, area sold, and average selling price, as well as the strong performance of property leasing business with significant revenue growth and high occupancy rates for core commercial projects Property Sales and Development Operational Data (2018 vs 2017) | Metric | 2018 | 2017 | YoY Change | | :--- | :--- | :--- | :--- | | Accumulated Contracted Sales (Total) | 49.03 billion RMB | 45.40 billion RMB (Estimated) | +8% | | Accumulated Contracted Sales Area | 2.263 million sq.m. | 2.487 million sq.m. (Estimated) | -9% | | Average Selling Price | Approx. 21,700 RMB/sq.m. | Approx. 18,250 RMB/sq.m. (Estimated) | +19% | - Property leasing business revenue grew significantly, with total rental and management fee income of approximately **507 million RMB** in 2018, a **32%** year-on-year increase[105](index=105&type=chunk)[106](index=106&type=chunk) - Core commercial projects such as Shenzhen Vanke Technology Park, Beijing Sohu Network Building, and Shanghai Bridge 8 project all achieved nearly **100%** occupancy rates, demonstrating strong operational capabilities[105](index=105&type=chunk)[106](index=106&type=chunk) [Corporate Governance and Other Reports](index=31&type=section&id=Corporate%20Governance%20and%20Other%20Reports) This section covers the company's governance structure, board member backgrounds, corporate governance practices, and commitments to environmental, social, and governance (ESG) aspects, demonstrating adherence to high standards despite minor deviations [Profiles of Directors and Company Secretary](index=31&type=section&id=Profiles%20of%20Directors%20and%20Company%20Secretary) This chapter provides detailed background information on the company's executive directors, non-executive directors, independent non-executive directors, and company secretary, highlighting the executive team's extensive experience in real estate development, strategic planning, and financial management from the parent company, while non-executive and independent non-executive directors bring diverse professional perspectives from investment, legal, and accounting fields - Executive Directors Mr. Ling Ke, Mr. Huang Juncan, Mr. Xu Jiajun, and Mr. Wei Chuanjun all hold key management positions such as Chairman, President, and Senior Vice President at the controlling shareholder Gemdale Corporation, demonstrating the parent company's deep involvement and management synergy with the listed platform[107](index=107&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - The independent non-executive director team, comprising Mr. Hui Chiu Chung, Mr. Jiang Shangyi, and Mr. Hu Chunyuan, possesses profound professional backgrounds and extensive industry experience in securities investment, law, and accounting, providing strong independent oversight for the company's corporate governance and decision-making[116](index=116&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [Corporate Governance Report](index=35&type=section&id=Corporate%20Governance%20Report) The company is committed to maintaining high governance standards and has adopted the Listing Rules' Corporate Governance Code, with the report period showing compliance with most code provisions, though three deviations were noted regarding director attendance at general meetings and board meeting frequency, while detailing the board's composition, responsibilities, committee operations, and measures for risk management, internal control, and investor relations - The report disclosed three deviations from the Corporate Governance Code: 1. Some non-executive and independent non-executive directors were unable to attend the 2018 Annual General Meeting; 2. The Chairman of the Board was unable to attend the said meeting; 3. Only **two** regular board meetings were held during the year, instead of the recommended quarterly meetings[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) - The roles of Chairman of the Board and Chief Executive Officer are held by different individuals (Mr. Huang Juncan and Mr. Xu Jiajun, respectively), ensuring effective segregation between board governance and the Group's daily operations[148](index=148&type=chunk)[151](index=151&type=chunk) - The Board, through its Audit Committee, conducts an annual review of the Group's risk management and internal control systems, confirming their effectiveness and adequacy across financial, operational, and compliance controls[193](index=193&type=chunk)[200](index=200&type=chunk) [Environmental, Social and Governance Report](index=54&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report outlines the Group's environmental, social, and governance (ESG) commitments and practices in FY2018, emphasizing environmental assessments, green building design, and energy-saving measures, while covering employee welfare, supply chain management, product responsibility, anti-corruption, and community investment, reflecting its dedication to sustainable development, with data primarily covering three core project subsidiaries in Shanghai, Shenzhen, and Xi'an - The Group integrates green concepts into project design, striving to meet China's "Green Building Evaluation Standard" one-star rating, with some projects already achieving one-star green building design certification[235](index=235&type=chunk)[237](index=237&type=chunk) Key Environmental Performance Data for 2018 | Metric | Value | | :--- | :--- | | Total Greenhouse Gas Emissions | 825 tonnes of CO2 equivalent | | Total Electricity Consumption | 1.17 million kWh | | Total Water Consumption | 18,926 cubic meters | | Total Non-hazardous Waste | 3.65 tonnes (primarily paper and plastic) | - The Group prioritizes product responsibility, ensuring project quality and information transparency, and has consequently received multiple honors such as "China Commercial Real Estate TOP100" and "Top 50 Comprehensive Strength of China Real Estate Development Enterprises in Commercial Real Estate"[305](index=305&type=chunk) - In terms of community investment, the Group actively participates in public welfare and charitable activities, for instance, Shanghai Zhongjun Company made a charitable donation to Songjiang District, Shanghai in 2018 to assist needy communities nearby[317](index=317&type=chunk)[319](index=319&type=chunk) [Statutory Reports and Financial Statements](index=80&type=section&id=Statutory%20Reports%20and%20Financial%20Statements) This section includes the statutory Directors' Report, Independent Auditor's Report, and complete consolidated financial statements, providing a comprehensive overview of the Group's financial performance and position in FY2018 [Directors' Report](index=80&type=section&id=Directors'%20Report) The Directors' Report outlines the Group's principal business activities, financial results, and dividend policy for 2018, confirming the proposed final dividend of RMB 0.0275 per share, detailing share capital changes, share option scheme execution, directors' and major shareholders' interests, and emphasizing various continuing connected transactions with controlling shareholder Gemdale Corporation and its associates, all in compliance with Listing Rules, while also covering business risks, compliance, and stakeholder relations [Principal Activities, Results and Dividends](index=80&type=section&id=Principal%20Activities%2C%20Results%20and%20Dividends) This section details the Group's core business activities, including property investment, development, and management of residential, commercial, and industrial park projects, as well as micro-lending, and outlines the board's recommendation for the final dividend for the year ended December 31, 2018 - The Group's principal activities include property investment, development, and management of residential, commercial, and industrial park projects, as well as micro-lending[322](index=322&type=chunk)[323](index=323&type=chunk) - The Board recommended a final dividend of **RMB 0.0275** per share for the year ended December 31, 2018, an increase from RMB 0.025 in 2017[324](index=324&type=chunk)[325](index=325&type=chunk) [Share Capital and Share Options](index=86&type=section&id=Share%20Capital%20and%20Share%20Options) This section provides an overview of the company's share capital structure and the status of its share option scheme, detailing the number of outstanding options, their weighted average exercise price, and changes during the year, as well as the remaining options available for grant under the 2013 scheme - As of the report date, approximately **440 million** share options, representing **2.77%** of the issued share capital, remain available for grant under the 2013 Share Option Scheme[375](index=375&type=chunk)[378](index=378&type=chunk) Share Option Movements in 2018 | Status | Number of Share Options | Weighted Average Exercise Price (HKD) | | :--- | :--- | :--- | | Outstanding at beginning of year | 958,886,000 | 0.6078 | | Exercised during the year | (12,990,000) | 0.4696 | | Outstanding at end of year | 945,896,000 | 0.6097 | [Connected Transactions](index=99&type=section&id=Connected%20Transactions) This section details the Group's various ongoing connected transactions with its ultimate controlling shareholder, Gemdale Corporation, and its associates, including property development services, project operation management, property management, bulk fitting-out services, and financial advisory services, all of which have been reviewed and confirmed to be conducted on normal commercial terms and in the best interests of shareholders - The Group has multiple continuing connected transactions with its ultimate controlling shareholder, Gemdale Corporation, and its associates, including: - Gemdale Corporation providing property development and technical services to the Group, with service fees of approximately **75.09 million RMB** in 2018 - The Group providing project operation management services to subsidiaries of Gemdale Corporation, with revenue of **26.40 million RMB** in 2018 - Gemdale Property providing property management services to the Group, with total fees of approximately **62.42 million RMB** in 2018 - The Group providing bulk fitting-out services to Gemdale Corporation, with revenue of approximately **52.32 million RMB** in 2018 - Gemdale Corporation providing financial advisory services to the Group, with fees of approximately **61.79 million RMB** in 2018[422](index=422&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk)[429](index=429&type=chunk)[441](index=441&type=chunk) - The independent non-executive directors have reviewed all continuing connected transactions, confirming they were conducted in the ordinary course of the Group's business on normal commercial terms, fair and reasonable, and in the overall interest of shareholders, with the company's auditor also issuing an unqualified opinion letter thereon[451](index=451&type=chunk)[452](index=452&type=chunk) [Independent Auditor's Report](index=111&type=section&id=Independent%20Auditor's%20Report) Ernst & Young, the auditor, issued an unqualified opinion on the Group's consolidated financial statements for 2018, affirming their true and fair presentation of the Group's financial position and operating results, while highlighting three key audit matters: fair value estimation of investment properties, determining the nature of subsidiary acquisitions as asset or business combinations, and revenue recognition timing for property sales due to HKFRS 15 adoption - Auditor Ernst & Young issued an **unqualified opinion** (standard audit opinion) on the financial statements, deeming them true and fair[481](index=481&type=chunk) - Key Audit Matters include: - **Estimation of fair value of investment properties**: Involves highly subjective estimates such as rent, occupancy rates, and capitalization rates - **Determining whether acquisition of subsidiaries constitutes a business combination**: Management needs to make significant judgments to distinguish between asset acquisition and business combination - **Revenue recognition from property sales**: Due to the adoption of new accounting standard (HKFRS 15), management needs to determine the point at which performance obligations are satisfied[488](index=488&type=chunk)[490](index=490&type=chunk)[494](index=494&type=chunk) [Consolidated Financial Statements](index=119&type=section&id=Consolidated%20Financial%20Statements) This section provides the Group's detailed consolidated financial data, with the consolidated statement of profit or loss showing 2018 revenue of 7.08 billion RMB and profit for the year of 2.75 billion RMB, the consolidated statement of financial position indicating total assets of 51.99 billion RMB and total equity of 13.87 billion RMB, and the consolidated statement of cash flows revealing net cash inflow from operating activities of 6.17 billion RMB, net outflows from investing and financing activities, resulting in a net decrease in cash and cash equivalents of 2.15 billion RMB [Consolidated Statement of Profit or Loss](index=119&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the Group's consolidated statement of profit or loss for the year ended December 31, 2018, detailing revenue, gross profit, profit before tax, profit for the year, and profit attributable to owners of the company, providing a clear overview of the Group's financial performance Summary of Consolidated Statement of Profit or Loss for 2018 (thousand RMB) | Item | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Revenue | 7,079,136 | 4,711,019 | | Gross Profit | 4,108,955 | 1,859,468 | | Profit Before Tax | 4,787,694 | 2,751,774 | | Profit for the Year | 2,752,139 | 1,807,248 | | Profit Attributable to Owners of the Company | 2,252,622 | 1,643,529 | [Consolidated Statement of Financial Position](index=121&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section presents the Group's consolidated statement of financial position as of December 31, 2018, detailing its assets, liabilities, and equity, providing a comprehensive snapshot of the Group's financial health and structure Summary of Consolidated Statement of Financial Position as at December 31, 2018 (thousand RMB) | Item | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 22,426,705 | 15,645,017 | | Total Current Assets | 29,561,052 | 28,023,735 | | **Total Assets** | **51,987,757** | **43,668,752** | | **Liabilities and Equity** | | | | Total Current Liabilities | 33,722,078 | 26,598,176 | | Total Non-current Liabilities | 4,395,294 | 4,022,948 | | **Total Liabilities** | **38,117,372** | **30,621,124** | | **Net Assets** | **13,870,385** | **13,047,628** | | Equity Attributable to Owners of the Company | 11,835,161 | 10,914,825 | | Non-controlling Interests | 2,035,224 | 2,132,803 | | **Total Equity** | **13,870,385** | **13,047,628** | [Consolidated Statement of Cash Flows](index=125&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) This section presents the Group's consolidated statement of cash flows for the year ended December 31, 2018, detailing cash flows from operating, investing, and financing activities, and showing the net change in cash and cash equivalents, providing insights into the Group's liquidity and cash management Summary of Consolidated Statement of Cash Flows for 2018 (thousand RMB) | Item | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 6,168,420 | 2,873,308 | | Net Cash (Used in)/from Investing Activities | (3,338,500) | 1,265,671 | | Net Cash Used in Financing Activities | (4,979,652) | (1,575,432) | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | **(2,149,732)** | **2,563,547** | | Cash and Cash Equivalents at Beginning of Year | 5,349,765 | 2,822,968 | | **Cash and Cash Equivalents at End of Year** | **3,214,170** | **5,349,765** |

[Corporate Information](index=2&type=section&id=Corporate%20Information) [Board of Directors](index=4&type=section&id=Board%20of%20Directors) The company's Board of Directors comprises four executive directors, two non-executive directors, and three independent non-executive directors, with Mr. Huang Junchan as Chairman, Mr. Xu Jiajun as CEO, and Mr. Wei Chuanjun as CFO, and includes audit, nomination, remuneration, and executive committees - The Board of Directors consists of **9 directors**: 4 executive directors, 2 non-executive directors, and 3 independent non-executive directors[6](index=6&type=chunk) - Key management includes: **Huang Junchan (Chairman)**, **Xu Jiajun (CEO)**, and **Wei Chuanjun (CFO)**[6](index=6&type=chunk) - The Board has established an audit committee, a nomination committee, a remuneration committee, and an executive committee[6](index=6&type=chunk) [Company Secretary and Registered Office](index=4&type=section&id=Company%20Secretary%20and%20Registered%20Office) The Company Secretary is Mr. Wong Ho Yin, with the registered office in Bermuda and the principal place of business in Central, Hong Kong, and Ernst & Young serves as the auditor, collaborating with major banks - The Company Secretary is **Mr. Wong Ho Yin**[6](index=6&type=chunk) - The registered office is in Bermuda, and the principal place of business is in Central, Hong Kong[6](index=6&type=chunk)[8](index=8&type=chunk) - The auditor is **Ernst & Young**, and principal bankers include China Everbright Bank, China Merchants Bank, DBS Bank, and Standard Chartered Bank[8](index=8&type=chunk) [Chairman's Statement](index=4&type=section&id=Chairman%27s%20Statement) [Market Overview](index=6&type=section&id=Market%20Overview) In 2018, China's property market experienced overall slower growth, despite transaction volumes and prices reaching record