[Chairman's Statement](index=6&type=section&id=%E4%B8%BB%E5%B8%AD%E8%87%B4%E8%BE%9C) [Operating Performance and Strategic Review](index=8&type=section&id=%E4%B8%BB%E5%B8%AD%E8%87%B4%E8%BE%9C) In 2019, facing complex domestic and international conditions and real estate market controls, the company achieved stable growth with contract sales of RMB 7.69 billion, total revenue of HKD 8.58 billion, and profit attributable to shareholders of HKD 0.60 billion, proposing a total dividend of HKD 4.1 cents per share Operating Performance Summary | Indicator | 2019 | | :--- | :--- | | **Contract Sales** | RMB 7.69 billion | | **Total Revenue** | HKD 8.58 billion | | **Profit After Tax** | HKD 1.22 billion | | **Profit Attributable to Shareholders** | HKD 0.60 billion | | **Proposed Total Dividend** | HKD 4.1 cents per share | - The company's strategy focuses on four core business segments: residential property development, investment property development, urban renewal services, and industry-finance capital cooperation, promoting diversified business development[19](index=19&type=chunk) - The commercial real estate segment performed steadily, with full-year commercial and office rental income reaching **HKD 0.75 billion**, a **6.6% year-on-year increase**, while the company steadily advanced its new rental housing business by signing the first Caohejing project[22](index=22&type=chunk) - The company adopted a comprehensive land acquisition strategy, successfully acquiring quality land in Yantai, Shandong, and by year-end, held 26 projects across 11 key cities with a salable gross floor area of **3.78 million square meters**[23](index=23&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Business Review](index=14&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) In 2019, the Group's core business focused on real estate development and investment in first and second-tier cities, achieving significant growth in contract sales to RMB 7.69 billion, with land reserves of approximately 3.78 million square meters supporting 3-5 years of development, and a 6.6% increase in investment property rental income Contract Sales Performance | Item | 2019 | 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Contract Sales** | RMB 7.688 billion | RMB 5.149 billion | +49.3% | | Of which: Commercial Properties | RMB 6.180 billion | RMB 5.149 billion | +20.0% | | Of which: Affordable Housing | RMB 1.508 billion | - | - | - As of the end of 2019, the Group's land reserves comprised 26 projects across 11 key mainland cities, with a future salable planned gross floor area of approximately **3.777 million square meters**, sufficient to support 3 to 5 years of development[28](index=28&type=chunk) - The total area of investment properties was approximately **0.756 million square meters**, with overall rental income increasing by **6.6% year-on-year to HKD 0.75 billion**; the first rental housing project, Caohejing, has signed a construction contract with a total gross floor area of approximately **0.066 million square meters**[30](index=30&type=chunk) [Financial Performance](index=15&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) In 2019, the Group's total revenue increased by 23.0% to HKD 8.58 billion, with gross profit up 8.7% to HKD 3.68 billion, while profit attributable to shareholders grew 4.8% to HKD 0.60 billion, despite a slight increase in net debt-to-equity ratio to 29.1% and a decrease in current ratio to 1.9 times Key Financial Indicators | Financial Indicator | 2019 | 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | HKD 8.58 billion | HKD 6.98 billion | +23.0% | | - Property Sales Revenue | HKD 7.54 billion | HKD 5.97 billion | +26.3% | | **Gross Profit** | HKD 3.68 billion | HKD 3.38 billion | +8.7% | | **Gross Profit Margin** | 42.8% | 48.5% | -5.7 percentage points | | **Profit for the Year** | HKD 1.22 billion | HKD 1.27 billion | -3.9% | | **Profit Attributable to Shareholders** | HKD 0.60 billion | HKD 0.57 billion | +4.8% | | **Basic Earnings Per Share** | HKD 12.48 cents | HKD 11.91 cents | +4.8% | - Revaluation of investment properties recorded a net appreciation of approximately **HKD 0.21 billion**, primarily from Shanghai Mart, compared to a net impairment of HKD 0.176 billion in the prior year[31](index=31&type=chunk) Key Financial Ratios | Financial Ratio | End of 2019 | End of 2018 | | :--- | :--- | :--- | | **Net Debt to Total Equity Ratio** | 29.1% | 26.4% | | **Current Ratio** | 1.9 times | 2.3 times | [Outlook](index=18&type=section&id=%E5%B1%95%E6%9C%9B) Despite global economic uncertainties and short-term challenges from the COVID-19 pandemic, the Group anticipates compensating for first-half impacts by increasing sales in the second half of 2020, continuing to focus on high-end residential development and commercial asset operations in core cities - The Group anticipates that while the COVID-19 pandemic may affect contract sales and construction