（股份代號：1563） 董事會會議召開日期 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的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對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的任何損失承擔任何責任。 ALLIANCE INTERNATIONAL EDUCATION LEASING HOLDINGS LIMITED 友聯國際教育租賃控股有限公司 （於開曼群島註冊成立的有限公司） 友聯國際教育租賃控股有限公司 主席 宋建波 香港，二零二四年十一月五日 於本公告日期，董事會包括執行董事李璐強先生、劉鎮江先生、劉美娜女士及袁建 山先生；非執行董事宋建波先生及焦建斌先生；以及獨立非執行董事劉長祥先生、 劉學偉先生、焦健先生、石禮謙先生及邢莉女士。 友聯國際教育租賃控股有限公司（「本公司」及其附屬公司，統稱「本集團」）董事（「董 事」）會（「董事會」）宣佈，將於二零二四年十一月二十日（星期三）舉行董事會會議， 藉以考慮及批准本集團截至二零二四年九月三十日止六個月的中期業績，以及處理 其他事項（如有）。 承董事會命 ...

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的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對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的任何損失承擔任何責任。 有關二零二五年框架協議之重續持續關連交易 重續持續關連交易 茲提述本公司日期分別為二零二二年七月六日、二零二二年八月十八日及二零二 三年八月十一日之公告及本公司日期分別為二零二二年八月三日及二零二三年九 月二十六日之通函，內容有關現有框架協議（包括現有框架供應協議及現有框架 採購協議）。 由於現有框架協議將於二零二四年十二月三十一日屆滿，南山學院、南山集團、 南山建設發展、龍口南山及龍口管理有意於上述屆滿後，繼續進行其項下擬進行 之持續關連交易，董事會欣然宣佈，於二零二四年十一月四日，南山學院與南山 集團、南山建設發展、龍口南山及龍口管理（視情況而定）各自訂立二零二五年框 架供應協議及二零二五年框架採購協議，以重續現有框架協議項下擬進行之持續 關連交易。 二零二五年框架協議（包括二零二五年框架供應協議及二零二五年框架採購協議） 應自二零二五年一月一日至二零二七年三月三十一日（包括首尾兩日）生效，惟須 達 ...

Financial Performance - The company recorded a profit of approximately RMB 182.8 million during the reporting period, benefiting from the acquisition of Yantai Nanshan College completed in 2022[10]. - The group's revenue for the reporting period reached approximately RMB 811.8 million, an increase of about 120.1% compared to RMB 368.8 million for the year ended December 31, 2022[25]. - The group recorded a gross profit of approximately RMB 441.3 million, with a gross profit margin of about 54.4%, up approximately 72.4% from RMB 256.0 million in the previous year[27]. - The group's net profit for the reporting period was approximately RMB 182.8 million, a decrease of about 50.9% from RMB 372.1 million in the previous year, mainly due to a one-time gain from the acquisition of a 70% stake in Yantai Nanshan College[32]. - Other income, gains or losses increased from approximately RMB 28.2 million to about RMB 82.7 million, driven by significant increases in foreign exchange gains, leasing income, and investment income[28]. Higher Education Sector - Enrollment at Yantai Nanshan College has shown steady growth, with total student numbers reaching 39,093 for the 2024/25 academic year, up from 34,958 in 2023/24[14]. - The financial performance of Yantai Nanshan College contributed RMB 606.54 million in revenue and RMB 195.97 million in profit before tax from August 18, 2022, to March 31, 2024[17]. - The average tuition fees for undergraduate and diploma programs remain approximately RMB 15,800 and RMB 9,800, respectively[14]. - The demand for higher education in China is expected to continue increasing due to rising income levels and a growing emphasis on educational attainment[17]. - The company anticipates stable revenue growth from its higher education segment, supported by long-term competitive advantages and favorable market conditions[17]. Leasing Business Expansion - The company expanded its leasing business into the shipping sector by establishing the Alliance Shipping Phase I Fund Limited Partnership, focusing on acquiring shares and interests in companies holding or operating vessels[9]. - The company acquired two bulk carriers during the reporting period, enhancing its revenue base and business network[7]. - The group aims to further expand its financing leasing and related businesses in healthcare, transportation, energy, and infrastructure sectors, capitalizing on the growth potential in the leasing industry[24]. - The overall leasing penetration rate in the Chinese market remains significantly lower than that of Europe and the United States, indicating substantial growth potential for the industry[24]. - The group expects strong demand for financing due to the ongoing transformation and upgrading of China's manufacturing sector, particularly in digital and intelligent manufacturing[21]. Economic Environment - China's GDP for 2023 reached RMB 121 trillion, with a year-on-year growth of about 3%[9]. - The overall business environment in China is gradually recovering from the COVID-19 pandemic, although market sentiment remains cautious[9]. - The company is positioned to benefit from structural changes in the national economy and the ongoing transformation of the manufacturing sector towards digital and intelligent manufacturing[7]. Corporate Governance and Risk Management - The company has established a comprehensive risk management system to control credit risks associated with financing and operating leasing businesses, including due diligence and independent data reviews[57]. - The board is responsible for the overall leadership and control of the group, including the appointment and supervision of senior management[110]. - The company has implemented a risk management system to ensure assets are protected from misappropriation and unauthorized disposal[135]. - The board and audit committee have reviewed the adequacy and effectiveness of the group's risk management and internal control systems, confirming no major control failures or compliance issues leading to significant losses[144]. - The company has implemented a whistleblowing policy to allow employees to report misconduct, ensuring confidentiality for whistleblowers[150]. Shareholder Engagement and Communication - The company emphasizes shareholder rights by presenting each independent matter at the annual general meeting for individual voting, with results published on the company and stock exchange websites[157]. - The company has established a shareholder communication policy to ensure effective engagement with shareholders through various channels, including annual general meetings and timely announcements[158]. - The board will review the effectiveness of the shareholder communication policy annually to ensure it meets the needs of shareholders and investors[158]. - The company has implemented a policy for shareholders to propose resolutions at meetings, requiring written submission at least 14 days prior to the meeting[161]. Strategic Initiatives and Future Outlook - The company plans to explore domestic and international business expansion and seek suitable acquisition projects, particularly in vocational education, higher education, and shipping projects[66]. - The company has provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[78]. - New product development includes the launch of an innovative educational leasing platform, expected to enhance user engagement and drive additional revenue streams[78]. - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years[78]. - Strategic acquisitions are planned to enhance service offerings, with a budget allocation of HKD 200 million for potential mergers and acquisitions[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（「聯交所」）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，概不對因本公告全部或任 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。 ALLIANCE INTERNATIONAL EDUCATION LEASING HOLDINGS LIMITED 友聯國際教育租賃控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1563） 截至二零二四年三月三十一日止十五個月之 末期業績公告 | --- | --- | |-------|-------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | 財務摘要 | | • | 截至二零二四年三月三十一日止十五個月，期內溢利約人民幣 182.8 百萬元，而截 至二零二二年十二月三十一日止年度的溢利約人民幣 372.1 百萬元。 | ...

Revenue and Profitability - The company's revenue increased by approximately 117.3% from RMB 203.2 million to RMB 441.4 million for the nine months ending September 30, 2023[13]. - The company's profit decreased by about 35.5% from RMB 359.1 million to RMB 231.5 million, mainly due to a one-time gain from the acquisition of Yantai Nanshan College recorded in August 2022[16]. - The higher education segment generated revenues of approximately RMB 334.1 million and a profit before tax of RMB 129.7 million during the reporting period[22]. - Other income surged from RMB 4.2 million to RMB 68.3 million, driven by significant increases in foreign exchange gains and investment income[15]. - The group's revenue increased due to the acquisition of Yantai Nanshan College, which was completed on August 18, 2022, and has since been consolidated into the group's financial statements[48]. - The profit before tax for the nine months ended September 30, 2023, was RMB 394,695,000, reflecting a significant increase in operational efficiency[157]. Costs and Expenses - The service costs rose from RMB 16.3 million to RMB 190.8 million, primarily due to the operations of Yantai Nanshan College[14]. - Administrative expenses for the reporting period were approximately RMB 48.3 million, an increase from RMB 31.3 million for the nine months ended September 30, 2022, primarily due to the acquisition of Yantai Nanshan College[29]. - Employee benefit expenses, including director remuneration, were approximately RMB 126.8 million for the reporting period, compared to RMB 95.4 million for the nine months ended September 30, 2022[36]. - Interest expenses totaled RMB 38,063,000 for the nine months ended September 30, 2023, down from RMB 42,080,000 in the same period last year, indicating improved cost management[162]. Financing and Investment - The company established a shipping fund in May 2023 to expand its financing and leasing business into the shipping sector[8]. - The group reported a net cash inflow from financing activities of RMB 305,000,000, up from RMB 270,000,000 in the previous year, indicating a growth of 12.96%[122]. - The net cash used in investing activities was RMB 504,839,000, compared to a cash inflow of RMB 38,556,000 in the previous year, indicating a shift in investment strategy[122]. - The company completed the placement of 47,160,000 shares at a price of HKD 3.52 per share, representing a discount of approximately 19.82% to the closing price of HKD 4.39 on the date of the agreement[78]. Assets and Liabilities - As of September 30, 2023, the total value of financing lease receivables was approximately RMB 2,036.3 million, a decrease of about 23.3% from RMB 2,142.6 million on December 31, 2022[33]. - The group's total equity increased to approximately RMB 2,843.2 million as of September 30, 2023, compared to RMB 2,598.0 million as of December 31, 2022[53]. - The group's debt balance decreased to approximately RMB 176.1 million as of September 30, 2023, from RMB 329.3 million as of December 31, 2022[53]. - The asset-liability ratio improved to approximately 5.8% as of September 30, 2023, down from 11.3% as of December 31, 2022, primarily due to reduced borrowing[53]. Strategic Initiatives - The company anticipates increased business activity due to the relaxation of COVID-19 restrictions and the full recovery of cross-border travel in China[11]. - The group plans to focus on quality over quantity in business development, aiming for steady progress while adapting to market changes[46]. - The group plans to deepen existing partnerships and continue designing advanced applied disciplines, as well as develop collaborations with upstream and downstream enterprises[68]. - The group will continue to explore domestic and overseas business expansion and seek suitable acquisition targets, particularly in vocational and higher education sectors[92]. Risk Management and Governance - The group emphasizes risk management and internal control, focusing on business development and diversification while enhancing asset monitoring[70]. - The company has established various committees under the board, including the Strategic Investment Committee, Audit Committee, Remuneration Committee, and Nomination Committee, to oversee different aspects of governance[94]. - The board aims to enhance corporate governance mechanisms and strengthen internal controls to improve asset management capabilities[93]. Employee and Operational Metrics - The group employed 1,994 full-time employees as of September 30, 2023, compared to 1,692 full-time employees on December 31, 2022[36]. - Total employee costs for the nine months ended September 30, 2023, amounted to RMB 126.8 million, an increase of 33.4% compared to RMB 95.0 million for the same period in 2022[141]. - The group reported a significant increase in the total remuneration for directors, which rose to RMB 3.8 million from RMB 2.4 million in the previous year[141]. Educational Initiatives - The group initiated a joint master's program with several universities, including Malaysia's Sarawak University and Russia's Ufa State Petroleum Technological University, enhancing its educational offerings[115]. - The group has established a partnership for joint training of master's students, indicating a strategic move towards expanding its educational services[115]. Cash Flow and Financial Health - For the nine months ended September 30, 2023, net cash generated from operating activities was RMB 760,355,000, a significant increase from RMB 289,436,000 in the same period of 2022, representing a growth of 162.5%[122]. - The total cash and cash equivalents at the end of the period were RMB 242,369,000, compared to RMB 144,275,000 at the end of the previous year, reflecting an increase of 68.2%[122]. - The expected credit loss rate for finance lease receivables was 0.16% as of September 30, 2023, compared to 58.10% for the same period in 2022[142].