highs, with popular cities maintaining purchase restrictions and some adjusting regulations to counter downward pressure on housing prices, while rising financing costs and tight capital supply were common industry challenges - In 2018, China's property market experienced overall slower growth, but **transaction volumes and prices reached record highs**[11](index=11&type=chunk) - Popular cities continued to implement measures to curb unreasonable housing demand, while some cities adjusted policies to resist downward pressure on housing prices[11](index=11&type=chunk) - Higher financing costs and tight capital supply are common challenges for the real estate industry, leading to shrinking development space for small and medium-sized developers[11](index=11&type=chunk)[12](index=12&type=chunk) [Business Overview And Outlook](index=7&type=section&id=Business%20Overview%20And%20Outlook) Despite market adjustments, the Group's 2018 contracted sales and profit attributable to shareholders both reached record highs, with a gross profit margin of 58%, as the Group actively expanded its business park operations and acquired new land, and plans to focus on first and second-tier cities in 2019 to expand sales and land reserves, seek M&A and cooperation opportunities, and develop high-end business parks and commercial projects 2018 Key Performance Indicators | Indicator | 2018 Data | | :--- | :--- | | Contracted Sales | **RMB 49.03 billion** | | Year-on-year Growth | **8%** | | Profit Attributable to Shareholders | **RMB 2.253 billion** | | Year-on-year Growth | **37%** | | Gross Profit Margin | **58%** | - The Group actively expanded its business park investment and development, with Phase I and II of Shenzhen Vanke Technology Park successfully attracting world-class tenants such as DJI, Amazon, and Intel[16](index=16&type=chunk)[17](index=17&type=chunk) - In 2018, **24 new development plots** were acquired, with a total gross floor area of approximately **2.73 million sq.m.**, of which **20% are located in Beijing and Shanghai**[17](index=17&type=chunk)[18](index=18&type=chunk) - Looking ahead to 2019, the Group will focus on first-tier and selected second-tier cities to expand contracted sales and land reserve scale, and seek equity M&A and cooperation opportunities[20](index=20&type=chunk) - For commercial properties, the Group will actively expand its development of high-end business parks and commercial projects in core areas of China's first and second-tier cities[20](index=20&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Highlights](index=9&type=section&id=Financial%20Highlights) In FY2018, the company's revenue and profit attributable to shareholders grew significantly, with earnings per share increasing by 37% year-on-year, while total assets and total equity increased, total loans and net loans decreased, and the gearing ratio and net loans to total equity ratio substantially improved FY2018 Key Financial Data (Consolidated Statement) | Indicator | 2018 (RMB thousand) | 2017 (RMB thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | **7,079,136** | 4,711,019 | **50.27%** | | Profit Attributable to Owners of the Company | **2,252,622** | 1,643,529 | **37.06%** | | Earnings Per Share (Basic) | **0.1419** | 0.1039 | **36.57%** | | Total Assets | **51,987,757** | 43,668,752 | **19.06%** | | Total Liabilities | **38,117,372** | 30,621,124 | **24.49%** | | Total Equity | **13,870,385** | 13,047,628 | **6.31%** | | Total Loans | **6,061,306** | 9,544,591 | **-36.40%** | | Net Loans | **1,960,484** | 2,993,271 | **-34.50%** | | Current Ratio | **0.9** | 1.1 | **-18.18%** | | Gearing Ratio | **44%** | 73% | **-39.73%** | | Net Loans to Total Equity | **14%** | 23% | **-39.13%** | [Financial Review](index=10&type=section&id=Financial%20Review) In FY2018, the Group's revenue significantly increased, primarily driven by a substantial rise in recognized property sales revenue, despite a decrease in fair value gains on investment properties, while direct operating and administrative expenses rose due to business expansion, and finance costs slightly increased due to higher market interest rates, leading to a 37% year-on-year growth in profit attributable to shareholders, improved liquidity and capital structure, and a significantly reduced net debt ratio FY2018 Key Profit or Loss Statement Data | Indicator | 2018 (RMB million) | 2017 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | **7,079.1** | 4,711.0 | **50.27%** | | Adjusted Revenue (excluding HKFRS 15 impact) | **12,160.6** | 4,711.0 | **158.13%** | | Other Income and Gains | **588.2** | 426.0 | **38.08%** | | Fair Value Gains on Investment Properties | **324.1** | 545.8 | **-40.62%** | | Direct Operating Expenses | **1,233.1** | 948.1 | **29.00%** | | Administrative Expenses | **92.2** | 82.4 | **11.89%** | | Finance Costs | **249.8** | 241.8 | **3.31%** | | Share of Profits of Joint Ventures and Associates | **1,341.4** | 1,192.8 | **12.46%** | | Profit Attributable to Owners of the Company | **2,252.6** | 1,643.5 | **37.06%** | | Basic Earnings Per Share | **0.1419** | 0.1039 | **36.57%** | - Total shareholders' funds increased from **RMB 10.9148 billion** at the end of 2017 to **RMB 11.8352 billion** at the end of 2018, primarily due to profit for the year[43](index=43&type=chunk)[47](index=47&type=chunk) - Deposits, bank and cash balances decreased by **40%** to **RMB 3.2379 billion**, mainly used for land acquisitions and project development[44](index=44&type=chunk)[48](index=48&type=chunk) - Total loans amounted to **RMB 2.0605 billion**, with annual interest rates ranging from **3.0% to 5.2%**[45](index=45&type=chunk)[49](index=49&type=chunk) - Net debt (total loans less cash and bank deposits) decreased by **RMB 1.0328 billion** to **RMB 1.9605 billion**, and the net debt ratio decreased from **23% to 14%**[51](index=51&type=chunk) Loan Repayment Profile (RMB thousand) | Repayment Period | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Total Short-term and Long-term Bank and Other Loans | **2,060,512** | 1,556,756 | | Total Loans from Related Parties | **4,000,794** | 7,987,835 | | Total Loans | **6,061,306** | 9,544,591 | - The Group's principal operations are in mainland China, with most transactions, assets, and liabilities denominated in RMB, making foreign exchange risk acceptable[55](index=55&type=chunk)[56](index=56&type=chunk) - **53%** of loans are interest-bearing at floating rates (2017: 72%), and interest rate risk is considered acceptable with no immediate hedging requirements[58](index=58&type=chunk)[59](index=59&type=chunk) - As of the end of 2018, investment properties with a total carrying value of **RMB 542.5 million** were pledged to secure other loans[61](index=61&type=chunk)[64](index=64&type=chunk) - Guarantees for property buyers' mortgage loans amounted to **RMB 1.6266 billion** (2017: RMB 3.1486 billion), and guarantees for joint ventures amounted to **RMB 486.9 million**[62](index=62&type=chunk)[63](index=63&type=chunk)[65](index=65&type=chunk) - The Board recommended a final dividend of **RMB 0.0275 per share** (2017: RMB 0.025 per share), totaling approximately **RMB 437 million**[15](index=15&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [Five-year Financial Summary](index=16&type=section&id=Five-year%20Financial%20Summary) The company provides a financial summary for the five fiscal years ended December 31, 2018, illustrating historical trends in revenue, profit before tax, profit for the year, total assets, total liabilities, and total equity Five-year Financial Summary (RMB thousand) | Indicator | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | **7,079,136** | 4,711,019 | 8,706,669 | 4,240,759 | 2,168,450 | | Profit Before Tax | **4,787,694** | 2,751,774 | 3,832,765 | 2,255,892 | 944,868 | | Profit for the Year | **2,752,139** | 1,807,248 | 2,004,369 | 1,375,151 | 645,925 | | Profit Attributable to Owners of the Company | **2,252,622** | 1,643,529 | 1,366,512 | 1,056,202 | 360,884 | | Total Assets | **51,987,757** | 43,668,752 | 32,167,328 | 25,100,925 | 14,899,651 | | Total Liabilities | **(38,117,372)** | (30,621,124) | (20,529,931) | (15,250,899) | (8,773,621) | | Total Equity | **13,870,385** | 13,047,628 | 11,637,397 | 9,850,026 | 6,126,030 | [Review of Operations](index=17&type=section&id=Review%20of%20Operations) The Group possesses a substantial and high-quality land bank totaling 13.75 million sq.m., primarily located in first and second-tier cities, and in 2018, 24 new land projects were successfully acquired, with a total planned gross floor area of approximately 2.73 million sq.m., while property sales achieved contracted sales of RMB 49.03 billion despite market adjustments, with average selling prices increasing by 19% year-on-year, and property leasing business performed strongly, with projects like Shenzhen Vanke Technology Park achieving nearly 100% occupancy, and rental/management fee income growing significantly by 32% - As of December 31, 2018, the Group's total land bank amounted to **13.75 million sq.m.