Financial Performance - The total revenue for the year ended December 31, 2024, was HKD 28,520,000, representing a slight increase of 0.55% from HKD 28,363,000 in 2023[2] - The company reported a pre-tax loss of HKD 71,354,000 for 2024, significantly improved from a pre-tax loss of HKD 1,739,488,000 in 2023[2] - The annual loss for 2024 was HKD 78,668,000, a substantial reduction compared to the annual loss of HKD 1,849,358,000 in 2023[2] - The basic and diluted loss per share for the year was HKD 0.0600, an improvement from HKD 0.6273 in 2023[3] - The group reported a significant pre-tax loss of HKD 71,354,000 in 2024, a decrease from a pre-tax loss of HKD 1,739,488,000 in 2023, indicating an improvement in financial performance[16] - The group recorded a total annual loss of HKD 78,668,000 in 2024, compared to a loss of HKD 1,849,358,000 in 2023, showing a substantial reduction in losses[16] - The basic loss per share for the year was HKD 46,133,000, a significant improvement from HKD 482,140,000 in 2023[23] - The group’s deferred tax expense for the year was HKD 3,446,000, a decrease from HKD 104,756,000 in 2023, reflecting a reduction in tax liabilities[19] Asset and Liability Management - The company's total assets less current liabilities amounted to HKD 1,337,709,000 as of December 31, 2024, down from HKD 1,433,408,000 in 2023[7] - Non-current assets totaled HKD 1,317,420,000 in 2024, a decrease from HKD 1,403,623,000 in 2023[7] - The net asset value as of December 31, 2024, was HKD 978,126,000, compared to HKD 1,063,099,000 in 2023[7] - The group's total assets decreased to HKD 1,403,511,000 in 2024 from HKD 1,496,606,000 in 2023, representing a decline of approximately 6.21%[16] - The group's total liabilities slightly decreased to HKD 425,385,000 in 2024 from HKD 433,507,000 in 2023, indicating improved financial stability[16] - The group's total assets amounted to HKD 1,403,511,000, a decrease from HKD 1,496,606,000 in 2023, while net assets were HKD 978,126,000, down from HKD 1,063,099,000[44] Cash Flow and Liquidity - The company reported a cash and cash equivalents balance of HKD 63,573,000 as of December 31, 2024, down from HKD 90,761,000 in 2023[7] - Cash flow from operating activities turned from a net inflow of HKD 24,263,000 in 2023 to a net outflow of HKD 15,967,000 in 2024, primarily due to timing differences in trade receivables[41] - As of December 31, 2024, the group's cash and bank balance was HKD 63,573,000, down from HKD 90,761,000 in 2023[42] Investment Properties - The fair value change of investment properties resulted in a loss of HKD 16,848,000 in 2024, compared to a loss of HKD 52,304,000 in 2023[2] - The fair value loss on investment properties was HKD 16,848,000 in 2024, down from HKD 52,304,000 in 2023, indicating a positive trend in property valuation[19] - The group experienced a decrease in fair value losses on investment properties from HKD 52,304,000 in 2023 to HKD 16,848,000 in 2024[40] Corporate Governance and Compliance - The company has complied with the corporate governance code as outlined in the listing rules throughout the year[78] - The audit committee has reviewed the annual performance data, which has been verified by the independent auditor, Ernst & Young[82] - The preliminary performance data for the year ending December 31, 2024, is consistent with the consolidated financial statements[82] - The company will publish its annual report, containing all required information, on its website and the Hong Kong Stock Exchange website[84] Legal and Regulatory Matters - The group lost control over Guangzhou Zhengda due to a court-ordered liquidation in May 2023, leading to its deconsolidation[31] - Legal actions regarding the distribution of remaining assets from Guangzhou Zhengda's liquidation are still pending, creating uncertainty[32] - The group anticipates potential legal risks related to claims from partners regarding the distribution of remaining assets from Guangzhou Zhengda[34] - The Guangzhou Intermediate Court rejected the liquidation petition from Yuefang Private Enterprise in May 2021, citing significant disputes regarding the company's dissolution and assets[62] - In May 2023, the Guangdong High Court revoked the previous rejection of the liquidation petition, indicating that the company should undergo an orderly exit through liquidation due to management deadlock[64] - A new liquidation decision was made in August 2023, appointing Guangdong Jinzhen Law Firm as the new liquidation team for Guangzhou Zhengda[66] - Hong Kong Zhengda has filed an appeal to the Guangdong High Court following the revocation of the liquidation rejection, with the case still pending[70] Future Plans and Opportunities - The group plans to develop a 22-story multifunctional commercial complex in Guangzhou, with a total construction area of approximately 234,000 square meters, expected to be completed in two phases by 2030[56] - The company has signed a new extension agreement on June 24, 2024, extending the deadline for a significant acquisition to June 30, 2026, aiming to reach revised terms[73] - The acquisition is expected to be funded through a combination of debt financing, equity financing, bank loans, and private equity funds[73] - The group continues to explore investment opportunities related to "new productive forces" in mainland China[53] Market Outlook - The board is optimistic about the domestic economy in mainland China stabilizing in the second half of the year, supported by government measures to boost foreign direct investment (FDI)[77] - The Hong Kong government is expected to push for the city to become a regional hub for family offices and AI businesses, which may create new economic opportunities[77]

Company Information [Core Company Information](index=4&type=section&id=Core%20Company%20Information) This report outlines core corporate information including board members, company secretary, registered office, principal bankers, auditors, and legal advisors - The report provides key contact and entity information for corporate governance and operations, including Executive Director Ho Kam Hung, Ernst & Young as auditors, and legal advisors in Hong Kong and Bermuda[4](index=4&type=chunk) Management Discussion and Analysis [Financial Review](index=5&type=section&id=Financial%20Review) Revenue for the period was **HK$14.26 million**, a slight decrease year-on-year, while net loss significantly narrowed to **HK$9.58 million** due to a substantial prior-year de-recognition loss, maintaining a low debt-to-asset ratio of **0.10** and **HK$78.76 million** in cash and bank balances Key Financial Performance (HK$ Thousand) | Metric | H1 2024 (Unaudited) | H1 2023 (Unaudited, Restated) | | :--- | :--- | :--- | | Revenue | 14,259 | 14,624 | | Net Loss Attributable to Owners of the Company | (9,583) | (480,475) | - Adjusted EBITDA was a profit of **HK$0.331 million**, a decrease from **HK$2.822 million** (restated) in the prior period, primarily due to additional professional fees incurred for the delayed release of the 2023 annual results announcement[7](index=7&type=chunk) - Loss before tax significantly decreased from **HK$1.752 billion** (restated) in the prior period to **HK$28.09 million**, primarily due to no de-recognition loss of a former subsidiary recorded in the current period[8](index=8&type=chunk) Key Financial Position (HK$ Thousand) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Bank Balances (HK$ Thousand) | 78,763 | 90,761 | | Debt-to-Asset Ratio | 0.10 | 0.10 | [Prior Period Adjustments](index=7&type=section&id=Prior%20Period%20Adjustments) Due to the loss of control over former subsidiary Guangzhou Zhengda, its deconsolidation from May 15, 2023, resulted in a significant non-cash loss of approximately **HK$1.708 billion** in 2023 and restatement of comparative financial data, alongside a correction to share option exercise accounting that did not impact total equity - The Board determined that the Group lost control over Guangzhou Zhengda from May 15, 2023, due to the court's appointment of a new liquidation committee, leading to its deconsolidation from the financial statements[14](index=14&type=chunk)[15](index=15&type=chunk) - The deconsolidation of Guangzhou Zhengda resulted in a significant non-cash and unrealized loss of approximately **HK$1.708 billion**, which had no impact on the Group's liquidity, and its equity interest was reclassified as a financial asset at fair value through profit or loss[15](index=15&type=chunk) - Accounting entries for shares issued in January 2023 due to share option exercises were restated to correct transfers between reserve accounts, with no impact on total equity[16](index=16&type=chunk) [Interim Dividend and Share Option Scheme](index=9&type=section&id=Interim%20Dividend%20and%20Share%20Option%20Scheme) The Board does not recommend an interim dividend for the period, and as of the reporting period end, **5,000,000** unexercised share options remain outstanding - The Board does not recommend an interim dividend for the six months ended June 30, 2024 (H1 2023: nil)[17](index=17&type=chunk) - As of June 30, 2024, **5,000,000** share options remain unexercised with an exercise price of **HK$0.09** per share, exercisable until December 1, 2025[18](index=18&type=chunk) [Fundraising Activities](index=9&type=section&id=Fundraising%20Activities) The company completed a new share issuance in April 2020, raising net proceeds of **HK$16.1 million**, with **HK$12.0 million** remaining unutilized at the period end, originally earmarked for the Guangzhou redevelopment project, which the Board will now consider reallocating due to Guangzhou Zhengda's deconsolidation Use of Proceeds from Share Issuance (HK$ Million) | Intended Use | Net Proceeds (HK$ Million) | Utilized (HK$ Million) | Unutilized (HK$ Million) | | :--- | :--- | :--- | :--- | | Cost of Guangzhou Redevelopment Project, China | 12.0 | – | 12.0 | | General Working Capital | 4.1 | 4.1 | – | | **Total** | **16.1** | **4.1** | **12.0** | - As Guangzhou Zhengda is no longer a subsidiary of the Group, the Board will consider reallocating the **HK$12.0 million** originally designated for its redevelopment project to other uses, with a separate announcement to follow once a decision is made[20](index=20&type=chunk) [Business Review](index=10&type=section&id=Business%20Review) The Group's core business involves property development, investment, and management in mainland China, actively exploring investment opportunities related to 'new quality productive forces,' with Chongqing Gangyu Plaza providing stable cash flow despite uncertainties from legal disputes concerning the Guangzhou property development project - The Group primarily engages in property development, investment, and management in mainland China, continuously exploring investment opportunities in projects related to 'new quality productive forces'[22](index=22&type=chunk) [Property Investment](index=11&type=section&id=Property%20Investment) Chongqing Gangyu Plaza commercial building serves as a stable cash flow source for the Group with high occupancy, providing essential working capital, and the Board is confident it will continue to generate stable income in the foreseeable future - Chongqing Gangyu Plaza property, with a total gross floor area of approximately **24,400 square meters**, is almost fully occupied with low shop turnover, providing stable cash flow and meeting the Group's working capital needs[23](index=23&type=chunk) [Property Development](index=11&type=section&id=Property%20Development) The Guangzhou Metropolis Shoe City redevelopment project plans to develop a large commercial complex with a total gross floor area of approximately **234,000 square meters**, with progress constrained by the demolition of the last building, and is expected to open earliest in early 2028 - The Guangzhou redevelopment project is planned as a 22-story multi-functional Grade A commercial complex with a total gross floor area of approximately **234,000 square meters**[24](index=24&type=chunk) - Assuming commencement in Q1 2025, the project is expected to be completed in two phases by Q1 2029, with the earliest opening in early 2028[25](index=25&type=chunk) [Current Status of Guangzhou Zhengda](index=12&type=section&id=Current%20Status%20of%20Guangzhou%20Zhengda) Despite deconsolidation and liquidation proceedings, Guangzhou Zhengda continues normal operations with unchanged legal title to its assets; the Group retains a **25%** beneficial interest in its parent company, Hong Kong Zhengda, which maintains control over Guangzhou Zhengda's daily operations and financial activities - Despite the decision to appoint a new liquidation committee, Guangzhou Zhengda continues to operate normally, with its registration status at the Administration for Industry and Commerce remaining 'in operation (open)'[27](index=27&type=chunk) - The Group's **25%** beneficial interest in Hong Kong Zhengda (which holds **100%** equity in Guangzhou Zhengda) remains unchanged, as does the legal title to Guangzhou Zhengda's assets[27](index=27&type=chunk)[28](index=28&type=chunk) [Briefing on "Liquidation Petition" against Guangzhou Zhengda](index=13&type=section&id=Briefing%20on%20%22Liquidation%20Petition%22%20against%20Guangzhou%20Zhengda) Management detailed the legal disputes surrounding the liquidation petition against Guangzhou Zhengda, asserting its lack of legal basis and outlining multiple legal and administrative actions taken, including lawsuits to clarify equity relationships, while stating that the liquidation procedures deviate from fundamental principles stipulated by the Supreme People's Court - Hong Kong Zhengda has filed a lawsuit with the Guangzhou Intermediate People's Court, seeking confirmation of its legal relationship and equity with relevant parties, and claiming **RMB41.0 million** in interest losses[30](index=30&type=chunk) - Management stated that, according to the Supreme People's Court's judicial interpretation, the court should have rejected the liquidation application as the applicant failed to prove "clear shareholder equity" and that "dissolution events" had occurred for the enterprise[33](index=33&type=chunk) - Management noted that the court did not hold a pre-liquidation hearing when processing the liquidation application and appointed a liquidation committee without a written ruling, both procedures being non-compliant[33](index=33&type=chunk) [Significant Acquisition and Litigation Updates](index=16&type=section&id=Significant%20Acquisition%20and%20Litigation%20Updates) The Group extended the final deadline for a significant acquisition to June 30, 2026, aiming to achieve revised terms, and its subsidiary, Hong Kong Zhengda, initiated a new lawsuit against Yuexiu State-owned Assets in April 2024 - On June 24, 2024, the Group signed a new extension agreement, further extending the final deadline for a significant acquisition to June 30, 2026[35](index=35&type=chunk) - Subsequent to December 31, 2023, the Group's subsidiary, Hong Kong Zhengda, initiated a lawsuit against Yuexiu State-owned Assets in the Guangzhou Intermediate People's Court in April 2024[37](index=37&type=chunk) [Outlook](index=17&type=section&id=Outlook) The Board anticipates a consolidation period in the mainland real estate market and will closely monitor trends, while actively responding to the national policy of 'developing new quality productive forces' by identifying suitable investment or business projects, and expects positive impacts from anticipated US interest rate cuts on the Hong Kong market, supporting the HKSAR government's governance according to law - The Board will actively identify suitable investment or business projects with reasonable capital budgets in response to the central government's policy of 'accelerating the development of new quality productive forces'[38](index=38&type=chunk) - The market widely anticipates a reduction in US federal interest rates before the November 2024 presidential election, which Hong Kong may follow, creating a new chapter for the economy[39](index=39&type=chunk) [Employees and Remuneration Policy](index=18&type=section&id=Employees%20and%20Remuneration%20Policy) As of the reporting period end, the Group employed approximately **20** staff, with total staff costs of **HK$3.87 million**, offering competitive remuneration, employee benefits, and training development resources Employee Count | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Number of Employees | Approx. 20 | 20 | Total Staff Costs (HK$ Thousand) | Metric | H1 2024 (HK$ Thousand) | H1 2023 (HK$ Thousand, Restated) | | :--- | :--- | :--- | | Total Staff Costs | 3,870 | 3,630 | Disclosure of Interests [Interests of Directors and Chief Executives](index=19&type=section&id=Interests%20of%20Directors%20and%20Chief%20Executives) Executive Director Mr. Ho Kam Hung collectively holds **117,600,000** shares in the company, representing **15.30%** of the issued share capital, comprising both direct beneficial ownership and interests held through controlled corporations Share Interests of Director Mr. Ho Kam Hung | Director's Name | Capacity and Nature of Interest | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Ho Kam Hung | Held through controlled corporations | 110,600,000 | 14.39% | | | Directly beneficially owned | 7,000,000 | 0.91% | | | **Total** | **117,600,000** | **15.30%** | [Directors' Rights to Purchase Shares](index=21&type=section&id=Directors%27%20Rights%20to%20Purchase%20Shares) During the reporting period, the company did not grant any rights to its directors, their spouses, or minor children to purchase shares or debentures of the company or any other body corporate - At no time during the period were any rights granted to any director or their associates to acquire benefits by purchasing shares or debentures of the company or any other body corporate[45](index=45&type=chunk) [Substantial Shareholders](index=21&type=section&id=Substantial%20Shareholders) Beyond directors, the report discloses shareholdings of several substantial shareholders, including Yip Ka Lai, Ho Cham Hung, Ho Pak Hung, and Lead Talent Investment Limited, all holding over **10%** of the shares Substantial Shareholders' Interests | Shareholder Name | Number of Shares Held | Percentage of Company's Share Capital | | :--- | :--- | :--- | | Yip Ka Lai (Spouse of Ho Kam Hung) | 117,600,000 | 15.30% | | Ho Cham Hung | 105,600,000 | 13.74% | | Ho Pak Hung | 99,800,000 | 12.98% | | Lead Talent Investment Limited | 108,000,000 | 14.05% | | Strong Hero Holdings Limited | 100,000,000 | 13.01% | Disclosures under Listing Rules [Corporate Governance and Compliance](index=23&type=section&id=Corporate%20Governance%20and%20Compliance) The company largely complied with the Corporate Governance Code during the reporting period; despite all three independent non-executive directors serving over nine years, the Nomination Committee and Board assessed and confirmed their continued independence, and all directors adhered to the Model Code for Securities Transactions, with no listed securities bought or redeemed by the company during this period - The Nomination Committee and the Board believe that despite all three independent non-executive directors serving for over nine years, they maintain their independence and can provide independent, balanced, and objective advice to the company[49](index=49&type=chunk) - The company's unaudited