ALLIANCE INTERNATIONAL EDUCATION LEASING HOLDINGS LIMITED 友聯國際教育租賃控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1563） 截至二零二三年九月三十日止九個月 中期業績公告 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的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對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的任何損失承擔任何責任。 | --- | --- | |-------|-----------------------------------------------------------------------------------------------------------------------------------------| | | | | | 財務摘要 | | • | 截至二零二三年九月三十日止九個月，收益約為人民幣 441.4 百萬元，較截至二零 二二年九月三十日止九個月約人民幣 203.2 百萬元。 | | • | 截至二零二三年九月三十日止九個月，期內 ...

Company Information [Company Name and Stock Code](index=3&type=section&id=Company%20Name%20and%20Stock%20Code) Union International Education Leasing Holdings Limited, formerly International Union Financial Leasing Co., Ltd., is listed under stock code 1563 - Company name is Union International Education Leasing Holdings Limited, formerly International Union Financial Leasing Co., Ltd., stock code is **1563**[36](index=36&type=chunk)[40](index=40&type=chunk) [Board of Directors](index=3&type=section&id=Board%20of%20Directors) The Board comprises executive, non-executive, and independent non-executive directors, with new appointments during the reporting period - Executive Directors include Mr. Li Luqiang (CEO), Mr. Liu Zhenjiang, Mr. Luo Zhenming, Mr. Qiao Renjie, and Mr. Yuan Jianshan (appointed on January 9, 2023)[40](index=40&type=chunk) - Non-executive Directors include Mr. Song Jianbo (Chairman of the Board, appointed on January 9, 2023) and Mr. Jiao Jianbin[40](index=40&type=chunk) - Independent Non-executive Directors include Mr. Liu Changxiang, Mr. Liu Xuewei, Mr. Jiao Jian, Mr. Shih Lai Him, and Ms. Xing Li (appointed on January 9, 2023)[40](index=40&type=chunk) [Board Committees (Company Information)](index=3&type=section&id=Board%20Committees%20(Company%20Information)) The company has Audit, Remuneration, Strategic Investment, and Nomination Committees, each with designated chairpersons and responsibilities - The Audit, Remuneration, and Nomination Committees comprise Mr. Liu Xuewei, Mr. Liu Changxiang, and Mr. Jiao Jian, with Mr. Liu Xuewei chairing the Audit and Remuneration Committees, and Mr. Song Jianbo chairing the Strategic Investment Committee[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk) [Registered Office and Principal Place of Business](index=3&type=section&id=Registered%20Office%20and%20Principal%20Place%20of%20Business) The company's registered office is in the Cayman Islands, with its principal place of business in Hong Kong at One Hennessy, Wan Chai - Registered office is located at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman KY1-1111, Cayman Islands[44](index=44&type=chunk) - Principal place of business in Hong Kong is Unit 2602, 26/F, One Hennessy, 1 Hennessy Road, Wan Chai, Hong Kong[44](index=44&type=chunk) [Other Company Information](index=3&type=section&id=Other%20Company%20Information) The company's website is www.aiel-holdings.com, auditor is Shinewing (HK) CPA Limited, and principal bankers include Industrial Bank Longkou Branch - Company website is **www.aiel-holdings.com**[44](index=44&type=chunk) - Auditor is Shinewing (HK) CPA Limited[44](index=44&type=chunk) - Principal bankers include Industrial Bank Longkou Branch, Shanghai Pudong Development Bank Co., Ltd. Tianjin Branch, and Bank of China[45](index=45&type=chunk) Management Discussion and Analysis [Business Review](index=4&type=section&id=Business%20Review) The Group adopted a dual-track strategy of higher education and financial leasing, benefiting from China's economic recovery, acquiring 70% equity in Yantai Nanshan University and establishing Union Shipping Fund I - The Group adopted a dual-track strategy by operating both higher education and financial leasing business segments to capture overall domestic economic growth[46](index=46&type=chunk) - The Group completed the acquisition of **70% equity interest in Yantai Nanshan University** in August 2022, with its financial data consolidated into the Group's financial statements[11](index=11&type=chunk)[46](index=46&type=chunk) - To expand financial leasing business into the shipping sector, the Group established Union Shipping Fund I Limited Partnership in May 2023, focusing on acquiring shares and interests in special purpose vehicles holding vessels or marine vessels[46](index=46&type=chunk) [Financial Review](index=5&type=section&id=Financial%20Review) The Group achieved significant growth in revenue and profit, driven by the consolidation of Yantai Nanshan University and stable financial leasing performance, with improved gross margin, reduced administrative expenses ratio, and lower finance costs Major Financial Indicators Changes | Indicator | For the six months ended June 30, 2023 (RMB million) | For the six months ended June 30, 2022 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 298.2 | 133.2 | 123.9% | | Profit | 153.8 | 46.0 | 234.3% | | Gross Profit | 171.2 | 133.2 | 28.6% | | Gross Profit Margin | 57.4% | 100% | -42.6% | | Administrative Expenses | 32.4 | 23.5 | 37.9% | | Administrative Expenses as % of Total Revenue | 10.9% | 17.7% | -6.8% | | Finance Costs | 33.0 | 50.5 | -34.6% | - Higher education business contributed approximately **RMB 219.3 million in revenue** and approximately **RMB 82.7 million in profit before income tax**[49](index=49&type=chunk) - Financial leasing business contributed approximately **RMB 79.0 million in revenue** and approximately **RMB 92.5 million in profit before income tax**[53](index=53&type=chunk) - Other income, gains or losses significantly increased from approximately **RMB 3.6 million to approximately RMB 49.6 million**, primarily due to government subsidies, exchange gains, rental income, and investment interest income[12](index=12&type=chunk)[17](index=17&type=chunk) - The Board does not recommend the payment of any interim dividend for the reporting period[61](index=61&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=6&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group's cash and cash equivalents, working capital, and total equity increased, while total borrowings and gearing ratio decreased, indicating improved liquidity and optimized financial structure Liquidity and Financial Resources | Indicator | June 30, 2023 (RMB million) | December 31, 2022 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 242.4 | 125.8 | 92.7% | | Working Capital | 730.2 | 563.6 | 29.6% | | Total Equity | 2,747.3 | 2,598.0 | 5.7% | | Borrowings Balance | 232.7 | 329.3 | -29.3% | | Gearing Ratio | 7.8% | 11.3% | -3.5% | | Borrowings Due Within One Year | 220.5 | 308.5 | -28.6% | | Borrowings Due After One Year | 12.2 | 20.9 | -41.6% | [Finance Lease Receivables](index=7&type=section&id=Finance%20Lease%20Receivables) The Group's total finance lease receivables decreased, but improved business environment, particularly enhanced repayment ability of healthcare industry lessees, led to a net reversal of impairment losses during the period Composition of Finance Lease Receivables | Item | June 30, 2023 (RMB million) | | :--- | :--- | | Gross finance lease receivables | 1,857.6 | | Less: Unearned finance income | 199.8 | | Less: Provision for impairment losses | 215.7 | - Finance lease receivables decreased by approximately **32.7%** from approximately **RMB 2,142.6 million** as of December 31, 2022, to approximately **RMB 1,442.1 million** as of June 30, 2023[63](index=63&type=chunk) - During the reporting period, a net reversal of impairment losses on finance lease receivables was recognized, mainly due to an improved business environment in China, especially the timely repayment by lessees in the healthcare industry[3](index=3&type=chunk)[68](index=68&type=chunk) - The Group continues to take various measures to recover finance lease receivables, including calling customers, on-site visits, and legal proceedings[64](index=64&type=chunk) [Employees and Remuneration Policy](index=7&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the Group's full-time employee count increased, and employee benefit expenses rose significantly, with the company offering competitive remuneration, medical, and retirement benefits, and a share option scheme to attract and retain talent Employee Count and Benefit Expenses | Indicator | June 30, 2023 | December 31, 2022 | For the six months ended June 30, 2023 (RMB million) | For the six months ended June 30, 2022 (RMB million) | | :--- | :--- | :--- | :--- | :--- | | Full-time Employee Count | 1,832 | 1,692 | - | - | | Employee Benefit Expenses | - | - | 88.6 | 6.7 | - The Group continues to provide employees with remuneration packages with reference to Group and individual performance and market remuneration levels, along with medical and retirement benefits[72](index=72&type=chunk) - Eligible employees may be granted share options under the terms of the share option scheme, aiming to attract and retain outstanding talent[72](index=72&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=8&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) The Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period - During the reporting period, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures[10](index=10&type=chunk) [Significant Investments](index=8&type=section&id=Significant%20Investments) The company did not make any significant investments during the reporting period - During the reporting period, the Company had no significant investments (including significant investments representing **5% or more** of the Group's total assets)[70](index=70&type=chunk) [Risk Management](index=8&type=section&id=Risk%20Management) The Group faces various risks including credit, liquidity, marketing, compliance, legal, operational, and reputational risks, and has established comprehensive risk management and internal control procedures, particularly for higher education and financial leasing businesses - The Group's business operations are subject to various risks, including credit, liquidity, marketing, compliance, legal, operational, and reputational risks[32](index=32&type=chunk) - The higher education business primarily faces personnel, enrollment, and market risks, with a risk management framework and measures established under the responsibility of the Board and the President[32](index=32&type=chunk)[33](index=33&type=chunk) - In the financial leasing business, credit risk is the primary concern, and the Group has developed a comprehensive risk management system to control risks through customer due diligence, independent data review, and multi-level approval processes[7](index=7&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk) - The Group voluntarily adopted the guidelines of the China Banking and Insurance Regulatory Commission to monitor finance lease receivables under a five-category classification: normal, special mention, substandard, doubtful, and loss[13](index=13&type=chunk)[18](index=18&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[80](index=80&type=chunk) - The Group is exposed to foreign exchange risk arising from assets and liabilities denominated in RMB, USD, and HKD, with management closely monitoring and taking hedging measures when necessary[33](index=33&type=chunk)[73](index=73&type=chunk) [Events After Reporting Period](index=10&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, the Group established Union Shipping Fund I Limited Partnership, revised the annual caps for continuing connected transactions, and terminated the agreement for subscription of new shares under general mandate - Union Fund I GP Limited entered into an agreement with Xinhai Bulk (Singapore) Pte. Ltd. to establish Union Shipping Fund I Limited Partnership, with Union Shipping Leasing Co., Ltd. subsequently joining as an additional limited partner[16](index=16&type=chunk)[23](index=23&type=chunk)[79](index=79&type=chunk) - Due to actual demand for goods and services under the framework procurement agreement exceeding expectations, the Group proposed to revise and increase the annual caps for continuing connected transactions[24](index=24&type=chunk)[81](index=81&type=chunk) - The Company entered into termination agreements with various subscribers to terminate the subscription agreement for new shares originally signed on May 22, 2023[21](index=21&type=chunk)[26](index=26&type=chunk)[30](index=30&type=chunk) [Contingent Liabilities](index=10&type=section&id=Contingent%20Liabilities) As of June 30, 2023, the Group had no significant contingent liabilities - As of June 30, 2023, the Group had no significant contingent liabilities (December 31, 2022: nil)[22](index=22&type=chunk) [Public Float](index=10&type=section&id=Public%20Float) As of the report date, the Company maintained an adequate public float of its issued shares, complying with Listing Rules - As of the date of this report, the Company has maintained an adequate public float of its issued shares in