**, with **23%** located in first-tier cities, **66%** in second-tier cities, and **11%** in third-tier cities[72](index=72&type=chunk)[73](index=73&type=chunk) - In 2018, **24 land projects** were acquired, with a total planned gross floor area of approximately **2.733 million sq.m.**, of which the Group's attributable interest was **1.415 million sq.m.**, and the average land acquisition cost was approximately **RMB 11,200/sq.m.**[101](index=101&type=chunk) 2018 Property Sales Data | Indicator | 2018 Data | 2017 Data | Year-on-year Change | | :--- | :--- | :--- | :--- | | Total Contracted Sales | **RMB 49.03 billion** | RMB 45.4 billion (estimated) | **8%** | | Total Contracted Sales Area | **2.263 million sq.m.** | 2.495 million sq.m. (estimated) | **-9%** | | Average Selling Price | **RMB 21,700/sq.m.** | RMB 18,236/sq.m. (estimated) | **19%** | - Shenzhen Vanke Technology Park Phase I and II, Beijing Sohu Internet Building, and Shanghai Bridge 8 projects achieved nearly **100% occupancy**, with the newly opened Hangzhou shopping center also achieving nearly **100% occupancy**[105](index=105&type=chunk)[106](index=106&type=chunk) - In 2018, total rental/management fee income was approximately **RMB 507 million**, a significant year-on-year increase of **32%**[105](index=105&type=chunk)[106](index=106&type=chunk) - Commercial projects under development are expected to generate an additional **RMB 1.5 billion** in rental income for the Group[106](index=106&type=chunk) [Profiles of Directors and Company Secretary](index=29&type=section&id=Profiles%20of%20Directors%20and%20Company%20Secretary) [Executive Directors](index=31&type=section&id=Executive%20Directors) This section introduces the backgrounds and responsibilities of four executive directors: Ling Ke, Huang Junchan, Xu Jiajun, and Wei Chuanjun, all possessing extensive experience in property development, corporate management, and strategic planning within Gemdale Group, holding key positions - Mr. Ling Ke (**59 years old**) has served as an Executive Director since November 2012, responsible for Gemdale Group's strategic planning, holding a Master's degree in Engineering Management and a Senior Economist qualification[107](index=107&type=chunk)[109](index=109&type=chunk) - Mr. Huang Junchan (**48 years old**) has served as an Executive Director and Group Chairman since November 2012, responsible for Gemdale Group's overall operations, holding a Bachelor's degree in Civil Engineering and an MBA[108](index=108&type=chunk)[109](index=109&type=chunk) - Mr. Xu Jiajun (**40 years old**) has served as an Executive Director since October 2012 and CEO since January 2013, responsible for Gemdale Group's capital management and strategic planning, holding a Master's degree in Management[110](index=110&type=chunk)[111](index=111&type=chunk) - Mr. Wei Chuanjun (**50 years old**) has served as an Executive Director and CFO since October 2012, responsible for Gemdale Group's overall finance and accounting, and is a Fellow of the Association of Chartered Certified Accountants[111](index=111&type=chunk)[112](index=112&type=chunk) [Non-executive Directors](index=32&type=section&id=Non-executive%20Directors) This section introduces the backgrounds of two non-executive directors, Mr. Loh Lian Huat and Ms. Zhang Feiyun, who bring extensive experience in real estate asset management and investment to the company - Mr. Loh Lian Huat (**55 years old**) has served as a Non-executive Director since May 2015, possessing over **18 years** of corporate real estate asset management experience, and is the founder of Silkrouteasia Capital Partners Pte. Ltd[113](index=113&type=chunk)[115](index=115&type=chunk) - Ms. Zhang Feiyun (**33 years old**) has served as a Non-executive Director since May 2015, currently a director of OUE Lippo Limited, a major shareholder of the company, and previously served as CEO of Shanghai Shengxiang Asset Management Co., Ltd[114](index=114&type=chunk)[115](index=115&type=chunk) [Independent Non-executive Directors](index=33&type=section&id=Independent%20Non-executive%20Directors) This section introduces the backgrounds of three independent non-executive directors: Mr. Hui Chiu Chung, Mr. Jiang Shangyi, and Mr. Hu Chunyuan, who bring extensive professional knowledge and experience in securities investment, law, and accounting audit, providing independent and objective opinions to the company - Mr. Hui Chiu Chung (**71 years old**) has served as an Independent Non-executive Director since December 2004, possessing over **47 years** of securities and investment experience, and is currently the Chairman and CEO of Luk Fook Financial Services Limited[116](index=116&type=chunk)[117](index=117&type=chunk) - Mr. Jiang Shangyi (**61 years old**) has served as an Independent Non-executive Director since November 2012, is a practicing solicitor in Hong Kong, and has extensive experience in foreign investment and property transactions in China[118](index=118&type=chunk) - Mr. Hu Chunyuan (**49 years old**) has served as an Independent Non-executive Director since November 2012, currently the Vice Chairman and Executive Partner of Ruihua Certified Public Accountants, and is a senior certified public accountant[119](index=119&type=chunk)[120](index=120&type=chunk) [Company Secretary](index=34&type=section&id=Company%20Secretary) Mr. Wong Ho Yin serves as the Company Secretary, responsible for ensuring compliance with Board procedures, providing information on regulatory developments, and assisting directors with induction training and professional development, possessing over 21 years of experience in accounting, treasury, finance, and M&A - Mr. Wong Ho Yin (**43 years old**) has served as Company Secretary since October 2012, responsible for corporate governance and statutory compliance[121](index=121&type=chunk)[122](index=122&type=chunk) - Mr. Wong is a member of the Hong Kong Institute of Certified Public Accountants and a Chartered Financial Analyst, with over **21 years** of experience in accounting, treasury, finance, and M&A[121](index=121&type=chunk)[122](index=122&type=chunk) [Corporate Governance Report](index=33&type=section&id=Corporate%20Governance%20Report) [Corporate Governance Practices](index=35&type=section&id=Corporate%20Governance%20Practices) The company is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code set out in Appendix 14 of the Listing Rules, and despite some deviations, such as certain non-executive directors and the chairman not attending the AGM, and board meetings being held less frequently than quarterly, the company believes it has provided sufficient information and ensured directors fulfill their duties - The company is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code in Appendix 14 of the Listing Rules[124](index=124&type=chunk) - Some non-executive directors and the Chairman were unable to attend the Annual General Meeting on May 16, 2018, constituting deviations from Code Provisions A.6.7 and E.1.2[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) - Only **two regular Board meetings** were held in 2018, fewer than the minimum of four per year required by Code Provision A.1.1; the company explained this was due to not publishing quarterly results and management providing sufficient information[126](index=126&type=chunk)[127](index=127&type=chunk) [Board of Directors and Committees](index=36&type=section&id=Board%20of%20Directors%20and%20Committees) The Board of Directors comprises four executive directors, two non-executive directors, and three independent non-executive directors, ensuring independent judgment and objective decision-making, and has three committees: Audit, Remuneration, and Nomination, each with clear terms of reference and sufficient resources to fulfill their duties, with the roles of Board Chairman and CEO separated to maintain an effective division of responsibilities - The Board of Directors comprises **four executive directors**, **two non-executive directors**, and **three independent non-executive directors**, with independent non-executive directors constituting **one-third of the Board**[130](index=130&type=chunk)[131](index=131&type=chunk)[135](index=135&type=chunk) - The Board Chairman is **Mr. Huang Junchan**, and the CEO is **Mr. Xu Jiajun**, with roles separated to ensure an effective division of responsibilities[148](index=148&type=chunk)[151](index=151&type=chunk) - The Board has established an Audit Committee, a Remuneration Committee, and a