condensed consolidated financial statements for the period were reviewed by the Audit Committee, and the interim report was approved by the Board on August 28, 2024[50](index=50&type=chunk) Unaudited Condensed Consolidated Financial Statements [Condensed Consolidated Income Statement](index=25&type=section&id=Condensed%20Consolidated%20Income%20Statement) The period recorded revenue of **HK$14.26 million** and a loss after tax of **HK$30.78 million**, representing a significant narrowing of loss compared to the restated prior period, primarily due to a substantial **HK$1.708 billion** loss from the deconsolidation of a former subsidiary in the prior period Condensed Consolidated Income Statement (HK$ Thousand) | Item (HK$ Thousand) | H1 2024 (Unaudited) | H1 2023 (Unaudited, Restated) | | :--- | :--- | :--- | | Revenue | 14,259 | 14,624 | | Loss on disposal of a former subsidiary | – | (1,708,355) | | Loss before tax | (28,093) | (1,751,703) | | Loss for the period | (30,783) | (1,861,665) | | Basic loss per share (HK Cents) | (1.25) | (62.51) | [Condensed Consolidated Statement of Financial Position](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets were **HK$1.451 billion** and net assets were **HK$1.028 billion**, with core non-current assets including **HK$1.002 billion** in 'equity interest in an entity at fair value through profit or loss' and **HK$0.360 billion** in investment properties Condensed Consolidated Statement of Financial Position (HK$ Thousand) | Balance Sheet Item (HK$ Thousand) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | **Non-current assets** | | | | Equity interest in an entity at fair value through profit or loss | 1,002,217 | 1,030,472 | | Investment properties | 359,520 | 369,600 | | **Total assets** | **1,451,330** | **1,496,606** | | **Net assets** | **1,027,672** | **1,063,099** | [Condensed Consolidated Cash Flow Statement](index=30&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) Cash flow from operating activities for the period shifted from a net inflow of **HK$5.12 million** in the prior period to a net outflow of **HK$3.66 million**, with cash and cash equivalents at period-end totaling **HK$78.76 million**, a decrease from **HK$90.76 million** at the beginning of the period Condensed Consolidated Cash Flow Statement (HK$ Thousand) | Cash Flow Item (HK$ Thousand) | H1 2024 (Unaudited) | H1 2023 (Unaudited, Restated) | | :--- | :--- | :--- | | Cash flows from/(used in) operating activities | (3,658) | 5,117 | | Net cash flows used in investing activities | – | (560) | | Net cash flows from/(used in) financing activities | (6,088) | 10,471 | | **Cash and cash equivalents at end of period** | **78,763** | **95,631** | [Notes to the Condensed Consolidated Financial Statements](index=31&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes to the financial statements detail accounting policies, specific impacts of prior period adjustments, operating segment information, and related party transactions, with Notes 12 and 13 being crucial for understanding the current period's financials, explaining the significant accounting impact of Guangzhou Zhengda's deconsolidation and subsequent fair value measurement [Note 1: Basis of Preparation and Prior Period Adjustments](index=31&type=section&id=Note%201%3A%20Basis%20of%20Preparation%20and%20Prior%20Period%20Adjustments) These financial statements are prepared in accordance with HKAS 34; comparative figures for H1 2023 were restated due to the deconsolidation of a former subsidiary (Guangzhou Zhengda) and a correction to the accounting treatment of share option exercises, which significantly increased the H1 2023 loss - Due to the loss of control over Guangzhou Zhengda from May 15, 2023, the Group deconsolidated it and restated the financial statements for the corresponding period in 2023[59](index=59&type=chunk) Restatement Impact on H1 2023 Condensed Consolidated Income Statement (HK$ Thousand) | Item (HK$ Thousand) | Previously Reported | Prior Period Adjustment | Restated | | :--- | :--- | :--- | :--- | | Profit/(Loss) before tax | 2,171 | (1,753,874) | (1,751,703) | | Loss for the period | (444) | (1,861,221) | (1,861,665) | [Note 2: Operating Segment Information](index=35&type=section&id=Note%202%3A%20Operating%20Segment%20Information) The Group is segmented into two operating categories: property investment and development, and corporate and others, with the vast majority of revenue and results (or losses) derived from the property investment and development segment, and only one customer contributing over **10%** of total revenue during the period - The Group's two reportable operating segments are (a) property investment and development and (b) corporate and others; all **HK$14.26 million** in revenue for the period was derived from the property investment and development segment[64](index=64&type=chunk)[65](index=65&type=chunk) [Note 12: Deconsolidation of a Former Subsidiary](index=39&type=section&id=Note%2012%3A%20Deconsolidation%20of%20a%20Former%20Subsidiary) This note details the accounting treatment for the deconsolidation of Guangzhou Zhengda on May 15, 2023, which resulted in a non-cash loss of approximately **HK$1.708 billion** in 2023 and the reclassification of its equity interest as a financial asset at fair value through profit or loss, with an initial fair value of **HK$1.014 billion** - Due to the Guangdong Provincial High Court's ruling and the Guangzhou Intermediate People's Court's decision to appoint a new liquidation committee, the Board determined that the Group lost control over Guangzhou Zhengda from May 15, 2023, leading to its deconsolidation[72](index=72&type=chunk) - The deconsolidation of Guangzhou Zhengda resulted in a **HK$1.708 billion** loss, primarily from the difference between the fair value of Guangzhou Zhengda's equity interest and the original carrying amounts of its related assets and liabilities[74](index=74&type=chunk)[76](index=76&type=chunk) [Note 13: Equity Interest in an Entity at Fair Value Through Profit or Loss](index=41&type=section&id=Note%2013%3A%20Equity%20Interest%20in%20an%20Entity%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) This asset represents the equity investment in Guangzhou Zhengda, with its fair value determined using the discounted net realizable value method (Level 3 fair value measurement); the period recorded a fair value change loss of **HK$28.26 million**, and its fair value is highly sensitive to unobservable inputs like discount rates and recovery discount rates Fair Value Movement of Equity Interest (HK$ Thousand) | Item (HK$ Thousand) | Amount | | :--- | :--- | | Carrying amount at January 1, 2024 | 1,030,472 | | Fair value change recognized in profit or loss | (28,255) | | **Carrying amount at June 30, 2024** | **1,002,217** | - The fair value measurement of this equity interest is classified as **Level 3**, determined using the discounted net realizable value method, with a discount rate of **4.2%** applied to cash flow forecasts[78](index=78&type=chunk) - The valuation of Guangzhou Zhengda's principal assets (investment properties and properties held for sale) utilized the residual method and market approach, applying a recovery discount rate of **25%**[79](index=79&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 14,259,000, a decrease of 2.5% compared to HKD 14,624,000 for the same period in 2023[1] - The company reported a loss before tax of HKD 28,093,000, significantly improved from a loss of HKD 1,751,703,000 in the prior year[1] - Total comprehensive loss for the period was HKD 35,427,000, compared to HKD 1,971,827,000 in the previous year, indicating a substantial reduction in losses[3] - Basic and diluted loss per share for ordinary shareholders was HKD 1.25, compared to HKD 62.51 in the same period last year[2] - The net loss attributable to equity holders was HKD 1,861,665,000 for the same period, compared to a loss of HKD 444,000 previously reported[10] - The group reported a pre-tax loss of HKD 28,093,000 and a post-tax loss of HKD 30,783,000 for the period, compared to a pre-tax loss of HKD 1,751,703,000 and a post-tax loss of HKD 1,861,665,000 in 2023[30] Assets and Liabilities - Non-current assets totaled HKD 1,365,035,000 as of June 30, 2024, down from HKD 1,403,623,000 at the end of 2023[4] - Cash and cash equivalents decreased to HKD 78,763,000 from HKD 90,761,000 at the end of 2023[4] - The company’s total equity as of June 30, 2024, was HKD 1,027,672,000, a decrease from HKD 1,063,099,000 at the end of 2023[5] - The group’s total assets amounted to HKD 1,451,330,000, down from HKD 1,496,606,000 as of December 31, 2023[32] - The deferred tax liabilities amounted to HKD 820,699,000, reflecting the company's tax obligations[25] Cash Flow and Expenses - The cash flow from operating activities improved to HKD 5,117,000 for the six months ended June 30, 2023, compared to HKD 1,541,000 previously reported[12] - Net cash flow from operating activities was HKD 3,658,000, down from HKD 5,117,000 in 2023[31] - The total tax expense for the period was HKD 2,690,000, a decrease from HKD 109,962,000 in the previous year, primarily due to the absence of taxable profits in Hong Kong[22] - Administrative expenses increased to HKD (14,381,000) from HKD (12,158,000) in the prior year, reflecting a rise in operational costs[1] Shareholder Information - The company did not recommend the payment of an interim dividend for the period, consistent with the previous year[20] - The company has not issued any potential dilutive ordinary shares during the reporting period[21] Legal and Regulatory Matters - Guangzhou Zhengda has filed a lawsuit against Yuexiu State-owned Assets, claiming RMB 41,000,000 in