accordance with the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[78](index=78&type=chunk) [Outlook and Plans](index=11&type=section&id=Outlook%20and%20Plans) The Group anticipates a gradual improvement in global and Chinese economies, will continue to explore business expansion and suitable acquisition projects, especially in overseas vocational and higher education, while strengthening risk management and client relationships in financial leasing - The Board expects the global and Chinese economies to continue to improve gradually, positioning the Company's higher education and financial leasing businesses favorably to capture overall domestic economic growth[185](index=185&type=chunk) - The Group will continue to explore expanding existing businesses and seeking suitable acquisition projects, both domestically and internationally, including overseas vocational and higher education, to enrich its existing operations[85](index=85&type=chunk) - Yantai Nanshan University will maintain stable development, and the Company will deepen partnerships and continue to organize and design more advanced applied disciplines[185](index=185&type=chunk) - The financial leasing business will seize market opportunities, adhere to the principle of "quality over quantity" for steady progress, and continuously strengthen risk management, internal control, and asset management capabilities[90](index=90&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - The Group will actively expand new clients (including new industries beyond the existing client base) and strive to maintain long-term cooperative relationships with existing high-quality clients[186](index=186&type=chunk) Other Information [Board Committees (Other Information)](index=13&type=section&id=Board%20Committees%20(Other%20Information)) The Company has Strategic Investment, Audit, Remuneration, and Nomination Committees, each operating under Board-established terms of reference and holding regular meetings to fulfill their duties - The Strategic Investment Committee is responsible for the Company's investment strategy, overseeing its implementation, and reporting to the Board, having held **one meeting** during the reporting period[87](index=87&type=chunk)[198](index=198&type=chunk) - The Audit Committee reviews the Group's internal controls and annual results, recommending their adoption by the Board, having held **two meetings** during the reporting period[88](index=88&type=chunk)[194](index=194&type=chunk)[198](index=198&type=chunk) - The Remuneration Committee is responsible for formulating and reviewing the remuneration policies and structure for directors and senior management, having held **two meetings** during the reporting period and providing recommendations on directors' remuneration[89](index=89&type=chunk)[195](index=195&type=chunk) - The Nomination Committee is responsible for making recommendations on director appointments and assessing the independence of independent non-executive directors, having held **two meetings** during the reporting period and approving new director appointments[93](index=93&type=chunk)[205](index=205&type=chunk) [Compliance with Corporate Governance Code](index=13&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Group is committed to promoting good corporate governance and has complied with all code provisions of the Corporate Governance Code from the beginning of the reporting period to the report date - The Group has established corporate governance procedures in accordance with the principles set out in the Corporate Governance Code contained in Appendix 14 of the Listing Rules[197](index=197&type=chunk) - From the beginning of the reporting period up to the date of this report, the Company has complied with all code provisions of the Corporate Governance Code and adopted most of the recommended best practices[197](index=197&type=chunk) [Standard Code for Securities Transactions by Directors](index=14&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a securities dealing code no less exacting than the Listing Rules' Model Code, and all directors confirmed compliance during the reporting period - The Company has adopted a code of conduct regarding securities transactions by directors, the terms of which are no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules[200](index=200&type=chunk) - All directors confirmed their compliance with the Securities Dealing Code throughout the period from the beginning of the reporting period up to the date of this report[200](index=200&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=14&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[206](index=206&type=chunk) [Use of Proceeds from Issue of Equity Securities](index=15&type=section&id=Use%20of%20Proceeds%20from%20Issue%20of%20Equity%20Securities) The Company completed a placing and subscription of new shares in December 2022, raising net proceeds of approximately HKD 669.6 million, primarily for the Group's financial leasing business, with approximately HKD 512.0 million utilized as expected - The Company completed the placing and subscription of new shares on December 14, 2022, issuing a total of **190,914,000 new shares**[99](index=99&type=chunk)[230](index=230&type=chunk)[232](index=232&type=chunk) - Both the placing price and subscription price were **HKD 3.52 per share**, representing a discount of approximately **16.19% to 19.82%** to the then market price[99](index=99&type=chunk) - The net proceeds from the placing and subscription amounted to **HKD 669.6 million**, of which approximately **HKD 512.0 million** had been utilized as expected as of June 30, 2023, primarily for the Group's financial leasing business[99](index=99&type=chunk) [Share Option Scheme](index=15&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme in 2019 to attract and retain talent, with no outstanding, granted, exercised, cancelled, or lapsed share options during the reporting period - The Company adopted a share option scheme on February 20, 2019, which became effective on March 15, 2019[95](index=95&type=chunk) - The share option scheme aims to attract and retain the best personnel and provide additional incentives to drive excellent performance for the Group's business[202](index=202&type=chunk) - During the reporting period, there were no outstanding, granted, agreed to be granted, exercised, cancelled, or lapsed share options under the share option scheme[105](index=105&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=16&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) As of June 30, 2023, certain directors and chief executives held long positions in the Company's shares, with Mr. Song Jianbo holding a significant proportion due to spousal interests Directors' and Chief Executive's Long Positions in Shares | Director/Chief Executive Name | Capacity/Nature of Interest | Number and Class of Shares (L) | Percentage of Interest in the Company | | :--- | :--- | :--- | :--- | | Mr. Li Luqiang | Interest in controlled corporation | 7,881,797 | 0.47% | | Mr. Li Luqiang | Beneficial owner | 621,000 | 0.04% | | Mr. Song Jianbo | Spouse's interest | 768,475,221 | 45.45% | - Save as disclosed, no director or chief executive of the Company and/or any of their respective associates had any interests and short positions in the shares, underlying shares and/or debentures of the Company and/or any of its associated corporations required to be recorded or notified under the Securities and Futures Ordinance[211](index=211&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=17&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2023, Union Capital Pte. Ltd. and its ultimate owner Ms. Sui Yongqing, Mr. Song Jianbo (spousal interest), and PA Investment Funds SPC and its associated companies were substantial shareholders of the Company Substantial Shareholders' Long Positions in Shares | Substantial Shareholder Name/Name | Capacity/Nature of Interest | Number and Class of Shares (L) | Percentage of Interest in the Company | | :--- | :--- | :--- | :--- | | Union Capital Pte. Ltd. | Beneficial owner | 768,475,221 | 45.45% | | Ms. Sui Yongqing | Interest in controlled corporation | 768,475,221 | 45.45% | | Mr. Song Jianbo | Spouse's interest | 768,475,221 | 45.45% | | PA Investment Funds SPC | Beneficial owner | 135,001,120 | 7.98% | | China Ping An Securities (Hong Kong) Company Limited | Interest in controlled corporation | 135,001,120 | 7.98% | | Ping An Securities Co., Ltd. | Interest in controlled corporation | 135,001,120 | 7.98% | | Ping An Trust Co., Ltd. | Interest in controlled corporation | 135,001,120 | 7.98% | | Ping An Insurance (Group) Company of China, Ltd. | Interest in controlled corporation | 135,001,120 | 7.98% | [Changes in Directors' Information](index=18&type=section&id=Changes%20in%20Directors%27%20Information) On January 9, 2023, Mr. Yuan Jianshan was appointed as an Executive Director, Mr. Song Jianbo as a Non-executive Director, and Ms. Xing Li as an Independent Non-executive Director - On January 9, 2023, Mr. Yuan Jianshan was appointed as an Executive Director, Mr. Song Jianbo as a Non-executive Director, and Ms. Xing Li as an Independent Non-executive Director[124](index=124&type=chunk)[179](index=179&type=chunk) [Review of Interim Financial Information](index=18&type=section&id=Review%20of%20Interim%20Financial%20Information) The Audit Committee reviewed the condensed consolidated interim financial information and this report, deeming them compliant with applicable accounting standards, Listing Rules, and other legal requirements - The Audit Committee has reviewed the condensed consolidated interim financial information and this report and is of the opinion that the information complies with applicable accounting standards, the requirements of the Listing Rules, and other applicable legal requirements, and that adequate disclosures have been made[121](index=121&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Statement)](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20(Statement)) For the six months ended June 30, 2023, the Group's revenue significantly grew by 123.9% to RMB 298.2 million, with profit for the period increasing by 234.3% to RMB 153.8 million, and basic and diluted earnings per share at RMB 0.0749 Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 298,208 | 133,178 | | Cost of Services | (126,991) | — | | Gross Profit | 171,217 | 133,178 | | Other Income, Gains or Losses | 49,575 | 3,628 | | Administrative Expenses | (32,435) | (23,518) | | Finance Costs | (33,034) | (50,480) | | Impairment Loss Reversal (Recognition) on Financial Assets | 41,579 | (2,701) | | Profit Before Income Tax | 194,579 | 60,107 | | Profit for the Period | 153,796 | 45,990 | | Profit for the Period Attributable to Owners of the Company | 126,680 | 45,990 | | Basic and Diluted Earnings Per Share (RMB) | 0.0749 | 0.0307 | Condensed Consolidated Statement of Financial Position [Condensed Consolidated Statement of Financial Position (Statement)](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position%20(Statement)) As of June 30, 2023, the Group's total assets less current liabilities were RMB 2,924.4 million, and total equity was RMB 2,747.3 million, with a decrease in finance lease receivables within non-current assets and a significant increase in net current assets Summary of Condensed Consolidated Statement of Financial Position | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 2,194,238 | 2,341,487 | | Current Assets | 1,369,609 | 1,833,159 | | Current Liabilities | 639,405 | 1,269,519 | | Net Current Assets | 730,204 | 563,640 | | Total Assets Less Current Liabilities | 2,924,442 | 2,905,127 | | Equity Attributable to Owners of the Company | 2,361,480 | 2,239,236 | | Non-controlling Interests | 385,840 | 358,724 | | Total Equity | 2,747,320 | 2,597,960 | | Non-current Liabilities | 177,122 | 307,167 | Condensed Consolidated Statement of Changes in Equity [Condensed Consolidated Statement of Changes in Equity (Statement)](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity%20(Statement)) For the six months ended June 30, 2023, equity attributable to owners of the Company increased from RMB 2,239.2 million at the beginning of the period to RMB 2,361.5 million at the end, primarily driven by profit for the period Summary of Condensed Consolidated Statement of Changes in Equity | Item | January 1, 2023 (RMB thousand) | Profit for the Period (RMB thousand) | Other Comprehensive Expenses for the Period (RMB thousand) | June 30, 2023 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 2,239,236 | 126,680 | (4,436) | 2,361,480 | | Non-controlling Interests | 358,724 | 27,116 | — | 385,840 | | Total | 2,597,960 | 153,796 | (4,436) | 2,747,320 | Condensed Consolidated Statement of Cash Flows [Condensed Consolidated Statement of Cash Flows (Statement)](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows%20(Statement)) For the six months ended June 30, 2023, the Group's net cash from operating activities significantly increased, net cash from investing activities was an outflow, net cash from financing activities was an outflow, and cash and cash equivalents at period-end rose to RMB 242.4 million Summary of Condensed Consolidated Statement of Cash Flows | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 539,465 | 274,724 | | Net Cash (Used in) From Investing Activities | (321,703) | 3,821 | | Net Cash Used in Financing Activities | (107,752) | (350,917) | | Net Increase (Decrease) in Cash and Cash Equivalents | 110,010 | (72,372) | | Cash and Cash Equivalents at End of Period | 242,448 | 69,195 | Notes to the Condensed Consolidated Interim Financial Information [1. General Information](index=23&type=section&id=1.