Nomination Committee, each with written terms of reference and reporting regularly to the Board[162](index=162&type=chunk)[163](index=163&type=chunk) - The Audit Committee comprises **three independent non-executive directors**, responsible for reviewing financial reporting, risk management, and the effectiveness of internal control systems[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - The Remuneration Committee is responsible for making recommendations on the remuneration policy and structure for directors and senior management, and for determining the remuneration packages of individual executive directors and senior management[172](index=172&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk) - The Nomination Committee is responsible for reviewing the Board's structure, size, and composition, identifying suitable candidates for Board appointment, and has adopted a Board Diversity Policy[181](index=181&type=chunk)[183](index=183&type=chunk) [Directors' Induction and Continuous Professional Development](index=40&type=section&id=Directors%27%20Induction%20and%20Continuous%20Professional%20Development) The company provides comprehensive induction training for new directors, covering business operations, policy procedures, and statutory and regulatory responsibilities, and directors regularly receive updated briefings on relevant laws and regulations and are encouraged to attend professional development courses and seminars to continuously enhance their knowledge and skills - New directors receive comprehensive induction materials covering the company's business, policies, and statutory and regulatory responsibilities[153](index=153&type=chunk) - Directors are regularly informed of amendments or updates to relevant laws, rules, and regulations[154](index=154&type=chunk) - The company encourages directors and senior executives to attend professional development courses and seminars to continuously update and enhance their knowledge and skills[154](index=154&type=chunk)[155](index=155&type=chunk) [Responsibility of Directors and Management](index=41&type=section&id=Responsibility%20of%20Directors%20and%20Management) The Board is responsible for ensuring leadership continuity, sound business strategies, adequate capital and management resources, and the completeness of financial and internal control systems, while management is responsible for the Group's daily operations, and the Board confirms that financial statements are prepared in accordance with accounting standards and believes the Group has sufficient resources for continuous operation - The Board is responsible for ensuring leadership continuity, sound business strategies, adequate capital and management resources, and the completeness of financial and internal control systems[158](index=158&type=chunk) - Management is responsible for the Group's daily operations, with departmental heads overseeing different business areas[158](index=158&type=chunk)[159](index=159&type=chunk) - The Board confirms that financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and believes the Group has sufficient resources for continuous operation[159](index=159&type=chunk)[160](index=160&type=chunk) [Accountability and Audit](index=49&type=section&id=Accountability%20and%20Audit) Directors confirm their responsibility for preparing true and fair financial statements, ensuring compliance with accounting standards and regulatory requirements, and external auditors issued an unqualified opinion on the financial statements, while the company has risk management and internal control systems, overseen by the Board and reviewed annually for effectiveness by the Audit Committee - Directors confirm their responsibility for preparing true and fair financial statements, complying with Hong Kong Financial Reporting Standards and regulatory requirements[192](index=192&type=chunk) - External auditors issued an **unqualified opinion** on the financial statements, finding no material uncertainties[192](index=192&type=chunk)[195](index=195&type=chunk) - The Board is responsible for overseeing the Group's risk management and internal control systems, and reviews their effectiveness annually through the Audit Committee[193](index=193&type=chunk)[196](index=196&type=chunk) - The internal audit department assists the Board and Audit Committee in reviewing the effectiveness of risk management and internal control systems[193](index=193&type=chunk)[194](index=194&type=chunk)[196](index=196&type=chunk) [Investor Relations and Communications with Shareholders](index=51&type=section&id=Investor%20Relations%20and%20Communications%20with%20Shareholders) The company is committed to maintaining effective communication with shareholders and investors, promptly disseminating information through annual reports, interim reports, announcements, and the company website, and the Annual General Meeting serves as a crucial platform for direct communication between the Board and shareholders, while also providing procedures for shareholders to convene extraordinary general meetings and propose resolutions, along with contact information for inquiries to the Board - The company promptly communicates information to shareholders and investors through annual reports, interim reports, announcements, and its corporate website[203](index=203&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) - The Annual General Meeting is a crucial platform for direct communication between the Board and shareholders[206](index=206&type=chunk)[208](index=208&type=chunk) - Shareholders holding not less than **10%** of the paid-up share capital may, in accordance with the company's bye-laws and Bermuda Companies Act, request in writing to convene an extraordinary general meeting[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - Shareholders may submit inquiries to the Board in writing through the Company Secretary[218](index=218&type=chunk)[219](index=219&type=chunk) [Environmental, Social and Governance Report](index=52&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) [About the Report and Commitments](index=54&type=section&id=About%20the%20Report%20and%20Commitments) This report is prepared in accordance with the ESG Reporting Guide in Appendix 27 of the HKEX Listing Rules, covering ESG matters for property development, investment, and management businesses in FY2018, and the Group is committed to fulfilling social responsibilities, with the Board having ultimate decision-making authority on ESG matters and an ESG working group established to monitor and report ESG performance - The report covers the period from **January 1, 2018, to December 31, 2018**, primarily involving property development, property investment, and management businesses[220](index=220&type=chunk) - Report data primarily comes from three core property project subsidiaries: Shanghai Zhongjun, Shenzhen Weixin, and Xi'an Zhutai, accounting for over **70%** of the Group's 2018 turnover[221](index=221&type=chunk)[223](index=223&type=chunk) - The Group's Board of Directors has ultimate decision-making authority on ESG matters and has established an ESG working group to report regularly to the Board[222](index=222&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk) - The Group's risk assessment and internal control systems also cover ESG-related risks, which are regularly assessed and reviewed[226](index=226&type=chunk)[227](index=227&type=chunk) [Stakeholder Engagement and Material ESG Issues](index=55&type=section&id=Stakeholder%20Engagement%20and%20Material%20ESG%20Issues) The Group values stakeholder interests, maintaining communication with shareholders, employees, suppliers, communities, customers, and media through various channels to understand their opinions and expectations, and based on assessment results, identified material ESG issues for reporting, including environmental (emissions, resource use, environment and natural resources) and social (employment, health and safety, development and training, labor standards, supply chain management, product responsibility, anti-corruption, community investment) - The Group communicates with stakeholders through various methods such as press releases, annual reports, employee newsletters, performance evaluations, charitable activities, customer satisfaction surveys, and interviews[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) - Material ESG issues include environmental aspects such as emissions, resource use, environment and natural resources, and social aspects such as employment, health and safety, development and training, labor standards, supply chain management, product responsibility, anti-corruption, and community investment[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) [Environmental](index=58&type=section&id=Environmental) The