interest losses[50] - The lawsuit began hearing in August 2024 and has not yet concluded[50] - The company remains confident that the liquidation petition against Guangzhou Zhengda lacks factual and legal basis[56] - The management has highlighted the lack of detailed mechanisms and procedures for liquidation under the Company Law of the People's Republic of China[52] Projects and Investments - The company completed a new share issuance of 108,000,000 shares at HKD 0.15 per share, raising a total of HKD 16.1 million, with 74.5% allocated for the Guangzhou reconstruction project[39] - The Guangzhou reconstruction project is expected to develop a 22-story multifunctional commercial complex with a total construction area of approximately 234,000 square meters, with the first phase completion anticipated by the end of 2027[45] - The company plans to explore investment opportunities related to "new productive forces" in addition to its core property development and management business[42] Employee and Governance - The total employee cost for the group was HKD 3,870,000 for the period, compared to HKD 3,630,000 in the previous year[61] - The group maintained approximately 20 employees as of June 30, 2024, consistent with the previous year[61] - The board supports the Hong Kong SAR government's lawful governance, especially in light of recent national security measures[60] - The board emphasizes the importance of competitive compensation and employee development resources to enhance performance[61] Market Conditions - The real estate market in China is still in a consolidation phase, with expectations for a rebound taking a few more years[59] - The board will closely monitor market trends to adjust the property portfolio and reconstruction timetable accordingly[59]

[Company Information](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This report provides core company information for China International Holdings Limited, including key contact details for board members, company secretary, registered office, principal place of business, auditor (Ernst & Young), legal advisors, and principal bankers - The report provides core company information for China International Holdings Limited, including details on board members, company secretary, registered office, principal place of business, auditor (Ernst & Young), legal advisors, and principal bankers[3](index=3&type=chunk)[639](index=639&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%AB%96%E6%9E%90) [Financial Review](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group turned from profit to loss this year, primarily due to a **HKD 1.71 billion** non-cash loss from the derecognition of former subsidiary **Guangzhou Zhengda**, despite positive adjusted EBITDA of **HKD 6.06 million** indicating core operational cash generation Key Financial Performance for FY2023 | Metric | 2023 (HKD Thousands) | 2022 (HKD Thousands) | | :--- | :--- | :--- | | Revenue | 28,363 | 30,283 | | Loss/Profit Before Tax | (1,739,488) | 54,950 | | Loss/Profit for the Year | (1,849,358) | 34,050 | | Net Loss/Profit Attributable to Ordinary Equity Holders of the Company | (482,140) | 3,273 | | Adjusted EBITDA | 6,060 | 7,447 | - The primary reasons for the year's shift from profit to loss include the recognition of a **HKD 1.708 billion** derecognition loss from a former subsidiary and a change in investment property fair value from a **HKD 50.69 million** gain last year to a **HKD 52.30 million** loss this year[619](index=619&type=chunk)[643](index=643&type=chunk) Assets and Liquidity Position (as at December 31, 2023) | Metric | 2023 (HKD Thousands) | 2022 (HKD Thousands) | | :--- | :--- | :--- | | Net Current Assets | 29,785 | 1,034 | | Net Assets | 1,063,099 | 3,021,523 | | Total Assets | 1,496,606 | 4,415,959 | - The Group's operations primarily rely on cash flow from business operations and debt financing, with net cash flow from operating activities amounting to **HKD 24.26 million** for the year[622](index=622&type=chunk) [Business Review](index=10&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's core business is property development, investment, and management in mainland China, with **Chongqing Gangyu Plaza** providing stable income, while the **Guangzhou** redevelopment project remains stalled due to legal disputes involving former subsidiary **Guangzhou Zhengda** - **Gangyu Plaza** in Chongqing is the Group's main income source, with a total gross floor area of approximately **24,400 square meters**, almost fully leased, providing stable cash flow[630](index=630&type=chunk)[684](index=684&type=chunk) - The redevelopment project in Guangzhou's Yuexiu District, intended for a multi-functional commercial complex with a total gross floor area of approximately **234,000 square meters**, is currently stalled due to incomplete demolition and legal issues[654](index=654&type=chunk)[19](index=19&type=chunk) - Former subsidiary **Guangzhou Zhengda** holds approximately **190 residential units** with a total gross floor area of about **11,000 square meters**, currently vacant or available for spot sale[632](index=632&type=chunk) [Legal Proceedings and Significant Matters](index=12&type=section&id=%E6%B3%95%E5%BE%8B%E8%A8%B4%E8%A8%9F%E8%88%87%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) This section details complex legal disputes surrounding former subsidiary **Guangzhou Zhengda**, where a 2023 court order for liquidation led to the Group losing control and derecognizing the entity, a key factor in the auditor's qualified opinion - In May 2023, the Guangdong High People's Court ruled to revoke the previous dismissal of the liquidation application against **Guangzhou Zhengda**, instructing the Guangzhou Intermediate People's Court to hear the case, leading to the resumption of liquidation proceedings[28](index=28&type=chunk)[57](index=57&type=chunk)[663](index=663&type=chunk) - Due to the court's liquidation ruling, the Board determined the Group lost control over **Guangzhou Zhengda**, ceasing its consolidation from **May 15, 2023**, with its interest reclassified as a financial asset measured at fair value through profit or loss[537](index=537&type=chunk)[666](index=666&type=chunk) - The Group has filed a retrial application with the Supreme People's Court and initiated new litigation with the Guangzhou Intermediate People's Court, aiming to challenge the legality of the liquidation decision and confirm its **100% interest** in **Guangzhou Zhengda**'s remaining assets[63](index=63&type=chunk)[31](index=31&type=chunk)[665](index=665&type=chunk) - Due to significant uncertainties surrounding the **Guangzhou Zhengda** liquidation case, the Company's auditor issued a **qualified audit opinion** on the consolidated financial statements for the year ended **December 31, 2023**[71](index=71&type=chunk) [Outlook](index=22&type=section&id=%E5%B1%95%E6%9C%9B) The Board anticipates a multi-year consolidation for mainland China's property market and improved Hong Kong economic conditions post-US interest rate cuts, while actively seeking investment opportunities aligned with 'new quality productive forces' - Mainland China's property market is expected to take several years to recover from the bear market, while Hong Kong's economy is anticipated to improve after US interest rate cuts[75](index=75&type=chunk)[104](index=104&type=chunk) - The Group will actively explore investment or business projects aligned with the 'new quality productive forces' policy to seize new opportunities[708](index=708&type=chunk) [Directors' Report](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) - The Board does not recommend the payment of any dividend for the year ended **December 31, 2023**[16](index=16&type=chunk)[712](index=712&type=chunk) - The Group's principal business is investment holding, with its subsidiaries primarily engaged in property development, investment, and management, and no significant changes in business nature occurred during the year[80](index=80&type=chunk)[679](index=679&type=chunk) - The report discloses connected transactions, primarily including the extension of a major acquisition's completion date and **HKD 0.843 million** in interest expenses incurred during the year for a loan from Director Mr. Ho Kam Hung[163](index=163&type=chunk) - The report details the interests of directors and substantial shareholders in the Company's shares, with Executive Director Mr. Ho Kam Hung and parties acting in concert with him identified as major controlling shareholders[150](index=150&type=chunk)[171](index=171&type=chunk)[124](index=124&type=chunk) [Corporate Governance Report](index=33&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) - The Company confirms compliance with the Corporate Governance Code set out in Appendix 14 of the Listing Rules throughout the review period[736](index=736&type=chunk) - The Board comprises five members, including one executive director, one non-executive director, and three independent non-executive directors, meeting independence requirements[158](index=158&type=chunk)[135](index=135&type=chunk) - The Company has established an Audit Committee, Remuneration Committee, and Nomination Committee, each chaired by an independent non-executive director, with their composition and key responsibilities disclosed in the report[192](index=192&type=chunk)[175](index=175&type=chunk)[196](index=196&type=chunk) - The Board is responsible for overseeing the Group's risk management and internal control systems, with their effectiveness regularly reviewed through the Audit Committee[178](index=178&type=chunk)[199](index=199&type=chunk) [Environmental, Social and Governance Report](index=41&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) - Environmentally, the