%20General%20Information) Union International Education Leasing Holdings Limited, incorporated in the Cayman Islands and listed on HKEX, primarily provides financial leasing and private higher education services - The Company was incorporated in the Cayman Islands on January 19, 2015, and listed on The Stock Exchange of Hong Kong Limited on March 15, 2019, with stock code **1563**[176](index=176&type=chunk) - The Group primarily engages in providing financial leasing services and private higher education services, with Union Capital Pte. Ltd., wholly owned by Ms. Sui Yongqing, as the controlling shareholder[176](index=176&type=chunk)[180](index=180&type=chunk) [2. Basis of Preparation](index=23&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated interim financial information is prepared in accordance with IAS 34 and Appendix 16 of the Listing Rules, presented in RMB, with reclassification of prior period financial statements due to the acquisition of Yantai Nanshan University - The condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange[140](index=140&type=chunk) - The condensed consolidated financial statements are presented in RMB, and all amounts are rounded to the nearest thousand[134](index=134&type=chunk) - Due to the acquisition of Yantai Nanshan University, comparative information for the six months ended June 30, 2022, has been restated in the condensed consolidated statement of profit or loss and other comprehensive income, with staff costs and other operating expenses reclassified to administrative expenses, and other income and net exchange losses reclassified to other income, gains or losses[136](index=136&type=chunk)[139](index=139&type=chunk)[144](index=144&type=chunk) [3. Principal Accounting Policies](index=24&type=section&id=3.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with the first-time application of new and revised IFRSs issued by the IASB, which had no significant impact on the interim period's financial performance and position - The condensed consolidated financial information has been prepared on the historical cost basis, except for certain financial instruments measured at fair value[148](index=148&type=chunk) - The Group has first-time applied the following new and revised International Financial Reporting Standards issued by the International Accounting Standards Board that are effective for the Group's financial year beginning on January 1, 2023: IFRS 17, IAS 1 and IFRS Practice Statement 2 (Amendments), IAS 8 (Amendments), IAS 12 (Amendments)[146](index=146&type=chunk)[149](index=149&type=chunk) - These amendments had no impact on the Group's condensed consolidated interim financial statements and are expected to affect accounting policy disclosures in the annual consolidated financial statements for the year ending March 31, 2024[147](index=147&type=chunk)[149](index=149&type=chunk)[153](index=153&type=chunk) [4. Revenue and Segment Information](index=26&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from higher education and financial leasing businesses, with total revenue of RMB 298.2 million for the period, where higher education, as a new reportable segment, contributed most of the revenue, and segment profit is allocated by service type, with key customer information disclosed Revenue by Service Type | Service Classification | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Tuition Fees | 201,693 | — | | Accommodation Fees | 17,557 | — | | Financial Leasing Services | 78,958 | 133,178 | | Total Revenue | 298,208 | 133,178 | - The Group's reportable operating segments under IFRS 8 include financial leasing and private higher education services[172](index=172&type=chunk) Operating Segment Revenue and Profit | Segment | Revenue (RMB thousand) | Segment Profit (RMB thousand) | | :--- | :--- | :--- | | Financial Leasing | 78,958 | 92,545 | | Private Higher Education Services | 219,250 | 82,712 | | Total | 298,208 | 175,257 | | Profit Before Tax | - | 194,579 | - The original expected duration of contracts for tuition fees, accommodation fees, and other education service fees is less than one year, and the Group has elected not to disclose the transaction price allocated to the remaining performance obligations[161](index=161&type=chunk)[168](index=168&type=chunk) - As of June 30, 2023, no single customer's revenue accounted for more than **10%** of the Group's total revenue[112](index=112&type=chunk)[116](index=116&type=chunk) [5. Other Income, Gains or Losses](index=29&type=section&id=5.%20Other%20Income%2C%20Gains%20or%20Losses) During the reporting period, the Group's other income, gains or losses significantly increased to RMB 49.6 million, mainly from exchange gains, investment and interest income, rental income, and government grants Composition of Other Income, Gains or Losses | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Net Exchange Gains (Losses) | 25,608 | (1,584) | | Investment and Interest Income | 15,539 | 3,821 | | Rental Income | 5,338 | — | | Government Grants | 522 | 1,220 | | Others | 2,568 | 171 | | Total | 49,575 | 3,628 | - Government grants represent value-added tax refunds granted by local governments to enterprises in the financial leasing industry, which are one-off subsidies with no specific conditions attached[178](index=178&type=chunk) [6. Finance Costs](index=29&type=section&id=6.%20Finance%20Costs) During the reporting period, the Group's finance costs significantly decreased to RMB 33.0 million, primarily due to reduced interest on borrowings and imputed interest from deposits by finance lease customers Composition of Finance Costs | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Imputed Interest on Consideration Payable | 13,851 | — | | Interest on Borrowings | 10,672 | 22,045 | | Imputed Interest from Deposits by Finance Lease Customers | 7,633 | 27,050 | | Interest on Lease Liabilities | 878 | 24 | | Interest on Bills Payable | — | 1,361 | | Total | 33,034 | 50,480 | [7. Impairment Loss Reversal (Recognition) on Financial Assets](index=29&type=section&id=7.%20Impairment%20Loss%20Reversal%20(Recognition)%20on%20Financial%20Assets) During the reporting period, the Group recorded a net reversal of impairment losses on financial assets of RMB 41.6 million, mainly due to impairment loss reversals on finance lease receivables offsetting some provisions Impairment Loss Reversal (Recognition) on Financial Assets | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Finance Lease Receivables | 42,347 | (2,701) | | Other Receivables | (768) | — | | Total | 41,579 | (2,701) | - During the reporting period, the Group recognized a net impairment provision of approximately **RMB 42.3 million**, primarily from impairment loss provisions of **RMB 40.1 million** for finance lease receivables, offset by reversals of impairment losses on finance lease receivables of **RMB 82.4 million** due to improved financial conditions and repayment by certain finance lease customers[273](index=273&type=chunk) [8. Profit Before Income Tax](index=30&type=section&id=8.%20Profit%20Before%20Income%20Tax) Profit before income tax was RMB 194.6 million, primarily after deducting expenses such as staff costs, depreciation of property and equipment, depreciation of right-of-use assets, amortization of intangible assets, and operating lease payments Deductions from Profit Before Income Tax | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Total Staff Costs | 88,585 | 6,689 | | Depreciation of Property and Equipment | 18,813 | 279 | | Depreciation of Right-of-Use Assets | 8,675 | 763 | | Amortization of Intangible Assets | 4,733 | 175 | | Lease Payments Under Operating Leases: Short-term Leases | 998 | 1,245 | [9. Income Tax Expense](index=30&type=section&id=9.%20Income%20Tax%20Expense) Income tax expense for the reporting period was RMB 40.8 million, mainly comprising PRC enterprise income tax and deferred tax, with deferred income tax primarily recognized for deductible temporary differences arising from impairment losses under the expected credit loss model Composition of Income Tax Expense | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | PRC Enterprise Income Tax — Current | 24,649 | 14,792 | | Deferred Tax — Current | 16,134 | (675) | | Total | 40,783 | 14,117 | - Deferred income tax is primarily recognized for deductible temporary differences arising from impairment losses under the expected credit loss model and taxable temporary differences arising from PRC withholding tax[280](index=280&type=chunk) [10. Dividends](index=31&type=section&id=10.%20Dividends) For the six months ended June 30, 2023, and 2022, the Company neither paid nor proposed to pay any dividends - The Company neither paid nor proposed to pay any dividends for the six months ended June 30, 2023, and 2022[282](index=282&type=chunk) [11. Earnings Per Share](index=31&type=section&id=11.%20Earnings%20Per%20Share) For the six months ended June 30, 2023, basic and diluted earnings per share attributable to owners of the Company were RMB 0.0749, a significant increase from the same period last year Earnings Per Share Calculation Data | Item | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | | :--- | :--- | :--- | | Profit for the purpose of calculating basic and diluted earnings per share (RMB thousand) | 126,680 | 45,990 | | Weighted average number of ordinary shares for calculating basic and diluted earnings per share (thousand shares) | 1,690,914 | 1,500,000 | | Basic and Diluted Earnings Per Share (RMB) | 0.0749 | 0.0307 | - As there were no outstanding dilutive potential ordinary shares for the six months ended June 30, 2023, and 2022, diluted earnings per share were equal to basic earnings per share[285](index=285&type=chunk) [12. Property and Equipment](index=31&type=section&id=12.%20Property%20and%20Equipment) During the reporting period, the Group acquired assets at a cost of approximately RMB 7.3 million and recognized a loss of approximately RMB 0.2 million from the write-off of property and equipment - During the reporting period, the Group acquired assets at a cost of approximately **RMB 7,291,000** (six months ended June 30, 2022: nil)[283](index=283&type=chunk) - During the reporting period, the Group wrote off equipment with a carrying amount of approximately **RMB 216,000**, resulting in a net write-off loss of approximately **RMB 216,000**[283](index=283&type=chunk) [13. Leases](index=31&type=section&id=13.%20Leases) As of June 30, 2023, the Group's right-of-use assets primarily included land use rights, buildings, and offices, with a total carrying amount of RMB 452.1 million, and lease liabilities of approximately RMB 38.3 million, with no lease agreements extended during the period Composition of Right-of-Use Assets | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Land Use Rights | 412,616 | 419,036 | | Buildings | 36,489 | 38,656 | | Offices | 3,000 | 3,088 | | Total | 452,105 | 460,780 | - As of June 30, 2023, the carrying amount of lease liabilities was approximately **RMB 38,330,000** (December 31, 2022: RMB 37,869,000)[284](index=284&type=chunk) - For the six months ended June 30, 2023, and 2022, the Group did not extend any lease agreements required to be recognized as right-of-use assets and lease liabilities[288](index=288&type=chunk) [14. Finance Lease Receivables](index=32&type=section&id=14.