Group considers environmental protection a crucial business consideration, requiring outsourced contractors in property development to conduct environmental assessments and implement eco-friendly measures, with some projects achieving a 1-star Green Building Design certification, while for property management, energy-saving and emission reduction policies are implemented, and tenants and occupants are required to sort waste and handle special waste, and the Group's offices also implement eco-friendly practices, with total greenhouse gas emissions in 2018 amounting to 825 tons of CO2 equivalent, and the Group is committed to conserving energy and water resources, saving approximately 11% of public energy consumption through measures such as smart lighting, HVAC system optimization, and automatic irrigation - Property development projects are outsourced to third-party contractors; the Group commissions engineering consulting firms to regularly inspect environmental conditions and integrates green concepts into design, with some projects obtaining **1-star Green Building Design certification**[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) - For property management, Gemdale Property is entrusted, which has obtained **ISO9001/ISO14001/OHSAS18001 certifications** and collaborates with Dongjiang Environmental for waste disposal[239](index=239&type=chunk)[240](index=240&type=chunk) - Tenants and occupants are required to sort waste, and control measures are established for catering businesses' oil fume emissions and wastewater treatment[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) - Group offices implement eco-friendly practices, promoting electronic records and paper recycling, generating **3.6 tons of disposable paper products** and **0.05 tons of plastic water bottle waste** in 2018[245](index=245&type=chunk)[246](index=246&type=chunk)[248](index=248&type=chunk) 2018 Greenhouse Gas Emissions and Energy/Water Consumption | Indicator | Data | Intensity (per employee) | | :--- | :--- | :--- | | Total CO2e Emissions | **825 tons** | **3 tons** | | Total Electricity Consumption | **1,170,000 kWh** | **4,500 kWh** | | Total Gasoline Consumption | **41,914 liters** | **162 liters** | | Total Water Consumption | **18,926 cubic meters** | **73 cubic meters** | - Project public energy consumption saved approximately **11%** through energy-saving measures such as smart lighting, HVAC system optimization, and automatic irrigation[257](index=257&type=chunk)[258](index=258&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk) - Environmental impact assessments are conducted before project construction, and measures to control noise and dust are implemented, such as using external scaffolding, tower cranes, and road sprinklers[267](index=267&type=chunk)[268](index=268&type=chunk) - Property renovation projects require clients to apply and submit supporting documents that meet environmental and safety standards, with renovation materials complying with national green environmental requirements[269](index=269&type=chunk)[270](index=270&type=chunk) - Projects implement a comprehensive smoking ban during operation, install air purifiers or fresh air conditioning systems, and equip catering waste rooms with ventilation, exhaust, and refrigeration equipment to eliminate odors[271](index=271&type=chunk)[272](index=272&type=chunk) [Social](index=67&type=section&id=Social) The Group views human resources as a vital asset, attracting and retaining talent through competitive compensation and benefits, promotion opportunities, and diverse activities, strictly adhering to labor laws, opposing discrimination, child labor, and forced labor, while supply chain management focuses on quality and environmental protection, prioritizing local suppliers, and in terms of product responsibility, the Group ensures advertising truthfulness, project quality, and customer service, while protecting customer privacy, and upholds principles of integrity and honesty, conducts regular anti-corruption training, and actively participates in community investment and charitable activities - The Group's human resources policy adheres to the "Employee Code of Conduct," with core values of dedication, integrity, courage, and ambition[273](index=273&type=chunk)[274](index=274&type=chunk) - Employee compensation references market levels and industry practices, with promotions and rewards based on performance and individual contributions, and benefit plans include MPF, insurance, and training allowances[274](index=274&type=chunk) - The Group complies with regulations such as the "Hong Kong Employment Ordinance" and "Labor Law of the People's Republic of China," ensuring legal and reasonable practices in recruitment, dismissal, working hours, and holidays[274](index=274&type=chunk)[279](index=279&type=chunk) 2018 Employee Percentage Distribution | Category | Shanghai Zhongjun | Xi'an Zhutai | Shenzhen Weixin | | :--- | :--- | :--- | :--- | | Male | **73%** | **80%** | **66%** | | Female | **27%** | **20%** | **34%** | | Management | **19%** | **10%** | **14%** | | Business Personnel | **73%** | **85%** | **73%** | | Support Staff | **8%** | **5%** | **13%** | | 25 years old or below | **3%** | **3%** | **10%** | | 26-29 years old | **8%** | **8%** | **28%** | | 30-39 years old | **84%** | **84%** | **50%** | | 40-49 years old | **5%** | **5%** | **11%** | | 50 years old or above | **0%** | **0%** | **1%** | | Hong Kong | **3%** | **0%** | **0%** | | Mainland China | **97%** | **100%** | **100%** | - The Group provides diverse activities for employees, such as annual dinners, sports events, and birthday parties, to promote physical and mental well-being and team cohesion[277](index=277&type=chunk) - As an equal opportunity employer, the Group opposes all forms of discrimination and monitors the human resources policies of its outsourced contractors[278](index=278&type=chunk)[280](index=280&type=chunk)[281](index=281&type=chunk) - The Group provides a safe working environment, regularly organizes fire safety training and drills, and arranges annual medical examinations and fitness activities for employees[282](index=282&type=chunk)[283](index=283&type=chunk)[285](index=285&type=chunk) - Outsourced contractors are required to purchase social insurance for employees, conduct occupational safety training, and acquire commercial insurance for hazardous projects[286](index=286&type=chunk)[287](index=287&type=chunk) - The Group has a comprehensive training system, including induction training, on-the-job training, and external training, with all costs borne by the Group[290](index=290&type=chunk)[291](index=291&type=chunk) 2018 Average Employee Training Hours | Employee Category | Shanghai Zhongjun (hours) | Xi'an Zhutai (hours) | Shenzhen Weixin (hours) | | :--- | :--- | :--- | :--- | | Male | **3.4** | **3.8** | **23** | | Female | **3.7** | **3.2** | **23** | | Senior Management | **0** | **0** | **12** | | Middle Management | **5** | **3.5** | **24** | | Business Staff | **3.7** | **3.5** | **24** | | Support Staff | **0** | **0** | **18** | - The Group strictly complies with labor laws, recruits individuals aged **18 or above**, prohibits child labor and forced labor, and conducts regular spot checks on subsidiaries and outsourced contractors[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) - In supply chain management, the Group has established supplier screening, bidding, and supervision/evaluation systems, promotes green procurement, and prioritizes local suppliers[297](index=297&type=chunk)[298](index=298&type=chunk) - In FY2018, the Group collaborated with **153 suppliers**, all from mainland China[298](index=298&type=chunk) - In product responsibility, the Group ensures real estate advertisements and labels are truthful and accurate, complies with the "Advertising Law of the People's Republic of China," and conducts long-term quality supervision of projects[300](index=300&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) - The Group has received multiple honors and certifications for its contributions to the real estate industry, such as "China Commercial Real Estate TOP100"[305](index=305&type=chunk) - In customer service, the Group has established comprehensive after-sales service and customer feedback channels, conducts regular customer satisfaction surveys, and protects customer privacy[306](index=306&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) - In anti-corruption, the Group adheres to principles of openness, responsibility, integrity, and honesty, regularly organizes anti-corruption training, and has a clear reporting mechanism[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) - In community investment, the Group actively utilizes resources