Company Overview - Japan Kosei Group Limited was founded by Mr. Pan Weiming and officially listed on the Hong Kong capital market on December 1, 2017, with stock code 627 [3] - The company has been actively developing residential projects in Changsha, Hunan Province since 2006, providing quality living spaces for the local middle class [3] - The business continues to focus on various types of real estate projects in Changsha, including integrated, commercial, office, and residential projects [3] Financial Performance - As of December 31, 2024, Japan Kosei reported total operating revenue of 99.7 million, a year-on-year decrease of 59.86% [2] - The net profit attributable to the parent company was -852 million, a year-on-year decrease of 74.11% [2] - The gross profit margin was -201.65%, and the debt-to-asset ratio was 151.43% [2] Market Performance - Over the past month, Japan Kosei has seen a cumulative increase of 117.39%, and a year-to-date increase of 106.19%, outperforming the Hang Seng Index by 22.22% [2] - The stock closed at 1.2 HKD per share on July 17, with a trading volume of 60,000 shares and a turnover of 72,000 HKD [1] - Currently, there are no institutional investment ratings for the stock [2] Industry Valuation - The average price-to-earnings (P/E) ratio for the real estate industry (TTM) is 10.11 times, with a median of -0.16 times [2] - Japan Kosei's P/E ratio is -1.54 times, ranking 160th in the industry [2] - Other companies in the industry include Baishida Holdings (0.68 times), Hengda Group Holdings (1.71 times), China New City (2.27 times), Ruosen Life Services (2.82 times), and Xingye IoT (3.12 times) [2]

Core Viewpoint - The company Japan Kosei (00627.HK) is planning to establish a joint venture to expand into artificial intelligence projects despite facing consecutive losses in its performance, attracting market attention [1][4]. Group 1: Company Performance - Japan Kosei reported a revenue of 99.7 million yuan in 2024, a year-on-year decline of 59.86% [6]. - The company experienced a net loss attributable to shareholders of 852 million yuan, compared to a loss of 489 million yuan in the previous year [6]. - The board aims to focus on high-potential real estate and land development projects in China and Japan, including undervalued urban redevelopment projects and logistics hubs [6]. Group 2: Joint Venture and Market Reaction - On July 3, Japan Kosei signed a memorandum of understanding with Beijing Yihe Dream Digital Technology Co., Ltd. to explore a potential joint venture in artificial intelligence [4]. - Following the announcement, Japan Kosei's stock price surged, reaching a peak of 1.58 HKD per share, with a maximum increase of over 240% and total trading volume exceeding 3.6 million HKD [3][4]. - The collaboration aims to leverage both companies' competitive advantages and resources to establish a mutually beneficial partnership, potentially diversifying revenue sources and achieving sustainable business growth [5].

Financial Performance - The total revenue for the year was approximately RMB 99,700,000, a decrease of 59.9% compared to RMB 248,399,000 for the previous year[15]. - The loss attributable to the company's owners for the year was RMB 852,224,000, compared to a loss of RMB 489,482,000 in the previous year[16]. - Basic and diluted loss per share for the year was RMB 0.5999, compared to RMB 0.7167 in the previous year[16]. - Property sales revenue was approximately RMB 99,123,000, a decrease of 60.0% from RMB 247,785,000 in the previous year[17][18]. - Rental income for the year was approximately RMB 577,000, down from approximately RMB 614,000 in the previous year[19]. - The group recorded a net loss of RMB 1.0376 billion for the year ending December 31, 2024[151]. - The company reported a net loss of RMB 1,037.6 million for the year, significantly higher than the net loss of RMB 686.7 million in 2023[163]. - The company’s equity attributable to owners showed a loss of RMB 1,873.3 million, compared to a loss of RMB 1,013.3 million in 2023[168]. - The company faced significant challenges in revenue recognition due to the loss of control over two subsidiaries, impacting financial reporting[157]. Financial Position - The group’s total liabilities increased by approximately 153.5% to RMB 1,806,734,000 as of December 31, 2024, compared to RMB 712,778,000 in the previous year[30]. - As of December 31, 2024, total liabilities exceeded current assets by RMB 1.8178 billion[151]. - The group had total borrowings of RMB 1.939 billion classified as current liabilities, with approximately RMB 1.515 billion secured against development properties[151]. - The company’s total liabilities increased, leading to a total equity attributable to non-controlling interests of RMB 66,563,000 as of December 31, 2024[169]. - The company had unrestricted cash and cash equivalents totaling only RMB 3.9 million as of December 31, 2024[178]. Operational Challenges - The operating environment remains challenging due to liquidity constraints, weak domestic demand, and unclear policies in the real estate sector[12]. - The expected credit loss provision for the year was approximately RMB 1,192,774,000, significantly up from RMB 607,950,000 in the previous year, primarily due to a provision for financial guarantees provided to a former subsidiary[21]. - The company is negotiating with lenders to secure new or renewed loans to improve liquidity[179]. - Management has implemented plans to enhance the group's liquidity and financial position[179]. Strategic Focus - The company aims to focus on high-potential real estate and land development projects in China and Japan, including undervalued urban redevelopment projects and logistics hubs[12]. - The group plans to prioritize investments in high-potential real estate and land development projects in China, while seeking strategic opportunities in Japan[28]. - The group continues to evaluate complementary opportunities in high-potential markets, including Malaysia and France, as part of its global growth strategy[29]. Corporate Governance - The company emphasizes the importance of high standards of corporate governance to manage business risks and enhance transparency[97]. - The board has implemented various governance policies and systems to ensure ethical conduct and best practices across the organization[97]. - The company has adopted the standard code of conduct for