Share Repurchase and Capital Structure - The company repurchased a total of 2,894,000 ordinary shares at a total purchase price of HKD 1,321,960 during the year ended December 31, 2023[1]. - The repurchased shares included 1,700,000 shares bought on December 29, 2023, at a price of HKD 0.35 per share[1]. - The issued share capital of the company was reduced by the par value of the repurchased shares that were cancelled on February 27, 2023[1]. - As of December 31, 2023, the company's issued and paid-up share capital was HKD 191,659,327.56, consisting of 4,791,483,189 ordinary shares with a par value of HKD 0.04 each[13]. - The group completed four share buybacks during the year, totaling 2,894,000 shares, with 1,194,000 shares canceled, involving an expenditure of HKD 1,321,960, accounting for 0.06% of the issued shares[87]. Financial Performance - Total revenue decreased by 27.8% to HKD 7,953,596,000 from HKD 11,022,496,000 in the previous year[30]. - Gross profit increased by 11.9% to HKD 3,325,390,000, with a gross margin of 41.8%, up from 26.9%[30]. - The net profit attributable to the company's owners was HKD 494,570,000, compared to HKD 305,001,000 in the previous year[21]. - Basic earnings per share rose to 10.32 HKD from 8.47 HKD, representing a 21.8% increase[21]. - The company's net asset value per share decreased to 2.92 HKD from 3.04 HKD, a decline of 3.9%[30]. - The group’s net profit increased by 60.9% to HKD 490,713,000, with earnings attributable to shareholders rising by 21.6% to approximately HKD 494,570,000[133]. Revenue Breakdown - Total revenue for 2023 was HKD 7,180,575, a decrease of 31.0% from HKD 10,480,999 in 2022[63]. - Property sales revenue was HKD 6,870,636, down 33.0% from HKD 10,275,286 in the previous year[63]. - Hotel operations revenue increased to HKD 299,672, up 47.5% from HKD 203,272 in 2022[63]. - Property sales revenue reached HKD 6,870,636,000, accounting for 86.4% of total revenue, down from 93.2% in the previous year[114]. Expenses and Liabilities - The income tax expense for the year was HKD 1,466,007 thousand in 2023, up from HKD 1,055,893 thousand in 2022, reflecting a significant increase of approximately 39%[45]. - The total trade payables decreased to HKD 1,007,357 thousand in 2023 from HKD 1,810,201 thousand in 2022, showing a reduction of about 44%[54]. - The total land value tax for the year was HKD 773,188 thousand in 2023, an increase from HKD 558,780 thousand in 2022, representing a rise of approximately 38%[45]. - The group recorded a net loss of approximately HKD 223,018,000 in other expenses, compared to a net loss of HKD 156,171,000 in 2022[119]. Cash Flow and Financing - Cash and cash equivalents rose to HKD 5,985,911, up 33.7% from HKD 4,477,602 in the previous year[63]. - The net debt-to-equity ratio decreased from 63.0% to 58.4%, with a current ratio of 1.4 times compared to 1.1 times at the end of 2022[93]. - The total loans of the group, including bank loans and other loans, amounted to approximately HKD 18,002,416,000, an increase from HKD 17,658,754,000 as of December 31, 2022[135]. Corporate Governance and Compliance - The company confirmed compliance with the corporate governance code as per the listing rules for the year ended December 31, 2023[10]. - The audit committee, composed of three independent non-executive directors, reviewed the audited financial statements for the year ended December 31, 2023[12]. - The company has adopted a custom code of conduct for securities trading by directors and relevant employees, ensuring compliance with the standard code[3]. - The company maintains the required public float as per the listing rules[15]. Future Outlook and Strategic Plans - The outlook for 2024 indicates a potential recovery in the real estate market, supported by favorable policy adjustments and improving consumer confidence[96]. - The group plans to continue expanding its property management and hotel operations in the upcoming year[63]. - The group aims to enhance its digital transformation through a three-phase plan in collaboration with Mingyuan Cloud, with the second phase already initiated in February 2023[86]. - The group plans to continue its rental housing business, with completed projects contributing stable rental income and new projects expected to be completed in 2024[112]. - The group aims to enhance land reserves and focus on high-quality real estate projects in key cities, particularly in the Yangtze River Delta region, to promote stable market development[139]. Dividends - The company proposed a final dividend of HKD 0.021 per ordinary share and a special dividend of HKD 0.008 per ordinary share, subject to shareholder approval[50]. - The board proposed a final cash dividend of HKD 0.021 per share and a special cash dividend of HKD 0.008 per share for the year ending December 31, 2023, subject to shareholder approval[140].

Financial Performance - The company's income tax for the six months ended June 30, 2023, was HKD 380,521, a decrease of 2.8% from HKD 388,734 in 2022[29]. - The depreciation of property, plant, and equipment for the same period was HKD 69,764, down from HKD 78,349, reflecting a reduction of 10.1%[31]. - The net loss attributable to the company's owners for the six months ended June 30, 2023, was HKD (302,936), compared to a profit of HKD 126,448 in 2022, indicating a significant decline[32]. - The weighted average number of ordinary shares used for calculating basic loss per share was 4,792,186 thousand shares, slightly down from 4,806,323 thousand shares in the previous year[32]. - For the six months ended June 30, 2023, the company reported total revenue of HKD 8,302,292,000, a decrease from HKD 8,909,949,000 in the same period of 2022, representing a decline of approximately 6.8%[38]. - The company's net profit for the same period was HKD 1,420,034,000, compared to HKD 1,419,336,000 in the previous year, indicating a slight increase of 0.05%[38]. - The total comprehensive income for the six months ended June 30, 2023, was HKD 5,881,923,000, compared to HKD 7,141,929,000 for the same period in 2022, reflecting a decrease of approximately 17.7%[38]. - The company reported a fair value loss of HKD 8,713,000 on financial instruments for the period, compared to a loss of HKD 18,065,000 in the same period of the previous year[38]. - The company's earnings per share for the six months ended June 30, 2023, was HKD 8.30, compared to HKD 8.29 for the same period in 2022, showing a marginal increase[38]. - The group reported a net impairment loss on investment properties of approximately HKD 2.26 million, primarily due to a decrease in fair value of properties in Tianjin[124]. - The group experienced a weaker RMB against HKD, leading to foreign exchange losses on bank and other borrowings[126]. - The company recorded a net loss of HKD 323.18 million for the six months ended June 30, 2023, compared to a profit of HKD 80.90 million for the same period in 2022[126]. - Shareholders' loss attributable to the company was approximately HKD 302.94 million, with a basic loss per share of HKD 0.0632[126]. Revenue and Sales - The group generates all revenue from customer contracts in China[27]. - The company has no single customer contributing 10% or more to its revenue for the six months ended June 30, 2023[45]. - The company's contract sales for the period amounted to RMB 4,880,370,000, representing a year-on-year increase of 200.7%[72]. - The total sales area was 157,000 square meters, up 68.8% year-on-year, with an average selling price of approximately RMB 31,000 per square meter[72]. - Key sales projects included Xi'an Natural World, Tianjin Shangshi Yangshan, Shanghai Shangshi Wanghai, and Shanghai Shangshi Yunduan, contributing 24.4%, 21.3%, 20.4%, and 14.9% to total contract sales respectively[72]. - The company’s contract sales for residential and affordable housing reached RMB 5,009,840,000, a year-on-year increase of 9.7%[96]. - The total average selling price increased by 114.5% to approximately RMB 29,600 per square meter, primarily due to a higher proportion of residential sales during the period[96]. - Property sales revenue reached HKD 1,271,776,000, accounting for 70.7% of total revenue, down from 95.0% in the previous year[102]. Investment and Development - The company holds approximately 55.13% of the shares in Shanghai Investment Holdings, which translates to 2,111,229,080 shares[10]. - The company has shifted several residential property projects from sale to rental, resulting in an increase in investment properties valued at HKD 211,911,000 as of June 30, 2023, up from HKD 110,506,000 in the previous year[51]. - The group has 28 real estate projects across 10 major cities in China, providing approximately 3.58 million square meters of saleable area[56]. - The company has a land reserve that supports future development projects, enhancing its market expansion strategy[121]. - The group has a total land reserve of approximately 3.58 million square meters as of June 30, 2023, across 28 projects in 10 cities[133]. - The company plans to continue focusing on urban integration development in Shanghai and other core first and second-tier cities, aiming to create greater value for shareholders and customers[69]. - The group plans to adopt a cautious strategy for future land acquisitions while maintaining sufficient land reserves[100]. - The company has ongoing projects with a total construction area of approximately 1.3 million square meters, including residential and commercial properties[118]. - The group has 12 ongoing projects with a total construction area of 2,630,000 square meters, including new projects in major cities like Xi'an and Shanghai[98]. Operational Performance - The gross profit for the period was HKD 772,063,000, a decline of 36.3%, with a gross margin of 42.9%, up 25.1 percentage points year-on-year[103]. - Rental income increased by 44.5% to HKD 375,736,000, compared to HKD 260,064,000 in the first half of 2022, due to the lifting of pandemic restrictions[99]. - The company has engaged in acquisitions to increase its non-controlling interests, enhancing its overall equity position[40]. - The company has completed and delivered fewer properties during the period, impacting overall performance[126]. - The company plans to optimize its debt and equity balance to maximize returns for shareholders, maintaining its overall strategy from the previous year[127]. - The management believes that the group has sufficient funds and future earnings to meet current working capital and future development needs[129]. - The group plans to enhance delivery volumes in the second half of the year while ensuring stable operations of new delivery models[132]. Market Outlook - The company anticipates that more projects will be completed and delivered in the second half of 2023, contributing to stable business development[68]. - The government is expected to strengthen policy support for the real estate sector in the second half of 2023, which may improve market confidence and demand[68]. - The group maintains a cautiously optimistic outlook for the real estate market, anticipating gradual recovery supported by government policies[110]. Employee and Management - The group employs 766 staff members, with compensation policies linked to performance, qualifications, and market statistics[130]. - The group has no foreign exchange hedging arrangements in place as of June 30, 2023, but will take necessary measures to mitigate exchange rate risks in the future[129]. - The group is committed to creating better value returns for shareholders through innovative business strategies and compliance with local real estate policies[132].