progress, the impact can be mitigated by increased sales efforts in the second half, given the first quarter is traditionally a low season and the Group has no projects in Hubei[36](index=36&type=chunk) - The Group will continue to adhere to pragmatic and prudent principles, focusing on high-end residential development while expanding investment and operation of commercial assets in core urban areas to maintain market advantage[37](index=37&type=chunk) [Property Information](index=20&type=section&id=%E7%89%A9%E6%A5%AD%E8%B3%87%E6%96%99%20%E2%80%94%20%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99) [Land Reserves](index=22&type=section&id=%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99) As of December 31, 2019, the Group held 26 real estate projects across 11 major cities, with a total planned gross floor area of 13.17 million square meters and approximately 3.78 million square meters of future salable gross floor area, laying a solid foundation for long-term development Land Reserve Summary | Item | Area (square meters) | | :--- | :--- | | **Total Site Area** | 5,853,038 | | **Total Planned Gross Floor Area** | 13,170,320 | | **Total Salable Gross Floor Area** | 10,594,234 | | **Cumulative Sold Area** | 6,817,303 | | **Future Salable Area** | 3,776,931 | - Land reserve projects are distributed across 11 key mainland cities including Shanghai, Beijing, Tianjin, Xi'an, Chongqing, Kunshan, Wuxi, Shenyang, Yantai, Changsha, and Shenzhen[28](index=28&type=chunk) [Major Investment Properties](index=23&type=section&id=%E4%B8%BB%E8%A6%81%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) As of the end of 2019, the Group's major investment properties had a total planned gross floor area of 0.756 million square meters, located in core cities like Shanghai, Chongqing, and Beijing, encompassing commercial, office, exhibition, and parking facilities Key Investment Properties | Project | City | Property Type | Planned Gross Floor Area (square meters) | | :--- | :--- | :--- | :--- | | Shanghai Mart | Shanghai | Exhibition, Trading Market, Office, and Parking Spaces | 284,651 | | City on City | Chongqing | Commercial, Parking Spaces | 251,847 | | Chenkai International Plaza | Shanghai | Office Building | 45,239 | | Shenyang Chenkai Center | Shenyang | Commercial | 30,332 | | **Total** | - | - | **756,269** | [Corporate Governance Report](index=35&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) [Board and Committees](index=37&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) The company maintains high corporate governance standards, complying with all Listing Rules, with a 10-member Board (6 executive, 4 independent non-executive directors) overseeing strategy and four specialized committees ensuring professional and independent decision-making - For the year ended December 31, 2019, the company consistently complied with all code provisions of Appendix 14 "Corporate Governance Code" of the Listing Rules[115](index=115&type=chunk) Board Committee Composition | Committee | Chairman | Composition | | :--- | :--- | :--- | | **Audit Committee** | Li Jiahui (INED) | 3 Independent Non-Executive Directors | | **Remuneration Committee** | Du Huikai (INED) | 2 Independent Non-Executive Directors, 1 Executive Director | | **Nomination Committee** | Zeng Ming (Chairman) | 1 Executive Director, 2 Independent Non-Executive Directors | | **Investment Appraisal Committee** | Fan Renda (INED) | 2 Independent Non-Executive Directors, 2 Executive Directors | [Internal Control and Risk Management](index=47&type=section&id=%E5%85%A7%E9%83%A8%E7%9B%A3%E6%8E%A7%E5%8F%8A%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Board is responsible for maintaining sound internal control and risk management systems to safeguard assets and shareholder interests, with regular reviews by the Audit Committee and annual assessments of risk management effectiveness by internal auditors - The Board is responsible for maintaining and regularly reviewing the effectiveness of internal control and risk management systems to ensure they adequately meet business needs[159](index=159&type=chunk) - The Group has established anti-fraud policies and procedures, along with risk management procedures to identify and control internal and external risks, with the Audit Committee having reviewed the system's effectiveness on behalf of the Board during the reporting period[160](index=160&type=chunk)[161](index=161&type=chunk) [Environmental, Social and Governance Report](index=47&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E8%88%87%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) [Talent Management](index=51&type=section&id=%E4%BA%BA%E6%89%8D%E7%AE%A1%E7%90%86) The Group adheres to a "people-oriented" philosophy, ensuring fair employment and promotion, comprehensive compensation, and extensive training, totaling 21,114 hours in 2019, while prioritizing occupational health and safety