securities trading by directors, confirming compliance throughout the year[100]. - The company has a whistleblowing policy to protect whistleblowers from retaliation and ensure confidentiality of reported information[135]. - The company has established procedures for shareholders to request special general meetings if they hold at least 10% of the paid-up capital[140]. Audit and Compliance - The independent auditor for the group's consolidated financial statements is Deloitte Touche Tohmatsu, which will retire at the upcoming annual general meeting but is eligible and willing to be reappointed[82]. - The audit committee consists of three independent non-executive directors, responsible for reviewing financial information and monitoring internal controls and risk management[115]. - The company has not identified any violations of relevant laws and regulations that would have a significant impact during the year[75]. - The financial statements have been prepared on a going concern basis, contingent on the success of management's plans[154]. Shareholder Relations - The company emphasizes the importance of effective communication with shareholders to enhance investor relations[144]. - The group does not recommend any final dividend for the year, consistent with the previous year[27]. - The company has confirmed that at least 25% of its issued shares are held by the public at all times during the year[81]. Environmental Commitment - The company is committed to environmental sustainability and has implemented measures to promote energy conservation and reduce emissions[74]. - The company plans to publish a detailed independent environmental, social, and governance report available for public access[77].

Financial Performance - The total revenue for the year was approximately RMB 99,700,000, a decrease of 59.9% compared to RMB 248,399,000 for the previous year[11]. - The loss attributable to the owners of the company for the year was RMB 852,224,000, compared to a loss of RMB 489,482,000 in the previous year, with basic and diluted loss per share at RMB 0.5999[12]. - Property sales revenue was approximately RMB 99,123,000, a decrease of 60.0% from RMB 247,785,000 in the previous year, primarily from projects in Hunan and Fujian provinces[13][14]. - Rental income for the year was approximately RMB 577,000, down from RMB 614,000 in the previous year, with a fair value loss of approximately RMB 500,000 on the investment property portfolio[15]. - The group reported a loss of approximately RMB 39,476,000 from the deemed disposal of a subsidiary in China, with no losses recorded in previous years[19]. - The group recorded a net loss of RMB 1.0376 billion for the year ending December 31, 2024[147]. - The total comprehensive loss for the year was RMB 1,045,493,000, compared to RMB 690,999,000 in 2023, reflecting a worsening financial position[161]. - The company reported a basic and diluted loss per share of RMB 59.99 for 2024, an improvement from RMB 71.67 in 2023[161]. - The company reported a pre-tax loss of RMB 1,047,890,000 for the year ending December 31, 2024, compared to a loss of RMB 675,593,000 in 2023, indicating a significant increase in losses[168]. Operating Expenses and Financial Management - Operating expenses included sales and distribution costs of approximately RMB 1,981,000, with a cost-to-revenue ratio of 2.0%, and administrative expenses of approximately RMB 28,461,000, with a cost-to-revenue ratio of 28.5%[16]. - The company recognized an expected credit loss provision of approximately RMB 1,192,774,000, significantly higher than RMB 607,950,000 in the previous year, mainly due to guarantees provided for a former subsidiary[17]. - Financing costs for the year amounted to approximately RMB 213,484,000, a significant decrease from RMB 492,057,000 in the previous year, primarily due to the cancellation of subsidiary consolidations[21]. - The company has taken multiple measures to improve liquidity and financial conditions, with plans to remove the disclaimer of opinion from the auditor's report if these measures are effective[121]. - The management has implemented plans to enhance the group's liquidity and financial position[175]. Strategic Focus and Future Plans - The company aims to focus on high-potential real estate and land development projects in China and Japan, including undervalued urban redevelopment projects and logistics hubs[8]. - The company plans to optimize its investment portfolio by seeking investment opportunities in stable revenue environments in China, Japan, and other countries[8]. - The group plans to prioritize investments in high-potential real estate and land development projects in China while seeking strategic opportunities in Japan, particularly in the tourism and hotel sectors[24]. - The group continues to evaluate complementary opportunities in high-potential markets, including Malaysia and France, as part of its global growth strategy[25]. Governance and Compliance - The company has implemented various governance policies and systems to ensure high standards of business conduct and ethical behavior[93]. - The board of directors is responsible for ensuring compliance with corporate governance codes and maintaining high standards of business ethics and governance[117]. - The company has established reporting channels for stakeholders to raise concerns about potential misconduct confidentially or anonymously[93]. - The company has adopted a board diversity policy to enhance diversity across various dimensions, including gender, age, cultural and educational background, and professional experience[105]. - The company has not entered into any management or administrative contracts concerning the overall business or any significant part of the business during the year[56]. Shareholder Information - As of December 31, 2024, the total number of issued shares was 1,420,673,262, with major shareholders holding approximately 69.97% of the issued share capital[64]. - The top five customers accounted for approximately 11.39% of the group's total revenue, an increase from 9.14% in the previous year[42]. - The company maintains a shareholder communication policy to ensure that shareholder opinions and concerns are properly addressed[140]. - The company’s website serves as an effective communication platform for shareholders and the public[141]. Risk Management - The company has established procedures to