Financial Performance - For the six months ended June 30, 2023, total revenue was HKD 1,797,834, a decrease of 73.6% compared to HKD 6,808,613 for the same period in 2022[18] - Gross profit for the same period was HKD 772,063, down 36.4% from HKD 1,211,643 in 2022[18] - The company reported a net loss of HKD 323,180 for the six months ended June 30, 2023, compared to a profit of HKD 80,904 in the prior year[19] - Basic loss per share for the period was HKD (6.32), compared to earnings of HKD 2.63 in the same period last year[19] - The company reported a loss attributable to shareholders of HKD (302,936,000) for the six months ended June 30, 2023, compared to a profit of HKD 126,448,000 in the same period last year[64] - The group recorded a net loss of approximately HKD 323,180,000 for the six months ended June 30, 2023, compared to a profit of HKD 80,904,000 for the same period in 2022, primarily due to foreign exchange losses from the depreciation of the RMB against the HKD and fewer properties completed and delivered[109] Revenue Breakdown - Total revenue for the first half of 2023 was HKD 1,422,098,000, a decrease of 78.3% compared to HKD 6,548,549,000 in the same period of 2022[30] - Property sales revenue dropped significantly to HKD 1,271,776,000, down 80.3% from HKD 6,464,820,000 year-on-year[30] - Hotel operations revenue increased to HKD 146,288,000, up 75.7% from HKD 83,283,000 in the previous year[30] - Rental income, property management, and hotel business contributed HKD 375,736,000, HKD 4,034,000, and HKD 146,288,000 respectively, representing 20.9%, 0.2%, and 8.2% of total revenue[80] - The overall rental income increased by 44.5% to HKD 375,736,000, compared to HKD 260,064,000 in the same period last year[103] Assets and Liabilities - The total assets less current liabilities amounted to HKD 36,595,947 as of June 30, 2023, compared to HKD 31,452,115 in 2022[23] - Cash and cash equivalents increased to HKD 6,131,301 from HKD 4,477,602 year-over-year[4] - The company’s non-current liabilities increased to HKD 19,333,958 from HKD 20,831,274 in the previous year[9] - Trade receivables aged over 180 days amounted to HKD 263,787,000, a significant increase from HKD 5,123,000 in the previous year[41] - The group’s trade and other payables totaled HKD 5,784,517,000, a decrease from HKD 6,779,706,000 as of December 31, 2022[42] - The total loans, including bank loans and other borrowings, were approximately HKD 18,558,907,000 as of June 30, 2023, compared to HKD 17,658,754,000 as of December 31, 2022[111] Investment and Property Management - The company’s investment properties decreased in value, with a net loss of HKD 2,263 recognized for the period[18] - The fair value of investment properties decreased by HKD 2,263,000, compared to an increase of HKD 1,208,000 in the same period of 2022[38] - The company recorded a net impairment loss of approximately HKD 2,263,000 on investment properties, primarily due to a decrease in fair value of properties in Tianjin[82] - The company has transitioned certain residential properties from sale to rental, with a book value of HKD 211,911,000 as of June 30, 2023[39] Sales and Market Strategy - The company's contract sales amount for commodity housing reached RMB 4,880,370,000, a year-on-year increase of 200.7% compared to RMB 1,623,150,000 in the same period last year[75] - The average selling price of commodity housing increased to approximately RMB 31,000 per square meter, driven by a higher proportion of sales in first-tier cities[75] - The company’s contract sales amount for residential and affordable housing was RMB 5,009,840,000, representing a year-on-year increase of 9.7% from RMB 4,568,240,000[101] - The total average selling price increased by 114.5% to approximately RMB 29,600 per square meter, primarily due to a higher proportion of residential property sales during the period[101] - The company is maintaining a cautious approach to land acquisition while ensuring sufficient land reserves, waiting for market conditions to improve[77] - The company continues to focus on expanding its presence in first and second-tier cities, particularly in the Yangtze River Delta region[89] Operational Efficiency - The group incurred a total financing cost of HKD 429,251,000, a decrease of 5.2% from HKD 452,543,000 in the same period last year[34] - The company’s distribution and selling expenses decreased by 3.9% to HKD 94,605,000, attributed to a decline in the number of properties delivered to customers[83] - The group has adopted a share option scheme to reward directors and eligible employees, although no options were granted during the six months ended June 30, 2023[112] Future Outlook - The group remains cautiously optimistic about the recovery of the Chinese real estate market in the second half of 2023, supported by government policies aimed at stabilizing the market[113] - The company plans to enhance delivery volumes in the second half of the year while ensuring the stability of new delivery models[89] Employee and Corporate Governance - The company employed 766 staff members as of June 30, 2023, with compensation policies based on performance, qualifications, and market comparisons[87] - The board does not recommend the payment of any interim dividend for the six months ended June 30, 2023, consistent with the previous year[114] - The company expressed gratitude to the board, management, employees, customers, suppliers, business partners, and shareholders for their ongoing support[133]

| --- | --- | --- | --- | --- | --- | --- | |-------|------------|----------|-------|-------|------------------|-------| | | | | | | | | | | | | | | | | | | 實幹創新 | | | | | | | | | | | | | | | | | 穩健前行 | | | | | | | 年2022 | | | | | | | | | | | | ad and the count | | 典雅 3 財務摘要 20 物業資料 — 土地儲備 119 董事會報告 141 綜合財務狀況表 261 詞彙 上 海 實 業 城 市 開 發 集 團 有 限 公 司 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED ( 於百慕達註冊成立之有限公司 ) 股份代號: 563 精工 巧築別致 2 公司資料 12 管理層討論及分析 17 投資者常見問題 111 董事及高級管理層簡介 139 綜合損益及其他全面收入報表 143 綜合股本權益變動表 ...

