中國新城市商業發展有限公司 China New City Commercial Development Limited Stock Code 股份代號: 1321 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) INTERIM REPORT 中期報告 2021 CONTENTS 目 錄 Corporate Information 2 公司資料 Investment Properties 4 投資物業 Major Properties Held for Development and/or Sales 5 持作發展及╱或銷售的主要物業 Management Discussion and Analysis 8 管理層討論與分析 Independent Review Report 19 獨立審閱報告 Interim Condensed Consolidated Statement of Profit or Loss 21 中期簡明綜合損益表 Interim Condensed Consolidated Stat ...

Financial Performance - The Group's revenue for 2020 was approximately RMB 700,370,000, representing a year-on-year decrease of approximately 64.2%[18] - Gross profit for the year was approximately RMB 170,155,000, reflecting a year-on-year decrease of approximately 78.1%[18] - Profit attributable to owners of the Company was approximately RMB 44,429,000, indicating a year-on-year increase of approximately 69.1%[18] - In 2020, the Group's revenue was approximately RMB 700,370,000, a year-on-year decrease of about 64.2%[21] - The gross profit for the year was approximately RMB 170,155,000, down approximately 78.1% year-on-year[21] - The profit attributable to the owners of the company was approximately RMB 44,429,000, an increase of about 69.1% year-on-year[21] - The recognized sales of properties sold and delivered for the year ended December 31, 2020, was approximately RMB 248,942,000, a decrease of 83.8% from RMB 1,534,552,000 in 2019[60] - Revenue from property sales dropped to approximately RMB 248,942,000, representing a decrease of approximately RMB 1,285,610,000 or 83.8% compared to the same period in 2019; after accounting for the disposal of investment properties, the adjusted drop was approximately RMB 465,851,000 or 30.4%[78] - Revenue from property rental and management amounted to approximately RMB 144,845,000, a decrease of approximately RMB 30,567,000 or 17.4% compared to the same period in 2019, mainly due to rental concessions offered to tenants during city lockdowns[79] - Revenue from hotel operations increased to approximately RMB 182,516,000, representing an increase of approximately RMB 41,246,000 or 29.2% compared to the same period in 2019, attributed to the opening of a new hotel in late October 2019[80] Equity and Cash Position - As of the end of 2020, the total equity of the Group reached approximately RMB 6,077,418,000, a slight decrease of approximately 1.0% from the end of 2019[18] - The carrying amount of cash at the end of 2020 was approximately RMB 1,108,888,000[18] - As of the end of 2020, the total equity of the Group was approximately RMB 6,077,418,000, a slight decrease of about 1.0% compared to the end of 2019[21] - The Group's cash balance was approximately RMB 1,108,888,000[21] - As of December 31, 2020, the Group's cash and cash equivalents and restricted cash totaled approximately RMB 1,108,888,000, an increase from approximately RMB 431,686,000 as of December 31, 2019[104] Strategic Focus and Development Plans - The Group plans to focus on land bank replenishment and the development and sales of commercial properties to generate quick and stable income and cash flows[19] - The Group is exploring potential mergers and acquisitions to achieve structural optimization and become more market-oriented[19] - The Group aims to diversify income sources and risk exposure through potential investment opportunities in China or overseas[19] - The Group will continue to optimize its capital structure while assessing market opportunities and acquiring quality land prudently[47][51] - The Group plans to upgrade its organizational capabilities to enhance competitiveness across different business segments[48][51] - The core business will remain focused on commercial property development, aiming for balanced and high-quality growth[49][51] Operational Performance - The total gross floor area (GFA) of land reserves was approximately 4,087,876 sq.m. as of December 31, 2020[25][26] - The contracted sales area for the Group was approximately 60,936 sq.m., an increase of 32% from 46,069 sq.m. in 2019, with contracted sales revenue of approximately RMB 1,242,900,000, up from RMB 1,040,700,000[65] - Hotel operations recorded revenue of approximately RMB 182,516,000, an increase of 29.2% from RMB 141,270,000 in 2019, with an occupancy rate of approximately 43%[69] - The total revenue from leasing business was approximately RMB 144,845,000, a decrease of approximately RMB 30,567,000 from RMB 175,412,000 in 2019, with an average occupancy rate of approximately 94%[70] Corporate Governance - The Board does not recommend any final dividend for the year ended December 31, 2020, maintaining a consistent approach from the previous year[136] - The roles of the chairperson and chief executive officer are separate, enhancing corporate governance[148] - The Board focuses on overall corporate strategies, financial performance, and corporate governance standards[156] - The Board has delegated day-to-day operations to senior management, who must report back and seek approval for key decisions[157] - Non-executive and independent non-executive directors possess extensive expertise and management experience[159] - The Articles stipulate that one third of the Directors must retire by rotation at each AGM, ensuring regular re-election[164] - The Board has established four committees to handle various responsibilities, including remuneration and audit[165] - The Audit Committee comprises three independent non-executive Directors, ensuring appropriate professional qualifications and expertise in accounting and financial management[191] Environmental and Social Responsibility - The Group is committed to environmental protection, monitoring projects to ensure compliance with environmental laws and regulations[130] - The Group encourages employees to be environmentally conscious, promoting pollution prevention and waste reduction[130] - No material accidents or environmental claims were reported during the year, indicating strong adherence to safety and environmental standards[126] - Customer satisfaction significantly impacts profitability, with the sales team actively engaging with customers to identify needs and adjust strategies accordingly[126] Employee and Investor Relations - The Group's employee count as of December 31, 2020, was 1,729, a decrease from 1,763 in 2019[120] - The Group's strategy includes improving product and service quality and enhancing investor relations management to maximize shareholder value[121] - The management is focused on enhancing investor relations through various communication methods to convey business strategies and performance[124]