with no major accidents reported Employee and Training Statistics | Category | Data | | :--- | :--- | | **Total Employees (Year-end)** | 782 persons | | - Male | 329 persons | | - Female | 453 persons | | **Total Training Hours** | 21,114 hours | | **Percentage of Employees Trained** | 100% | - The Group strictly prohibits child and forced labor, ensuring occupational health and safety through measures such as establishing an Occupational Safety and Health Committee, formulating emergency plans, and providing safety training[174](index=174&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) [Product Responsibility and Supply Chain](index=61&type=section&id=%E7%94%A2%E5%93%81%E8%B2%AC%E4%BB%BB%E8%88%87%E4%BE%9B%E6%87%89%E9%8F%88) The Group prioritizes project quality with a systematic management structure, ensuring no reconstruction due to safety or quality issues, while maintaining a sustainable supply chain through a comprehensive vendor list and actively combating corruption through education and disciplinary measures - The Group has established a full-process engineering quality management system from design to construction and delivery, ensuring product quality, with no major quality or safety incidents reported during the period[209](index=209&type=chunk)[210](index=210&type=chunk) - In supply chain management, the Group has established a supplier database of **282 suppliers** and manages them meticulously through an evaluation mechanism to ensure product quality and service levels[218](index=218&type=chunk)[220](index=220&type=chunk) - The Group is resolute against corruption, conducting anti-corruption education, investigations, and handling through its Disciplinary Inspection Committee, and requiring middle management to sign "Commitment Letters on Integrity in Practice"[222](index=222&type=chunk)[223](index=223&type=chunk) [Environmental Protection](index=65&type=section&id=%E7%92%B0%E5%A2%83%E4%BF%9D%E8%AD%B7) The Group integrates environmental protection into all stages of property development and operation, focusing on energy conservation and emission reduction, promoting green buildings like Binjiang Chenkai Center, and implementing eco-friendly office practices - The Group actively promotes green buildings, with its Binjiang Chenkai Center project receiving a Two-Star Green Building Design Label certificate and the TODTOWN TIANHUI project obtaining LEED Gold pre-certification[226](index=226&type=chunk)[231](index=231&type=chunk) Greenhouse Gas Emissions | Greenhouse Gas Emissions (Scope 1 + Scope 2) | 2019 | Unit | | :--- | :--- | :--- | | **Total Emissions** | 46,302.80 | tonnes of CO2e | | **Total Emission Intensity** | 0.054 | tonnes/HKD 10,000 revenue | Resource Consumption | Resource Consumption | 2019 | Unit | | :--- | :--- | :--- | | **Electricity Consumption** | 59,459,597.80 | kWh | | **Water Consumption** | 943,880.18 | tonnes | [Community Investment](index=75&type=section&id=%E7%A4%BE%E5%8D%80%E6%8A%95%E8%B3%87) The Group actively fulfills its social responsibility through continuous contributions to education, charity, and community building, including donations to Chongming District and Xuhui District, and ongoing support for Hope Primary Schools and rural teacher training programs - During the reporting period, the Group's major donations included RMB **1 million** to Shanghai Chongming District, RMB **0.15 million** to Shanghai Xuhui District Charity Foundation, and financial aid to impoverished university students[246](index=246&type=chunk) - The Group continuously carries out branded public welfare activities, including supporting Lu'an Chenkai Hope Primary School, organizing the "Art for Children" care program, and the seventh consecutive "Wanyuan Spark" rural teacher training program[247](index=247&type=chunk)[248](index=248&type=chunk)[250](index=250&type=chunk) [Directors' Report](index=88&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) [Results and Distributions](index=90&type=section&id=%E6%A5%AD%E7%B8%BE%E5%8F%8A%E5%88%86%E6%B4%BE) The Board reported the annual results for the year ended December 31, 2019, and proposed a final dividend and a special dividend, with the total amount remaining consistent with the previous year Proposed Dividends | Dividend Item | Proposed for 2019 | For 2018 | | :--- | :--- | :--- | | **Final Dividend** | HKD 1.8 cents per share | HKD 1.8 cents per share | | **Special Dividend** | HKD 2.3 cents per share | HKD 2.3 cents per share | | **Total Dividend** | **HKD 4.1 cents per share** | **HKD 4.1 cents per share** | [Share Capital and Share Option Schemes](index=91&type=section&id=%E8%82%A1%E6%9C%AC%E5%8F%8A%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) During the reporting period, the company repurchased and cancelled 4.65 million ordinary shares, with 27.75 million share options remaining unexercised under the 2002 scheme by year-end, and no options granted under the new 2013 scheme - For the year ended December 31, 2019, the company repurchased a total of **4,650,000 ordinary shares** on the Stock Exchange for a total consideration of approximately **HKD 4.92 million**, all of which have been cancelled[358](index=358&type=chunk) Unexercised Share Options | Share Option Scheme | Number of Unexercised Options as at End of 2019 | % of Issued Share Capital | | :--- | :--- | :--- | | **2002 Scheme** | 27,750,000 options | Approx 0.58% | | **2013 New Scheme** | 0 options | 0% | [Financial Statements and Notes](index=101&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=106&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E5%A0%B1%E8%A1%A8) In 2019, the Group's total revenue was HKD 8.58 billion, a 23.0% increase, with gross profit at HKD 3.68 billion, up 8.7%, resulting in a profit attributable to owners of HKD 0.60 billion, a 4.8% increase, despite a slight decrease in profit for the year to HKD 1.22 billion due to reduced income tax expense Consolidated Profit or Loss Summary | Item (HKD thousands) | 2019 | 2018 | | :--- | :--- | :--- | | **Total Revenue** | 8,583,906 | 6,977,683 | | **Gross Profit** | 3,676,392 | 3,380,865 | | **Profit Before Tax** | 2,745,131 | 2,824,387 | | **Profit for the Year** | 1,219,698 | 1,269,747 | | **Profit Attributable to Owners of the Company** | 600,292 | 573,074 | [Consolidated Statement of Financial Position](index=108&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of the end of 2019, the Group's total assets were HKD 60.44 billion, total liabilities HKD 36.66 billion, and total equity HKD 23.78 billion, indicating a stable financial structure, with non-current assets increasing to HKD 20.54 billion primarily due to investment property growth Consolidated Financial Position Summary | Item (HKD thousands) | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Non-current Assets** | 20,536,554 | 17,461,508 | | **Current Assets** | 39,907,470 | 41,528,769 | | **Total Assets** | **60,444,024** | **58,990,277** | | **Current Liabilities** | 21,227,410 | 18,401,644 | | **Non-current Liabilities** | 15,434,988 | 17,212,827 | | **Total Liabilities** | **36,662,398** | **35,614,471** | | **Total Equity** | **23,781,626** | **23,375,806** | [Consolidated Statement of Cash Flows](index=112&type=section&id=%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In 2019, the Group generated HKD 1.22 billion in net cash from operating activities, a significant improvement, with net cash outflow from investing activities of HKD 1.19 billion and net cash inflow from financing activities of HKD 0.16 billion, resulting in year-end cash and cash equivalents of HKD 9.11 billion Consolidated Cash Flow Summary | Item (HKD thousands) | 2019 | 2018 | | :--- | :--- | :--- | | **Net Cash Generated from Operating Activities** | 1,218,395 | 296,219 | | **Net Cash Used in Investing Activities** | (1,193,971) | (391,654) | | **Net Cash Generated From (Used In) Financing Activities** | 155,674 | (3,606,518) | | **Net Increase (Decrease) in Cash and Cash Equivalents** | 180,098 | (3,701,953) | | **Cash and Cash Equivalents at End of Year** | 9,111,782 | 9,127,828 | [Notes to the Consolidated Financial Statements](index=115&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The financial statement notes detail the company's accounting policies and specific components of various items, including revenue recognition, fair value estimation of investment properties, net realizable value assessment of properties held for sale, and the structure and collateralization of bank borrowings [Note 5. Revenue](index=148&type=section&id=%E9%99%84%E8%A8%BB%205.%20%E6%94%B6%E5%85%A5) The Group's total revenue primarily derives from property sales, accounting for 87.8%, recognized upon completion and delivery, while hotel operations and property management revenue are recognized over time Revenue Breakdown | Revenue Source (HKD thousands) | 2019 | 2018 | | :--- | :--- | :--- | | **Property Sales** | 7,536,760 | 5,966,198 | | **Hotel Operations** | 290,232 | 295,653 | | **Property Management** | 6,894 | 12,163 | | **Rental** | 750,020 | 703,669 | | **Total** | **8,583,906** | **6,977,683** | [Note 16. Investment Properties](index=160&type=section&id=%E9%99%84%E8%A8%BB%2016.%20%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) As of the end of 2019, the fair value of the Group's investment properties significantly increased to HKD 14.80 billion from HKD 12.00 billion, mainly due to transfers from properties held for sale and fair value gains, with valuations performed by independent professional valuers using investment and direct comparison methods Changes in Fair Value of Investment Properties | Item (HKD thousands) | Amount | | :--- | :--- | | **As at January 1, 2019** | 12,002,506 | | **Transfers from Properties Held for Sale** | 2,235,045 | | **Net Fair Value Gain** | 210,191 | | **Others and Exchange Adjustments** | 355,516 | | **As at December 31, 2019** | **14,803,258** | - Valuation methods primarily include the investment method (based on market rents and reversionary yields) and the direct comparison method (based on comparable property transaction prices); reversionary yield is a key unobservable input, where a higher yield results in a lower fair value[605](index=605&type=chunk) [Note 34. Bank and Other Borrowings](index=180&type=section&id=%E9%99%84%E8%A8%BB%2034.