Financial Performance - Total revenue for the year ended December 31, 2022, was HKD 11,022,496 thousand, a slight increase from HKD 11,015,088 thousand in 2021[3] - Gross profit decreased to HKD 2,970,470 thousand in 2022 from HKD 3,554,120 thousand in 2021, reflecting a decline of approximately 16.4%[3] - Net profit for the year was HKD 305,001 thousand, down from HKD 898,684 thousand in the previous year, representing a decrease of about 66.1%[4] - Basic earnings per share decreased to HKD 8.47 from HKD 11.91, a decline of approximately 28.8%[4] - The company reported a significant drop in rental income, which fell to HKD 541,497 thousand from HKD 829,307 thousand, a decrease of about 34.8%[3] - Other comprehensive income for the year was a loss of HKD 1,038,212 thousand, compared to a gain of HKD 1,635,599 thousand in 2021, indicating a significant shift in financial performance[4] - The company reported a net profit of HKD 848,598 for the year, significantly lower than HKD 2,762,758 in 2021, indicating a decrease of approximately 69.3%[44] - The group recorded a net profit of HKD 305,001,000, a decline of 66.1% compared to HKD 898,684,000 in the previous year[144] Revenue and Sales - Property sales revenue rose to HKD 10,275,286 thousand, an increase from HKD 9,937,996 thousand in the previous year[38] - The total contract sales amount from commodity housing was RMB 4,711,840,000, a decrease from RMB 7,764,440,000 in 2021, with a sales area of 248,000 square meters, representing a year-on-year increase of 25.9%[85] - The total contract sales amount for commodity and affordable housing was RMB 7,908,440,000, down 11.5% from RMB 8,933,090,000 in 2021[106] - Contract sales from affordable housing reached RMB 3,196,600,000, a significant increase of 173.5% year-on-year, with a sales area of 256,000 square meters, up 306.3%[107] - The group's revenue for the year ended December 31, 2022, was HKD 11,022,496,000, a year-on-year increase of 0.1%, primarily due to competitive flagship projects being delivered as planned[137] - Property sales revenue reached HKD 10,275,286,000, accounting for 93.2% of total revenue, compared to 90.2% in the previous year[137] Dividends and Shareholder Returns - The company proposed a final dividend of HKD 3.0 per share, down 33.3% from HKD 4.5 per share in the previous year[20] - The company declared a final dividend of HKD 0.021 per share in 2022, up from HKD 0.019 in 2021, totaling HKD 216,285,000 compared to HKD 206,672,000 in the previous year[48] - The proposed final dividend is HKD 0.021 per ordinary share and a special dividend of HKD 0.009 per ordinary share, subject to shareholder approval[69] - The company plans to distribute a final cash dividend of HKD 0.021 per share and a special cash dividend of HKD 0.009 per share for the year ended December 31, 2022, pending shareholder approval[169] Assets and Liabilities - Total liabilities decreased to HKD 22,569,287 thousand from HKD 24,630,428 thousand, indicating a reduction of approximately 8.4%[5] - Cash and cash equivalents decreased significantly to HKD 4,477,602 thousand from HKD 14,116,711 thousand, a decline of about 68.3%[5] - Total non-current assets increased to HKD 28,847,264 thousand from HKD 28,261,083 thousand in 2021[23] - The company reported a significant decrease in current liabilities, totaling HKD 25,994,672 thousand, down from HKD 36,356,973 thousand in 2021[26] - The net asset value per share attributable to the company’s owners decreased to HKD 3.04, down 4.1% from HKD 3.17 in the previous year[20] - The debt-to-equity ratio increased to 63.0%, compared to 24.0% in the previous year, indicating a higher leverage position[20] - The net debt to total equity ratio increased from 24.0% to 63.0% year-on-year, with a current ratio of 1.1 times[119] Operational Highlights - The company is focusing on expanding its property development and investment operations in mainland China[28] - The group completed 12 construction projects with a total area of 2,499,000 square meters as of December 31, 2022, including significant projects in Xi'an and Shanghai[132] - The group launched multiple residential projects, achieving stable sales performance despite the pandemic's impact[133] - The group plans to focus on promoting key projects in Xi'an and Shanghai to meet market demand for premium residential properties[111] - The group aims to explore the long-term rental housing market and enhance land reserves to create more development opportunities[149] Market Conditions - The real estate market in mainland China saw a significant downturn, with a 10% decrease in development investment and a 26.7% drop in sales revenue[84] - The macroeconomic outlook for 2023 indicates a recovery in the real estate sector, supported by government measures to boost domestic demand and housing improvements[167] Corporate Governance - The audit committee consists of three independent non-executive directors who reviewed the financial statements for the year ended December 31, 2022[153] - The company confirmed compliance with the corporate governance code and the relevant securities trading guidelines throughout the year ended December 31, 2022[177] - The board of directors expressed gratitude to customers, suppliers, business partners, and shareholders for their continued support[179] Share Repurchase - The company repurchased a total of 13,646,000 shares at a total cost of HKD 7,503,060 during the year ended December 31, 2022[157] - The highest repurchase price per share was HKD 0.61, while the lowest was HKD 0.495[175] - All repurchased shares were cancelled by December 30, 2022, and February 27, 2023, resulting in a reduction of the issued share capital[176]

Financial Performance - For the six months ended June 30, 2022, the company reported revenue of HKD 6,808,613, a significant increase from HKD 4,577,400 for the same period in 2021, representing a growth of approximately 48.5%[8] - The profit attributable to equity holders for the same period was HKD 126,448, compared to HKD 54,029 in the previous year, marking an increase of about 134%[8] - The basic earnings per share rose to HKD 2.63, up from HKD 1.12, reflecting a substantial improvement in profitability[8] - For the six months ended June 30, 2022, the group's revenue was HKD 6,808,613,000, representing a year-on-year increase of 48.7% compared to HKD 4,577,400,000 for the same period in 2021[30] - The group recorded a gross profit of HKD 1,211,643,000, a decrease of 34.4% year-on-year, with a gross profit margin of 17.8%, down 22.6 percentage points[32] - The group reported a net profit of HKD 80,904,000, a decline of 61.0% compared to HKD 207,224,000 in the same period last year[38] - The company reported a profit before tax of HKD 469,638 thousand, a decline of 64.4% compared to HKD 1,318,398 thousand in the previous year[167] - The company’s non-controlling interests reported a loss of HKD 45,544 thousand, compared to a profit of HKD 153,195 thousand in the previous year[169] - The company reported a comprehensive income of HKD 1,114,618,000 for the period, reflecting a significant change in financial performance[177] Debt and Financial Position - The net debt to total equity ratio increased to 52.6% from 24.0%, indicating a rise in leverage[8] - As of June 30, 2022, the group held cash and cash equivalents of HKD 8,807,685,000, down from HKD 14,116,711,000 at the end of 2021[39] - The group's total borrowings amounted to HKD 20,163,705,000, an increase from HKD 19,720,082,000 at the end of 2021[39] - Total liabilities decreased to HKD 27,286,196 thousand from HKD 36,356,973 thousand at the end of 2021[174] - The total liabilities as of June 30, 2022, were HKD 11,266,051,000, reflecting the company's financial obligations[177] - The company received new bank and other borrowings amounting to HKD 4,504,385,000, an increase of 21.1% from HKD 3,717,769,000 in the same period last year[188] Real Estate Projects and Sales - The company has 29 real estate projects across 11 major cities in China, providing approximately 3.95 million square meters of saleable area, laying a solid foundation for long-term development[2] - The company plans to launch several residential projects in the second half of 2022, including the Xi'an Qiyuan Road project and the Shanghai Qingpu project[15] - The company’s flagship projects, including Beijing Xidiaoyutai and Shanghai Wanyuan City, continue to contribute significant sales revenue[15] - For the first half of 2022, the company's contract sales amounted to RMB 4.57 billion, a decrease of 6.1% year-on-year, with a total sales area of 331,000 square meters, up 198.2%[24] - The average selling price of properties dropped by 68.5% to approximately RMB 13,800 per square meter, primarily due to a higher proportion of affordable housing sales[24] - Contract sales from affordable housing reached RMB 2.95 billion, a substantial increase of 377.9% year-on-year, with a sales area of 238,000 square meters[25] - The company has 12 ongoing projects with a total construction area of 2.43 million square meters, including significant projects in Xi'an and Shanghai[27] Market Conditions and Outlook - The overall real estate market saw a 5.4% decline in development investment and a 28.9% drop in sales, with residential sales down 31.8% in the first half of 2022[22] - The company maintains a cautiously optimistic outlook for the second half of 2022, anticipating government measures to stimulate the real estate market and improve buyer confidence[19] - The real estate market in China is expected to stabilize in the second half of 2022, with potential for further policy relaxation to support recovery[44] Corporate Governance and Compliance - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange during the reporting period[136] - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited interim financial statements for the six months ending June 30, 2022[142] - The company confirmed that there were no violations of the securities trading guidelines by relevant employees during the six months ending June 30, 2022[137] Shareholder and Dividend Information - The company does not recommend any interim dividend for the six months ended June 30, 2022, consistent with the previous year[133] - The company aims to improve shareholder returns through a flexible dividend policy, leveraging its retained earnings[181] - The company expressed gratitude to its board, management, employees, customers, suppliers, business partners, and shareholders for their continued support[159] Strategic Initiatives - The company plans to leverage its strong brand advantage as a state-owned enterprise to maintain steady growth and create greater value for shareholders[44] - The company is focusing on strategic acquisitions to strengthen its market presence and operational capabilities[179] - The company has plans for market expansion and new product development, aiming to enhance its competitive position[179]