Financial Performance - The Group's revenue for the six months ended June 30, 2020, dropped to approximately RMB 305,533,000, representing a decrease of approximately RMB 357,689,000 or 53.9% compared to the previous period[18]. - The Group's consolidated revenue for the six months ended June 30, 2020, was approximately RMB 305,533,000, representing a decrease of approximately RMB 357,689,000 or 53.9% compared to the same period in 2019[36]. - Revenue from property sales dropped to approximately RMB 122,443,000, a decrease of approximately RMB 351,932,000 or 74.2% compared to the same period in 2019[37]. - Revenue from property rental and management amounted to approximately RMB 80,591,000, an increase of approximately RMB 2,794,000 or 3.6% compared to the same period in 2019[37]. - Revenue from hotel operations was approximately RMB 63,869,000, representing an increase of approximately RMB 3,753,000 or 6.2% compared to the same period in 2019[39]. - The Group's gross profit for the period was approximately RMB 55,528,000, a decrease of approximately RMB 234,794,000 or 80.9% compared to the same period in 2019, with a gross profit margin of 18.2%, down by 25.6 percentage points[40]. - The profit attributable to the Group was approximately RMB 54,789,000 for the period, compared to approximately RMB 8,171,000 in the same period in 2019, mainly due to a fair value gain of approximately RMB 356,806,000 upon transfer to investment properties[57]. - The company reported a profit before tax of RMB 111,177,000 for the six months ended June 30, 2020, down from RMB 143,454,000 in the same period of 2019, representing a decline of about 22.5%[152]. - Total comprehensive income for the period reached RMB 64,989,000, up from RMB 49,782,000, indicating an increase of 30.5% year-over-year[99]. Market Conditions - The GDP of China decreased by 6.8% in the first quarter of 2020, marking the worst quarterly figures since 1992[16]. - The hotel operation in China experienced a significant decline in occupancy, reaching record lows in February 2020, but there are early signs of recovery driven by corporate travel and small-scale meetings[19]. - The PRC property market has shown signs of recovery as the pandemic was gradually controlled from the second quarter of 2020[18]. - The overall economy in China has been returning to normal as factories resume production and people restart work[16]. Strategic Initiatives - The Group plans to focus on land bank replenishment and the development and sales of commercial properties to generate quick and stable income and cash flows[20]. - The Group will consider potential mergers and acquisitions to achieve structural optimization and become more market-oriented[20]. - The Group will monitor the impact of the COVID-19 pandemic and adjust its strategies accordingly[20]. - The Group aims to diversify its revenue sources and mitigate risks through potential investments in China or overseas[22]. - The company plans to focus on expanding its property management services and enhancing operational efficiency in response to market challenges[150]. - The company is focusing on market expansion and new product development as part of its strategic initiatives moving forward[200]. Financial Position - As of June 30, 2020, the Group's cash and cash equivalents and restricted cash totaled approximately RMB 409,389,000, down from approximately RMB 431,686,000 as of December 31, 2019[69]. - The Group's gearing ratio as of June 30, 2020, was 71%, up from 66% as of December 31, 2019[69]. - Capital commitments as of June 30, 2020, were approximately RMB 823,258,000, compared to approximately RMB 767,467,000 as of December 31, 2019[71]. - Contingent liabilities as of June 30, 2020, were approximately RMB 6,540,000, significantly down from approximately RMB 258,800,000 as of December 31, 2019[72]. - As of June 30, 2020, the Group's bank borrowings and other borrowings amounted to approximately RMB 4,822,800,000, an increase from approximately RMB 4,456,105,000 as of December 31, 2019[77]. - The Group's total assets pledged as collateral for borrowings were valued at RMB 2,857,609,000 as of June 30, 2020[78]. - The number of employees decreased to 1,627 as of June 30, 2020, from 1,763 as of December 31, 2019, reflecting a reduction in workforce[80]. Cash Flow - The net cash used in operating activities for the six months ended June 30, 2020, was RMB 1,060,503,000, compared to RMB 277,752,000 in the same period of 2019, indicating a significant increase in cash outflow[117]. - Net cash generated from investing activities was RMB 707,978,000, compared to a net cash used of RMB (67,731,000) in the previous period[122]. - The net cash generated from financing activities was RMB 330,640,000, compared to RMB 32,976,000 in the previous period[122]. - Cash and cash equivalents at the end of the period were RMB 387,449,000, an increase from RMB 236,773,000 at the end of the previous period[122]. - The company reported a net decrease in cash and cash equivalents of RMB (21,885,000) for the current period, compared to a decrease of RMB (312,507,000) previously[122]. Revenue Breakdown - The commercial property development segment generated revenue of RMB 122,443,000, down from RMB 474,375,000 in the prior year, reflecting a decrease of about 74.2%[152]. - The property rental segment reported revenue of RMB 80,591,000, compared to RMB 77,797,000 in the previous year, indicating an increase of approximately 3.6%[152]. - Hotel operations segment revenue was RMB 63,869,000, slightly up from RMB 60,116,000 in 2019, marking an increase of about 4.6%[152]. - The geographical revenue breakdown indicates that Mainland China contributed RMB 290,656,000, while other regions contributed RMB 14,877,000 for the reporting period[159].