%20Finance%20Lease%20Receivables) As of June 30, 2023, total finance lease receivables were RMB 1,857.6 million, with impairment loss provisions of RMB 215.7 million, classified based on credit risk into 12-month expected credit losses and lifetime expected credit losses for credit-impaired assets, and changes in impairment loss provisions were disclosed Composition and Maturity of Finance Lease Receivables | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Receivables under finance leases not exceeding one year | 1,153,627 | 1,611,768 | | After one year but within two years | 382,063 | 401,303 | | After two years but within three years | 191,815 | 297,306 | | After three years but within four years | 130,102 | 270,613 | | After four years but within five years | — | 87,621 | | Total investment in leases | 1,857,607 | 2,668,611 | | Less: Unearned finance income | (199,817) | (266,810) | | Present value of minimum lease receivables | 1,657,790 | 2,401,801 | | Less: Provision for impairment losses | (215,714) | (259,225) | | Carrying Amount | 1,442,076 | 2,142,576 | Changes in Impairment Loss Provisions for Finance Lease Receivables | Item | 12-month Expected Credit Losses (RMB thousand) | Credit-impaired Lifetime Expected Credit Losses (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | As at January 1, 2023 | 42,153 | 217,072 | 259,225 | | Provisions during the period | — | 40,066 | 40,066 | | Reversals during the period | (46,561) | (35,852) | (82,413) | | As at June 30, 2023 | 2,643 | 213,071 | 215,714 | | Expected Loss Rate | 0.21% | 53.65% | 13.01% | - The Group classifies finance lease receivables into 12-month expected credit losses, non-credit-impaired lifetime expected credit losses, and credit-impaired lifetime expected credit losses based on changes in credit risk levels compared to initial recognition[214](index=214&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) [15. Trade and Other Receivables](index=34&type=section&id=15.%20Trade%20and%20Other%20Receivables) As of June 30, 2023, total trade and other receivables were RMB 317.1 million, with impairment loss provisions of RMB 46.3 million, primarily including short-term loans receivable, expenses paid on behalf of customers, and interest receivable Composition of Trade and Other Receivables | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 1,122 | 549 | | Prepayments | 303 | 1,457 | | Expenses Paid on Behalf of Customers | 50,422 | 45,330 | | Recoverable VAT | 9,342 | 8,752 | | Short-term Loans Receivable | 238,441 | 280,961 | | Interest Receivable | 10,598 | 2,441 | | Other Receivables | 6,938 | 1,025 | | Subtotal | 317,136 | 340,515 | | Less: Provision for Impairment Losses | (46,325) | (44,238) | | Carrying Amount | 270,811 | 296,277 | - Short-term loans receivable from independent parties are unsecured, bear interest at an annual rate of **15%**, and are repayable on agreed dates, with no impairment losses recognized during the reporting period[218](index=218&type=chunk) - Trade receivables primarily refer to other tuition fees and service fees receivable from students applying for other tuition and services within the academic year, involving multiple individual students with no significant concentration of credit risk[301](index=301&type=chunk) Ageing Analysis of Trade Receivables | Ageing | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Within 30 days | 1,122 | 549 | [16. Bank Balances](index=35&type=section&id=16.%20Bank%20Balances) As of June 30, 2023, the Group's bank balances were RMB 242.4 million, with pledged bank balances released during the reporting period Composition of Bank Balances | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Bank Balances | 242,448 | 225,832 | | Less: Pledged Bank Balances | — | (100,000) | | Cash and Cash Equivalents | 242,448 | 125,832 | - Pledged bank balances refer to deposits pledged to banks for bills payable, which were released during the reporting period[222](index=222&type=chunk) [17. Trade Payables, Bills Payable and Other Payables](index=35&type=section&id=17.%20Trade%20Payables%2C%20Bills%20Payable%20and%20Other%20Payables) As of June 30, 2023, trade payables, bills payable, and other payables included a trade payables balance of approximately RMB 1.0 million - Trade payables, bills payable, and other payables include a trade payables balance of approximately **RMB 1,041,000** (December 31, 2022: RMB 4,239,000)[298](index=298&type=chunk) Ageing Analysis of Trade Payables | Ageing | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Within one year | — | 1,041 | | After one year | — | 4,239 | [18. Borrowings](index=36&type=section&id=18.%20Borrowings) During the reporting period, the Group obtained new borrowings of RMB 305.0 million, bearing fixed market interest rates, used for working capital - During the reporting period, the Group obtained new borrowings of **RMB 305.0 million** (six months ended June 30, 2022: nil)[260](index=260&type=chunk) - The loans bear interest at fixed market rates of **4.00% to 4.50%** and are repayable in installments over a period exceeding **2 years**, with proceeds used to fund the Group's working capital[260](index=260&type=chunk) [19. Company's Share Capital](index=36&type=section&id=19.%20Company%27s%20Share%20Capital) As of June 30, 2023, the Company's authorized share capital was USD 50,000, with issued share capital of 1,690,914,000 shares at a par value of USD 1,691, and the placing and subscription of new shares completed in December 2022 increased share capital and share premium Company's Share Capital | Item | Par Value Per Share | Number of Shares | USD (thousand) | RMB (thousand) | | :--- | :--- | :--- | :--- | :--- | | Authorized Share Capital | USD 0.000001 | 50,000,000,000 shares | 50,000 | - | | Issued Share Capital (June 30, 2023) | USD 0.000001 | 1,690,914,000 shares | 1,691 | 11,366 | | Placing and Subscription of New Shares | USD 0.000001 | 190,914,000 shares | 191 | 1,327 | - The placing and subscription were completed on December 14, 2022, raising total proceeds of approximately **RMB 600,992,000**, resulting in a net increase in share capital and share premium of approximately **RMB 1,000** and **RMB 599,491,000**, respectively[230](index=230&type=chunk)[300](index=300&type=chunk) [20. Fair Value Measurement of Financial Instruments](index=37&type=section&id=20.%20Fair%20Value%20Measurement%20of%20Financial%20Instruments) The Group uses valuation techniques such as discounted cash flow models for fair value measurement of financial instruments, classifying them into fair value hierarchies (Level 1 to 3) based on the observability of input data - The Group uses valuation techniques such as discounted cash flow models for finance lease receivables, lease liabilities, financial assets at fair value through other comprehensive income, financial assets at fair value through profit or loss, and financial assets measured at amortized cost[233](index=233&type=chunk) - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs directly or indirectly), and Level 3 (unobservable inputs)[243](index=243&type=chunk)[244](index=244&type=chunk)[249](index=249&type=chunk) Fair Value Measurement Hierarchy of Financial Assets | Financial Instrument | Fair Value Level | Fair Value as of June 30, 2023 (RMB thousand) | Fair Value as of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | :--- | | Unlisted Investment Funds | Level 2 | 180,275 | — | | Listed Bond Investments | Level 1 | 39,000 | 83,000 | - During the period, there were no transfers into or out of Level 1 and Level 2 fair value hierarchies[245](index=245&type=chunk) [21. Related Party Transactions](index=38&type=section&id=21.%20Related%20Party%20Transactions) The Group has various related party transactions with Nanshan Group and its subsidiaries, and Longkou Nanshan and its subsidiaries, including finance lease income, rental expenses, services received, and purchases of inventory and property and equipment, with key management personnel compensation also disclosed Major Related Party Transactions | Related Party | Transaction Type | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | :--- | | Nanshan Group and its subsidiaries | Finance lease income generated | 23,176 | 93,518 | | Nanshan Group and its subsidiaries | Lease expenses paid | 944 | 993 | | Nanshan Group and its subsidiaries | Services received | 10,081 | — | | Longkou Nanshan and its subsidiaries | Services received | 4,698 | — | | Longkou Nanshan and its subsidiaries | Purchase of inventory | 1,780 | — | - Ms. Sui Yongqing, wife of Mr. Song Jianbo, one of the key management personnel of Nanshan Group, is the sole shareholder of Union Capital, the Company's ultimate shareholder[239](index=239&type=chunk) - Longkou Nanshan is wholly owned by Mr. Song Zuowen and Ms. Lü Shuling, and Ms. Sui Yongqing is the daughter-in-law of Mr. Song and Ms. Lü[240](index=240&type=chunk) Key Management Personnel Compensation | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Basic Salaries and Allowances | 3,530 | 2,911 | | Employer's Contributions to Pension Schemes | 114 | 51 | | Other Social Benefits | 14 | 154 | | Total | 3,658 | 3,116 | - Key management personnel compensation is determined with reference to the Group's and individual performance[305](index=305&type=chunk)

Finance Lease Receivables - As of December 31, 2022, the total outstanding finance lease receivables amounted to RMB 2,142,576,000, with 40 customers involved in sale and leaseback transactions[2] - The largest customer and the top five customers accounted for approximately 12.8% and 53.3% of the total outstanding finance lease receivables, respectively[2] - The public infrastructure sector represented 57.2% of the outstanding finance lease receivables, followed by the aviation sector at 26.8% and healthcare at 13.7%[3] - Approximately 69.8% of the outstanding finance lease receivables were secured by collateral[15] - As of December 31, 2022, RMB 1,226,508,000 of the finance lease receivables were classified as current assets, while RMB 916,068,000 were non-current assets[12] - The average repayment period for finance lease receivables is between 2 to 5 years, with interest rates ranging from 3.7% to 12.6%[5] - The finance lease receivables are primarily unsecured, with the majority being non-collateralized[15] Short-term Loans - The total outstanding short-term loans amounted to RMB 280,961,000, with interest rates ranging from 7.8% to 24%[4] - Four borrowers accounted for 31.9%, 30.9%, 19.1%, and 18.1% of the total outstanding short-term loans[7] - All outstanding short-term loans as of December 31, 2022, have been repaid by the borrowers[17]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company's financial performance shows significant profit growth and asset structure changes, with a notable increase in shareholder equity | Metric | For the Six Months Ended June 30, 2023 (RMB million) | For the Six Months Ended June 30, 2022 (RMB million) | | :--- | :--- | :--- | | Revenue | 298.2 | 133.2 | | Profit for the Period | 153.8 | 46.0 | | **Statement of Financial Position (Period-end):** | | | | Total Assets | 3,563.8 | 4,174.6 (December 31, 2022) | | Total Equity | 2,747.3 | 2,598.0 (December 31, 2022) | | **Financial Ratios:** | | | | Return on Equity | 5.8% | - | | Return on Assets | 4.0% | - | - Total assets decreased by approximately **14.6%** from December 31, 2022, while total equity increased by approximately **5.7%**[40](index=40&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, including income, balance, equity, and cash flow statements, reflecting the company's financial position and performance [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company achieved significant growth in revenue and profit for the period, primarily due to the consolidation of Yantai Nanshan University, which also led to increased service costs, offset by other income and reversal of impairment losses on financial assets | Metric | For the Six Months Ended June 30, 2023 (RMB thousand) | For the Six Months Ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 298,208 | 133,178 | | Service Costs | (126,991) | — | | Gross Profit | 171,217 | 133,178 | | Other income, gains or losses | 49,575 | 3,628 | | Administrative Expenses | (32,435) | (23,518) | | Finance Costs | (33,034) | (50,480) | | Reversal (recognition) of impairment losses on financial assets | 41,579 | (2,701) | | Profit before income tax | 194,579 | 60,107 | | Profit for the period | 153,796 | 45,990 | | Basic and diluted earnings per share (RMB) | 0.0749 | 0.0307 | - Profit for the period increased by approximately **234%** year-on-year, primarily benefiting from the consolidation of Yantai Nanshan University[41](index=41&type=chunk)[115](index=115&type=chunk) - Other income, gains or losses significantly increased from **RMB 3.6 million** in the same period of 2022 to **RMB 49.6 million**[41](index=41&type=chunk)[138](index=138&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total assets slightly decreased, while net current assets and total equity increased, reflecting changes in asset structure and growth in shareholders' equity | Metric | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets:** | | | | Property and equipment | 812,340 | 824,078 | | Right-of-use assets | 452,105 | 460,780 | | Finance lease receivables | 625,959 | 916,068 | | Financial assets at fair value through other comprehensive income | 180,275 | — | | **Current assets:** | | | | Finance lease receivables | 816,117 | 1,226,508 | | Bank balances | 242,448 | 225,832 | | **Current liabilities:** | | | | Trade payables, bills payable and other payables | 216,932 | 535,378 | | Borrowings | 220,462 | 308,475 | | **Total:** | | | | Net current assets | 730,204 | 563,640 | | Total equity | 2,747,320 | 2,597,960 | - Finance lease receivables within non-current assets significantly decreased from **RMB 916,068 thousand** to **RMB 625,959 thousand**[60](index=60&type=chunk) - Trade payables, bills payable, and other payables within current liabilities substantially decreased from **RMB 535,378 thousand** to **RMB 216,932 thousand**[60](index=60&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) During the reporting period, the company's total equity increased due to profit for the period and an increase in non-controlling interests, though exchange rate changes led to a decrease in translation reserves | Metric | As of June 30, 2023 (RMB thousand) | As of January 1, 2022 (RMB thousand) | | :--- | :--- | :--- | | Equity attributable to owners of the Company | 2,361,480 | 1,273,474 | | Non-controlling interests | 385,840 | — | | Total equity | 2,747,320 | 1,273,474 | | Profit for the period and total comprehensive (expense) income | 149,360 | 47,337 (For the Six Months Ended June 30, 2022) | - Non-controlling interests emerged from zero, reflecting the consolidation of minority shareholder interests after the acquisition of Yantai Nanshan University[45](index=45&type=chunk) - Translation reserves turned negative due to exchange differences during the period, changing from **RMB 2,985 thousand** to **RMB (1,451) thousand**[45](index=45&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) During the reporting period, operating cash flow significantly increased, investment cash outflows were primarily for financial asset purchases and consideration paid, and financing cash outflows decreased, resulting in a net increase in cash and cash equivalents | Metric | For the Six Months Ended June 30, 2023 (RMB thousand) | For the Six Months Ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Net cash generated from operating activities | 539,465 | 274,724 | | Net cash (used in) generated from investing activities | (321,703) | 3,821 | | Net cash used in financing activities | (107,752) | (350,917) | | Net increase (decrease) in cash and cash equivalents | 110,010 | (72,372) | | Cash and cash equivalents at end of period | 242,448 | 69,195 | - Cash outflow from investing activities primarily included the purchase of financial assets at fair value through profit or loss (**RMB 1,307,997 thousand**) and consideration paid (**RMB 295,000 thousand**)[65](index=65&type=chunk) - Cash outflow from financing activities significantly decreased, mainly due to reduced repayment of borrowings[65](index=65&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the condensed consolidated interim financial information, covering general information, accounting policies, segment reporting, and financial instrument disclosures [General Information](index=8&type=section&id=General%20Information) The Group primarily engages in finance lease services and private higher education services, expanding its private higher education business through the acquisition of a 70% equity interest in Yantai Nanshan University - The Company was incorporated in the Cayman Islands on January 19, 2015, and listed on the Hong Kong Stock Exchange on March 15, 2019[66](index=66&type=chunk) - In August 2022, the Group acquired a **70%** equity interest in Yantai Nanshan University, expanding its private higher education services[50](index=50&type=chunk) - Comparative information for the six months ended June 30, 2022, has been restated in the condensed consolidated statement of profit or loss and other comprehensive income to reflect the impact of the acquisition[51](index=51&type=chunk)[67](index=67&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=8&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) This interim financial information is prepared in accordance with IAS 34, based on historical cost, except for certain financial instruments measured at fair value. New and revised IFRSs were first applied this period, with no significant impact on financial performance [Basis of Preparation](index=8&type=section&id=Basis%20of%20Preparation) The condensed consolidated interim financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and Appendix 16 of the Listing Rules, presented in RMB - The financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and the applicable disclosure requirements of Appendix 16 to the Listing Rules[68](index=68&type=chunk) - The condensed consolidated financial statements are presented in RMB, with all amounts rounded to the nearest thousand[86](index=86&type=chunk) [Principal Accounting Policies](index=9&type=section&id=Principal%20Accounting%20Policies) The condensed consolidated financial information is prepared on a historical cost basis, except for certain financial instruments measured at fair value. The accounting policies adopted by the Group are consistent with those followed in preparing the 2022 annual consolidated financial statements - The condensed consolidated financial information is prepared on a historical cost basis, except for certain financial instruments measured at fair value[89](index=89&type=chunk) - The accounting policies adopted in this interim period are consistent with those followed in preparing the annual consolidated financial statements for the year ended December 31, 2022[69](index=69&type=chunk) [Application of New and Revised International Financial Reporting Standards](index=9&type=section&id=Application%20of%20New%20and%20Revised%20International%20Financial%20Reporting%20Standards) The Group first applied new and revised IFRSs issued by the IASB and effective from January 1, 2023, which had no significant impact on the financial performance and position for the current and prior periods - The Group first applied new and revised standards such as IAS 8 (Amendments), IAS 12 (Amendments), and IFRS 17[53](index=53&type=chunk)[69](index=69&type=chunk)[90](index=90&type=chunk) - The new and revised standards had no significant impact on the Group's condensed consolidated interim financial statements and are expected to affect accounting policy disclosures in the 2024 annual consolidated financial statements[70](index=70&type=chunk)[71](index=71&type=chunk) - IAS 12 (Amendments) narrowed the scope of initial recognition exemption, changing the recognition of deferred tax assets and liabilities, but will not affect the overall deferred tax balance presented in the consolidated statement of financial position[72](index=72&type=chunk)[92](index=92&type=chunk) [Revenue and Segment Information](index=10&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from higher education and finance lease services. With the acquisition of Yantai Nanshan University, higher education became a new reportable operating segment, contributing significant revenue and segment profit Revenue by Source | Revenue Source | For the Six Months Ended June 30, 2023 (RMB thousand) | For the Six Months Ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Tuition fees | 201,693 | — | | Accommodation fees | 17,557 | — | | Finance lease services | 78,958 | 133,178 | | **Total Revenue** | **298,208** | **133,178** | - For the six months ended June 30, 2023, higher education services (tuition and accommodation fees) contributed **RMB 219,250 thousand** in revenue, while finance lease services contributed **RMB 78,958 thousand**[73](index=73&type=chunk) - The Group now has two reportable operating segments: finance lease and private higher education services[96](index=96&type=chunk) Segment Performance | Segment | Revenue (RMB thousand) | Segment Profit (RMB thousand) | | :--- | :--- | :--- | | Finance Lease | 78,958 | 92,545 | | Private Higher Education Services | 219,250 | 82,712 | | **Total** | **298,208** | **175,257** | [Other Income, Gains or Losses](index=12&type=section&id=Other%20Income%2C%20Gains%20or%20Losses) During the reporting period, other income, gains or losses significantly increased, primarily driven by higher net exchange gains and investment and interest income Other Income, Gains or Losses by Source | Source | For the Six Months Ended June 30, 2023 (RMB thousand) | For the Six Months Ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Net exchange gains (losses) | 25,608 | (1,584) | | Investment and interest income | 15,539 | 3,821 | | Rental income | 5,338 | — | | Government grants | 522 | 1,220 | | Others | 2,568 | 171 | | **Total** | **49,575** | **3,628** | - Net exchange gains turned from losses to gains, serving as a primary driver for the increase in other income[79](index=79&type=chunk) - Government grants primarily represent VAT refunds for finance lease enterprises, amounting to **RMB 522 thousand** for the current period[99](index=99&type=chunk) [Finance Costs](index=13&type=section&id=Finance%20Costs) During the reporting period, finance costs significantly decreased, primarily due to reduced interest on borrowings and imputed interest from finance lease customer deposits Finance Costs by Source | Source | For the Six Months Ended June 30, 2023 (RMB thousand) | For the Six Months Ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Imputed interest on consideration payable | 13,851 | — | | Borrowings | 10,672 | 22,045 | | Imputed interest from finance lease customer deposits | 7,633 | 27,050 | | Lease liabilities | 878 | 24 | | Bills payable | — | 1,361 | | **Total** | **33,034** | **50,480** | - Finance costs decreased by approximately **34.6%** year-on-year, primarily benefiting from a reduction in total borrowings[81](index=81&type=chunk)[139](index=139&type=chunk)[162](index=162&type=chunk) [Reversal (Recognition) of Impairment Losses on Financial Assets](index=13&type=section&id=Reversal%20%28Recognition%29%20of%20Impairment%20Losses%20on%20Financial%20Assets) During the reporting period, the Group recorded a net reversal of impairment losses on financial assets, primarily due to improved credit risk for finance lease receivables and partial repayments Impairment Losses on Financial Assets | Source | For the Six Months Ended June 30, 2023 (RMB thousand) | For the Six Months Ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Finance lease receivables | 42,347 | (2,701) | | Other receivables | (768) | — | | **Total** | **41,579** | **(2,701)** | - A net impairment provision of approximately **RMB 42.3 million** was recognized this period, primarily comprising impairment losses on finance lease receivables of **RMB 40.1 million** (due to increased credit risk) and a reversal of impairment losses of **RMB 82.4 million** (due to improved financial condition and repayments)[81](index=81&type=chunk) - In the same period of 2022, a net impairment provision of **RMB 2.7 million** was recognized, mainly from impairment losses on finance lease receivables[103](index=103&type=chunk) [Profit Before Income Tax and Income Tax Expense](index=14&type=section&id=Profit%20Before%20Income%20Tax%20and%20Income%20Tax%20Expense) During the reporting period, profit before income tax significantly increased, with a corresponding rise in income tax expense, primarily influenced by China's corporate income tax and deferred tax Profit Before Income Tax and Income Tax Expense | Metric | For the Six Months Ended June 30, 2023 (RMB thousand) | For the Six Months Ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Profit before income tax | 194,579 | 60,107 | | Income tax expense | 40,783 | 14,117 | | — China corporate income tax (current) | 24,649 | 14,792 | | — Deferred tax (current) | 16,134 | (675) | - Deferred income tax is primarily recognized for deductible temporary differences arising from impairment losses under the expected credit loss model and taxable temporary differences from China withholding tax[83](index=83&type=chunk) [Dividends](index=14&type=section&id=Dividends) The Company's Board of Directors does not recommend the payment of any interim dividend for the reporting period - The Company neither paid nor proposed to pay any dividends for the six months ended June 30, 2023, and 2022[105](index=105&type=chunk)[123](index=123&type=chunk) [Earnings Per Share](index=15&type=section&id=Earnings%20Per%20Share) During the reporting period, basic and diluted earnings per share significantly increased, primarily due to higher profit for the period and changes in the weighted average number of ordinary shares Earnings Per Share Calculation | Metric | For the Six Months Ended June 30, 2023 | For the Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Profit for the purpose of calculating basic and diluted earnings per share (RMB thousand) | 126,680 | 45,990 | | Weighted average number of ordinary shares for the purpose of calculating basic and diluted earnings per share (thousand shares) | 1,690,914 | 1,500,000 | | Basic and diluted earnings per share (RMB) | 0.0749 | 0.0307 | - As there were no unexercised ordinary shares with dilutive potential during the period, diluted earnings per share equal basic earnings per share[125](index=125&type=chunk) [Property and Equipment](index=15&type=section&id=Property%20and%20Equipment) During the reporting period, the Group acquired new assets and wrote off some equipment - For the six months