Financial Performance - The total contracted sales for the year reached RMB 8,933,090,000[17] - The overall revenue for the year was HKD 11,015,088,000[17] - The net profit after tax was HKD 898,684,000, with shareholders' profit amounting to HKD 572,328,000[17] - The proposed dividend is HKD 0.045 per share[17] - The company's total revenue for the year ended December 31, 2021, was HKD 11,015,088,000, representing a year-on-year increase of 73.3% from HKD 6,356,732,000 in 2020[39] - Property sales revenue reached HKD 9,937,996,000, accounting for 90.2% of total revenue, compared to 86.2% in 2020[39] - Rental income from investment properties increased by 25.1% to HKD 829,307,000, up from HKD 662,718,000 in 2020[36] - The gross profit for the year was HKD 3,554,120,000, a 61.7% increase from the previous year, with a gross profit margin of 32.3%[39] - The company recorded a net profit of HKD 898,684,000, up 21.3% from HKD 740,964,000 in 2020, with earnings per share of HKD 11.91[39] Sales and Market Strategy - The company aims to maintain stable growth amidst changes in the real estate market and regulatory policies[17] - The company is actively responding to market changes and promoting new strategies for expansion[17] - The company has implemented a marketing strategy that integrates online and offline channels to boost sales during the market recovery phase[54] - The company achieved a strong sales performance despite the pandemic, with flagship projects delivering as scheduled[39] - The total contract sales amount for the group's residential and affordable housing reached RMB 8,933,090,000 in 2021, representing a year-on-year increase of 17.4% from RMB 7,608,340,000 in 2020[31] - The contract sales amount from residential properties was RMB 7,764,440,000 in 2021, up from RMB 7,426,400,000 in 2020, indicating a growth of 4.5%[31] - The contract sales area for the group was 197,000 square meters in 2021, which is a 40.7% increase year-on-year[31] - The contract sales amount from affordable housing surged to RMB 1,168,650,000 in 2021, a significant increase of 542.3% compared to RMB 181,940,000 in 2020[31] Development Projects and Land Acquisition - The company has 28 real estate projects across 11 major cities in China, providing approximately 3.93 million square meters of future saleable area[2] - The company successfully acquired three quality land parcels in Xi'an and Shanghai under the "two concentrated" land policy, laying a foundation for future development over the next three to five years[23] - The group successfully acquired land use rights for two residential plots in Shanghai, with a total bid price of RMB 1,178,000,000 and an area of 30,051 square meters[34] - The group has 14 ongoing projects with a total construction area of 2,982,000 square meters, including significant projects in Xi'an and Shanghai[34] - The total land reserve amounts to 5,303,596 square meters, with a total planned construction area of 12,311,206 square meters and a total saleable area of 10,163,536 square meters[70] Financial Health and Debt Management - The debt-to-equity ratio at the end of 2021 was 31.9%[11] - The company has achieved all "three red lines" indicators, demonstrating strong financial health and risk resistance[23] - As of December 31, 2021, the company's net debt to total equity ratio decreased from 31.9% to 24.0%, with a current ratio of 1.2 times[1] - The total loans of the company amounted to approximately 19,720,082,000 HKD as of December 31, 2021, compared to 17,747,266,000 HKD in the previous year[1] - The company increased its cash reserves and reduced its debt ratio by divesting from its subsidiary Shanghai Huanyu, which is part of its long-term development strategy[31] Corporate Governance and Investor Relations - The company emphasizes maintaining good relationships with investors and ensuring timely and accurate communication regarding operational status and financial performance[140] - In 2021, the company engaged with nearly 100 investors and capital market participants through non-deal roadshows and meetings[149] - The company is committed to enhancing corporate governance practices to ensure sustainable growth and shareholder value[151] - The board consists of nine members, including five executive directors and four independent non-executive directors, in compliance with listing rules[160] - The board has adopted a diversity policy to ensure a balanced mix of skills, experience, and perspectives, recognizing the benefits of diversity for competitive advantage and sustainable development[163] Future Outlook and Strategic Focus - The company plans to continue focusing on real estate development in key first and second-tier cities, particularly in the Shanghai metropolitan area, while also promoting diversified businesses such as health industries[49] - The company believes the real estate market in 2022 will maintain overall stability, focusing on high-quality projects in the Shanghai metropolitan area and other core first and second-tier cities[62] - The company aims to enhance operational capabilities and promote diversified quality development in response to the "housing is for living, not for speculation" policy[62] - The company plans to continue expanding its health-related business and rental housing services in response to market demands[36]

Financial Performance - For the six months ended June 30, 2021, the company's revenue was HKD 4,577,400,000, representing a 44.3% increase from HKD 3,172,823,000 for the same period in 2020[10]. - The profit attributable to equity holders of the company for the same period was HKD 54,029,000, a decrease of 64.2% compared to HKD 151,041,000 in the previous year[10]. - The basic earnings per share for the first half of 2021 was HKD 1.12, down from HKD 3.14 in the same period of 2020[10]. - The group reported a profit of HKD 207,224,000, a decrease of 41.6% compared to HKD 355,072,000 in the previous year[41]. - Gross profit for the six months was HKD 1,847,237,000, reflecting a 29.0% increase, with a gross margin of 40.4%[36]. - The company reported a net profit of HKD 207,224, a decrease of 41.7% compared to HKD 355,072 in the previous year[157]. - Total revenue for the six months ended June 30, 2021, was HKD 4,577,400, a 44.2% increase from HKD 3,172,823 in 2020[155]. - Total comprehensive income for the period was HKD 521,844, compared to a loss of HKD 81,225 in 2020[157]. Sales and Contract Performance - In the first half of 2021, the total contract sales amount for the group reached RMB 4,866,570,000, representing a year-on-year increase of 31.3% compared to RMB 3,706,390,000 in the same period of 2020[25]. - The total contract sales area was 111,000 square meters, which is a 73.4% increase year-on-year, while the average selling price decreased by 24.4% to approximately RMB 43,800 per square meter[25]. - The total sales amount for commercial housing reached RMB 4,250,320,000, accounting for 87.3% of the total contract sales[25]. - Property sales revenue reached HKD 4,031,412,000, accounting for 88.1% of total revenue, with significant contributions from projects in Shanghai[33]. Project Development and Land Acquisition - The company has 27 real estate projects across 11 major cities in China, providing approximately 4.14 million square meters of saleable area[4]. - The group successfully acquired multiple high-quality land parcels, including residential land in Shanghai and Tianjin, to enhance its land reserves[17]. - The company successfully acquired land use rights for a project in Xi'an, Shaanxi Province, for approximately RMB 1.525 billion, covering an area of 51,208 square meters, which can be developed into a residential project of about 102,418 square meters[47]. - The company aims to strengthen its existing quality land reserves and optimize resource allocation towards premium development models[48]. - The company has adopted a prudent strategy for future land acquisitions and has restructured its projects accordingly[52]. Financial Position and Debt Management - As of June 30, 2021, the group had cash and cash equivalents of HKD 9,039,343,000, down from HKD 9,550,663,000 at the end of 2020[42]. - The total loans amounted to approximately HKD 20,986,896,000, an increase from HKD 17,747,266,000 a year earlier[44]. - The net debt to total equity ratio improved to 45.0% from 31.9% year-on-year, indicating a stronger balance sheet[11]. Market Strategy and Future Outlook - The company aims to focus on high-quality urban renewal and industry development in core Chinese city clusters[16]. - The real estate market is expected to continue steady growth in the second half of 2021, supported by central government policies and the "14th Five-Year Plan"[50]. - The company plans to focus on the Shanghai metropolitan area and other first- and second-tier cities, enhancing existing quality land development and seizing urban renewal opportunities[50]. - Future guidance indicates an expected revenue growth of approximately 10% for the next quarter[187]. Corporate Governance and Shareholder Information - The company did not declare any interim dividends for the six months ending June 30, 2021, consistent with the previous year[119]. - Major shareholders hold significant stakes, with 上實控股 owning 2,111,229,080 shares, representing 43.93% of the issued share capital, and 上實集團 holding 3,064,869,977 shares, accounting for 63.77%[142]. - The audit committee reviewed the unaudited interim financial statements for the six months ended June 30, 2021, ensuring compliance with accounting principles and risk management procedures[127]. Operational Efficiency and Cost Management - Distribution and selling expenses rose by 78.2% to HKD 176,787,000 due to increased marketing efforts[38]. - The company reported a decrease in operational expenses by 248,683, reflecting improved cost management strategies[195].

上 海 實 業 城 市 開 發 集 團 有 限 公 司 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED ( 於百慕達註冊成立之有限公司 ) 股份代號:563 知新致逵 崇實篤永 USIC NEWS D E ard North Computer ● 年報 2020 上海實業城市開發集團有限公司（「上實城開」）現於中國10個主要城市擁有24個房地產項目， 分佈於上海、北京、天津、昆山、無錫、瀋陽、西安、重慶、煙台及深圳，當中大部分為中、 高檔住宅物業，興建工程正全速進行，為本集團提供約357萬平方米的可售建築面積，奠定了 長遠發展的良好基石。 名鑄佳築 御品典藏 目錄 2 公司資料 3 財務摘要 6 主席致辭 12 管理層討論及分析 19 投資者常見問題 22 物業資料 — 土地儲備 24 於中國主要項目介紹 35 投資者關係報告 38 企業管治報告 52 環境、社會與管治報告 88 董事及高級管理層簡介 95 董事會報告 108 獨立核數師報告 114 綜合損益及其他全面收入報表 116 綜合財務狀況表 118 綜合股本權益變動表 120 綜合現金流量表 ...