Financial Performance - The Group's revenue for the year ended December 31, 2019, was approximately RMB 1,956 million, with property sales contributing nearly RMB 1,535 million[8]. - The gross profit of the Group was approximately RMB 778 million, resulting in a profit of approximately RMB 45 million for the year[8]. - Profit attributable to owners of the parent was approximately RMB 26 million, with earnings per share of approximately RMB 1.3 cents[8]. - The Group recorded consolidated revenue of approximately RMB1,955,853,000 for the year under review, representing a slight increase of 1.6% compared to RMB1,924,619,000 in 2018[95]. - Revenue from property sales amounted to approximately RMB1,534,552,000, reflecting a decrease of 2.8% from RMB1,578,447,000 in 2018[95]. - Revenue from property rental increased by 9.4% to approximately RMB175,412,000, up from RMB160,369,000 in 2018[97]. - The hotel operation recorded a revenue of approximately RMB141,270,000, representing an increase of 26.9% from RMB111,328,000 in 2018[97]. - Gross profit for the year amounted to approximately RMB778,236,000, a significant increase of 128.6% from RMB340,491,000 in 2018, with a gross profit margin of 39.8%[97]. - Other income and gains increased significantly by 262.1% to approximately RMB68,460,000, compared to RMB18,905,000 in 2018[97]. - The Group achieved a profit of approximately RMB45,289,000 for the year, a turnaround from a loss of approximately RMB221,997,000 in 2018[101]. Market Conditions - The Chinese economy maintained a GDP growth rate of 6.1% in 2019, despite challenges such as the Sino-US trade war and weakening domestic demand[12]. - The impact of the COVID-19 outbreak on the real estate market is expected to be short-lived, with demand anticipated to pick up once the epidemic is under control[41][42]. - The COVID-19 outbreak is expected to have a short-term impact on sales, development, investment, and cash flow in the real estate industry[70][72]. - The Chinese government plans to adopt more proactive monetary and fiscal policies to stabilize foreign demand and promote consumption[66][67]. Business Strategy and Development - The Group adhered to a principle of prudent investment and sound operation amidst regulatory controls in the real estate industry[12]. - The Group aims to strengthen its main real estate business while improving its diversified industries[12]. - The Group is focused on creating synergy through coordinated development among various business platforms[12]. - The Group will continue to promote new breakthroughs in performance to meet the needs for a better life[12]. - The International Office Center (IOC) project is a key development project, expected to drive property sales revenue and ensure steady growth in the Group's revenue from property sales in the future[46][49]. - The Group is focusing on expanding its presence in cultural education, healthcare, film and entertainment, and cultural leisure tourism segments across the Yangtze River Delta region[45][49]. - The Group aims to create a night culture at the Yuyao Times Square by introducing food trucks, street markets, and outdoor decorations to attract more visitors[47][50]. - The Group's new child-oriented business model integrates health, education, entertainment, and sports, aiming to drive growth in the child-related industry[30]. Property and Project Performance - Jiarun Mansion at Plot A3 recorded strong sales performance with the launch of fine-decorated apartments, contributing to stable property sales revenue and higher profitability for the Group[17]. - The occupancy rate of Highlong Plaza reached over 94%, with 24 new brands added, enhancing rental performance and visitor traffic[22]. - Revenue from hotel operations increased by nearly 26.9% year on year, with the successful opening of Ningbo Bright Hotel contributing significantly to the Group's income[25]. - The Group's film and television revenue grew by nearly 42%, with a 46% increase in the cumulative number of customers received compared to the same period last year[34]. - The Xixi New City Project and Xixi Manhattan Project, located near key attractions, were delivered successfully, driving property sales revenue growth[19]. - The Group's property leasing revenue showed steady growth, primarily from Highlong Plaza and Zhong An Intime City, with successful business strategy adjustments[23]. Financial Management and Resources - The Group's total cash and bank balances were approximately RMB431,686,000, a decrease from approximately RMB625,322,000 in 2018[107]. - The Group's bank and other borrowings increased to approximately RMB4,456,105,000 as of December 31, 2019, compared to approximately RMB2,968,085,000 in 2018[109]. - The maturity profile of borrowings shows that borrowings due within 1 year decreased to RMB351,860,000 from RMB922,460,000 in 2018[112]. - The Group's net current assets improved to approximately RMB1,773,345,000 as of December 31, 2019, compared to net current liabilities of approximately RMB257,828,000 in 2018[119]. - The current ratio increased to approximately 1.59 as of December 31, 2019, up from 0.94 in 2018[121]. - The gearing ratio rose to 66% as of December 31, 2019, compared to 40% in 2018[120]. - The total cost of borrowings for the year was approximately RMB218,936,000, an increase from approximately RMB198,985,000 in 2018[125]. - The Group's available financial resources totaled approximately RMB12,249,955,000 as of December 31, 2019, including undrawn borrowing facilities of approximately RMB7,793,850,000[107]. Corporate