identify, assess, and manage significant risks, including risk identification and prioritization based on potential impact and likelihood[127]. - The board has engaged Riskory Consultancy Limited for an annual review of the risk management and internal control systems, with no significant deficiencies reported[131]. - The internal audit function within the finance department is responsible for reviewing the effectiveness of internal controls, providing reasonable assurance against significant misstatements or losses[131]. Tax and Liabilities - The group has incurred tax liabilities of RMB 1.840 billion and RMB 2.406 billion as of December 31, 2024, related to property sales and profits in China[152]. - As of December 31, 2024, the total liabilities exceeded current assets by RMB 1.8178 billion[147]. - The group is facing overdue borrowings totaling approximately RMB 1.515 billion and interest payable of about RMB 30.2 million[149]. Changes in Corporate Structure - The company changed its name from "Fullsun International Holdings Group Co., Limited" to "Japan Kyosei Group Company Limited" effective November 30, 2023[79]. - The company’s shares abbreviation changed from "FULLSUN INT'L" to "JAPAN KYOSEI" effective January 23, 2024[79].

Financial Performance - The total revenue for the year was approximately RMB 99,700,000, a decrease of 59.9% compared to RMB 248,399,000 for the previous year[15]. - The loss attributable to the company's owners for the year was RMB 852,224,000, compared to a loss of RMB 489,482,000 in the previous year[16]. - Basic and diluted loss per share for the year was RMB 0.5999, compared to RMB 0.7167 in the previous year[16]. - Property sales revenue was approximately RMB 99,123,000, a decrease of 60.0% from RMB 247,785,000 in the previous year[17][18]. - Rental income for the year was approximately RMB 577,000, compared to RMB 614,000 in the previous year[19]. - The group recorded a net loss of RMB 1.0376 billion for the year ending December 31, 2024[151]. - The company reported a net loss of RMB 1,037.6 million for the year, significantly higher than the net loss of RMB 686.7 million in 2023[163]. - The company’s equity attributable to owners showed a loss of RMB 1,873.3 million, compared to a loss of RMB 1,013.3 million in 2023[168]. - The company incurred financing costs of RMB 213.5 million, down from RMB 492.1 million in 2023[163]. - The company recognized a gain of RMB 782.4 million from the disposal of subsidiaries, contrasting with a loss of RMB 69.1 million in 2023[163]. Financial Position - As of December 31, 2024, total liabilities exceeded current assets by RMB 1.8178 billion[151]. - The group had total borrowings of RMB 1.939 billion classified as current liabilities, with approximately RMB 1.515 billion secured against development properties[151]. - The company’s cash and cash equivalents decreased to RMB 3.9 million from RMB 44.0 million in 2023[166]. - The company had overdue borrowings totaling approximately RMB 1.515 billion and interest payable of about RMB 30.2 million[153]. - The company’s total liabilities increased, leading to a total loss attributable to non-controlling interests of RMB 1,873,297,000 as of December 31, 2024[169]. - The company’s total equity attributable to owners decreased to RMB 300,524,000 as of December 31, 2024, down from RMB 900,579,000 at the beginning of the year[169]. Operational Challenges - The operating environment remains challenging due to liquidity issues, weak domestic demand, and unclear policies in the real estate sector[12]. - The group recognized an expected credit loss provision of approximately RMB 1,192,774,000, significantly up from RMB 607,950,000 in the prior year, primarily due to a provision for financial guarantees provided to a former subsidiary[21]. - The company is currently negotiating with lenders to secure new or renewed loans to improve liquidity[179]. - Management has implemented plans to enhance the company's liquidity and financial condition, which are critical for ongoing operations[179]. Corporate Governance - The company emphasizes the importance of high standards of corporate governance to manage business risks and enhance transparency, ensuring stakeholder interests are protected[97]. - The board has implemented various governance policies and systems to support high standards of business conduct and ethical behavior, with regular reviews planned[97]. - The company has established reporting channels for external parties to confidentially raise concerns regarding potential misconduct by the group, its employees, or directors[97]. - The board is committed to maintaining a strong independent element, with at least three independent non-executive directors, ensuring effective independent judgment[102]. - The company has adopted the standard code of conduct for securities trading by directors, confirming compliance throughout the year[100]. Strategic Focus - The company aims to focus on high-potential real estate and land development projects in China and Japan, including undervalued urban redevelopment projects and logistics hubs[12]. - The group plans to prioritize investments in high-potential real estate and land development projects in China while seeking strategic opportunities in Japan[28]. - The group continues to evaluate complementary opportunities in high-potential markets, including Malaysia and France, as part of its global growth strategy[29]. Compliance and Regulations - The company has not been aware of any violations of relevant laws and regulations that would have a significant impact during the year[75]. - The company has confirmed that at least 25% of its issued shares are held by the public, in compliance with listing rules[81]. - The company has complied with the disclosure requirements for related and continuing connected transactions as per the listing rules[63]. Environmental and Social Responsibility - The company is committed to environmental sustainability and has implemented measures to promote energy conservation and reduce emissions[74]. - The company plans to publish a detailed independent environmental, social, and governance report available for public access[77]. Shareholder Relations - The company maintains a shareholder communication policy to ensure effective engagement and feedback from investors[144]. - The board does not recommend the payment of any final dividends for the year[27].