[Company Information](index=4&type=section&id=Company%20Information) This chapter provides fundamental company information for Shanghai Industrial Urban Development Group Co., Ltd., including board members, company secretary, registered office, principal place of business in Hong Kong, principal bankers, auditors, and listing details - Board members include **Huang Haiping (Chairman)**, **Zhou Xiong (Vice Chairman and President)** as executive directors, and **Du Huikai, Fan Renda, Li Jiahui, Qiao Zhigang** as independent non-executive directors[8](index=8&type=chunk) - The company secretary is **Chan Kin Chu**, and the auditor is **Deloitte Touche Tohmatsu**[8](index=8&type=chunk)[9](index=9&type=chunk) - The company's shares are listed on The Stock Exchange of Hong Kong Limited under stock code **563**[8](index=8&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This chapter outlines key financial data for the six months ended June 30, 2020, showing a significant year-on-year decrease in revenue and profit attributable to shareholders, while presale proceeds increased, and the net gearing ratio rose with a slight decline in the current ratio Financial Highlights for the Six Months Ended June 30 (HK$ Thousand) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 3,172,823 | 4,603,326 | | Profit attributable to owners of the Company | 151,041 | 310,678 | | Earnings per share — Basic (HK cents) | 3.14 | 6.46 | | Earnings per share — Diluted (HK cents) | 3.14 | 6.46 | Financial Position Highlights (HK$ Thousand) | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Presale proceeds received from property sales | 6,297,051 | 6,004,601 | | Net gearing ratio (%) | 42.5% | 29.1% | | Current ratio | 1.8 | 1.9 | - The **net gearing ratio** increased from **29.1%** at the end of 2019 to **42.5%** as of June 30, 2020, while the **current ratio** slightly decreased from **1.9** to **1.8**[11](index=11&type=chunk) [Chairman's Report](index=6&type=section&id=Chairman%27s%20Report) The Chairman's Report reviews the operating performance in the first half of 2020 amidst the COVID-19 pandemic, highlighting the company's significant contract sales and high gross profit margin despite challenges, and its proactive response through online sales, land reserve expansion, and commercial project completion, while emphasizing its positioning as an urban core area operator and future plans to drive sales and explore diversified business formats for greater value creation - In the first half of 2020, the Group's total revenue reached **HK$3.173 billion**, contract sales recorded **RMB3.706 billion**, profit after tax was **HK$355 million**, profit attributable to shareholders was **HK$151 million**, and the gross profit margin was as high as **45.1%**[15](index=15&type=chunk) - In response to the pandemic, the company adapted flexibly, offering **'online property viewing'** sales services in Shanghai and other cities, which received positive market feedback[16](index=16&type=chunk) - Jointly with Shanghai Aerospace and Hongyi Group, the company successfully bid for the **xh221–01 plot in Hongmei Street, Xuhui District, Shanghai**, with a total transaction price of **RMB4.628 billion**, planned for scientific research land, rental housing, and underground commercial areas[17](index=17&type=chunk) - Awarded **'18th among Top 100 Commercial Real Estate Enterprises'** in the '2020 China Commercial Top 100 List', with multiple projects receiving accolades[17](index=17&type=chunk) - Looking ahead to the second half, the company will actively promote sales, explore diversified business formats, and vigorously develop real estate finance and commercial asset investment and operation[18](index=18&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This chapter provides a detailed analysis of the real estate market environment and the Group's business performance in the first half of 2020, noting that despite the pandemic, the Group achieved contract sales growth through online sales and high-end projects, made progress in property development, investment properties, and land reserves, while financially, revenue and profit declined, but gross profit margin improved, liquidity remained ample, and corporate bonds were successfully issued, with future focus on core areas of hot cities and diversified business development - The real estate market was impacted by the COVID-19 pandemic, with the central government adhering to the **'housing is for living, not for speculation'** principle, local governments implementing city-specific policies, and first and second-tier city markets rapidly recovering in the second quarter[23](index=23&type=chunk) - The Group promoted **online property viewing and sales**, with strong sales for high-end flagship projects, developing around four core business segments: **'residential property development + investment property development + urban renewal services + industrial-financial capital cooperation'**[24](index=24&type=chunk) Contract Sales Performance | Metric | H1 2020 | H1 2019 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Contract sales amount (RMB) | 3,706,390,000 | 3,414,670,000 | +8.5% | | Total contract sales area (sqm) | 64,000 | 99,000 | -35.4% | | Average selling price (RMB/sqm) | 57,900 | 34,500 | +67.8% | - During the period, approximately **110,300 square meters** were delivered, mainly for **Shanghai Wanyuancheng, Xi'an ZiranJie, and Shanghai Dangdai Yishu**[26](index=26&type=chunk) - Total investment property area was approximately **816,000 square meters**, with rental income decreasing by **22.9%** year-on-year to **HK$290,288,000**, primarily due to rent reduction policies during the pandemic[27](index=27&type=chunk) Financial Performance Summary (HK$ Thousand) | Metric | H1 2020 | H1 2019 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 3,172,823 | 4,603,326 | -31.1% | | Property sales revenue | 2,829,760 | 4,085,037 | -30.7% | | Gross profit | 1,432,178 | 1,961,763 | -27.0% | | Gross profit margin | 45.1% | 42.6% | +2.5 percentage points | | Net fair value gain on investment properties | 173,682 | 201,921 | -14.0% | | Distribution and selling expenses | 99,200 | 138,506 | -28.4% | | General and administrative expenses | 187,727 | 166,938 | +12.5% | | Profit | 355,072 | 765,162 | -53.6% | | Profit attributable to shareholders | 151,041 | 310,678 | -51.4% | | Basic and diluted earnings per share (HK cents) | 3.14 | 6.46 | -51.4% | - Bank balances and cash amounted to **HK$7,740,449,000**, the **net gearing ratio** increased from **29.1%** at the end of last year to **42.5%**, and the **current ratio** slightly decreased to **1.8 times**[38](index=38&type=chunk) - Successfully issued **RMB550 million** corporate bonds with a coupon rate of **3.49%**, used for repaying corporate bonds[38](index=38&type=chunk) - Added the **xh221–01 plot in Hongmei Street, Xuhui District, Shanghai**, with a future saleable planned gross floor area of approximately **3.71 million square meters**, supporting 3 to 5 years of future development[44](index=44&type=chunk) [Project Information](index=14&type=section&id=Project%20Information) This chapter outlines the Group's 26 real estate projects across 11 major cities in China, including mid-to-high-end residential, serviced apartments, commercial, and office properties, with a total future saleable land reserve of approximately **3.71 million square meters** as of June 30, 2020, and details of major investment properties - The Group owns **26 projects** in **11 cities** in China, including mid-to-high-end residential, serviced apartments, commercial, and office properties[47](index=47&type=chunk) - As of June 30, 2020, the total future saleable land reserve was approximately **3.71 million square meters**[47](index=47&type=chunk)[48](index=48&type=chunk) Overview of Major Projects (As of June 30, 2020) | Project | City | Site Area (sqm) | Planned GFA (sqm) | Future Saleable (sqm) | | :--- | :--- | :--- | :--- | :--- | | Wanyuancheng | Shanghai | 943,000 | 1,226,298 | 90,327 | | Binjiang Chenkai Center | Shanghai | 77,371 | 525,888 | 324,600 | | TODTOWN TIANHUI | Shanghai | 117,825 | 605,000 | 329,095 | | Dangdai Meishu (Chenkai Yunwai) | Shanghai | 120,512 | 191,636 | 42,116 | | ZiranJie | Xi'an | 2,101,967 | 3,899,867 | 745,882 | | Senlinhai | Changsha | 679,620 | 1,032,534 | 711,757 | | Total | | 5,853,038 | 13,170,320 | 3,713,063 | Major Investment Properties (As of June 30, 2020) | Project | City | Property Type | Planned GFA (sqm) | | :--- | :--- | :--- | :--- | | Shanghai Youth City | Shanghai | Commercial | 16,349 | | Shanghai Mart | Shanghai | Exhibition, trading market, office and car park | 284,651 | | Chenkai International Tower | Shanghai | Office | 45,239 | | Binjiang Chenkai Center Plot 1 | Shanghai | Office | 25,845 | | Chengshangcheng | Chongqing | Commercial, office and car park | 285,264 | | Total | | | 815,531 | [Introduction to Major Projects in China](index=16&type=section&id=Introduction%20to%20Major%20Projects%20in%20China) This chapter provides detailed introductions to the Group's key projects across major Chinese cities, including Wanyuancheng, Binjiang Chenkai Center, TODTOWN Tianhui, Dangdai Yishu, Dangdai Meishu, Shanghai Mart, Shanghai Jingcheng, and Chengxing projects in Shanghai; Yantai projects; Youth Apartment, Xidiaoyutai Yuxi in Beijing; Laochengxiang in Tianjin; Shenyang Chenkai Center in Shenyang; Youzhan, Kuncheng Dijinyuan in Kunshan; Shanghai Central Chenkai International in Wuxi; and ZiranJie in Xi'an, showcasing the Group's diversified layout across different cities and property types with addresses, categories, and key features for each project - The **Shanghai Wanyuancheng** project, located in Minhang District, is a large-scale key residential base, encompassing international apartments, detached villas, garden houses, large-flat luxury residences, modern commercial properties, and green parks[54](index=54&type=chunk) - The **Binjiang Chenkai Center**, situated in the Xuhui Riverside commercial district, is planned for comprehensive commercial use, with some completed properties for sale and rental[55](index=55&type=chunk) - **TODTOWN Tianhui** is an advanced TOD project in Shanghai, an 'aerial city' integrating residential, commercial, and leisure functions, with access to multiple rail transit lines[57](index=57&type=chunk) - The **Beijing Xidiaoyutai Yuxi** project, located on West Third Ring Road adjacent to Kunyu River, enjoys rare riverside views, primarily featuring riverside luxury residences as its core product[77](index=77&type=chunk) - The **Xi'an ZiranJie** project, located in the core area of Chanba Ecological District, is the premier ecological development in Northwest China, with diverse planned plots and comprehensive supporting facilities[95](index=95&type=chunk) [Other Information](index=25&type=section&id=Other%20Information) This chapter covers the Group's corporate governance, dividend policy, securities transactions, specific covenants in loan agreements, disclosure of interests of directors and substantial shareholders, and changes in directors' information, noting no interim dividend was declared for the first half of 2020, compliance with corporate governance code, and disclosure of controlling shareholders' holdings and board changes - The Board did not recommend the payment of any interim dividend for the six months ended June 30, 2020[97](index=97&type=chunk) - The company complied with the code provisions of the **Corporate Governance Code** in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[100](index=100&type=chunk) - Loan agreements stipulate that controlling shareholders **Shanghai Industrial Holdings Limited** and/or **Shanghai Industrial (Group) Co., Ltd.