Group is committed to energy conservation and emission reduction, implementing strict air conditioning temperature control policies at **Chongqing Gangyu Plaza** and replacing lighting with energy-efficient products[209](index=209&type=chunk)[231](index=231&type=chunk) - Socially, the Group prioritizes employee welfare and safety, offering additional benefits like paid leave and medical insurance, conducting regular fire drills, and emphasizing that it has never employed child or forced labor[215](index=215&type=chunk)[216](index=216&type=chunk)[260](index=260&type=chunk) - The Group has established strict internal guidelines against corruption and money laundering, with no related cases reported during the review period[241](index=241&type=chunk) - As of **December 31, 2023**, the Group had approximately **20 employees**, with most having served for over **20 years**, indicating a low turnover rate[228](index=228&type=chunk)[259](index=259&type=chunk) [Biographical Details of Directors](index=47&type=section&id=%E8%91%A3%E4%BA%8B%E7%B0%A1%E6%AD%B7) - The report provides biographical details for executive, non-executive, and independent non-executive directors, showcasing their extensive experience in property investment, law, finance, accounting, and information technology[265](index=265&type=chunk) - Mr. Ho Kam Hung, the Managing Director, possesses over **30 years** of experience in property investment and development in mainland China and Hong Kong[243](index=243&type=chunk) [Independent Auditor's Report](index=48&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) - Auditor Ernst & Young issued a **'Qualified Opinion'** on the consolidated financial statements for the current year[246](index=246&type=chunk)[267](index=267&type=chunk) - The basis for the qualified opinion stems from significant uncertainty regarding the final distribution of remaining assets of former subsidiary **Guangzhou Zhengda**, which is undergoing liquidation, preventing the auditor from obtaining sufficient audit evidence to assess the fair value of **Guangzhou Zhengda**'s equity, the derecognition loss, and whether related financial impacts require adjustment[269](index=269&type=chunk)[270](index=270&type=chunk) - Key audit matters, in addition to those leading to the qualified opinion, include the assessment of control over **Hong Kong Zhengda** and the fair value estimation of investment properties[271](index=271&type=chunk)[299](index=299&type=chunk)[274](index=274&type=chunk) [Audited Financial Statements](index=55&type=section&id=%E7%B6%93%E5%AF%A9%E6%A0%B8%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Consolidated Statement of Profit or Loss](index=55&type=section&id=%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group recorded **HKD 28.36 million** revenue in 2023, but a **HKD 1.708 billion** derecognition loss from a former subsidiary resulted in a **HKD 1.739 billion** loss before tax and a **HKD 482.14 million** loss attributable to equity holders, a significant reversal from the prior year's profit Summary of Consolidated Statement of Profit or Loss | Metric | 2023 (HKD Thousands) | 2022 (HKD Thousands) | | :--- | :--- | :--- | | Revenue | 28,363 | 30,283 | | Derecognition Loss of a Former Subsidiary | (1,708,355) | - | | Loss/Profit Before Tax | (1,739,488) | 54,950 | | Loss/Profit for the Year | (1,849,358) | 34,050 | | Loss/Profit Attributable to Ordinary Equity Holders of the Company | (482,140) | 3,273 | | Basic Loss/Earnings Per Share | (62.73) HK cents | 0.46 HK cents | [Consolidated Statement of Comprehensive Income](index=56&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Total comprehensive expenses for the year significantly increased to **HKD 1.958 billion** from **HKD 209 million** last year, primarily due to the **HKD 1.849 billion** loss for the year and **HKD 129.535 million** in foreign exchange differences Summary of Consolidated Statement of Comprehensive Income/Expenses | Metric | 2023 (HKD Thousands) | 2022 (HKD Thousands) | | :--- | :--- | :--- | | Loss/Profit for the Year | (1,849,358) | 34,050 | | Exchange Differences Arising from Translation of Overseas Operations | (129,535) | (242,675) | | Total Comprehensive Expenses for the Year | (1,958,424) | (208,625) | [Consolidated Statement of Financial Position](index=57&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 **end-2023**, total assets decreased from **HKD 4.416 billion** to **HKD 1.497 billion**, and total equity fell from **HKD 3.022 billion** to **HKD 1.063 billion**, reflecting a major asset restructuring with a **HKD 1.030 billion** equity interest in an entity at fair value through profit or loss replacing derecognized investment properties Summary of Consolidated Statement of Financial Position | Metric | 2023 (HKD Thousands) | 2022 (HKD Thousands) | | :--- | :--- | :--- | | Non-current Assets | 1,403,623 | 4,277,572 | | Current Assets | 92,983 | 138,387 | | **Total Assets** | **1,496,606** | **4,415,959** | | Current Liabilities | (63,198) | (137,353) | | Non-current Liabilities | (370,309) | (1,257,083) | | **Total Liabilities** | **(433,507)** | **(1,394,436)** | | **Net Assets** | **1,063,099** | **3,021,523** | [Consolidated Statement of Changes in Equity](index=59&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Total equity for the year decreased significantly by **HKD 1.958 billion** from **HKD 3.022 billion** at the beginning of the year to **HKD 1.063 billion** at year-end, primarily driven by the substantial total comprehensive expenses for the period - Total comprehensive expenses for the year, amounting to **HKD 1.958 billion**, were the primary reason for the decrease in total equity from **HKD 3.022 billion** to **HKD 1.063 billion**[317](index=317&type=chunk) [Consolidated Statement of Cash Flows](index=60&type=section&id=%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Despite significant accounting losses, the Group maintained robust cash flow, generating **HKD 24.26 million** net cash inflow from operating activities, with net cash outflow from financing activities at **HKD 15.63 million**, resulting in an increased year-end cash and cash equivalents balance of **HKD 90.76 million** Summary of Consolidated Statement of Cash Flows | Metric | 2023 (HKD Thousands) | 2022 (HKD Thousands) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 24,263 | 26,456 | | Net Cash Flow Used in Investing Activities | (575) | - | | Net Cash Flow Used in Financing Activities | (15,634) | (28,537) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 8,054 | (2,081) | | Cash and Cash Equivalents at Year-End | 90,761 | 84,874 | [Notes to the Financial Statements](index=61&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The notes provide detailed explanations of significant accounting policies, key judgments, and estimates, with Notes 9, 13, and 32(e) being crucial for understanding the **Guangzhou Zhengda** derecognition event and its financial impact, while Note 14 details investment property fair value measurement - Note 9 details the calculation of the **HKD 1.708 billion** loss from the derecognition of **Guangzhou Zhengda**, attributing it primarily to the difference between the fair value of **Guangzhou Zhengda**'s equity and its original carrying amount of assets and liabilities[517](index=517&type=chunk)[538](index=538&type=chunk)[519](index=519&type=chunk) - Notes 13 and 14 explain the Group's fair value measurement for financial assets and investment properties, with the retained **Guangzhou Zhengda** equity (**HKD 1.030 billion**) and remaining investment properties (**HKD 0.370 billion**) after derecognition both valued using significant unobservable inputs (Level 3 fair value hierarchy)[527](index=527&type=chunk)[552](index=552&type=chunk)[579](index=579&type=chunk) - Note 32(e) provides a detailed historical background and latest developments regarding the **Guangzhou Zhengda** liquidation petition, serving as a core chapter for understanding the entire event's context[780](index=780&type=chunk)[783](index=783&type=chunk)[910](index=910&type=chunk) [Five-Year Group Financial Summary](index=127&type=section&id=%E4%BA%94%E5%B9%B4%E9%9B%86%E5%9C%98%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) Five-Year Financial Data Summary (for the year ended December 31) | Metric (HKD Thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Results** | | | | | | | Revenue | 28,363 | 30,283 | 57,670 | 24,423 | 41,732 | | Profit/(Loss) Before Tax | (1,739,488) | 54,950 | 59,109 | (440) | (78,805) | | Profit/(Loss) Attributable to Ordinary Equity Holders of the Company | (482,140) | 3,273 | 6,811 | (6,576) | (18,505) | | **Assets and Liabilities** | | | | | | | Total Assets | 1,496,606 | 4,415,959 | 4,727,091 | 4,564,165 | 4,299,524 | | Total Liabilities | (433,507) | (1,394,436) | (1,503,715) | (1,451,973) | (1,384,655) | [Schedule of Properties](index=128&type=section&id=%E7%89%A9%E6%A5%AD%E6%AC%8A%E7%9B%8A%E8%A1%A8) - As of **December 31, 2023**, the Group's principal investment property comprises certain floors of **Gangyu Plaza** in Chongqing, China, for commercial use, in which the Group holds a **100% interest**[809](index=809&type=chunk)