Acquisition and Investments - The company completed the acquisition of shares for a total consideration of HKD 400 million on June 13, 2024[4]. - The company has agreed to acquire all shares of a target company for HKD 400,000,000, which will be incorporated into the group's consolidated financial statements upon completion[20]. - The target company will become a wholly-owned subsidiary of the company upon completion of the acquisition[20]. Financial Performance - The group's total revenue for the period was approximately RMB 60,712,000, a decrease of 67.8% compared to the previous period (RMB 188,351,000) [12]. - The group reported a loss attributable to owners of approximately RMB 302,399,000, compared to a loss of RMB 256,813,000 in the previous period [12]. - Property sales revenue for the period was approximately RMB 60,295,000, down 68.0% from the previous period, primarily due to a contraction in the real estate market in second and third-tier cities [13]. - The company reported a net loss of approximately RMB 312 million for the six months ended June 30, 2024[42]. - The company recorded a cash inflow from operating activities of RMB 5.063 million for the six months ended June 30, 2024[40]. - The company reported a gross loss for the six months ended June 30, 2024, of RMB 63,781 thousand, compared to a gross loss of RMB 127,008 thousand in the same period of 2023[33]. - The net loss for the period was RMB 312,012 thousand, which is an increase from a net loss of RMB 277,368 thousand in the prior year, indicating a worsening of approximately 12.5%[33]. - Basic and diluted loss per share for the six months ended June 30, 2024, was RMB 21.29, compared to RMB 2.26 for the same period in 2023, reflecting a significant increase in losses per share[33]. Assets and Liabilities - As of June 30, 2024, total assets amounted to RMB 6,394,953,000, a decrease from RMB 6,644,890,000 as of December 31, 2023[54]. - The total liabilities as of June 30, 2024, were RMB 7,457,926,000, compared to RMB 7,357,668,000 as of December 31, 2023, indicating an increase in liabilities[55]. - The group's total borrowings amounted to approximately RMB 1,658,157,000, with a debt-to-asset ratio of 25.9% [17]. - The net current liabilities as of June 30, 2024, were RMB (1,516,021) thousand, worsening from RMB (1,166,670) thousand at the end of 2023[34]. - The company’s total liabilities increased to RMB 5,130,528 thousand from RMB 4,974,843 thousand, reflecting a rise in financial obligations[76]. Operational Efficiency and Strategy - The company reported a strong performance in the first half of 2024, with a focus on maximizing operational efficiency and profitability[4]. - The company is focused on expanding its market presence through strategic acquisitions and development projects in Japan and China[4]. - The group is actively seeking alternative financing solutions to meet its financial obligations and operational expenses, indicating ongoing liquidity challenges[44]. - The group aims to accelerate the construction and pre-sale of its development properties to generate cash flow, contingent on meeting necessary conditions[44]. - The group has implemented measures to control administrative costs and capital expenditures to alleviate cash flow pressures[44]. Market and Development Projects - As of June 30, 2024, the total construction area of completed projects is 418,909 square meters, with 285,672 square meters attributable to the company[9]. - The company has ongoing projects in various locations, including Shanghai and Zhejiang, with significant construction areas planned for future development[9]. - The company plans to explore real estate resources and land development opportunities in Eurasia, particularly through partnerships with Japanese companies[16]. - The group has seven development and unsold projects with a total construction area of approximately 418,909 square meters[12]. Governance and Compliance - The company continues to review and enhance its corporate governance practices to ensure compliance with the corporate governance code[30]. - The board believes that the current governance structure provides adequate safeguards to maintain a proper balance of power within the board[30]. - The company’s audit committee consists of three independent non-executive directors, responsible for overseeing financial reporting and risk management[29]. Employee and Shareholder Information - As of June 30, 2024, the group employed approximately 106 staff members, with employee contributions to the Mandatory Provident Fund set at 5% of income, capped at HKD 1,500 per month[22]. - Major shareholders include Mr. Kenichi Yanase, who holds approximately 69.97% of the company's shares through Grateful Heart Inc., which owns 994,019,402 shares[26]. - The company has not issued, exercised, or canceled any stock options since the adoption of the stock option plan, with a total of 11,236,749 shares available for issuance under the plan, representing about 0.79% of the total issued shares[28]. Other Financial Metrics - The company incurred impairment losses of RMB 58,425,000 on properties under development for the six months ended June 30, 2024[64]. - Interest expenses for the six months ended June 30, 2024, were RMB 185,365,000, a decrease from RMB 197,612,000 for the same period in 2023[60]. - The company did not declare or recommend any dividends for the six months ended June 30, 2024, and 2023[64]. - The total remuneration for the top five highest-paid employees was RMB 2,106 thousand, a slight decrease from RMB 2,131 thousand in the previous period[92].

Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 60.71 million, a decrease of 68% compared to RMB 188.35 million in the same period of 2023[1] - Gross loss for the period was RMB 63.78 million, improving by 50% from a gross loss of RMB 127.01 million in the previous year[1] - Loss before tax increased by 24% to RMB 332.42 million from RMB 268.87 million year-on-year[1] - Net loss for the period was RMB 312.01 million, a 12% increase from RMB 277.37 million in the same period last year[1] - Basic loss per share was RMB 21.29, a significant increase of 842% compared to RMB 2.26 in the previous year[1] - The total comprehensive loss for the period was RMB 317.20 million, compared to RMB 342.84 million in the same period last year[3] - The group recorded a net loss of approximately RMB 312 million for the period ending June 30, 2024, with total losses attributable to shareholders amounting to RMB 1.32 billion[7] - The group reported a net loss of RMB (302,399,000) for the six months ended June 30, 2024, compared to a net loss of RMB (256,813,000) for the same period in 2023[26] Assets and Liabilities - Non-current assets totaled RMB 619.60 million as of June 30, 2024, slightly down from RMB 620.90 million at the end of 2023[4] - Current assets decreased to RMB 5,775.36 million from RMB 6,023.99 million at the end of 2023[4] - Current liabilities increased to RMB 7,291.38 million from RMB 7,190.66 million at the end of 2023[5] - The company reported a net current liability of RMB (1,516.02) million, worsening from RMB (1,166.67) million in the previous year[5] - As of June 30, 2024, total assets amounted to RMB 6,644,890,000, with segment assets of RMB 3,830,384,000 in property development and RMB 593,528,000 in property investment[16] - The group incurred a total liability of RMB 7,457,926,000 as of June 30, 2024, with segment liabilities of RMB 924,917,000 in property development and RMB 248,000 in property investment[17] Borrowings and Financing - As of June 30, 2024, the group's total borrowings were approximately RMB 1.66 billion, with RMB 1.61 billion secured against various properties[7] - The group has defaulted on borrowings totaling approximately RMB 1.79 billion, which includes RMB 1.61 billion in principal and RMB 1.18 billion in related interest[7] - The group is in discussions with lenders regarding the restructuring of existing borrowings and obtaining new financing sources[8] - The company reported a loss of approximately RMB 4,315,000 from the sale of its subsidiary, Hunan Asia-Pacific, which was completed on May 23, 2024, for a cash consideration of RMB 500,000[38] - The company had total borrowings of RMB 1,658,187,000, consistent with the previous period[35] Cash Flow and Expenses - The group has implemented measures to control administrative costs and capital expenditures to improve cash flow[8] - As of June 30, 2024, the group had approximately RMB 50 million in unrestricted cash and cash equivalents[7] - Financing costs for the six months ended June 30, 2024, were RMB 185,365,000, a decrease from RMB 197,612,000 in the previous year[20] - The group recognized impairment losses of RMB 51,889,000 related to receivables from a former subsidiary and non-controlling interests[19] - The company reported a decrease in selling and distribution expenses to approximately RMB 2.8 million, down from RMB 13.0 million in the previous period, with a cost-to-revenue ratio of 4.55%[47] Revenue Sources - Total revenue for the six months ending June 30, 2024, was RMB 60.71 million, with RMB 60.30 million from the sale of completed properties[13] - Property sales revenue for the six months ended June 30, 2024, was approximately RMB 60.3 million, a significant decrease of 68.0% compared to RMB 188.4 million in the previous period[45] - Rental income during the same period was RMB 417,000, compared to zero in the previous period, primarily from commercial investment properties in Changsha[46] Market Outlook and Strategic Initiatives - The group is actively seeking potential investors for property development projects and investment properties to alleviate liquidity pressure[8] - The group plans to actively seek collaboration opportunities with Japanese companies to enhance profitability through mergers and acquisitions[50] - The group is optimistic about the recovery of the Chinese real estate market in 2024, driven by improving economic conditions and favorable policies[51] Other Financial Information - The group did not declare or recommend any dividends for the six months ended June 30, 2024[24] - The company did not declare an interim dividend for the period, consistent with the previous period[51] - The income tax credit for the period was approximately RMB 20.4 million, compared to an income tax expense of RMB 8.5 million in the previous period, mainly due to the recognition of excess provisions for land appreciation tax[49] - The average number of ordinary shares for basic loss per share calculation was 1,420,673,262 for the six months ended June 30, 2024[26] - The group held seven development and sale projects with a total construction area of approximately 418,909 square meters, of which the group's attributable area was about 285,672 square meters as of June 30, 2024[45] - The group has maintained the fair value of its investment property portfolio unchanged as of June 30, 2024[46]