Governance and Compliance - The Company has complied with the corporate governance code provisions as set out in the CG Code for the year ended December 31, 2019[166]. - The Audit Committee reviewed the audited consolidated financial statements for the year ended December 31, 2019, ensuring adherence to accounting standards[147]. - The Company has adopted a code of conduct for Directors' securities transactions that meets the required standards[148]. - The Board focuses on overall corporate strategies, financial performance, and compliance with corporate governance standards[193]. - The roles of the chairperson and chief executive officer are separate, enhancing corporate governance[185]. - The Board members have no material relationships among themselves, ensuring independence[177]. - The Company has closely monitored its projects to ensure compliance with environmental protection laws and regulations[140]. - No material accidents or environmental claims were reported during the year, indicating compliance with relevant PRC laws and regulations[139]. Employee and Stakeholder Relations - The Group had 1,763 employees as of December 31, 2019, an increase from 1,399 in 2018, with staff costs rising to approximately RMB 133,076,000 from RMB 123,116,000[131]. - The Group emphasizes investor relations management to communicate its operational vision and future strategies to stakeholders[133].

[Corporate Information](index=3&type=section&id=Corporate%20Information) The report provides fundamental corporate details including core management, board members, registered office, principal place of business, and primary banking relationships[6](index=6&type=chunk)[11](index=11&type=chunk) [Chairperson's Statement](index=5&type=section&id=Chairperson's%20Statement) [Results Review](index=5&type=section&id=Results%20Review) In the first half of 2019, the Group achieved significant performance improvement with revenue up 28%, gross profit surging 299%, and comprehensive income attributable to equity holders turning profitable, leading the Board to recommend no interim dividend 2019 H1 Key Financial Indicators | Indicator | 2019 H1 | 2018 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Revenue** | Approx. 663 million RMB | Approx. 518 million RMB | +28% | | **Gross Profit** | Approx. 290 million RMB | Approx. 73 million RMB | +299% | | **Gross Margin** | 44% | 14% | +30 percentage points | | **Comprehensive Income Attributable to Equity Holders** | Approx. 21 million RMB | Approx. -99 million RMB | Turned profitable | - During the review period, contracted sales area was approximately **24,061 square meters**, with contracted sales revenue of approximately **479 million RMB**[17](index=17&type=chunk) - To meet the Group's future business development needs, the Board does not recommend declaring an interim dividend for 2019[17](index=17&type=chunk) [Market and Business Review](index=6&type=section&id=Market%20and%20Business%20Review) Under the policy of "housing is for living, not for speculation," the Group adheres to prudent investment and stable operations, with property sales and leasing maintaining stability, hotel operations growing, and strategic expansion into parent-child education and healthcare - Property Sales: IOC Jia Run Gong Guan, Xixi New City, and Xixi Manhattan projects were progressively delivered, becoming the primary drivers of property sales revenue growth[26](index=26&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - Property Leasing: Revenue remained stable compared to the same period last year, primarily from Hangzhou Xiaoshan Henglong Plaza (occupancy rate over **97%**) and Yuyao Zhong An Times Square[32](index=32&type=chunk) - Hotel Operations: Revenue increased by nearly **26%** year-on-year, with occupancy rate rising from **48%** in the same period last year to **55%**. Hangzhou Somerset Serviced Residence, a collaboration with CapitaLand Singapore, opened in April 2019[36](index=36&type=chunk)[37](index=37&type=chunk) - Emerging Industries: The Group further acquired **31.56%** equity in the UK parent-child education brand Maggie & Rose, with plans to open approximately **18 clubs** in Greater China over the next five years. Concurrently, in healthcare, Hangzhou Qiushi Eye Hospital opened in March 2019[42](index=42&type=chunk)[48](index=48&type=chunk) [Prospects and Outlook and Development Strategies](index=11&type=section&id=Prospects%20and%20Outlook%20and%20Development%20Strategies) Looking ahead, the Group will continue to focus on urbanization development in the Yangtze River Delta region, leveraging key projects like IOC to drive sales growth and expand into diversified emerging industries including cultural education and healthcare - The Group's strategic core is to focus on urbanization development in the Yangtze River Delta region and establish a prominent brand there[55](index=55&type=chunk) - The key development project IOC (International Office Center), adjacent to Hangzhou Olympic Sports Center and the 2022 Asian Games venues, is expected to continue driving significant sales revenue growth for the Group. Construction on IOC Plot A2 commenced in late 2018, with foundation piling successfully completed[60](index=60&type=chunk)[61](index=61&type=chunk) - The Group will expand into four new emerging industry sectors: cultural education, healthcare, film and television entertainment, and cultural tourism and leisure, building upon its existing commercial foundation[56](index=56&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Analysis](index=13&type=section&id=Financial%20Analysis) In