[Errata Notice](index=1&type=section&id=Errata%20Notice) This notice provides corrections to a previous announcement, details the current board composition, and includes a standard disclaimer [Announcement Revision](index=1&type=section&id=Announcement%20Revision) This section corrects the share trading suspension date previously announced by China International Holdings Limited on June 28, 2024 - The company's share trading suspension date has been corrected from the originally misstated '9:00 a.m. on July 2, 2024' to **9:00 a.m. on April 2, 2024**[2](index=2&type=chunk) [Board Members](index=1&type=section&id=Board%20Members) This section details the composition of China International Holdings Limited's Board of Directors as of the announcement date Board Member Composition | Position | Name | | :--- | :--- | | Executive Director | Mr. Ho Kam Hung | | Non-Executive Director | Mr. Yeung Kwok Shui | | Independent Non-Executive Directors | Mr. Tam Kong, Ms. Wong Miu Ting, Mr. Wong Kui Fai | [Disclaimer](index=1&type=section&id=Disclaimer) This section clarifies that HKEX and SEHK bear no responsibility for the announcement's content, accuracy, or completeness - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness[1](index=1&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement[1](index=1&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company swung to a significant loss in FY2023, primarily due to a large deconsolidation loss, impacting key financial metrics and balance sheet items [Consolidated Income Statement](index=1&type=section&id=Consolidated%20Income%20Statement) The company swung to an annual loss of HKD 1.85 billion in FY2023, primarily driven by a HKD 1.71 billion deconsolidation loss from a former subsidiary, despite a slight revenue decrease Key Consolidated Income Statement Data | Metric | 2023 (HKD thousands) | 2022 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 28,363 | 30,283 | -6.3% | | Deconsolidation loss of a former subsidiary | (1,708,355) | – | N/A | | Loss before tax | (1,739,488) | 54,950 (Profit) | Swung from profit to loss | | Annual loss | (1,849,358) | 34,050 (Profit) | Swung from profit to loss | | Loss attributable to owners of the Company | (482,140) | 3,273 (Profit) | Swung from profit to loss | [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) As of year-end 2023, total assets significantly decreased by 66% to HKD 1.5 billion, primarily due to a reduction in investment property value following subsidiary deconsolidation, while total liabilities and net assets also declined Consolidated Balance Sheet Summary | Metric | 2023 (HKD thousands) | 2022 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | 1,403,623 | 4,277,572 | -67.2% | | Total assets | 1,496,606 | 4,415,959 | -66.1% | | Total liabilities | 433,507 | 1,394,436 | -68.9% | | Net assets | 1,063,099 | 3,021,523 | -64.8% | | Equity attributable to owners of the Company | 375,814 | 873,970 | -57.0% | [Key Financial Metrics](index=2&type=section&id=Key%20Financial%20Metrics) Impacted by the substantial loss, basic loss per share was HKD 62.73 cents, with no final dividend proposed, though adjusted EBITDA remained positive at HKD 6.06 million, indicating core operational profitability - Basic loss per share was **HKD 62.73 cents**, compared to earnings per share of **HKD 0.46 cents** in the prior year[139](index=139&type=chunk)[57](index=57&type=chunk) - The Board did not recommend a final dividend for the year ended December 31, 2023[56](index=56&type=chunk) - Adjusted EBITDA was a profit of **HKD 6.06 million**, a decrease from **HKD 7.447 million** in 2022, primarily reflecting core business profitability[180](index=180&type=chunk) [Independent Auditor's Report](index=14&type=section&id=Independent%20Auditor%27s%20Report) The auditor issued a qualified opinion on the 2023 financial statements due to significant uncertainties regarding the final asset distribution of a former subsidiary undergoing liquidation [Qualified Opinion](index=14&type=section&id=Qualified%20Opinion) The auditor issued a qualified opinion on the 2023 consolidated financial statements due to significant uncertainty regarding the final asset distribution of Guangzhou Zhengda, a former subsidiary undergoing liquidation, impacting the valuation of its equity and related deconsolidation loss - The auditor issued a qualified opinion, stating that, except for the potential effects of the uncertainty regarding Guangzhou Zhengda's liquidation asset distribution, the financial statements present a true and fair view of the Group's financial position[51](index=51&type=chunk)[19](index=19&type=chunk) - The core of the qualified opinion is the inability to obtain sufficient audit evidence regarding the final distribution of Guangzhou Zhengda's remaining assets during liquidation, which may affect its equity valuation and the related deconsolidation loss amount[49](index=49&type=chunk)[50](index=50&type=chunk) [Management's Response](index=16&type=section&id=Management%27s%20Response) Management, supported by the Audit Committee, believes its wholly-owned subsidiary, Hong Kong Zhengda, holds 100% ownership of Guangzhou Zhengda's remaining assets post-liquidation and remains optimistic about a favorable legal outcome despite potential claims - Management believes that, based on the cooperation agreement and Chinese law, Hong Kong Zhengda owns all remaining assets in Guangzhou Zhengda's liquidation and is optimistic about winning any potential legal disputes[145](index=145&type=chunk) [Management Discussion & Analysis](index=16&type=section&id=Management%20Discussion%20%26%20Analysis) Management discusses the financial performance, business operations, and significant litigation concerning a former subsidiary, along with the outlook for the property market and future investment strategies [Financial Review](index=16&type=section&id=Financial%20Review) The annual swing to loss was primarily due to a non-cash, one-off HKD 1.71 billion deconsolidation loss from Guangzhou Zhengda and a fair value loss on investment properties, though core operating cash flow remained stable, and the gearing ratio stayed low - The annual swing from profit to loss was primarily due to (i) a **HKD 1.71 billion** deconsolidation loss from a former subsidiary; (ii) a **HKD 16.25 million** fair value gain on equity instruments at fair value through profit or loss; and (iii) a **HKD 52.30 million** fair value loss on investment properties (compared to a **HKD 50.69 million** gain last year)[181](index=181&type=chunk) - The deconsolidation loss of Guangzhou Zhengda was a non-cash transaction and had no impact on the Group's liquidity[161](index=161&type=chunk) Liquidity and Financial Resources | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Cash and bank balances | HKD 90.761 million | HKD 84.874 million | | Net cash flow from operating activities | HKD 24.263 million | HKD 26.456 million | | Gearing ratio | 0.10 | 0.04 | [Business Review](index=20&type=section&id=Business%20Review) The Group primarily engages in property investment and development in mainland China, with its core investment property, 'Gangyu Plaza' in Chongqing, providing stable cash flow, while the former subsidiary Guangzhou Zhengda's planned commercial complex development in Guangzhou is stalled due to legal disputes - The investment property 'Gangyu Plaza' in Chongqing operates stably with nearly full occupancy, providing the Group with stable cash flow and working capital[189](index=189&type=chunk)[171](index=171&type=chunk) - Former subsidiary Guangzhou Zhengda owns property in a prime location in Guangzhou, originally planned for a multi-functional commercial complex with a total GFA of approximately **234,000 sq.m.**, but the project is stalled due to liquidation disputes[190](index=190&type=chunk)[191](index=191&type=chunk) [Update on Material Litigation (Guangzhou Zhengda)](index=22&type=section&id=Update%20on%20Material%20Litigation%20(Guangzhou%20Zhengda)) The core event of this period is the complex legal litigation surrounding former subsidiary Guangzhou Zhengda, where a court ruling in May 2023 mandated its liquidation, leading to deconsolidation and a significant loss, prompting the company to pursue multiple legal avenues to challenge the decision - Core dispute: Third-party 'Yuefang Private Enterprise' applied for compulsory liquidation of Guangzhou Zhengda, citing 'company operational deadlock'[91](index=91&type=chunk)[70](index=70&type=chunk) - Key turning point: In May 2023, the Guangdong High Court overturned the lower court's decision to dismiss the liquidation application, ordering Guangzhou Zhengda's liquidation ('revocation of dismissal ruling'), which resulted in the Group losing control over Guangzhou Zhengda[69](index=69&type=chunk)[37](index=37&type=chunk) - Countermeasures: The Group has applied for a retrial with the Supreme People's Court and initiated separate lawsuits, asserting that 'Yuefang Private Enterprise' lacks legal standing, aiming to fundamentally invalidate the liquidation decision[73](index=73&type=chunk)[102](index=102&type=chunk)[110](index=110&type=chunk) [Outlook](index=32&type=section&id=Outlook) The Board anticipates the mainland China property market will require several years to rebound, while actively seeking investment opportunities aligned with 'new quality productive forces' and expecting improvement in the Hong Kong economy with impending US interest rate cuts - The Board anticipates the mainland China property market will require several years to rebound from the bear market and will closely monitor market dynamics[87](index=87&type=chunk) - The Group will actively explore investment opportunities related to 'new quality productive forces,' aiming to upgrade and transform traditional industrial chains[130](index=130&type=chunk) - It is anticipated that the US will begin interest rate cuts by year-end or early next year, at which point the economic downturn in Hong Kong is expected to improve[115](index=115&type=chunk) [Notes to the Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section details the basis of financial statement preparation, accounting policy changes, segment information, and the financial impact of deconsolidating