%20%E9%8A%80%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E6%AC%BE) As of the end of 2019, the Group's total borrowings were approximately HKD 16.71 billion, comprising HKD 9.19 billion in bank borrowings and HKD 7.52 billion in other borrowings, with HKD 4.91 billion being secured and HKD 5.43 billion due within one year Borrowing Classification | Borrowing Classification (HKD thousands) | December 31, 2019 | | :--- | :--- | | **Bank Borrowings** | 9,190,100 | | **Other Borrowings** | 7,522,202 | | **Total Borrowings** | **16,712,302** | | **Secured Borrowings** | 4,907,102 | | **Unsecured Borrowings** | 11,805,200 | Repayment Schedule | Repayment Period (HKD thousands) | Amount | | :--- | :--- | | **Within one year** | 5,426,344 | | **Between one and two years** | 3,242,916 | | **Between two and five years** | 6,902,203 | | **After five years** | 1,140,839 | [Financial Summary](index=221&type=section&id=%E8%B2%A1%E5%8B%99%E6%96%8B%E8%A6%81) [Five-Year Financial Summary](index=223&type=section&id=%E4%BA%94%E5%B9%B4%E8%B2%A1%E5%8B%99%E6%96%8B%E8%A6%81) This section presents the Group's key financial data over the past five years, illustrating trends in revenue, profit, assets, and liabilities, showing stable growth in profit attributable to owners and expanding total assets and equity despite revenue fluctuations Five-Year Financial Highlights | Item (HKD thousands) | 2015 | 2016 | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 3,871,923 | 5,490,564 | 9,372,903 | 6,977,683 | 8,583,906 | | **Profit Attributable to Owners of the Company** | 517,385 | 521,888 | 536,109 | 573,074 | 600,292 | | **Total Assets** | 63,780,450 | 60,136,208 | 64,477,607 | 58,990,277 | 60,444,024 | | **Total Liabilities** | 44,266,699 | 38,157,202 | 40,280,312 | 35,614,471 | 36,662,398 |

[Company Information](index=4&type=section&id=Company%20Information) This section outlines the company's foundational details, including its governance structure, operational presence, and public listing information - This section provides basic company information, including board members, committee composition, registered office, principal place of business, auditor (Deloitte Touche Tohmatsu), and listing information (HKEX: 563)[8](index=8&type=chunk)[9](index=9&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) The company reported strong financial performance in H1 2019 with significant revenue and profit growth, alongside a healthy financial position Financial Highlights for H1 2019 (HKD thousands) | Indicator | For the six months ended June 30, 2019 | For the six months ended June 30, 2018 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 4,603,326 | 3,838,773 | +19.9% | | Profit attributable to owners of the Company | 310,678 | 254,473 | +22.1% | | Basic earnings per share (HK cents) | 6.46 | 5.29 | +22.1% | Key Financial Ratios | Indicator | As of June 30, 2019 | As of December 31, 2018 | Change | | :--- | :--- | :--- | :--- | | Net gearing ratio | 30.6% | 26.4% | Increased by 4.2 percentage points | | Current ratio | 2.2 | 2.3 | Decreased by 0.1 | - As of June 30, 2019, proceeds from pre-sale of properties received amounted to **HKD 5.96 billion**, a decrease from **HKD 6.54 billion** at the end of 2018[10](index=10&type=chunk) - Regarding debt maturity, short-term debt due within one year accounted for **28.4%**, while debt maturing in the second to fifth years had the highest proportion at **56.3%**[13](index=13&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) The Group achieved stable operating performance in H1 2019 amidst a complex economic environment, with growth in revenue and profit, driven by strong contracted sales and diversified asset strategy - In H1 2019, the Group's overall operating performance remained stable with progress, achieving revenue of **HKD 4.603 billion** and profit attributable to shareholders of **HKD 311 million**[15](index=15&type=chunk) - Contracted sales recorded **RMB 3.414 billion**, with flagship projects like Shanghai Wanyuan City, Shanghai TODTOWN TIANHUI, and Xi'an Nature contributing the main sales revenue[15](index=15&type=chunk) - The Group adheres to a development strategy combining residential and commercial assets, with total commercial asset revenue increasing by **9.2%** year-on-year and the successful introduction of the Hyatt Centric brand to the Shanghai TODTOWN TIANHUI project[17](index=17&type=chunk) - As of June 30, 2019, the Group owned **25 real estate projects** in **10 first and