the first half of 2019, the Group's consolidated revenue increased by 28% to RMB 663 million, driven by high-unit-price property sales, while gross profit surged 299% to RMB 290 million, and loss attributable to equity holders significantly narrowed to RMB 20.81 million, achieving a turnaround with exchange gains 2019 H1 Revenue Composition | Revenue Source | Amount (RMB) | Year-on-Year Change | | :--- | :--- | :--- | | Property Sales | 474 million RMB | +30% | | Property Leasing and Management | 83 million RMB | +0.5% | | Hotel Operations | 60 million RMB | +26% | | **Total Revenue** | **663 million RMB** | **+28%** | - Gross profit significantly increased by **299%** year-on-year to **290 million RMB**, with gross margin improving from **14.1%** to **43.8%**, primarily due to increased revenue recognition from high-margin core commercial property projects[70](index=70&type=chunk) - Finance costs increased by **71%** year-on-year to **62.87 million RMB**, mainly because interest on loans related to completed properties held for sale was no longer capitalized[82](index=82&type=chunk) - Loss attributable to equity holders narrowed from **54.09 million RMB** in the same period last year to **20.81 million RMB**, a **62%** decrease. Including exchange gains, comprehensive income attributable to equity holders was **20.80 million RMB**, compared to a loss of **98.64 million RMB** in the same period last year[83](index=83&type=chunk) [Investment Properties and Land Reserve](index=17&type=section&id=Investment%20Properties%20and%20Land%20Reserve) As of June 30, 2019, the Group's total land reserve was approximately 3.06 million square meters, with an investment property portfolio covering commercial complexes totaling 0.298 million square meters, and the IOC project serving as a core asset for development and/or sale - As of June 30, 2019, the Group's total land reserve had a gross floor area of approximately **3.06 million square meters**[98](index=98&type=chunk) Summary of Principal Properties Held for Development and/or Sale | Project | Location | Land Reserve Gross Floor Area (Square Meters) | | :--- | :--- | :--- | | International Office Center (Plot A) | Hangzhou, Zhejiang Province | 706,586 | | International Office Center (Plots B & C) | Hangzhou, Zhejiang Province | 1,098,065 | | Xuzhou MixC | Xuzhou, Jiangsu Province | 562,371 | | Zhong An Times Square (Phase I & II) | Yuyao, Zhejiang Province | 267,535 | [Material Acquisitions and Disposal](index=19&type=section&id=Material%20Acquisitions%20and%20Disposal) During the reporting period, the Group acquired approximately 31.56% of Maggie and Rose Limited for GBP 8.84 million, with no other material acquisitions or disposals of subsidiaries and associates - The Group acquired approximately **31.56%** of the issued share capital of Maggie and Rose Limited for a consideration of **8.84 million GBP** (approximately **90.8 million HKD**), with this investment to be recognized in the second half of 2019[106](index=106&type=chunk)[107](index=107&type=chunk) [Human Resources and Remuneration Policy](index=19&type=section&id=Human%20Resources%20and%20Remuneration%20Policy) As of June 30, 2019, the Group employed 1,588 staff, with staff costs decreasing by 3% to RMB 73.45 million due to focused sales strategy, and remuneration policies are based on market levels, industry standards, and individual performance Human Resources Data | Indicator | June 30, 2019 | June 30, 2018 | | :--- | :--- | :--- | | **Total Employees** | 1,588 persons | 1,373 persons | | **Staff Costs (H1)** | Approx. 73.45 million RMB | Approx. 75.35 million RMB | [Capital Structure and Liabilities](index=20&type=section&id=Capital%20Structure%20and%20Liabilities) As of June 30, 2019, the Group's capital structure remained robust despite increased leverage, with the gearing ratio rising to 46%, cash and cash equivalents decreasing to RMB 294 million, total borrowings at RMB 3.13 billion, and contingent liabilities primarily from mortgage loan guarantees Key Capital Structure Indicators | Indicator | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Cash and Cash Equivalents and Restricted Cash** | 294 million RMB | 625 million RMB | | **Current Ratio** | 1.11 | 0.94 | | **Gearing Ratio (Net Debt/Total Equity)** | 46% | 40% | | **Total Borrowings** | 3.135 billion RMB | 2.968 billion RMB | - As of the period end, the Group's capital commitments were approximately **394 million RMB**, primarily for construction costs[118](index=118&type=chunk) - Contingent liabilities were approximately **237 million RMB**, mainly for guarantees provided for mortgage loans granted to property buyers[119](index=119&type=chunk) Asset Pledges (for Secured Borrowings) | Asset Category | Pledged Carrying Value (June 30, 2019) | | :--- | :--- | | Investment Properties | 1.289 billion RMB | | Completed Properties Held for Sale | 1.565 billion RMB | | Property and Equipment | 584 million RMB | | Properties Under Development | 415 million RMB | | **Total** | **3.864 billion RMB** | [Risk Management](index=22&type=section&id=Risk%20Management) The Group maintains a conservative risk management strategy, not employing foreign exchange hedging tools as most transactions are in RMB, and currently not using interest rate swaps to hedge floating-rate borrowings - Foreign Exchange Risk: Business is primarily in China, with most transactions conducted in RMB, and no foreign exchange hedging instruments are used[127](index=127&type=chunk) - Interest