a former subsidiary [Basis of Preparation and Changes in Accounting Policies](index=5&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The financial statements are prepared in accordance with HKFRS and the historical cost convention, with the adoption of new and revised HKFRS standards during the year having no significant impact on the Group's financial statements - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS) and the disclosure requirements of the Hong Kong Companies Ordinance[141](index=141&type=chunk) - Several new standards, including HKAS 1 (Revised), HKAS 8 (Revised), and HKAS 12 (Revised), were adopted during the year, none of which had a significant impact on the Group's financial statements[152](index=152&type=chunk)[142](index=142&type=chunk)[136](index=136&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The Group operates in two segments: Property Investment and Development, and Corporate and Others, with all external revenue in 2023 derived from the former, which recorded a significant loss primarily due to subsidiary deconsolidation, and over 90% of the Group's revenue and assets are located in mainland China - The Group is organized into two reportable operating segments: (a) Property Investment and Development; and (b) Corporate and Others[14](index=14&type=chunk)[144](index=144&type=chunk)[29](index=29&type=chunk) Segment Results Summary (2023, HKD thousands) | Segment | Sales to external customers | Segment results | | :--- | :--- | :--- | | Property Investment and Development | 28,363 | (1,724,344) | | Corporate and Others | – | (14,678) | | **Total** | **28,363** | **(1,739,022)** | - For the year 2023, revenue from a single major customer A amounted to **HKD 28.363 million**, representing **100%** of total revenue[3](index=3&type=chunk)[28](index=28&type=chunk) [Deconsolidation of a Former Subsidiary](index=11&type=section&id=Deconsolidation%20of%20a%20Former%20Subsidiary) Due to a court-ordered liquidation, the Group lost control of Guangzhou Zhengda on May 15, 2023, leading to its deconsolidation and a significant HKD 1.71 billion loss recognized in the income statement, with the remaining equity reclassified as a financial asset at fair value - Due to the court's liquidation order, the Board determined that the Group lost control over Guangzhou Zhengda from May 15, 2023, and thus deconsolidated it[37](index=37&type=chunk) Financial Impact of Deconsolidation (HKD thousands) | Item | Amount | | :--- | :--- | | Release of exchange fluctuation reserve | 20,469 | | Net assets of Guangzhou Zhengda | 2,702,106 | | **Deconsolidation loss of a former subsidiary** | **(1,708,355)** | | Equity interest recognized as financial asset at fair value through profit or loss | 1,014,220 | - The fair value of Guangzhou Zhengda's equity interest was determined using the discounted net realizable value method, considering asset fair value, related taxes, recovery time, and discount rates[40](index=40&type=chunk) [Corporate Governance and Other Information](index=33&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's adherence to corporate governance codes, the Audit Committee's review of annual results, and the status of share trading [Corporate Governance and Compliance](index=33&type=section&id=Corporate%20Governance%20and%20Compliance) The Board believes the company largely complied with the Listing Rules' Corporate Governance Code during 2023, with a minor deviation regarding director rotation deemed in spirit with the code, and the Audit Committee has reviewed the annual results - The Board believes the company largely complied with the Corporate Governance Code throughout the year, with a deviation from Code Provision A.4.2 (regarding rotation of directors) but deemed to be in line with the spirit of the code[117](index=117&type=chunk)[132](index=132&type=chunk) - The company's Audit Committee has reviewed the annual results[121](index=121&type=chunk) - The company's shares were suspended from trading from 9:00 a.m. on July 2, 2024, and an application has been made for resumption of trading after the announcement[123](index=123&type=chunk)[134](index=134&type=chunk)

Financial Performance - The consolidated revenue for the six months ended June 30, 2023, was HKD 14,752,000, a slight increase of approximately 2% compared to HKD 15,104,000 for the same period last year[7]. - The adjusted EBITDA for the period was HKD 3,021,000, down from HKD 4,995,000 in the previous year[8]. - The net loss for the group during the period was HKD 444,000, a decrease from a profit of HKD 521,000 in the same period last year, attributed to a decline in revenue and an increase in administrative expenses[9]. - For the six months ended June 30, 2023, the company's revenue was HKD 14,752,000, a decrease of 2.33% compared to HKD 15,104,000 in the same period of 2022[105]. - The company reported a loss of HKD 444,000 for the period, compared to a profit of HKD 521,000 in the previous year, indicating a significant decline in profitability[105]. - The pre-tax profit for the period was HKD 2,171,000, down from HKD 3,118,000 in 2022, reflecting a decrease of approximately 30.4%[122]. - The basic earnings per share attributable to ordinary shareholders was HKD 0.02, down from HKD 0.15 in the same period last year, a decline of 86.67%[105]. - The total employee cost for the period was HKD 3,599,000, a decrease from HKD 3,916,000 in the previous year[76]. Financial Position - The cash and bank balance as of June 30, 2023, was HKD 95,874,000, an increase from HKD 84,874,000 as of December 31, 2022, with no bank borrowings[10]. - The group had outstanding borrowings of HKD 69,098,000 as of June 30, 2023, down from HKD 72,297,000 at the end of the previous year[13]. - The total assets of the group as of June 30, 2023, were HKD 4,233,749,000, a decrease from HKD 4,415,989,000 as of December 31, 2022[14]. - The net current assets as of June 30, 2023, were HKD 12,838,000, compared to HKD 1,034,000 as of December 31, 2022[14]. - The company's total equity decreased to HKD 2,883,771,000 from HKD 3,021,523,000, a decline of approximately 4.56%[111]. - The total liabilities decreased to HKD 1,217,706,000 from HKD 1,257,083,000, reflecting a reduction of about 3.13%[111]. Capital and Investments - The company announced the issuance of 60,000,000 stock options at an exercise price of HKD 0.09, raising a total of HKD 4,950,000 before expenses[22]. - As of June 30, 2023, the net proceeds from the new share issuance amounted to HKD 16.1 million, with 74.5% allocated to the Guangzhou development project and 25.5% for general working capital[25]. - The Guangzhou reconstruction project is budgeted at approximately RMB 1.7 billion (HKD 1.836 billion), with the company and related parties bearing 25% and 75% of the total cost respectively[39]. - The company owns around 190 residential units with a total construction area of approximately 11,000 square meters, which are currently vacant or available for sale[41]. Legal and Regulatory Matters - The company is currently facing legal challenges regarding a liquidation petition against its indirect subsidiary, Guangzhou Zhengda, with recent court rulings impacting its operational status[51]. - The company expressed disappointment over a recent ruling that overturned a previous dismissal of the liquidation petition, indicating ongoing legal disputes[51]. - The company plans to address the legal issues through litigation or arbitration rather than liquidation procedures[51]. - Guangzhou Zhengda's Chinese partner holds 0% equity, thus has no shareholder rights according to Chinese company law[55]. - The so-called liquidation announcement is the second attempt by Yuefang Private Enterprise to initiate compulsory liquidation, following a similar attempt in 2009 that was dismissed in 2021[58]. - Guangzhou Zhengda's business operations remain normal, and it is still registered as an "operating enterprise" as of the latest public report[60]. Market and Economic Outlook - Economic indicators show a strong rebound in both mainland China and Hong Kong following the lifting of travel restrictions in March 2023[68]. - The central government aims for a 5% economic growth target for 2023, despite facing challenges such as the ongoing Ukraine war and high inflation rates in Western countries[68]. - The board maintains a cautiously optimistic outlook for the stability and prosperity of the Chinese economy this year[70]. - The board expresses optimism for economic rebound in mainland China and Hong Kong in the fourth quarter of 2023[75]. - The government emphasizes the importance of macro policies, expanding demand, reform, innovation, and risk prevention to stabilize the economy[70]. Corporate Governance - The company has complied with the corporate governance code throughout the period[94]. - The board consists of five members, with independent non-executive directors making up 60% of the board[96]. - Major shareholders include Ye Jiali with 15.30% and He Zhanxiong with 13.74% of the company's shares[86]. - The company’s major shareholder, He Jianxiong, holds 14.39% of the company through controlled corporations and 0.91% directly[78].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責, 對其準確性或完整性亦不發表任何聲明,並明確表示概不就因本公告全部或任何 部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 1 中期業績 中期業績 中華國際控股有限公司(「本公司」)董事會(「董事會」)謹此宣佈,本公司截至二零 二三年六月三十日止六個月未經審核綜合業績(「中期業績」),連同二零二二年同 期之比較數字,如下: 簡明綜合收益表 | | | 截至六月三十日止六個月 | | |-------------------------------------|------|--------------------------|---------------| | | | 二零二三年 | 二零二二年 | | | | (未經審核) | (未經審核) | | | 附註 | 千港元 | 千港元 | | 收入 | 2 | 14,752 | 15,104 | | 其他收入及收益 | | 229 | 526 | | 行政開支 | | (12,087) | (11,717) | | 財務費用 | 3 | (723) | (795) | | 稅 ...