** must collectively directly or indirectly own not less than **51%** of the total share capital of the Company and maintain management control[102](index=102&type=chunk)[103](index=103&type=chunk) Directors' and Chief Executive's Interests in Shares and Underlying Shares of the Company (As of June 30, 2020) | Name of Director | Capacity | Number of underlying shares in respect of share options granted | Approximate percentage of the Company's issued share capital | | :--- | :--- | :--- | :--- | | Ye Weiqi | Beneficial owner | 6,000,000 | 0.12% | | Zhong Tao | Beneficial owner | 6,000,000 | 0.12% | | Du Huikai, JP | Beneficial owner | 1,000,000 | 0.02% | | Fan Renda | Beneficial owner | 1,000,000 | 0.02% | | Li Jiahui | Beneficial owner | 1,000,000 | 0.02% | Substantial Shareholders' Interests in Shares and Underlying Shares of the Company (As of June 30, 2020) | Name of Substantial Shareholder | Capacity | Number of shares in the Company held | Approximate percentage of the Company's issued share capital | | :--- | :--- | :--- | :--- | | SIHL | Held by controlled corporations | 2,328,671,400(L) | 48.45% | | SIIC Group | Held by controlled corporations | 3,106,296,148(L) | 64.63% | - **Mr. Zeng Ming** resigned as Chairman of the Board, Executive Director, and Chairman of the Nomination Committee, **Mr. Fei Zuoxiang** resigned as Executive Director, and **Mr. Huang Haiping** was appointed as Chairman of the Board, Executive Director, and Chairman of the Nomination Committee, all effective from **May 18, 2020**[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=31&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements of Shanghai Industrial Urban Development Group Co., Ltd. for the six months ended June 30, 2020, concluding that nothing came to their attention that caused them to believe the condensed consolidated financial statements were not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 - The auditor is **Deloitte Touche Tohmatsu**, and the scope of review is based on **Hong Kong Standard on Review Engagements 2410**[127](index=127&type=chunk)[129](index=129&type=chunk) - The review concluded that the condensed consolidated financial statements have been prepared, in all material respects, in accordance with **Hong Kong Accounting Standard 34**[128](index=128&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the Group's profit or loss and other comprehensive income for the six months ended June 30, 2020, showing a **31.1%** year-on-year decrease in total revenue and a **53.6%** significant year-on-year decline in profit for the period, primarily due to reduced revenue from goods and services and exchange differences, resulting in a negative total comprehensive expense for the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HK$ Thousand) | Metric | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Total revenue | 3,172,823 | 4,603,326 | | Cost of sales | (1,740,645) | (2,641,563) | | Gross profit | 1,432,178 | 1,961,763 | | Profit before tax | 1,050,375 | 1,626,661 | | Income tax expense | (695,303) | (861,499) | | Profit for the period | 355,072 | 765,162 | | Profit for the period attributable to owners of the Company | 151,041 | 310,678 | | Profit for the period attributable to non-controlling interests | 204,031 | 454,484 | | Basic and diluted earnings per share (HK cents) | 3.14 | 6.46 | Total Other Comprehensive Income (Expense) for the Period (HK$ Thousand) | Metric | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Exchange differences on translation from functional currency to presentation currency | (453,884) | (5,359) | | Fair value gain on equity instruments at fair value through other comprehensive income (net of tax) | 17,587 | 15,693 | | Total comprehensive (expense) income for the period | (81,225) | 775,496 | | Total comprehensive (expense) income for the period attributable to owners of the Company | (87,246) | 314,564 | | Total comprehensive (expense) income for the period attributable to non-controlling interests | 6,021 | 460,932 | [Condensed Consolidated Statement of Financial Position](index=34&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position as of June 30, 2020, showing an increase in non-current assets primarily due to growth in investment properties and interests in joint ventures, a slight decrease in current assets mainly from reduced properties under development for sale and properties held for sale, relatively stable total liabilities, and a slight decrease in total equity Condensed Consolidated Statement of Financial Position (HK$ Thousand) | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Non-current assets** | | | | Investment properties | 16,102,337 | 14,803,258 | | Interests in joint ventures | 2,278,710 | 615,213 | | **Current assets** | | | | Properties under development for sale and properties held for sale | 27,490,440 | 28,952,836 | | Bank balances and cash | 7,740,449 | 9,111,782 | | **Current liabilities** | | | | Presale proceeds received from property sales | 6,297,051 | 6,004,601 | | Bank and other borrowings (current) | 5,411,120 | 5,426,344 | | **Non-current liabilities** | | | | Bank and other borrowings (non-current) | 12,566,204 | 11,285,958 | | **Equity attributable to owners of the Company** | 12,964,136 | 13,249,553 | | **Non-controlling interests** | 10,274,375 | 10,532,073 | - Total non-current assets increased by **14.7%** to **HK$23,559,322 thousand**, primarily due to an **8.8%** increase in investment properties and a significant **270.4%** growth in interests in joint ventures[136](index=136&type=chunk) - Total current assets decreased by **8.7%** to **HK$36,437,206 thousand**, with properties under development for sale and properties held for sale decreasing by **5.1%**, and bank balances and cash decreasing by **15.0%**[136](index=136&type=chunk) - Equity attributable to owners of the Company and non-controlling interests both slightly decreased, leading to a **2.3%** reduction in total equity to **HK$23,238,511 thousand**[138](index=138&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=36&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the changes in the Group's equity for the six months ended June 30, 2020, showing a negative total comprehensive expense attributable to owners of the Company and a positive total comprehensive income attributable to non-controlling interests, with **HK$600 million** transferred from the share premium account to the contributed surplus account to increase distributable reserves Summary of Changes in Equity (HK$ Thousand) | Metric | H1 2020 | | :--- | :--- | | At January 1, 2020 (audited) | 23,781,626 | | Profit for the period | 355,072 | | Exchange differences on translation from functional currency to presentation currency | (453,884) | | Fair value gain on equity instruments at fair value through other comprehensive income | 17,587 | | Total comprehensive expense for the period | (81,225) | | Transfer to distributable reserves | — | | Dividends recognised as distribution | (197,058) | | Dividends declared to non-controlling interests | (264,832) | | At June 30, 2020 (unaudited) | 23,238,511 | - Total comprehensive expense attributable to owners of the Company was **HK$(87,246) thousand**, while total comprehensive income attributable to non-controlling interests was **HK$6,021 thousand**[142](index=142&type=chunk) - Pursuant to a special resolution, **HK$600,000,000** was transferred from the share premium account to the contributed surplus account to increase distributable reserves[142](index=142&type=chunk)[146](index=146&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=38&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement presents the Group's cash flows for the six months ended June 30, 2020, showing a significant increase in net cash used in operating activities and an increase in net cash used in investing activities, primarily due to investments in joint ventures, while net cash from financing activities significantly decreased, resulting in a net decrease in cash and cash equivalents for the period, negatively impacted by foreign currency exchange rate changes Condensed Consolidated Statement of Cash Flows (HK$ Thousand) | Metric | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | (218,867) | (34,100) | | Net cash used in investing activities | (1,098,450) | (927,984) | | Net cash from financing activities | 95,298 | 1,811,947 | | Net (decrease) increase in cash and cash equivalents | (1,222,019) | 849,863 | | Effect of foreign currency exchange rate changes | (149,314) | (26,963) | | Cash and cash equivalents at June 30 | 7,740,449 | 9,950,728 | - Net cash used in operating activities significantly increased from **HK$(34,100) thousand** in H1 2019 to **HK$(218,867) thousand** in H1 2020[149](index=149&type=chunk) - Net cash used in investing activities increased by **18.4%**, primarily due to an investment of **HK$1,680,104 thousand** in joint ventures[149](index=149&type=chunk) - Net cash from financing activities significantly decreased from **HK$1,811,947 thousand** in H1 2019 to **HK$95,298 thousand** in H1 2020, despite a substantial increase in new bank and other borrowings[151](index=151&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=40&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This chapter provides detailed notes to the condensed consolidated financial statements, covering the basis of preparation, significant impact of the COVID-19 pandemic, significant accounting policies, segment information, finance costs, income tax, earnings per share, movements in investment properties, amounts due from/to related companies, trade and other receivables and prepayments, trade and other payables and deferred income, bank and other borrowings, share capital, capital commitments, contingent liabilities, related party transactions, fair value measurement of financial instruments, and dividend information [1. Basis of Preparation](index=40&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The condensed consolidated financial statements are prepared in accordance with **Hong Kong Accounting Standard 34** and **Appendix 16 of the Listing Rules**[153](index=153&type=chunk) - The **COVID-19 pandemic** negatively impacted the global economy and the Group's operations, leading to reduced property sales, hotel operations, and rental income, but the Chinese government introduced fiscal measures and corporate support[153](index=153&type=chunk) - During the period, **RMB1.5275 billion (approximately HK$1.6801 billion)** was injected into a joint venture for the acquisition of a plot of land in Xuhui District, Shanghai[154](index=154&type=chunk) [2. Significant Accounting Policies](index=40&type=section&id=2.