Rate Risk: Risk primarily arises from floating-rate borrowings, with no interest rate swaps currently used for hedging[128](index=128&type=chunk) [Events After the Period Under Review](index=22&type=section&id=Events%20After%20the%20Period%20Under%20Review) Subsequent to the reporting period, a lawsuit was filed by the seller seeking to cancel the transaction for the acquisition of 22.65% equity in Zhejiang Xinnongdu Industrial Co., Ltd. (XND), for which shares were issued in January 2019. As of the report date, the lawsuit has not been adjudicated, and the outcome remains uncertain - Regarding the acquisition of **22.65%** equity in Zhejiang Xinnongdu, the seller has filed a lawsuit seeking cancellation. As of the report date, the outcome of the lawsuit remains uncertain[132](index=132&type=chunk)[133](index=133&type=chunk) [Financial Information](index=23&type=section&id=Financial%20Information) [Report on Review of Unaudited Interim Condensed Consolidated Financial Information](index=23&type=section&id=Report%20on%20Review%20of%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information) Ernst & Young reviewed the interim financial information for the six months ended June 30, 2019, in accordance with HKSAE 2410, concluding that nothing suggested the information was not prepared in all material respects according to IAS 34 - Auditor Ernst & Young reviewed, rather than fully audited, this interim financial information[143](index=143&type=chunk) - The review concluded that nothing came to the auditor's attention that caused them to believe the interim financial information was not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting'[144](index=144&type=chunk) [Interim Condensed Consolidated Financial Statements](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) The financial statements show strong growth in the Group's revenue and gross profit in the first half of 2019, but net profit attributable to owners of the parent remained a loss, while total assets and liabilities saw slight increases, and operating cash flow was a net outflow primarily supported by financing activities [Interim Condensed Consolidated Statement of Profit or Loss](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) In the first half of 2019, the Group's revenue was RMB 663 million, up 28%, and gross profit was RMB 290 million, up 299%, but due to increased income tax expense, net loss attributable to owners of the parent was RMB 20.81 million, a significant narrowing from the prior year 2019 H1 Summary of Statement of Profit or Loss | Item (RMB '000) | 2019 H1 | 2018 H1 | | :--- | :--- | :--- | | **Revenue** | 663,222 | 516,864 | | **Gross Profit** | 290,322 | 72,804 | | **Profit/(Loss) Before Tax** | 143,454 | (44,494) | | **Income Tax Expense** | (135,283) | (26,241) | | **Profit/(Loss) for the Period** | 8,171 | (70,735) | | **Loss Attributable to Owners of the Parent** | (20,812) | (54,090) | | **Basic Loss Per Share** | **(1.04 cents)** | **(2.9 cents)** | [Interim Condensed Consolidated Statement of Comprehensive Income](index=26&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Building on the profit for the period of RMB 8.17 million, and including exchange differences, the Group's total comprehensive income for the period was RMB 49.78 million, with total comprehensive income attributable to owners of the parent turning positive at RMB 20.80 million 2019 H1 Summary of Statement of Comprehensive Income | Item (RMB '000) | 2019 H1 | 2018 H1 | | :--- | :--- | :--- | | **Profit/(Loss) for the Period** | 8,171 | (70,735) | | **Other Comprehensive Income (Exchange Differences)** | 41,611 | (44,551) | | **Total Comprehensive Income/(Loss) for the Period** | 49,782 | (115,286) | | **Comprehensive Income Attributable to Owners of the Parent** | 20,799 | (98,641) | [Interim Condensed Consolidated Statement of Financial Position](index=27&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2019, the Group's total assets were RMB 13.56 billion, total liabilities RMB 7.45 billion, and net assets RMB 6.11 billion, with non-current assets and completed properties held for sale being major components, and interest-bearing borrowings totaling RMB 3.13 billion Summary of Statement of Financial Position (as of June 30, 2019) | Item (RMB '000) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | 13,562,141 | 13,231,588 | | Non-current Assets | 9,456,961 | 9,153,872 | | Current Assets | 4,105,180 | 4,077,716 | | **Total Liabilities** | 7,450,462 | 7,333,545 | | Non-current Liabilities | 3,749,354 | 2,998,001 | | Current Liabilities | 3,701,108 | 4,335,544 | | **Net Assets** | 6,111,679 | 5,898,043 | | **Total Equity** | 6,111,679 | 5,898,043 | [Interim Condensed Consolidated Statement of Changes in Equity](index=29&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2019, the Group's total equity increased from RMB 5.90 billion at the beginning of the year to RMB 6.11 billion, primarily driven by comprehensive income for the period and proceeds from new share issuance - Total equity increased from **5.898 billion RMB** at the beginning of the period to **6.111 billion RMB** at the end of the period[225](index=225&type=chunk)[268](index=268&type=chunk) - Key drivers for the equity increase include total comprehensive income of **49.78 million RMB** for the period and proceeds from new share issuance of **163.85 million RMB**[239](index=239&type=chunk)[245](index=245&type=chunk)[250](index=250&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=30&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In