ended June 30, 2023, the Group acquired assets at a cost of approximately **RMB 7,291,000**[85](index=85&type=chunk) - Equipment with a carrying amount of approximately **RMB 216,000** was written off during the period, resulting in a net write-off loss of approximately **RMB 216,000**[38](index=38&type=chunk) [Leases](index=16&type=section&id=Leases) The Group's right-of-use assets and lease liabilities remained relatively stable, with no new lease agreements extended during the period Right-of-Use Assets | Class of Right-of-Use Assets | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Land use rights | 412,616 | 419,036 | | Buildings | 36,489 | 38,656 | | Offices | 3,000 | 3,088 | | **Total** | **452,105** | **460,780** | - As of June 30, 2023, the carrying amount of lease liabilities was approximately **RMB 38,330,000**, largely consistent with the end of 2022[15](index=15&type=chunk) - During the period, the Group did not extend any lease agreements requiring recognition as right-of-use assets and lease liabilities[15](index=15&type=chunk) [Finance Lease Receivables](index=16&type=section&id=Finance%20Lease%20Receivables) The Group's total finance lease receivables and present value both decreased, with credit risk assessed and provisions made based on overdue status Finance Lease Receivables Ageing | Ageing | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Not more than one year | 1,153,627 | 1,611,768 | | More than one year but within two years | 382,063 | 401,303 | | More than two years but within three years | 191,815 | 297,306 | | More than three years but within four years | 130,102 | 270,613 | | More than four years but within five years | — | 87,621 | | **Gross investment in leases** | **1,857,607** | **2,668,611** | | **Present value of minimum lease receivables** | **1,442,076** | **2,142,576** | - The present value of finance lease receivables decreased from **RMB 2,142,576 thousand** as of December 31, 2022, to **RMB 1,442,076 thousand** as of June 30, 2023[16](index=16&type=chunk) - If contractual payments are overdue by more than **30 days**, the Group assumes a significant increase in credit risk; if overdue by more than **90 days**, it assesses whether the credit is impaired[16](index=16&type=chunk)[18](index=18&type=chunk) [Trade and Other Receivables](index=17&type=section&id=Trade%20and%20Other%20Receivables) The Group's total trade and other receivables decreased, with short-term loans receivable and prepayments decreasing, but expenses paid on behalf of customers increasing Trade and Other Receivables Breakdown | Item | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 1,122 | 549 | | Prepayments | 303 | 1,457 | | Expenses paid on behalf of customers | 50,422 | 45,330 | | Short-term loans receivable | 238,441 | 280,961 | | Interest receivable | 10,598 | 2,441 | | Other receivables | 6,938 | 1,025 | | **Subtotal** | **317,136** | **340,515** | | Less: Provision for impairment losses | (46,325) | (44,238) | | **Total** | **270,811** | **296,277** | - Ageing analysis of trade receivables shows that amounts overdue within **30 days** increased from **RMB 549 thousand** at the end of 2022 to **RMB 1,122 thousand** as of June 30, 2023[32](index=32&type=chunk) [Bank Balances](index=18&type=section&id=Bank%20Balances) The Group's bank balances significantly increased, primarily due to the release of pledged bank balances Bank Balances and Cash Equivalents | Item | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Bank balances | 242,448 | 225,832 | | Less: Pledged bank balances | — | (100,000) | | **Cash and cash equivalents** | **242,448** | **125,832** | - For the six months ended June 30, 2023, pledged bank deposits were released, leading to a significant increase in cash and cash equivalents[36](index=36&type=chunk) [Trade Payables, Bills Payable and Other Payables](index=18&type=section&id=Trade%20Payables%2C%20Bills%20Payable%20and%20Other%20Payables) The Group's trade payables balance significantly decreased, and ageing analysis shows all amounts are due within one year - The trade payables balance was approximately **RMB 1,041,000**, a significant decrease from **RMB 4,239,000** as of December 31, 2022[1](index=1&type=chunk) Trade Payables Ageing | Ageing | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 1,041 | 4,239 | [Borrowings](index=18&type=section&id=Borrowings) During the reporting period, the Group obtained new borrowings for working capital, bearing interest at fixed market rates - For the six months ended June 30, 2023, the Group obtained new borrowings of **RMB 305.0 million**[3](index=3&type=chunk) - The loan bears interest at fixed market rates of **4.00% to 4.50%** and is repayable in installments over a period exceeding **2 years**[3](index=3&type=chunk) - The proceeds were used to fund the Group's operations[3](index=3&type=chunk) [Share Capital of the Company](index=19&type=section&id=Share%20Capital%20of%20the%20Company) The Company's authorized share capital remained unchanged, while issued share capital increased due to the placement and subscription of new shares completed in November 2022 Share Capital Details | Class | Par value per share | Number of shares | Amount (USD) | | :--- | :--- | :--- | :--- | | Authorized share capital | USD 0.000001 | 50,000,000,000 | 50,000 | | Issued share capital (June 30, 2023) | USD 0.000001 | 1,690,914,000 | 1,691 | | Issued share capital (January 1, 2022) | USD 0.000001 | 1,500,000,000 | 1,500 | - On November 30, 2022, the Company completed the placement and subscription of a total of **190,914,000** new ordinary shares, with total proceeds of approximately **RMB 600,992,000**[5](index=5&type=chunk)[37](index=37&type=chunk) - All new shares rank pari passu in all respects with the existing shares[21](index=21&type=chunk) [Fair Value Measurement of Financial Instruments](index=19&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The Group measures financial instruments at fair value using valuation techniques such as discounted cash flow models, classifying them into different fair value hierarchies based on the observability of input data - The Group uses valuation techniques such as discounted cash flow models, with key parameters including recent transaction prices, interest yield curves, and exchange rates[22](index=22&type=chunk) - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable input data), and Level 3 (unobservable input data)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) Fair Value Hierarchy of Financial Instruments | Financial Instrument | Fair Value Hierarchy | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | :--- | | Unlisted fund investments | Level 2 | 180,275 | — | | Listed bond investments | Level 1 | 39,000 | 83,000 | - During the period, there were no transfers into or out of Level 1 and Level 2 fair value hierarchies[6](index=6&type=chunk) [Related Party Transactions](index=21&type=section&id=Related%20Party%20Transactions) The Group has multiple related party transactions with Nanshan Group and its subsidiaries, and Longkou Xinnanshan Investment Development Co., Ltd. and its subsidiaries, including finance lease income, lease expenses, services received, and asset purchases - Ms. Sui Yongqing, wife of Mr. Song Jianbo, one of the key management personnel of Nanshan Group, is the sole shareholder of Union Capital, the Company's ultimate shareholder[20](index=20&type=chunk) - Longkou Nanshan is wholly owned by Mr. Song Zuowen and Ms. Lü Shuling, and Ms. Sui is the daughter-in-law of Mr. Song and Ms. Lü[107](index=107&type=chunk) Related Party Transactions Summary | Transacting Party | Type of Transaction | For the Six Months Ended June 30, 2023 (RMB thousand) | For the Six Months Ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | :--- | | Nanshan Group and its subsidiaries | Finance lease income generated | 23,176 | 93,518 | | | Lease expenses paid | 944 | 993 | | | Services received | 10,081 | — | | Longkou Nanshan and its subsidiaries | Services received | 4,698 | — | | | Purchase of inventories | 1,780 | — | - As of June 30, 2023, finance lease receivables from Nanshan Group and its subsidiaries amounted to **RMB 655,786 thousand**[129](index=129&type=chunk) [Management Discussion and Analysis](index=23&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's business performance, financial position, risk management, and future outlook, highlighting key operational and financial trends [Business Review](index=23&type=section&id=Business%20Review) The Group achieved significant profit growth during the reporting period through a dual-track strategy of higher education and finance leasing, primarily benefiting from the consolidation of Yantai Nanshan University and an improving Chinese economic environment [Overall Business Overview](index=23&type=section&id=Overall%20Business%20Overview) The Group recorded a profit of approximately **RMB 153.8 million** during the reporting period, continuing last year's profitability trend, primarily benefiting from the acquisition and consolidation of Yantai Nanshan University - The Group recorded a profit of approximately **RMB 153.8 million** for the six months ended June 30, 2023[115](index=115&type=chunk) - In August 2022, the Group completed the acquisition of a **70%** equity interest in Yantai Nanshan University, and in May 2023, established Union Shipping Phase I Fund Limited Partnership to expand into the shipping sector[131](index=131&type=chunk) - With China's economy gradually recovering, the Group is leveraging its dual-track strategy of higher education and finance leasing to capture domestic economic growth opportunities[154](index=154&type=chunk) [Higher Education Business](index=23&type=section&id=Higher%20Education%20Business) Yantai Nanshan University, as the Group's private higher education institution, offers undergraduate and diploma programs, adhering to a "production-education integration, school-enterprise cooperation" philosophy, and contributed significant revenue and profit before tax during the reporting period - Yantai Nanshan University offers **49** undergraduate programs and **40** diploma programs across **30** departments, committed to improving students' practical training and employment prospects[116](index=116&type=chunk) - During the reporting period, the higher education business generated revenue of approximately **RMB 219.3 million** and profit before tax of approximately **RMB 82.7 million**[133](index=133&type=chunk) - Higher education revenue primarily derives from tuition fees, accommodation fees, and other education service fees, all generated in China[136](index=136&type=chunk) [Finance Lease Business](index=24&type=section&id=Finance%20Lease%20Business) The Group's finance lease business primarily serves the healthcare and aviation sectors, benefiting from a stable Chinese market and clear regulatory policies, resulting in a net reversal of impairment provisions during the reporting period - The Group's finance lease business primarily serves customers in the healthcare and aviation industries[118](index=118&type=chunk) - During the reporting period, the finance lease business generated revenue of approximately **RMB 79.0 million** and profit before tax of approximately **RMB 92.5 million**[135](index=135&type=chunk) - China's finance lease industry is entering a critical period of transformation with stricter regulation, but the "14th Five-Year Plan" is expected to guide manufacturing upgrades, providing clear prospects for finance lease companies serving the real economy[157](index=157&type=chunk) [Financial Review](index=24&type=section&id=Financial%20Review) The Group achieved significant revenue and profit growth during the reporting period, while effectively controlling finance costs, improving liquidity, and reversing impairment provisions for finance lease receivables [Revenue](index=24&type=section&id=Revenue) During the reporting period, the Group's revenue significantly increased, primarily due to the consolidation of the higher education business - Revenue for the reporting period increased by approximately **123.9%** from approximately **RMB 133.2 million** in the same period of 2022 to approximately **RMB 298.2 million**[120](index=120&type=chunk) - Revenue primarily originated from higher education and finance lease income[136](index=136&type=chunk) [Service Costs](index=25&type=section&id=Service%20Costs) During the reporting period, service costs significantly increased, primarily attributable to the operations of Yantai Nanshan University - Service costs for the reporting period were approximately **RMB 127.0 million**, compared to zero in the same period of 2022[161](index=161&type=chunk) [Gross Profit and Gross Profit Margin](index=25&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Both the Group's gross profit and gross profit margin improved, reflecting enhanced business profitability - Gross profit for the reporting period was approximately **RMB 171.2 