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)

[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 ...