the first half of 2019, the Group experienced a net cash outflow of RMB 278 million from operating activities and RMB 68 million from investing activities, relying on financing activities for cash inflow, resulting in cash and cash equivalents decreasing to RMB 237 million 2019 H1 Summary of Statement of Cash Flows | Item (RMB '000) | 2019 H1 | 2018 H1 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | (277,752) | (288,137) | | **Net Cash (Used in)/Generated from Investing Activities** | (67,731) | 443,864 | | **Net Cash Generated from Financing Activities** | 32,976 | 63,709 | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | (312,507) | 219,436 | | **Cash and Cash Equivalents at End of Period** | 236,773 | 544,808 | [Notes to Interim Condensed Consolidated Financial Information](index=32&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Information) The notes detail the basis of financial statement preparation, accounting policy changes (IFRS 16 impact), segment operations, asset/liability breakdowns, related party transactions, commitments, contingent liabilities, and fair value of financial instruments - Accounting Policy Changes: The Group adopted IFRS 16 'Leases' effective January 1, 2019, leading to the recognition of **280 million RMB** in right-of-use assets and **273 million RMB** in lease liabilities[344](index=344&type=chunk)[362](index=362&type=chunk) Segment Revenue and Results (2019 H1) | Segment (RMB '000) | External Revenue | Segment Results | | :--- | :--- | :--- | | Commercial Property Development | 474,375 | 278,350 | | Property Leasing | 77,797 | 528 | | Hotel Operations | 60,116 | (33,200) | | Others | 50,934 | (54,112) | | **Total** | **663,222** | **191,566** | - Related Party Transactions: As of period end, receivables from related companies were approximately **131 million RMB**, and payables to related companies were approximately **972 million RMB**. Additionally, Chairman Shi Kancheng provided guarantees for the Group's borrowings of **470 million RMB**[504](index=504&type=chunk)[509](index=509&type=chunk)[515](index=515&type=chunk) - Contingent Liabilities: As of period end, the total mortgage guarantees provided by the Group for property buyers amounted to approximately **237 million RMB**[525](index=525&type=chunk) [Other Information](index=84&type=section&id=Other%20Information) [Directors' and Substantial Shareholders' Interests](index=84&type=section&id=Directors'%20and%20Substantial%20Shareholders'%20Interests) This section discloses the shareholdings of directors and substantial shareholders in the company and its associated corporations, with Chairman Shi Kancheng being the controlling shareholder holding approximately 64.64% of shares, alongside other key shareholders - Chairman Shi Kancheng, through corporations controlled by his wholly-owned Whole Good Management Limited, collectively holds **1.301 billion shares**, representing **64.64%** of the issued share capital[611](index=611&type=chunk)[613](index=613&type=chunk) - Substantial shareholder Ideal World Investments Limited holds **1.27 billion shares**, representing **63.08%** of the share capital[621](index=621&type=chunk) [Corporate Governance](index=87&type=section&id=Corporate%20Governance) The Group complied with the Corporate Governance Code, adopted a standard for directors' securities transactions, and the Audit Committee reviewed the interim financial information, with no interim dividend recommended and no listed securities purchased, sold, or redeemed during the period - The Board does not recommend declaring an interim dividend for the six months ended June 30, 2019[631](index=631&type=chunk) - The company complied with the code provisions of the Corporate Governance Code and adopted a standard code for directors' securities transactions[632](index=632&type=chunk)[633](index=633&type=chunk) - The Audit Committee reviewed the unaudited interim condensed consolidated financial information for the period[640](index=640&type=chunk) - During the review period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[643](index=643&type=chunk)

Financial Performance - The Group's revenue for the year ended December 31, 2018, was approximately RMB1,925 million, representing a significant increase of approximately 550% compared to 2017[11]. - The gross profit of the Group was approximately RMB340 million, an increase of 152% compared to 2017[11]. - The loss attributable to equity holders decreased to approximately RMB244 million, down by RMB732 million from 2017[13]. - The basic loss per share was approximately RMB0.13, a decrease of RMB0.40 compared to 2017[13]. - The Group's loss, excluding the fair value movement of investment properties, was approximately RMB219 million, compared to RMB359 million in 2017[11]. - The Group's consolidated revenue for the year was approximately RMB1,924,619,000, representing an increase of 550% compared to RMB295,986,000 in 2017[127]. - Gross profit for the year amounted to approximately RMB340,491,000, an increase of approximately 152% from RMB135,369,000 in 2017[130]. - The gross profit margin decreased to approximately 18% from 46% in 2017, primarily due to property sales in non-core urban areas[131]. - Contracted sales revenue for the Group was approximately RMB1,670,300,000, down from RMB3,296,300,000 in 2017, indicating a decrease of approximately 49%[101]. - The contracted sales area for the year was approximately 71,906 sq.m., a decrease from 243,268 sq.m. in 2017, representing a decline of approximately 70%[101]. Property Development and Sales - Property business sales reached nearly RMB1,578 million, marking a record high for the Group[11]. - The Group's property sales were significantly boosted by the Xixi New City project, which benefited from its prime location and intelligent home design, contributing to overall sales revenue stability[22][23]. - The Xixi New City project has a total site area of 39,703 sq.m. and a total GFA of 83,391 sq.m., integrating urban prosperity with ecological tranquility[79]. - The completion of Yuyao Zhong An Times Square and Intime City projects will significantly increase the Group's leasable area and guest rooms, providing stable cash flow support[46]. - The total GFA of the company's land bank is approximately 3,251,907 sq.m.