second-tier cities**, with a future saleable GFA of approximately **3.78 million square meters**, laying a foundation for long-term development[18](index=18&type=chunk) - Looking ahead to H2, the Group will continue to focus on "overall perspective, structural optimization, concerted efforts, and overcoming difficulties," promoting diversified business layouts based on stable operations[19](index=19&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's H1 2019 performance, covering market conditions, business operations, financial results, liquidity, and future outlook [Real Estate Market Environment](index=9&type=section&id=Real%20Estate%20Market%20Environment) China's real estate market entered a stable development phase in H1 2019 under the "houses are for living, not for speculation" policy, with prices stabilizing and financing tightening - The central government reiterated "houses are for living, not for speculation" and stated "real estate will not be used as a short-term economic stimulus," expecting the market to maintain scale adjustments and generally stable prices in H2[22](index=22&type=chunk) - The tightening financing environment for real estate enterprises and rising financing costs create a development advantage for those with ample cash flow and low debt levels[22](index=22&type=chunk) [Business Review](index=9&type=section&id=Business%20Review) The Group demonstrated strong business performance in H1 2019, marked by significant growth in contracted sales, active property development, and steady increase in investment property rental income Contracted Sales Performance H1 2019 | Indicator | H1 2019 | H1 2018 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Contracted Sales Amount | RMB 3.415 billion | RMB 2.275 billion | +50.1% | | Contracted Sales Area | 99,000 sqm | - | -10.0% | | Average Selling Price | Approx. RMB 34,500/sqm | - | +66.7% | - The three major projects, Shanghai Wanyuan City, Contemporary Art Villa, and Xi'an Nature, collectively contributed **93.5%** of the total contracted sales in H1[24](index=24&type=chunk) - In property development, there were **13 projects** under construction, with a total GFA under construction of **3.124 million square meters**, and the residential portion of the landmark project TODTOWN TIANHUI was sold out upon launch[25](index=25&type=chunk)[26](index=26&type=chunk) - Total investment property area was approximately **642,000 square meters**, with overall rental income increasing by **9.2%** year-on-year to **HKD 377 million**, and the TODTOWN TIANHUI project successfully introduced the Hyatt Centric hotel brand[27](index=27&type=chunk)[28](index=28&type=chunk) [Financial Performance](index=10&type=section&id=Financial%20Performance) The Group's H1 2019 financial performance was stable with revenue and profit growth, despite a decrease in gross profit margin due to lower-margin project deliveries, alongside effective cost control Revenue Composition H1 2019 (HKD thousands) | Revenue Source | H1 2019 | H1 2018 | % of Total Revenue (2019) | | :--- | :--- | :--- | :--- | | Property Sales | 4,085,037 | 3,349,779 | 88.7% | | Rental Income | 376,670 | 345,064 | 8.2% | | Hotel Operations | 138,242 | 134,623 | 3.0% | | **Total Revenue** | **4,603,326** | **3,838,773** | **100%** | - Gross profit margin was **42.6%**, a decrease of **12.3 percentage points** from **54.9%** in the same period last year, mainly due to lower gross profit margins of some properties delivered during the period[31](index=31&type=chunk) - Effective cost control led to a **28.4%** year-on-year decrease in distribution and selling expenses, and a **23.2%** year-on-year decrease in general and administrative expenses[33](index=33&type=chunk)[34](index=34&type=chunk) Profit Performance H1 2019 | Indicator | H1 2019 | H1 2018 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Profit for the period | HKD 765 million | HKD 628 million | +21.8% | | Profit attributable to shareholders | HKD 311 million | HKD 254 million | +22.1% | | Basic earnings per share | 6.46 HK cents | 5.29 HK cents | +22.1% | [Liquidity and Financial Resources](index=11&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintained a stable financial position as of June 30, 2019, with ample cash and a healthy net gearing ratio, ensuring sufficient resources for operations and future development Financial Position Indicators | Indicator | As of June 30, 2019 | As of December 31, 2018 | | :--- | :--- | :--- | | Bank balances and cash | HKD 9.951 billion | HKD 9.128 billion | | Net gearing ratio | 30.6% | 26.4% | | Current ratio | 2.2 times | 2.3 times | | Total loans | HKD 17.962 billion | HKD 15.396 billion | [Other Operating Information](index=12&type=section&id=Other%20Operating%20Information) The Group's operations are primarily RMB-denominated with no foreign exchange hedging, supported by a stable workforce and substantial land reserves for future growth - Land