and encourages employee participation in community and charitable activities, such as providing charitable donations to Songjiang District, Shanghai[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) [Statutory Reports and Financial Statements](index=78&type=section&id=Statutory%20Reports%20and%20Financial%20Statements) [Directors' Report](index=78&type=section&id=Directors%27%20Report) The Directors' Report outlines the company's principal business, performance, dividend policy, business review (including risks and stakeholder relationships), segment information, share capital and share option movements, directors' and major shareholders' interests, and connected transactions for FY2018, emphasizing the company's commitment to legal compliance, enhancing corporate value, and shareholder returns - The company's principal business is investment holding, while the Group's main businesses include property investment, development, and management of residential, commercial, and industrial park projects, as well as micro-lending[322](index=322&type=chunk)[323](index=323&type=chunk) - The Board recommended a final dividend of **RMB 0.0275 per share** and approved and adopted a dividend policy on February 26, 2019, aiming to maintain sufficient cash reserves, fund future growth, and enhance shareholder value[324](index=324&type=chunk)[325](index=325&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) - The Group's principal risks include business risks arising from China's economic, political, and legal developments, as well as financial risks[333](index=333&type=chunk)[334](index=334&type=chunk)[336](index=336&type=chunk)[338](index=338&type=chunk) - The Group values its relationships with employees, customers, service providers, partners, and shareholders, and is committed to providing quality products and services to ensure sustainable development[339](index=339&type=chunk)[340](index=340&type=chunk)[342](index=342&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk)[346](index=346&type=chunk) - In 2018, the Group had no material breaches or non-compliance with applicable laws and regulations[349](index=349&type=chunk)[351](index=351&type=chunk) 2018 Revenue and Operating Profit by Business Segment | Business Segment | Revenue (RMB thousand) | Segment Profit/(Loss) (RMB thousand) | | :--- | :--- | :--- | | Property Development | **6,184,335** | **4,261,913** | | Property Investment and Management | **507,260** | **631,112** | | Micro-lending | **387,541** | **149,296** | | Corporate Expenses | – | **(44,906)** | | Total | **7,079,136** | **4,997,415** | - As of December 31, 2018, the total number of issued shares was **15,874,713,827**, with **12,990,000 new shares** issued due to the exercise of share options[375](index=375&type=chunk)[388](index=388&type=chunk)[400](index=400&type=chunk) - Directors and chief executives hold interests in the company's shares and share options, with **Mr. Ling Ke holding 1.05% equity** and **Mr. Huang Junchan holding 0.91% equity**[397](index=397&type=chunk)[398](index=398&type=chunk) - Major shareholder Run An Limited holds **41.36%** of the company's shares, and OUE Lippo Limited holds **14.82%** of the shares[407](index=407&type=chunk) - The Group entered into several continuing connected transactions during the year, including property development and technical services, project operation entrustment, property management services, system installation engineering, bulk fitting-out services, leasing agreements, and financial advisory services[421](index=421&type=chunk)[422](index=422&type=chunk)[425](index=425&type=chunk)[428](index=428&type=chunk)[429](index=429&type=chunk)[432](index=432&type=chunk)[434](index=434&type=chunk)[437](index=437&type=chunk)[440](index=440&type=chunk)[441](index=441&type=chunk)[442](index=442&type=chunk) - Board members hold interests or positions in Gemdale Group and its subsidiaries, but the Board operates independently of Gemdale Group and has an Audit Committee to monitor potential conflicts of interest[456](index=456&type=chunk)[457](index=457&type=chunk) - As of the end of 2018, the Group employed approximately **2,900 staff**, maintained competitive remuneration levels, and provided various employee benefits[472](index=472&type=chunk)[473](index=473&type=chunk) [Independent Auditor's Report](index=109&type=section&id=Independent%20Auditor%27s%20Report) Ernst & Young issued an unqualified opinion on Gemdale Properties and Investments Corporation Limited's consolidated financial statements for the year ended December 31, 2018, deeming them to present a true and fair view of the Group's financial position, financial performance, and cash flows, in compliance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance, while also highlighting key audit matters such as the estimation of fair value for investment properties, determination of whether subsidiary acquisitions constitute business combinations, and revenue recognition from property sales - Ernst & Young issued an **unqualified opinion** on the consolidated financial statements[481](index=481&type=chunk) - Key audit matters include: estimation of **fair value for investment properties**, determining whether **subsidiary acquisitions constitute business combinations**, and **revenue recognition from property sales**[485](index=485&type=chunk)[488](index=488&type=chunk)[490](index=490&type=chunk)[493](index=493&type=chunk)[494](index=494&type=chunk) - Auditors assessed the competence and objectivity of the valuation experts engaged by the Group and evaluated the key assumptions and methodologies used in the valuations[489](index=489&type=chunk) - Auditors assessed management's judgment on whether acquisitions constituted business combinations and examined relevant contract terms and financial statements[492](index=492&type=chunk) - Auditors assessed the impact of the new accounting standard **HKFRS 15** on revenue recognition and examined relevant contracts, bank statements, and completion certificates[494](index=494&type=chunk)[496](index=496&type=chunk) [Consolidated Statement of Profit or Loss](index=117&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year ended December 31, 2018, the Group's revenue reached RMB 7.079 billion, with a gross profit of RMB 4.109 billion, while profit before tax was RMB 4.788 billion, and profit for the year was RMB 2.752 billion, of which profit attributable to owners of the company was RMB 2.253 billion, with basic earnings per share of RMB 0.1419 2018 Consolidated Statement of Profit or Loss Summary (RMB thousand) | Indicator | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Revenue | **7,079,136** | 4,711,019 | | Cost of Sales | **(2,970,181)** | (2,851,551) | | Gross Profit | **4,108,955** | 1,859,468 | | Direct Operating Expenses | **(1,233,079)** | (948,062) | | Other Income and Gains | **588,247** | 425,992 | | Fair Value Change of Investment Properties | **324,144** | 545,840 | | Administrative Expenses | **(92,189)** | (82,373) | | Finance Costs | **(249,776)** | (241,843) | | Share of Profits of Joint Ventures | **1,347,197** | 1,189,781 | | Share of Losses of Associates | **(5,805)** | 2,971 | | Profit Before Tax | **4,787,694** | 2,751,774 | | Tax | **(2,035,555)** | (944,526) | | Profit for the Year | **2,752,139** | 1,807,248 | | Profit Attributable to Owners of the Company | **2,252,622** | 1,643,529 | | Non-controlling Interests | **499,517** | 163,719 | | Basic Earnings Per Share (RMB) | **0.1419** | 0.1039 | | Diluted Earnings Per Share (RMB) | **0.1396** | 0.1029 | [Consolidated Statement of Comprehensive Income](index=118&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the year ended December 31, 2018, the Group's profit for the year was RMB 2.752 billion, and other comprehensive loss primarily stemmed from exchange differences on translating foreign operations, resulting in a total comprehensive income for the year of RMB 2.702 billion, of which RMB 2.183 billion was attributable to owners of the company 2018 Consolidated Statement of Comprehensive Income Summary (RMB thousand) | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Profit for the Year | **2,752,139** | 1,807,248 | | Other comprehensive (loss)/income (to be reclassified to profit or loss in subsequent periods) | | | | Exchange differences on translating foreign operations | **(512,540)** | 597,880 | | Share of exchange differences on translating foreign operations of joint ventures | **86,022** | (99,659) | | Reversal on disposal of subsidiaries | **59,590** | – | | Debt investments at fair value through other comprehensive income: fair value changes, net of tax | **691** | – | | Net other comprehensive (loss)/income | **(366,237)** | 491,255 | | Other comprehensive income/(loss) (not to be