Financial Performance - For the year ended December 31, 2022, the company recorded a revenue of HKD 30,283,000, a decrease of 47.5% compared to HKD 57,670,000 in 2021[8] - The net profit attributable to ordinary shareholders for the year was HKD 3,273,000, down 52.0% from HKD 6,811,000 in the previous year[8] - Adjusted EBITDA for the year was HKD 7,447,000, a decline of 74.6% from HKD 29,301,000 in 2021[9] - The company's cash and bank balances as of December 31, 2022, were HKD 84,874,000, down from HKD 93,204,000 in 2021[12] - The total assets of the company as of December 31, 2022, were HKD 4,415,959,000, a decrease from HKD 4,727,091,000 in the previous year[12] - The company had outstanding borrowings of HKD 72,297,000 as of December 31, 2022, compared to HKD 79,359,000 in 2021[12] - Total employee costs, including director remuneration, amounted to HKD 8,280,000 for the year ending December 31, 2022, compared to HKD 7,967,000 in 2021[51] - The group employs approximately 30 staff members, consistent with the previous year[51] Investment Properties - The fair value gain on investment properties for the year was HKD 50,692,000, an increase from HKD 33,638,000 in the previous year[10] - The company has two investment properties located in Chongqing and Guangzhou, with a total book value of HKD 4,274,112,000 as of December 31, 2022[15] - The company holds significant property interests in Chongqing and Guangzhou, with the Chongqing property being a commercial building with a total construction area of approximately 49,400 square meters[23][27] - The Guangzhou redevelopment project is planned to be a 22-story multifunctional commercial complex with a total construction area of approximately 234,000 square meters, with an estimated construction cost of RMB 1.7 billion (approximately HKD 1.921 billion)[30][31] - The first phase of the Guangzhou redevelopment project is expected to be completed by the end of 2026, with the second phase by the first quarter of 2028, and the new commercial complex is anticipated to open in early 2027[31] - The company expects to continue generating rental income from remaining units and temporary parking lots in the Guangzhou redevelopment project until construction begins[31] - The Chongqing property has maintained low shop turnover rates, with most shops leased to third parties on annual contracts[27] Financing and Capital Structure - The company issued 55 million new shares after the exercise of stock options, raising HKD 4.95 million before expenses[17] - As of December 31, 2022, the net proceeds from the new share issuance amounted to HKD 16.1 million, with 74.5% (HKD 12.0 million) allocated for the reconstruction costs of the Guangzhou development project[21] - The company plans to finance the construction costs through bank loans, project financing, equity financing, and potential new funds from investors[31] - The company’s capital debt ratio remained stable at 0.02 for both 2022 and 2021[11] Legal and Regulatory Matters - The court ruled in May 2021 to reject a forced liquidation application against Guangzhou Zhengda, confirming that the company remains operational and is wholly owned by Hong Kong Zhengda[39] - The company is optimistic about favorable outcomes in ongoing legal disputes, including an appeal related to compensation decisions from the former Guangzhou Housing Authority[44] - The company has not received any court summons, notices, or judgments related to the liquidation petition as of now[89] - The company maintains that the so-called liquidator lacks valid authorization to handle the liquidation matters of Guangzhou Zhengda[85] - The compensation decision from the housing authority required Guangzhou Zhengda to pay approximately RMB 27,600,000 to nine claimants, but this obligation was later revoked by the Guangzhou Municipal Government[102] Corporate Governance - The board of directors confirmed that there are no other significant risks or uncertainties affecting the company beyond those disclosed in the annual report[112] - The board consists of 5 members, including 1 executive director and 3 independent non-executive directors, all of whom have served for over 10 years[169] - The audit committee is composed entirely of independent non-executive directors, ensuring compliance with governance codes[182] - The remuneration committee includes three independent non-executive directors and one executive director, responsible for determining the remuneration policies[186] - The company has adopted a whistleblowing policy to encourage reporting of any suspected misconduct or unethical behavior, ensuring protection for whistleblowers[194] - The company has established effective mechanisms to support a highly independent board and regularly reviews its governance structure[175] Market Outlook and Economic Conditions - Following the implementation of the "full resumption" policy in March 2023, economic activities in both mainland China and Hong Kong are gradually returning to normal, with strong economic rebound indicators[45] - The central government aims for a 5% economic growth target for 2023, despite challenges such as the ongoing Russia-Ukraine conflict and potential financial crises in the West[45] - The new government emphasizes economic recovery as a priority, with a focus on maintaining openness and supporting private enterprises[46] - The group anticipates that the US Federal Reserve's interest rate hikes will peak in the third quarter of 2023, potentially stabilizing the RMB exchange rate[46] - The group plans to leverage the economic opportunities presented by the recovering market to enhance its business strategies and growth[45] Shareholder Matters - The company did not recommend the payment of a final dividend for the year ended December 31, 2022[22] - The company reported a profit for the year ending December 31, 2022, but has decided not to declare any dividends due to ongoing reconstruction projects and the focus on long-term capital appreciation rather than short-term profits[113][114] - Major shareholders holding 5% or more of the company's shares include Ye Jiali with 15.30% (117,600,000 shares) and He Zhanxiong with 13.74% (105,600,000 shares)[146] Employee Relations - The company emphasizes the importance of competitive remuneration to foster a fair and caring relationship with employees[51] - The company maintains a close relationship with employees, providing a fair and safe working environment along with training and development resources[152]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責, 對其準確性或完整性亦不發表任何聲明,並明確表示概不因本公佈全部或任何部 份內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 (於百慕達註冊成立之有限公司) (股份代號:1064) 截至二零二二年十二月三十一日止年度之初步業績 本公告乃根據香港聯合交易所有限公司證券上市規則(「上市規則」)第13.49(1)及(2) 條作出公佈。 中華國際控股有限公司(「本公司」)董事會(「董事會」)謹此宣佈本公司及其附屬公 司(統稱「本集團」)截至二零二二年十二月三十一日止年度之綜合業績(「年度業 績」),連同比較數字及相關解釋附註如下: 綜合收益表 截至二零二二年十二月三十一日止年度 | | | 二零二二年 | 二零二一年 | |------------------------|------|----------------|--------------| | | 附註 | 千港元 | 千港元 | | 收入 | 2 | 30,283 | 57,670 | | 銷售成本 | | – | (5,628) | | 毛利 | | 30,283 | 52 ...