Reserves: Owns **25 projects** in **10 key cities** including Shanghai and Beijing, with a future saleable planned GFA of approximately **3.775 million square meters**[41](index=41&type=chunk) - Human Resources: As of June 30, 2019, the Group employed **777 staff**[40](index=40&type=chunk) [Outlook](index=13&type=section&id=Outlook) The Group anticipates a differentiated real estate market in H2 2019 due to city-specific policies and will continue to focus on mid-to-high-end residential and commercial asset operations in core and new first-tier cities - Real estate policies are expected to deepen "city-specific policies" in H2, leading to differentiated market activity across cities[42](index=42&type=chunk) - The Group will continue to focus on mid-to-high-end residential development and commercial asset operation in core cities, with a particular focus on developing projects in new first-tier cities like Xi'an and Shenyang[42](index=42&type=chunk) [Project Portfolio](index=14&type=section&id=Project%20Portfolio) This section details the Group's extensive project portfolio across China, highlighting its strategic land reserves and diverse project types in key cities [Project Information](index=14&type=section&id=Project%20Information) As of June 30, 2019, the Group's portfolio includes 25 projects across 10 Chinese cities, with significant future saleable land reserves strategically concentrated in core and high-potential regions Land Reserve Overview (As of June 30, 2019) | Indicator | Data | | :--- | :--- | | Number of Projects | 25 | | Cities Covered | 10 | | Total Future Saleable Area | 3,775,400 sqm | | Saleable Area Under Construction | 1,537,777 sqm | | Future Development Saleable Area | 1,502,261 sqm | Future Saleable GFA by Region | Region | Proportion | | :--- | :--- | | Yangtze River Delta Region | 48.2% | | Xi'an | 20.1% | | Changsha | 18.8% | | Chongqing | 6.4% | | Shenyang | 3.1% | | Beijing | 2.5% | | Tianjin | 0.9% | [Introduction to Major Projects in China](index=16&type=section&id=Introduction%20to%20Major%20Projects%20in%20China) This chapter provides an overview of the Group's flagship projects across major Chinese cities, showcasing its comprehensive development and operation capabilities in diverse property types - Shanghai region projects are densely distributed, covering multiple key projects such as Wanyuan City, Binjiang Chenkai Center, TODTOWN TIANHUI, Contemporary Art Villa, and Shanghai Mart, with diverse business formats[47](index=47&type=chunk)[49](index=49&type=chunk)[52](index=52&type=chunk)[55](index=55&type=chunk)[61](index=61&type=chunk) - Besides Shanghai, the Group also owns multiple mature or under-construction large-scale projects in core cities like Beijing (Youth Hub, Xidiaoyutai Jiayuan), Tianjin (Old City), and Xi'an (Nature)[76](index=76&type=chunk)[79](index=79&type=chunk)[83](index=83&type=chunk)[102](index=102&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) This section covers corporate governance, dividend policy, securities transactions, loan covenants, audit committee review, and controlling shareholder interests - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2019[112](index=112&type=chunk) - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[113](index=113&type=chunk) - The Company has complied with the Corporate Governance Code in the Listing Rules, and all Directors confirmed compliance with the Model Code for Securities Transactions by Directors[115](index=115&type=chunk)[116](index=116&type=chunk) - The Company disclosed two loan agreements containing covenants requiring the controlling shareholders (SI Group and/or SIHL) to maintain not less than **51%** controlling interest[117](index=117&type=chunk)[118](index=118&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim financial statements for the six months ended June 30, 2019[120](index=120&type=chunk) - As of June 30, 2019, controlling shareholders SIHL and SI Group indirectly held approximately **71.00%** and **71.25%** of the Company's equity, respectively[130](index=130&type=chunk)[131](index=131&type=chunk) [Condensed Consolidated Financial Statements](index=33&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including the review report, statements of profit or loss, financial position, changes in equity, cash flows, and explanatory notes [Review Report](index=33&type=section&id=Review%20Report) The independent auditor, Deloitte Touche Tohmatsu, issued an unmodified review conclusion on the interim financial statements, confirming their preparation in accordance with HKAS 34 - The auditor, Deloitte Touche Tohmatsu, issued an unmodified review conclusion on the interim financial statements[140](index=140&type=chunk)[141](index=141&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=34&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2019, the Group reported total revenue of HKD 4.603 billion and profit attributable to owners