Financial Performance - The total revenue for the year was approximately RMB 248,399,000, a decrease of 86.2% compared to the previous year (RMB 1,793,763,000) [23] - The net loss attributable to the company's owners for the year was RMB 489,482,000, compared to RMB 663,554,000 in the previous year, with a basic loss per share of RMB 71.67 [24] - Property sales revenue for the year was approximately RMB 247,785,000, down 86.2% from RMB 1,793,263,000 in the previous year due to weakened demand [26] - Rental income for the year was approximately RMB 614,000, an increase from RMB 500,000 in the previous year, despite a fair value loss of RMB 79,390,000 on investment properties [27] - Financing costs for the year amounted to approximately RMB 492,057,000, significantly up from RMB 136,954,000 in the previous year due to the completion of several development projects [28] - The income tax expense for the year was approximately RMB 11,155,000, a decrease of 79.1% from RMB 53,397,000 in the previous year, primarily due to reduced taxable profits [29] Corporate Restructuring - In July 2023, the company completed a capital restructuring, which included a share consolidation, capital reduction, and share issuance [16] - The company appointed a new board of directors and established a new management team following the restructuring [16] - The board and new management team will actively seek potential investment projects and explore opportunities in land and property investments outside of China, including in France, Japan, and Malaysia [16] - On November 30, 2023, the company changed its English name to "Japan Kyosei Group Company Limited" to establish a new corporate image and identity [16] Assets and Liabilities - As of December 31, 2023, the group's cash and bank balances were approximately RMB 44,011,000, a decrease from RMB 183,449,000 in 2022 [32] - The total borrowings of the group were approximately RMB 1,657,501,000, down from RMB 2,704,114,000 in 2022, resulting in a debt-to-asset ratio of 24.9%, compared to 32.0% in 2022 [32] - Current assets were approximately RMB 6,023,988,000, down from RMB 7,616,001,000 in 2022, while current liabilities were approximately RMB 7,190,658,000, down from RMB 7,916,622,000 in 2022 [33] - The net debt of the group was approximately RMB 712,778,000, a decline of 413.5% from a net asset of RMB 227,334,000 in 2022 [33] Governance and Management - The board of directors is responsible for overall management, including strategy formulation and performance monitoring [150] - The board consists of one executive director and three independent non-executive directors, ensuring a strong independent element [158] - The roles of the chairman and CEO are clearly defined and separated to ensure independence and checks and balances [162] - The company has adopted governance policies to ensure high standards of business conduct and ethics [152] - The audit committee consists of three independent non-executive directors, ensuring oversight of financial reporting and compliance [175] Risk Management - The company has established procedures for identifying, assessing, and managing significant risks that may impact its business and operations [196] - Risk assessment includes evaluating the impact and likelihood of risks on the business [197] - The board is responsible for the risk management and internal control system, aiming to identify and control the impact of identified risks [199] - The company’s risk management system is designed to manage rather than eliminate risks associated with achieving business objectives [199] Employee and Social Responsibility - The company is committed to fulfilling social responsibilities and promoting employee welfare, environmental protection, and sustainable development [122] - The company has established a long-term incentive plan through its share option scheme to reward employees based on performance and contributions [119] - The group has approximately 106 employees as of December 31, 2023, with compensation based on market benchmarks [47] Compliance and Legal Matters - The company has not been aware of any significant legal or regulatory violations that could impact its operations during the year [121] - The company complies with the corporate governance code and has established a whistleblowing channel for reporting misconduct [152] Future Outlook - The company is focused on new business development in the environmental materials and international trade sectors, leveraging the expertise of its new CEO [133] - The company aims to enhance its market presence through strategic initiatives and potential mergers and acquisitions in the future [132]

Financial Performance - The company's revenue for the year ended December 31, 2023, was approximately RMB 248.40 million, a significant decrease from RMB 1,793.76 million in 2022, representing a decline of about 86.2%[19] - The basic and diluted loss per share attributable to the owners of the company was RMB 0.7167, compared to a restated loss of RMB 5.8384 per share in 2022[19] - The company reported a loss attributable to owners of approximately RMB 489.48 million for the year ended December 31, 2023, compared to a loss of RMB 663.55 million in 2022, indicating a reduction in losses by about 26.2%[32] - The company incurred a gross loss of RMB 234.85 million, compared to a gross loss of RMB 299.99 million in the previous year, showing an improvement in gross loss margin[34] - The company reported a net loss of approximately RMB 687 million for the year ended December 31, 2023, with total