reclassified to profit or loss in subsequent periods) | | | | Exchange differences on translating foreign operations | **307,537** | (470,724) | | Equity investments designated at fair value through other comprehensive income: fair value changes, net of tax | **8,292** | – | | Net other comprehensive income/(loss) | **315,829** | (470,724) | | Other comprehensive (loss)/income for the year, net of tax | **(50,408)** | 20,531 | | Total comprehensive income for the year | **2,701,731** | 1,827,779 | | Attributable to owners of the Company | **2,182,779** | 1,682,162 | | Non-controlling Interests | **518,952** | 145,617 | [Consolidated Statement of Financial Position](index=119&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2018, the Group's total assets were RMB 51.988 billion, comprising non-current assets of RMB 22.427 billion and current assets of RMB 29.561 billion, while total liabilities amounted to RMB 38.117 billion, with current liabilities of RMB 33.722 billion and non-current liabilities of RMB 4.395 billion, and total equity was RMB 13.870 billion 2018 Consolidated Statement of Financial Position Summary (RMB thousand) | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | **126,963** | 63,372 | | Investment Properties | **8,839,014** | 6,366,809 | | Investments in Joint Ventures | **7,803,183** | 5,872,493 | | Investments in Associates | **2,620,385** | 632,736 | | Deferred Tax Assets | **965,358** | 554,852 | | **Total Non-current Assets** | **22,426,705** | **15,645,017** | | **Current Assets** | | | | Properties Held for Sale | **3,935,273** | 1,395,639 | | Properties Under Development | **12,410,071** | 13,562,264 | | Deposits, Bank and Cash Balances | **3,237,920** | 5,395,765 | | **Total Current Assets** | **29,561,052** | **28,023,735** | | **Total Assets** | **51,987,757** | **43,668,752** | | **Current Liabilities** | | | | Trade Payables | **2,010,954** | 1,537,372 | | Receipts in Advance, Accruals and Other Payables | **20,025,204** | 14,637,328 | | Interest-bearing Bank and Other Loans | **1,310,181** | 1,087,557 | | Loans from Ultimate Holding Company | **948,641** | 5,240,113 | | Loans from Joint Ventures | **4,010,559** | 1,856,269 | | Tax Payables | **3,393,054** | 1,849,866 | | **Total Current Liabilities** | **33,722,078** | **26,598,176** | | **Non-current Liabilities** | | | | Interest-bearing Bank and Other Loans | **750,331** | 469,199 | | Deferred Tax Liabilities | **1,040,485** | 960,027 | | **Total Non-current Liabilities** | **4,395,294** | **4,022,948** | | **Total Liabilities** | **38,117,372** | **30,621,124** | | **Total Equity** | **13,870,385** | **13,047,628** | [Consolidated Statement of Changes in Equity](index=121&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the year ended December 31, 2018, the Group's total equity increased from RMB 13.048 billion at the end of 2017 to RMB 13.870 billion, with equity attributable to owners of the company at RMB 11.835 billion and non-controlling interests at RMB 2.035 billion, and changes in equity were primarily influenced by profit for the year, the adoption of HKFRS 9 and HKFRS 15, and dividend distributions 2018 Consolidated Statement of Changes in Equity Summary (RMB thousand) | Indicator | January 1, 2018 (Restated) | Profit for the Year | Other Comprehensive Income/(Loss) | Total Comprehensive Income for the Year | Final Dividend Declared for 2017 | New Shares Issued upon Exercise of Share Options | Capital Contribution from Non-controlling Interests | Dividends Paid to Non-controlling Interests | As at December 31, 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Equity Attributable to Owners of the Company** | | | | | | | | | | | Issued Share Capital | **1,438,153** | – | – | – | – | **1,058** | – | – | **1,439,211** | | Share Premium Account | **3,651,830** | – | – | – | – | **8,441** | – | – | **3,660,271** | | Total Reserves | **5,276,965** | **2,252,622** | **(78,826)** | **2,173,796** | **(396,848)** | **(4,531)** | – | – | **6,939,790** | | **Non-controlling Interests** | **2,132,803** | **499,517** | **518,952** | **145,617** | – | – | **154,714** | **(427,406)** | **2,035,224** | | **Total Equity** | **13,047,628** | **2,752,139** | **(50,408)** | **2,701,731** | **(396,848)** | **4,968** | **154,714** | **(427,406)** | **13,870,385** | [Consolidated Statement of Cash Flows](index=123&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year ended December 31, 2018, the Group's net cash from operating activities was RMB 6.168 billion, net cash used in investing activities was RMB 3.339 billion, and net cash used in financing activities was RMB 4.980 billion, resulting in cash and cash equivalents at year-end amounting to RMB 3.214 billion, a decrease of RMB 2.150 billion from the beginning of the year 2018 Consolidated Statement of Cash Flows Summary (RMB thousand) | Cash Flow Category | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Net Cash from Operating Activities | **6,168,420** | 2,873,308 | | Net Cash (Used in)/from Investing Activities | **(3,338,500)** | 1,265,671 | | Net Cash Used in Financing Activities | **(4,979,652)** | (1,575,432) | | Net (Decrease)/Increase in Cash and Cash Equivalents | **(2,149,732)** | 2,563,547 | | Cash and Cash Equivalents at Beginning of Year | **5,349,765** | 2,822,968 | | Cash and Cash Equivalents at End of Year | **3,214,170** | 5,349,765 | [Notes to the Financial Statements](index=126&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes to the financial statements provide detailed information on the Group's accounting policies, significant accounting judgments and estimates, operating segment information, revenue and other income, finance costs, profit before tax, taxation, directors' and highest-paid employees' emoluments, earnings per share, dividends, property, plant and equipment, investment properties, properties held for sale, properties under development, prepayments for acquisition of land use rights, investments in joint ventures and associates, intangible assets, available-for-sale financial investments, financial assets at fair value through other comprehensive income, trade receivables, prepayments, deposits and other receivables, restricted cash, deposits, bank and cash balances, issued share capital, reserves, trade payables, receipts in advance, accruals and other payables, contingent liabilities, interest-bearing bank and other loans, loans to/from related parties, amounts due to/from related parties, deferred taxation, non-wholly owned subsidiaries with material non-controlling interests, business combinations, acquisition of assets through acquisition of subsidiaries, disposal and deemed disposal of subsidiaries, notes to the consolidated statement of cash flows, pledge of assets, commitments, related party transactions, financial instruments by category, fair value and fair value hierarchy of financial instruments, financial risk management objectives and policies, and details of principal subsidiaries - The Group first adopted new and revised Hong Kong Financial Reporting Standards in 2018, including **HKFRS 9 Financial Instruments** and **HKFRS 15 Revenue from Contracts with Customers**, resulting in transitional adjustments to the financial statements[25](index=25&type=chunk)[26](index=26&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk)[141](index=141&type=chunk) - The adoption of **HKFRS 15** resulted in a **RMB 5.0815 billion** decrease in 2018 revenue and a **RMB 1.3525 billion** decrease in profit attributable to owners of the company[143](index=143&type=chunk) - The Group exercises significant accounting judgments and estimates in areas such as **property sales revenue recognition**, **asset impairment**, **land appreciation tax**, and **fair value estimation of investment properties**[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - In 2018, the Group acquired **Women Touzi Group** to expand its property leasing business and recognized a goodwill impairment of **RMB 29.702 million**[263](index=263&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - In 2018, the Group disposed of subsidiaries including Jinheheng, Zhitao, and Shuokun, and deemed disposed of Xinyu Group and Ronghui Group, resulting in cash inflows and equity changes[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk) - The Group's financial instruments are exposed to **foreign exchange risk**, **interest rate risk**, **credit risk**, and **liquidity risk**, with corresponding management policies in place[299](index=299&type=chunk)[1202](index=1202&type=chunk) - As of the end of 2018, **45%** of the Group's debt was due within one year, with liquidity risk managed through related party loans and interest-bearing bank loans[303](index=303&type=chunk)[1221](index=1221&type=chunk)