of HKD 311 million, despite a decrease in gross profit Condensed Consolidated Statement of Profit or Loss (HKD thousands) | Item | H1 2019 (Unaudited) | H1 2018 (Unaudited) | | :--- | :--- | :--- | | Total Revenue | 4,603,326 | 3,838,773 | | Gross Profit | 1,961,763 | 2,108,291 | | Profit before tax | 1,626,661 | 1,592,732 | | Profit for the period | 765,162 | 628,335 | | **Profit attributable to owners of the Company** | **310,678** | **254,473** | | **Total comprehensive income attributable to owners of the Company** | **314,564** | **64,063** | [Condensed Consolidated Statement of Financial Position](index=36&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2019, the Group maintained a robust financial position with total assets of HKD 60.887 billion, supported by significant inventories and investment properties Condensed Consolidated Statement of Financial Position Summary (HKD thousands) | Item | As of June 30, 2019 (Unaudited) | As of December 31, 2018 (Audited) | | :--- | :--- | :--- | | **Non-current assets** | **18,353,655** | **17,461,508** | | Investment properties | 12,746,876 | 12,002,506 | | **Current assets** | **42,533,385** | **41,528,769** | | Inventories | 30,783,840 | 31,075,378 | | Bank balances and cash | 9,950,728 | 9,127,828 | | **Total assets** | **60,887,040** | **58,990,277** | | **Current liabilities** | **19,720,717** | **18,401,644** | | **Non-current liabilities** | **17,468,185** | **17,212,827** | | **Total liabilities** | **37,188,902** | **35,614,471** | | **Total equity** | **23,698,138** | **23,375,806** | | Equity attributable to owners of the Company | 13,178,006 | 13,060,692 | [Condensed Consolidated Statement of Changes in Equity](index=38&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Equity attributable to owners of the Company increased to HKD 13.178 billion as of June 30, 2019, primarily driven by comprehensive income, partially offset by declared dividends - During the period, equity attributable to owners of the Company increased by **HKD 117 million**, with key changes including: an increase in total comprehensive income for the period of **HKD 315 million**, and a decrease due to dividends recognized as distribution of **HKD 197 million**[151](index=151&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=40&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2019, the Group experienced net cash outflows from operating and investing activities, offset by significant financing inflows, resulting in a net increase in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Summary (HKD thousands) | Item | H1 2019 (Unaudited) | H1 2018 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (34,100) | (1,430,350) | | Net cash used in investing activities | (927,984) | (317,609) | | Net cash from (used in) financing activities | 1,811,947 | (1,503,402) | | **Net increase (decrease) in cash and cash equivalents** | **849,863** | **(3,251,361)** | | Cash and cash equivalents at beginning of period | 9,127,828 | 13,348,589 | | **Cash and cash equivalents at end of period** | **9,950,728** | **10,008,879** | [Notes to the Condensed Consolidated Financial Statements](index=42&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the financial statements, covering the adoption of HKFRS 16, revenue composition, segment information, and contingent liabilities - The Group first applied HKFRS 16 "Leases" on January 1, 2019, recognizing lease liabilities of approximately **HKD 247 million** and right-of-use assets of **HKD 254 million**, with no restatement of comparative information[166](index=166&type=chunk)[189](index=189&type=chunk) - Revenue primarily derived from property sales, accounting for **96.6%** of total revenue from goods and services, with all operations and revenue located in China[198](index=198&type=chunk)[199](index=199&type=chunk) - Regarding contingent liabilities, the Group provided mortgage loan guarantees of **HKD 2.912 billion** for property buyers and disclosed a significant legal proceeding related to the Hunan Qian Shui Wan project, where the court accepted the Group's application for retrial[244](index=244&type=chunk)[247](index=247&type=chunk) - During the period, a final dividend of **1.8 HK cents** per share and a special dividend of **2.3 HK cents** per share for 2018 were declared, totaling approximately **HKD 197 million**[259](index=259&type=chunk)

上 海 實 業 城 市 開 發 集 團 有 限 公 司 SHANGHAI INDUSTRIAL URBAN DEVELOPMENT GROUP LIMITED ( 於百赫達註冊成立之有限公司 ) 股份代號: 563 擎動價值 臻啓新程 年 報 2018 海納城智 築勢未來 上海實業城市開發集團有限公司（「上實城開」）現 於中國1 0個主要城市擁有2 5個房地產項目，分佈 於上海、昆山、無錫、北京、瀋陽、天津、西安、 重慶、長沙及深圳，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388萬 平方米的可售建築面積，奠定了長遠發展的良好基 石。 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 18 投資者常見問題 20 物業資料 — 土地儲備 22 於中國主要項目介紹 34 投資者關係報告 38 企業管治報告 50 環境、社會與管治報告 61 董事及高級管理層簡介 68 董事會報告 80 獨立核數師報告 86 綜合損益及其他全面收入報表 88 綜合財務狀況表 90 綜合股本權益變動表 92 綜合現金流量表 95 綜合財務報表附註 210 財務概要 211 詞彙 2 上海實 ...