[62]. - The total gross floor area (GFA) of land reserves is approximately 3.25 million sq.m., distributed across seven cities in the Yangtze River Delta Region[42]. - The Group anticipates continued market acceptance of its development projects in the Yangtze River Delta Region, supported by low-cost land and national strategies[45]. Operational Strategies and Future Plans - The Company is focused on expanding its property development portfolio and enhancing operational efficiencies moving forward[11]. - Future strategies include exploring new market opportunities and potential acquisitions to drive growth[11]. - The Group's strategic focus on diversifying revenue sources and optimizing its operating structure is part of its "Three-year Strategy" initiated in 2018, aiming for sustainable growth across various segments[20][21]. - The Group's strategic focus for 2019 includes exploring low-cost, high-potential land through mergers and acquisitions[51]. - The Group aims to integrate traditional and emerging sectors, focusing on cultural tourism, health, and education industries while strengthening real estate and commercial operations[46]. Hospitality and Leasing - Hotel operations recorded continuous revenue growth, supported by the successful performance of the Zhong An Holiday Inn and the opening of two new brand hotels, increasing the number of leasable hotel rooms[28][29]. - The total revenue from leasing business for the year was approximately RMB160,369,000, representing an increase of approximately 152% from RMB63,610,000 recorded in 2017[106]. - The average occupancy rate of leasing properties was approximately 96%, up from 91% in 2017[106]. - Hotel operations recorded revenue of approximately RMB111,328,000, an increase of approximately 67% from RMB66,815,000 in 2017, with an occupancy rate of approximately 58%[103]. Investments and Acquisitions - The Group acquired land use rights for a state land parcel in Hangzhou for RMB39.38 million, covering an area of 37,500 sq.m. for commercial/hotel use[40]. - An equity transfer agreement was signed to acquire 51% equity interest in Xuzhou Wanxiang for RMB144 million, with a refundable performance deposit of RMB60 million, covering 154,802 sq.m. for commercial use[42]. - The Group established a joint venture with Maggie & Rose to invest in quality family lifestyle businesses in mainland China, Macau, and Taiwan[125]. - Zhong An Shenglong acquired an additional 22.65% equity interest in Zhejiang Xinnongdu, bringing its total ownership to 42.5%[109]. Financial Position and Resources - As of December 31, 2018, the total cash and bank balances of the Group were approximately RMB625,322,000, an increase from RMB612,463,000 in 2017[150]. - The Group's total available financial resources amounted to approximately RMB10.99 billion, including undrawn borrowing facilities of approximately RMB8.02 billion and borrowings of RMB2.97 billion[150]. - The Group's bank and other borrowings as of December 31, 2018, were approximately RMB2,968,085,000, a decrease from RMB3,107,739,000 in 2017[155]. - The Group's net current liabilities were approximately RMB257,828,000 as of December 31, 2018, compared to net current assets of approximately RMB215,003,000 in 2017[163]. - The Group's gearing ratio was 40% as of December 31, 2018, down from 42% in 2017[163]. Corporate Governance and Compliance - The Audit Committee is responsible for reviewing and supervising the financial reporting process and internal controls of the Group, ensuring compliance with applicable standards[200]. - The results for the year ended 31 December 2018 have been audited by Ernst & Young, with an unmodified auditor's report included in the annual report[199]. - The Audit Committee comprises three independent non-executive Directors, ensuring independent oversight of financial matters[198]. - The Group has not reported any material accidents or environmental claims during the review year, indicating compliance with relevant laws and regulations[186]. - The Group is committed to environmental protection and monitors project compliance with environmental laws and standards[188]. Employee and Stakeholder Relations - The Group's commitment to employee development includes continuous learning and training programs to enhance skills and maintain competitiveness[174]. - The management has developed strategies to enhance cost management, risk management, and corporate governance standards, focusing on identifying potential acquisitions for improved asset returns[176]. - Customer satisfaction is critical for profitability, with a dedicated sales team working to understand and meet customer needs[179]. - The Group emphasizes investor relations management to communicate operational vision and future strategies to stakeholders through various channels[176].