liabilities exceeding current assets by approximately RMB 1.167 billion[65] - The company reported a net loss attributable to shareholders of RMB 489,482,000 for 2023, an improvement from a loss of RMB 663,554,000 in 2022[95] Debt and Liabilities - As of December 31, 2023, the company had defaulted on loans totaling approximately RMB 1.614 billion in principal and RMB 996 million in related interest, amounting to a total of RMB 2.610 billion in defaulted loans[10] - The total current liabilities increased to RMB 7.19 billion in 2023 from RMB 6.91 billion in 2022, indicating a rise in financial obligations[23] - The company has not repaid any principal or interest on defaulted loans as of the financial statement approval date, indicating ongoing financial distress[29] - As of December 31, 2023, the company's total borrowings were approximately RMB 1.658 billion, all classified as current liabilities, with about RMB 1.614 billion secured against the company's properties and equipment[65] - The company has approximately RMB 44 million in unrestricted cash and cash equivalents as of December 31, 2023[65] - The group’s total liabilities were not detailed, but it was noted that all liabilities are allocated to operating segments[111] Corporate Restructuring - The company completed a capital restructuring in July 2023, which included share consolidation, capital reduction, and share issuance, and appointed a new board of directors and management team[2] - The group completed a restructuring on July 26, 2023, which included a share consolidation and capital reduction, resulting in a new major shareholder, Jin Bang Investment Limited, holding 69.97% of the company's ordinary shares[25] - The group issued 1,307,019,402 ordinary shares as part of the restructuring on July 26, 2023, increasing the total number of issued shares from 113,653,860 to 1,420,673,262[200] - The group generated restructuring income of RMB 788,983,000 during the reporting period[196] - The funds raised from the issuance of shares amounted to HKD 168,000,000 (approximately RMB 149,125,000) after deducting restructuring expenses of approximately RMB 15,730,000[197] Governance and Compliance - The company plans to enhance its corporate governance practices to ensure compliance with relevant codes and regulations[5] - The board of directors does not recommend the payment of any final dividend for the year[1] - The company changed its English name to "Japan Kyosei Group Company Limited" on November 30, 2023, to establish a new corporate image[2] Operational Challenges - The management anticipates that high interest rates and expected refinancing costs may severely impact the company's operating performance for the year ending December 31, 2024[67] - The company is actively seeking alternative financing solutions to meet its financial obligations and operational expenditures[30] - The company is actively seeking new financing from banks and financial institutions to restructure existing borrowings and fund ongoing property developments[45] - The company has identified several significant uncertainties that may raise doubts about its ability to continue as a going concern[66] Asset Management - The company's total assets decreased to RMB 6.02 billion in 2023 from RMB 7.62 billion in 2022, reflecting a decline in asset value[22] - The group’s total assets related to properties under development decreased from RMB 3,763,237,000 in 2022 to RMB 379,801,000 in 2023, a decline of 89.92%[149] - The fair value of completed investment properties as of December 31, 2023, was RMB 578,100,000[122] - The total assets of the property development segment were RMB 6,421,717,000, while the property investment segment had total assets of RMB 669,276,000 as of December 31, 2023[108] Revenue Sources - The company recorded a total revenue of RMB 248.399 million, with RMB 247.785 million from property sales and RMB 614,000 from leasing[55] - Property sales revenue for the year was approximately RMB 247,785,000, a significant decrease from RMB 1,793,263,000 in the previous year[179] - The total revenue from investment property rental income was reported as a loss of RMB 614,000 in 2023, compared to a loss of RMB 500,000 in 2022[101] - The company experienced a significant loss in the property investment segment, reporting a loss of RMB 90.690 million[63] Cost Management - The company has implemented measures to control administrative costs and reduce capital expenditures as part of its restructuring efforts[30] - Administrative expenses for the year were approximately RMB 46,065,000, down from about RMB 55,610,000 in the previous year, reflecting effective cost control measures[181] - The total employee costs (excluding directors' remuneration) amounted to RMB 21,615,000 in 2023, down from RMB 39,623,000 in 2022[94] Future Outlook - The company is actively seeking potential investment projects outside of China, exploring opportunities in countries such as France, Japan, and Malaysia[2] - The group plans to accelerate the construction and pre-sale of its development properties, subject to necessary conditions being met[69] - The group is actively exploring project cooperation opportunities with companies related to real estate resources and land development in Japan[184]