%20Significant%20Accounting%20Policies) The accounting policies used in these condensed consolidated financial statements for the interim period are consistent with those of the previous year, except for the application of amendments to Hong Kong Financial Reporting Standards, which include 'Definition of Materiality', 'Definition of a Business', and 'Interest Rate Benchmark Reform', but had no significant impact on the Group's financial position and performance - The accounting policies used in the preparation of the condensed consolidated financial statements are consistent with those applied in the annual financial statements for the year ended December 31, 2019, except for the application of amendments to **Hong Kong Financial Reporting Standards**[154](index=154&type=chunk) - Amendments to **HKAS 1 and HKAS 8 'Definition of Materiality'**, **HKFRS 3 'Definition of a Business'**, and **HKFRS 9, HKAS 39 and HKFRS 7 'Interest Rate Benchmark Reform'** were applied[155](index=155&type=chunk) - The application of these amendments had **no significant impact** on the condensed consolidated financial statements[159](index=159&type=chunk) [3A. Revenue from Contracts with Customers](index=41&type=section&id=3A.%20Revenue%20from%20Contracts%20with%20Customers) This chapter details the Group's revenue composition from contracts with customers, primarily from property sales, followed by hotel operations and property management, with revenue recognized mainly at a point in time, reflecting the characteristics of property sales Revenue from Contracts with Customers (HK$ Thousand) | Type of goods or services | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Property sales | 2,829,760 | 4,085,037 | | Hotel operations | 50,260 | 138,242 | | Property management | 2,515 | 3,377 | | Total | 2,882,535 | 4,226,656 | Timing of Revenue Recognition (HK$ Thousand) | Timing of revenue recognition | H1 2020 | H1 2019 | | :--- | :--- | :--- | | At a point in time | 2,829,760 | 4,085,037 | | Over time | 52,775 | 141,619 | | Total | 2,882,535 | 4,226,656 | - All revenue generated by the Group from contracts with customers originated from its operations in **China**[161](index=161&type=chunk) [3B. Segment Information](index=42&type=section&id=3B.%20Segment%20Information) This chapter presents the Group's business segment information, indicating that all operations are located in China, and all revenue and non-current assets (excluding certain property and equipment) are derived from and located in China, with no single customer contributing **10%** or more to the Group's revenue during the reporting period - All of the Group's operations are located in **China**, and all revenue and non-current assets (excluding certain property and equipment) are derived from and located in **China**[163](index=163&type=chunk) - For the six months ended June 30, 2020 and 2019, no single customer contributed **10% or more** to the Group's revenue[163](index=163&type=chunk) [4. Finance Costs](index=42&type=section&id=4.%20Finance%20Costs) This chapter presents the Group's finance costs, including interest on bank and other borrowings and lease liabilities, noting a slight decrease in total finance costs for the period, but also a reduction in amounts capitalized to properties under development for sale, leading to a slight increase in finance costs charged to profit or loss Finance Costs (HK$ Thousand) | Metric | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Interest on bank and other borrowings | 529,215 | 541,632 | | Interest on lease liabilities | 2,103 | 2,518 | | Total finance costs | 531,318 | 544,150 | | Less: Amount capitalized to properties under development for sale | (208,059) | (229,649) | | **Finance costs charged to profit or loss** | **323,259** | **314,501** | - For the six months ended June 30, 2020, borrowing costs arising from general pooled borrowings were capitalized to qualifying assets at an annual capitalization rate of **3.33%** (H1 2019: **5.18%**)[165](index=165&type=chunk) [5. Income Tax](index=43&type=section&id=5.%20Income%20Tax) This chapter details the Group's income tax composition, including PRC Enterprise Income Tax, PRC Land Appreciation Tax, and PRC withholding tax on dividend income, noting a year-on-year decrease in total income tax for the period, mainly due to reductions in Enterprise Income Tax and Land Appreciation Tax, and clarifies relevant tax rates and exemptions Income Tax (HK$ Thousand) | Metric | H1 2020 | H1 2019 | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 318,653 | 499,848 | | PRC Land Appreciation Tax | 393,717 | 668,705 | | PRC withholding tax on dividend income | 8,775 | — | | Deferred tax | (25,842) | (307,054) | | **Income tax expense for the period** | **695,303** | **861,499** | - The Enterprise Income Tax rate for PRC subsidiaries is **25%**[167](index=167&type=chunk) - PRC Land Appreciation Tax is levied at progressive rates ranging from **30% to 60%**, with sales of ordinary standard residential properties exempt under specific conditions[168](index=168&type=chunk) - The Group did not generate or derive any income in Hong Kong, thus no provision for **Hong Kong Profits Tax** was made[169](index=169&type=chunk) [6. Profit for the Period](index=44&type=section&id=6.%20Profit%20for%20the%20Period) This chapter lists various expenses and income items deducted or included in calculating profit for the period, including depreciation of property, plant and equipment, depreciation of right-of-use assets, interest income from bank deposits, and net exchange losses Items Deducted from (Included in) Profit for the Period (HK$ Thousand) | Item | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 98,123 | 62,054 | | Depreciation of right-of-use assets | 19,591 | 18,018 | | Interest income from bank deposits (included in other income) | (46,492) | (40,575) | | Net exchange losses (gains) (included in net other expenses, gains and losses) | 10,952 | (3,221) | [7. Earnings Per Share](index=44&type=section&id=7.%20Earnings%20Per%20Share) This chapter explains the calculation of basic and diluted earnings per share, which were both **3.14 HK cents** for the six months ended June 30, 2020, a decrease from the prior period, and no exercise of share options was assumed in calculating diluted earnings due to their exercise price being higher than the average market price Earnings Per Share Calculation Data | Metric | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (HK$ Thousand) | 151,041 | 310,678 | | Weighted average number of ordinary shares (thousand shares) | 4,806,323 | 4,810,973 | | Basic and diluted earnings per share (HK cents) | 3.14 | 6.46 | - The calculation of diluted earnings per share for the current and comparative interim periods did not assume the exercise of the Company's share options, as their exercise price was higher than the average market price for both interim periods[172](index=172&type=chunk) [8. Movements in Investment Properties](index=45&type=section&id=8.%20Movements%20in%20Investment%20Properties) This chapter describes movements in the Group's investment properties, whose fair value as of June 30, 2020, was determined by independent valuer Cushman & Wakefield, with a net fair value gain of approximately **HK$173.7 million** recorded for the period, and the Group also transferred some properties held for sale to investment properties, generating a fair value gain of approximately **HK$253.1 million** - The fair value of investment properties was determined by independent valuer **Cushman & Wakefield Limited**, with a net fair value gain on investment properties of approximately **HK$173,682,000** recorded for the period[173](index=173&type=chunk) - Subsequent expenditures of approximately **HK$85,673,000** were incurred during the period[173](index=173&type=chunk) - Properties held for sale with a carrying amount of approximately **HK$1,336,003,000** were transferred to investment properties, and a fair value gain of approximately **HK$253,146,000** was recognized[174](index=174&type=chunk) [9. Amounts Due from (to) Related Companies](index=46&type=section&id=9.%20Amounts%20Due%20from%20(to)%20Related%20Companies) This chapter details the Group's balances of amounts due from and to related parties, including joint ventures, entities controlled by Xuhui SASAC, non-controlling shareholders, and SIHL, with these amounts being diverse in nature, including trade and non-trade, some interest-bearing loans, and some interest-free and repayable on demand Amounts Due from (to) Related Companies (HK$ Thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Amounts due from related companies recognized as current assets** | | | | — Joint ventures | 11 | 336,499 | | — Entities controlled by Xuhui SASAC | 1,536 | — | | **Amounts due to related companies recognized as current liabilities** | | | | — Xuhui SASAC and entities controlled by Xuhui SASAC | 436,963 | 220,605 | | — Non-controlling shareholders | 188,617 | 386,224 | | — SIHL | 25,990 | 26,505 | | **Amounts due to related companies recognized as non-current liabilities** | | | | — A non-controlling shareholder | 61,305 | 61,794 | - Amounts due from joint ventures are non-trade in nature, interest-free, and unsecured, with **RMB300.82 million (approximately HK$336.5 million)** repaid to the Group during the period[179](index=179&type=chunk) - Amounts due to Xuhui SASAC and entities controlled by Xuhui SASAC include a trust loan of **RMB200 million (approximately HK$219.4 million)**, bearing fixed annual interest rates ranging from **7.5% to 9.0%**, repayable in **June 2021**[179](index=179&type=chunk) [10. Trade and Other Receivables and Prepayments](index=48&type=section&id=10.%20Trade%20and%20Other%20Receivables%20and%20Prepayments) This chapter provides a detailed breakdown of the Group's trade and other receivables and prepayments, with non-current portions primarily including loans receivable and prepayments for land acquisition, and current portions covering trade receivables, other receivables, advances to contractors, prepaid other taxes, and deposits and prepayments, also presenting an aging analysis of trade receivables Trade and Other Receivables and Prepayments (HK$ Thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Recognized as non-current assets** | | | | Loans receivable | 9,060 | 9,239 | | Prepayments for land acquisition | 711,967 | 726,063 | | **Recognized as current assets** | | | | Trade receivables (net of loss allowance) | 20,725 | 15,984 | | Other receivables | 330,473 | 226,832 | | Advances to contractors | 33,713 | 26,173 | | Prepaid other taxes | 327,323 | 364,719 | | Deposits and prepayments | 38,066 | 41,225 | - Non-current loans receivable of **RMB8,260,000 (approximately HK$9,060,000)** are repayable by **December 31, 2021**, bear a fixed annual interest rate of **5%**, and are secured by the borrower's equity and guarantee[184](index=184&type=chunk) - Prepayments for land acquisition of **RMB649,100,000 (approximately HK$711,967,000)** have been fully paid for the development of a residential property in Shanghai[185](index=185&type=chunk) Aging Analysis of Trade Receivables (Net of Loss Allowance) (HK$ Thousand) | Aging | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | 0 to 90 days | 13,557 | 1,348 | | 91 to 180 days | 76 | 1,138 | | Over 180 days | 7,092 | 13,498 | | Total | 20,725 | 15,984 | [11. Trade and Other Payables and Deferred Income](index=50&type=section&id=11.%20Trade%20and%20Other%20Payables%20and%20Deferred%20Income) This chapter details the Group's trade and other payables and deferred income, with current liabilities including trade payables, bills payable, accrued expenses for properties under development for sale, interest payable, and other taxes payable, while non-current liabilities primarily consist of deferred income, and also discloses the progress of legal proceedings and settlement agreements related to the disposal of subsidiary Hunan Qian Shui Wan Trade and Other Payables and Deferred Income (HK$ Thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Recognized as current liabilities** | | | | Trade payables | 1,342,121 | 1,236,195 | | Bills payable | 92,043 | 632,627 | | Accrued expenses for properties under development for sale | 2,435,916 | 2,595,930 | | Interest payable | 154,271 | 90,924 | | Other taxes payable | 343,413 | 76,804 | | **Recognized as non-current liabilities** | | | | Deferred income | 4,423 | 4,853 | - Deposits of **RMB191,100,000 (approximately HK$209,608,000)** were received for the disposal of Hunan Qian Shui Wan[194](index=194&type=chunk) - A settlement was reached with **Evergrande Changsha** regarding the legal proceedings for the disposal of Hunan Qian Shui Wan, with Evergrande Changsha committing to continue fulfilling the agreement on or before **October 30, 2020**, and **Evergrande Group** providing payment guarantee[195](index=195&type=chunk)[196](index=196&type=chunk) Aging Analysis of Trade Payables and Bills Payable (HK$ Thousand) | Aging | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | 0 to 30 days | 355,705 | 805,946 | | 31 to 180 days | 358,215 | 631,708 | | 181 to 365 days | 483,568 | 276,219 | | Over 365 days | 236,676 | 154,949 | | Total | 1,434,164 | 1,868,822 | [12. Bank and Other Borrowings](index=52&type=section&id=12.%20Bank%20and%20Other%20Borrowings) This chapter outlines the Group's bank and other borrowings, noting that for the six months ended June 30, 2020, the Group obtained approximately **HK$6.6179 billion** in new borrowings and repaid approximately **HK$5.0443 billion**, with borrowings bearing floating annual interest rates ranging from **3.80% to 6.51%**, used for property development projects and general working capital - For the six months ended June 30, 2020, new bank and other borrowings of approximately **HK$6,617,943,000** were obtained[200](index=200&type=chunk) - Bank and other borrowings of approximately **HK$5,044,313,000** were repaid[200](index=200&type=chunk) - Bank and other borrowings bear floating annual interest rates ranging from **3.80% to 6.51%** and are repayable within one year to over five years[200](index=200&type=chunk) [13. Share Capital](index=52&type=section&id=13.%20Share%20Capital) This chapter presents the Group's share capital information, showing that as of June 30, 2020, the issued and fully paid share capital comprised **4,806,323 thousand shares** with a par value of **HK$0.04** per share, totaling **HK$192,253 thousand** Share Capital (HK$ Thousand) | Metric | Number of shares (thousand shares) | Share capital (HK$ Thousand) | | :--- | :--- | :--- | | At June 30, 2020 | 4,806,323 | 192,253 | [14. Capital Commitments](index=52&type=section&id=14.%20Capital%20Commitments) This chapter discloses the Group's capital commitments, with capital expenditure contracted but not provided for in the condensed consolidated financial statements relating to properties under development for sale amounting to **HK$6,976,682 thousand** as of June 30, 2020 Capital Commitments (HK$ Thousand) | Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Contracted but not provided for in the condensed consolidated financial statements — Additions to properties under development for sale | 6,976,682 | 8,826,760 | | — Contributions to joint ventures | — | 1,708,613 | | Total | 6,976,682 | 10,535,373 | [15. Contingent Liabilities](index=53&type=section&id=15.%20Contingent%20Liabilities) This chapter details the Group's contingent liabilities, including corporate guarantees and litigation, noting that the Group provides guarantees for bank financing to property purchasers and an associate, and discloses the latest developments in the land development agreement litigation related to Hunan Qian Shui Wan, where despite an unfavorable court ruling, the Group is seeking a retrial and has reached a settlement guarantee agreement with relevant parties Corporate Guarantees (HK$ Thousand) | Guaranteed party | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Property purchasers | 2,570,188 | 3,055,182 | | An associate | 391,576 | 399,329 | | Total | 2,961,764 | 3,454,511 | - The Group provided bank guarantees for mortgage loans granted to property purchasers, and management believes the likelihood of purchasers defaulting on repayments is **remote**[204](index=204&type=chunk) - In the land development agreement litigation related to **Hunan Qian Shui Wan**, the Higher People's Court ruled unfavorably against the Group, demanding compensation of **RMB122 million**, and the Group has filed a civil procuratorial protest with the People's Procuratorate, requesting a retrial[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) - An enforcement settlement guarantee agreement was reached with **Evergrande Changsha**, where Evergrande Changsha committed to providing an **irrevocable guarantee** for Hunan Qian Shui Wan's responsibility to pay the judgment sum[210](index=210&type=chunk) [16. Related Party Transactions](index=55&type=section&id=16.%20Related%20Party%20Transactions) This chapter discloses significant transactions between the Group and related parties, including management fees, property agency fees, rental income, and interest expenses with entities controlled by SIHL, associates, non-controlling shareholders of subsidiaries, and entities controlled by Xuhui SASAC, also detailing key management compensation and noting the Group's ordinary course of business with other PRC government-related entities as a PRC government-controlled enterprise Related Party Transactions (HK$ Thousand) | Related party | Nature of transaction | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | | Entities controlled by SIHL | Management fees | (941) | — | | Associates | Property agency fees | (10,956) | (10,224) | | Associates | Rental income | 463 | — | | A non-controlling shareholder of a subsidiary | Management fees | (3,132) | (3,462) | | An entity controlled by Xuhui SASAC | Interest expense | (10,097) | (10,866) | Key Management Compensation (HK$ Thousand) | Item | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Short-term employee benefits | 3,836 | 6,299 | | Post-employment benefits | 36 | — | | Total | 3,872 | 6,299 | - The Group is part of the larger **SIIC Group**, which is controlled by the PRC government, and conducts ordinary course of business with other PRC government-related entities[215](index=215&type=chunk) [17. Fair Value Measurement of Financial Instruments](index=56&type=section&id=17.%20Fair%20Value%20Measurement%20of%20Financial%20Instruments) This chapter provides information on the Group's fair value determination methods for financial instruments, with financial assets measured at fair value on a recurring basis including PRC listed equity securities (Level 1) and PRC unlisted equity securities (Level 3), where unlisted equity securities are valued using the adjusted net asset method under the cost approach, and reconciliations for Level 3 fair value measurements are disclosed Fair Value of Financial Assets Measured at Fair Value on a Recurring Basis (HK$ Thousand) | Financial assets | June 30, 2020 | December 31, 2019 | Fair value hierarchy | Valuation techniques and key inputs | | :--- | :--- | :--- | :--- | :--- | | PRC listed equity securities at fair value through profit or loss | 3,118 | 3,342 | Level 1 | Quoted bid prices in active markets | | PRC listed equity securities at fair value through other comprehensive income | 122,922 | 101,588 | Level 1 | Quoted bid prices in active markets | | PRC unlisted equity securities at fair value through other comprehensive income | 55,666 | 58,620 | Level 3 | Adjusted net asset method under cost approach (discount factor 9%) | Reconciliation of Level 3 Fair Value Measurements (HK$ Thousand) | Item | Unlisted equity securities classified as equity instruments at fair value through other comprehensive income | | :--- | :--- | | At January 1, 2020 | 58,620 | | Exchange adjustments | (2,954) | | At June 30, 2020 (unaudited) | 55,666 | - The Group's management believes there were **no significant changes** in the fair value of unlisted equity instruments at fair value through other comprehensive income for the six months ended June 30, 2020[220](index=220&type=chunk) [18. Dividends](index=58&type=section&id=18.%20Dividends) This chapter discloses the Group's dividend policy and dividends recognized as distribution, noting that for the six months ended June 30, 2020, the Group declared and paid 2019 final and special dividends totaling approximately **HK$197.1 million**, with no interim dividend proposed for 2020 during the reporting period Dividends Recognized as Distribution During the Period (HK$ Thousand) | Type of dividend | H1 2020 | H1 2019 | | :--- | :--- | :--- | | 2019 final dividend declared of 1.8 HK cents | 86,514 | 86,598 | | 2019 special dividend declared of 2.3 HK cents | 110,544 | 110,652 | | Total | 197,058 | 197,250 | - Approximately **HK$187,777,000** was paid for the six months ended June 30, 2020[224](index=224&type=chunk) - No interim dividend was proposed for the six months ended June 30, 2020[225](index=225&type=chunk)