Financial Performance - The company reported a loss of RMB 316,863,000 for the six months ended June 30, 2023[16]. - The company reported a pre-tax loss of RMB 268,867 thousand for the six months ended June 30, 2023[50]. - The company reported a loss of RMB 256,813,000 for the six months ended June 30, 2023, compared to a loss of RMB 304,358,000 for the same period in 2022, indicating a reduction in losses by approximately 15.6%[84]. - The group reported customer contract revenue of RMB 1.428 billion for the six months ended June 30, 2023, compared to RMB 188.351 million from the sale of completed properties[33][45]. - Total revenue for the period was approximately RMB 188,351,000, a decrease of 86.8% compared to the previous period (approximately RMB 1,430,024,000)[131]. - Loss attributable to owners of the company for the period was approximately RMB 256,813,000, compared to a loss of approximately RMB 304,358,000 in the previous period[132]. - Property sales revenue for the period was approximately RMB 188,351,000, significantly down from approximately RMB 1,427,741,000 in the previous period, primarily due to weakened demand[133]. - The gross loss for the period was RMB 127.01 million, compared to a gross loss of RMB 77.25 million in the previous year[187]. - The company reported a net loss of approximately RMB 277.37 million for the six months ended June 30, 2023, compared to a net loss of RMB 316.86 million for the same period in 2022[197]. Assets and Liabilities - As of June 30, 2023, total assets amounted to RMB 8,384,639 thousand, with property development assets at RMB 6,413,650 thousand and property investment assets at RMB 673,048 thousand[52]. - The total liabilities as of June 30, 2023, were RMB 8,500,144 thousand, with property development liabilities at RMB 3,393,332 thousand and property investment liabilities at RMB 243,354 thousand[62]. - The company’s total borrowings amounted to approximately RMB 2.74 billion, with RMB 2.73 billion due within one year[197]. - The company’s current liabilities exceeded current assets by approximately RMB 640.83 million as of June 30, 2023[189]. - The company’s equity attributable to owners was a deficit of RMB 1.09 billion as of June 30, 2023, compared to a deficit of RMB 769.28 million at the end of 2022[200]. Cash Flow and Financing - Operating cash flow before changes in working capital was negative RMB 176.269 million for the six months ended June 30, 2023, compared to negative RMB 81.499 million for the same period in 2022[34]. - The group reported a net decrease in cash and cash equivalents of RMB 51.038 million for the six months ended June 30, 2023[34]. - As of June 30, 2023, the group's bank balance and cash were approximately RMB 112,654,000, down from RMB 183,449,000 on December 31, 2022[140]. - Total bank and other borrowings amounted to approximately RMB 2,740,946,000, with a debt-to-asset ratio of 32.7% as of June 30, 2023[140]. - The group is actively negotiating with banks and financial institutions to secure new financing for loan restructuring and ongoing property development[23]. Corporate Governance - The company has adopted the corporate governance code as per the listing rules, with all major decisions made after consulting the board[169]. - The audit committee consists of three independent non-executive directors, responsible for overseeing financial reporting and risk management[164]. - The company has complied with the corporate governance code, except for the separation of roles between the chairman and CEO[169]. - The company has confirmed compliance with the standard code of conduct for securities transactions by all directors during the reporting period[182]. - The company is focused on enhancing corporate governance practices to ensure compliance with the corporate governance code[169]. Shareholder Information - As of June 30, 2023, the total issued shares amounted to 11,365,386,067, with a significant shareholder holding 56.45%[8]. - The company’s major shareholder, Shun An Fund, holds 1,307,019,402 shares, representing 92.00% of its issued capital[8]. - As of June 30, 2023, Mr. Pan Haoran held 6,416,140,000 shares, representing approximately 56.45% of the company's issued share capital[161]. - The total number of issued shares as of June 30, 2023, was 11,365,386,067[161]. Operational Challenges - The company faced challenges due to the ongoing COVID-19 pandemic, supply chain disruptions, and a credit crisis among property developers, which have severely affected its business operations[82]. - The group anticipates that high interest and refinancing costs will significantly impact its operating performance for the year ending December 31, 2023[21]. Employee and Cost Management - Total employee costs (excluding directors' remuneration) increased to RMB 31,816,000 in the first half of 2023, up from RMB 24,455,000 in the same period of 2022, reflecting a rise of about 30.4%[8]. - Operating expenses included selling and distribution costs of approximately RMB 12,995,000, with a cost-to-revenue ratio of 6.90%, and administrative expenses of approximately RMB 35,650,000, with a cost-to-revenue ratio of 18.93%[136]. Investment and Development - The company is exploring investment opportunities beyond China, considering markets in France, Japan, and Malaysia to diversify its portfolio[89]. - The group is considering expanding trade operations in China, including building materials, food, and health-related products[95]. - The group is focused on property development and investment as its main business[127]. - The group aims to ensure market stability for food and agricultural products post-COVID-19[95].