million**, with a gross profit margin of approximately **57.4%**, representing an increase of approximately **28.6%** compared to gross profit of approximately **RMB 133.2 million** in the same period of 2022[137](index=137&type=chunk) [Other Income, Gains or Losses](index=25&type=section&id=Other%20Income%2C%20Gains%20or%20Losses) The Group's other income, gains or losses significantly increased, driven by government grants, exchange gains, rental income, and investment interest income - Other income, gains or losses increased from approximately **RMB 3.6 million** in the same period of 2022 to approximately **RMB 49.6 million** in the reporting period[138](index=138&type=chunk) [Administrative Expenses](index=25&type=section&id=Administrative%20Expenses) The Group's administrative expenses increased, but their proportion of total revenue decreased, indicating improved operational efficiency - Administrative expenses for the reporting period were approximately **RMB 32.4 million** (2022: approximately **RMB 23.5 million**), accounting for **10.9%** of total revenue (2022: **17.7%**)[138](index=138&type=chunk) [Finance Costs](index=25&type=section&id=Finance%20Costs) The Group's finance costs significantly decreased, primarily due to a reduction in total borrowings - Finance costs decreased by approximately **34.6%** from approximately **RMB 50.5 million** in the same period of 2022 to approximately **RMB 33.0 million** in the reporting period[139](index=139&type=chunk) - Total borrowings decreased from **RMB 467.7 million** as of June 30, 2022, to **RMB 232.7 million** as of June 30, 2023[162](index=162&type=chunk) [Profit for the Period](index=26&type=section&id=Profit%20for%20the%20Period) The Group's profit for the period significantly increased, primarily benefiting from the consolidation of Yantai Nanshan University - Profit for the reporting period was approximately **RMB 153.8 million**, a significant increase of approximately **2.3 times** compared to approximately **RMB 46.0 million** in the same period of 2022[141](index=141&type=chunk) - The increase was primarily due to stable net profit from the finance lease business and the consolidation of Yantai Nanshan University's net profit into the Group's profit[141](index=141&type=chunk) [Dividends](index=26&type=section&id=Dividends) The Board does not recommend the payment of any interim dividend for the reporting period - The Board does not recommend the payment of any interim dividend for the reporting period (2022: nil)[142](index=142&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=26&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group maintains a healthy liquidity position with increased cash and cash equivalents, ample working capital, and a significantly reduced gearing ratio - As of June 30, 2023, cash and cash equivalents were approximately **RMB 242.4 million** (December 31, 2022: approximately **RMB 125.8 million**)[142](index=142&type=chunk) - Working capital (current assets less current liabilities) was approximately **RMB 730.2 million** (December 31, 2022: approximately **RMB 563.6 million**)[142](index=142&type=chunk) - The gearing ratio (total debt at period-end / total equity and debt) was approximately **7.8%** (December 31, 2022: approximately **11.3%**), primarily due to a reduction in borrowings relative to business scale[142](index=142&type=chunk) [Finance Lease Receivables](index=26&type=section&id=Finance%20Lease%20Receivables) The Group's total finance lease receivables decreased, but impairment loss provisions remain a significant component - As of June 30, 2023, the carrying amount of finance lease receivables was approximately **RMB 1,442.1 million**, a decrease of approximately **32.7%** from approximately **RMB 2,142.6 million** as of December 31, 2022[143](index=143&type=chunk) - Finance lease receivables comprise a gross amount of approximately **RMB 1,857.6 million**, unearned finance income of approximately **RMB 199.8 million**, and impairment loss provisions of approximately **RMB 215.7 million**[143](index=143&type=chunk) [Factors and Measures for Reversal of Impairment Losses](index=27&type=section&id=Factors%20and%20Measures%20for%20Reversal%20of%20Impairment%20Losses) During the reporting period, a net reversal of impairment losses on finance lease receivables occurred, primarily due to an improved business environment and timely repayments by lessees, with the Group continuing to take prudent measures to recover outstanding amounts - The improving business environment in China, particularly timely repayments by lessees in the healthcare sector, led to a net reversal of impairment losses on finance lease receivables[144](index=144&type=chunk) - During the reporting period, **eight** customers failed to repay relevant lease fees, and the Group recognized impairment provisions in accordance with IFRS 9[166](index=166&type=chunk) - The Group's recovery measures include contacting customers by phone, on-site visits, and legal proceedings, and these measures are considered effective[167](index=167&type=chunk)[169](index=169&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) The Group's employee count and employee benefits expenses significantly increased, and it continues to offer competitive remuneration and benefits to attract and retain talent - As of June 30, 2023, the Group employed **1,832** full-time employees (December 31, 2022: **1,692** employees)[170](index=170&type=chunk) - Employee benefits expenses (including directors' emoluments) for the reporting period were approximately **RMB 88.6 million** (2022: approximately **RMB 6.7 million**)[170](index=170&type=chunk) - The Group provides remuneration, medical, and retirement benefits, and grants share options to eligible employees under its share option scheme[171](index=171&type=chunk) [Risk Management](index=28&type=section&id=Risk%20Management) The Group faces various risks, including credit, liquidity, and operational risks, and has established comprehensive risk management frameworks and internal control procedures for both its higher education and finance lease businesses [Risk Management for Higher Education Business](index=28&type=section&id=Risk%20Management%20for%20Higher%20Education%20Business) Yantai Nanshan University has established a principal responsibility system and a board strategic decision-making mechanism, and purchased insurance to manage its personnel, enrollment, and market risks - The principal is responsible for ongoing risk management, while the board is responsible for strategic decisions, including budget, investment, acquisitions, and future development[147](index=147&type=chunk)[171](index=171&type=chunk) - The university purchased insurance (including public liability insurance), consistent with common practice in China's education industry[171](index=171&type=chunk) [Risk Management for Finance Lease Business](index=29&type=section&id=Risk%20Management%20for%20Finance%20Lease%20Business) The Group has established a comprehensive risk management system for the credit risk of its finance lease business, including customer due diligence, independent data review, multi-level approval procedures, and asset quality classification, with regular evaluation of the expected credit loss model - The Group has developed a comprehensive risk management system to control credit risk through customer due diligence, independent data review, and multi-level approval procedures[190](index=190&type=chunk)[172](index=172&type=chunk) - The Group voluntarily adopted a five-category classification for measuring and monitoring the asset quality of finance lease receivables: normal, special mention, substandard, doubtful, and loss[148](index=148&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[191](index=191&type=chunk) - The Group uses an Expected Credit Loss (ECL) model, considering factors such as industry customer nature, credit history, and economic conditions to assess provisions, and regularly evaluates and adjusts them[193](index=193&type=chunk) [Contingent Liabilities](index=30&type=section&id=Contingent%20Liabilities) As of the end of the reporting period, the Group had no significant contingent liabilities - As of June 30, 2023, the Group had no significant contingent liabilities (December 31, 2022: nil)[150](index=150&type=chunk) [Share Option Scheme](index=30&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme in 2019 to attract and retain talent and drive business development. No share options were granted or exercised during the reporting period - The Share Option Scheme aims to attract and retain the best personnel, provide additional incentives, and drive the Group's business to achieve excellent results[151](index=151&type=chunk) - Under the scheme, the total number of shares that may be issued is **150,000,000** shares[152](index=152&type=chunk) - For the six months ended June 30, 2023, there were no outstanding share options under the Share Option Scheme, nor were any share options granted, agreed to be granted, exercised, cancelled, or lapsed[196](index=196&type=chunk) [Use of Proceeds from Issue of Equity Securities](index=31&type=section&id=Use%20of%20Proceeds%20from%20Issue%20of%20Equity%20Securities) The Company completed the placement and subscription of new shares in December 2022, with net proceeds primarily used for the Group's finance lease business - On December 14, 2022, the Company completed the placement and subscription of a total of **190,914,000** new shares at a placing price of **HKD 3.52** per share[153](index=153&type=chunk) - The net proceeds from the placing and subscription amounted to **HKD 669.6 million**, of which approximately **HKD 512.0 million** has been used as intended for the Group's finance lease business[153](index=153&type=chunk) [Events After the Reporting Period](index=32&type=section&id=Events%20After%20the%20Reporting%20Period) After the reporting period, the Group established Union Shipping Phase I Fund Limited Partnership to expand into shipping, revised the annual caps for continuing connected transactions, and extended the deadline for new share subscriptions - On May 2, 2023, Union Fund I GP, an indirect wholly-owned subsidiary of the Company, entered into an agreement with Xiehai Bulk to establish Union Shipping Phase I Fund Limited Partnership, expanding into the shipping sector[198](index=198&type=chunk) - The Group proposed to revise the annual caps for continuing connected transactions to address Yantai Nanshan University's actual procurement needs exceeding expectations[180](index=180&type=chunk) - The Company and the subscriber agreed to extend the final closing date for the subscription of **109,080,000** new shares to September 14, 2023[181](index=181&type=chunk) [Outlook and Plans](index=33&type=section&id=Outlook%20and%20Plans) The Group anticipates a gradual improvement in global and Chinese economies, will continue to deepen its higher education and finance lease businesses, explore new breakthroughs and acquisition projects, and continuously strengthen risk management and internal controls - The Group expects global and Chinese economies to continue improving gradually, with its higher education and finance lease businesses capturing overall domestic economic growth[182](index=182&type=chunk) - The higher education business will deepen cooperation, establish advanced applied disciplines, and develop upstream, downstream, and new enterprise collaborations[203](index=203&type=chunk) - The finance lease business will adhere to the "quality over quantity" principle, adapt to market changes, adjust operating strategies, strengthen asset management, and diversify customer and project categories[183](index=183&type=chunk)[205](index=205&type=chunk) - The Group will continue to explore domestic and international business expansion and suitable acquisition projects, especially those with potential, stable cash flow, or synergistic effects[184](index=184&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) This section covers corporate governance, securities transactions, audit committee functions, and information publication, ensuring transparency and compliance with regulatory standards [Compliance with Corporate Governance Code](index=34&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules during the reporting period - The Company has established corporate governance procedures in accordance with the principles of the Corporate Governance Code set out in Appendix 14 of the Listing Rules[206](index=206&type=chunk) - From the beginning of the reporting period up to the date of this announcement, the Company has complied with all code provisions of the Corporate Governance Code[206](index=206&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=35&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[188](index=188&type=chunk) [Audit Committee](index=35&type=section&id=Audit%20Committee) The Company's Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing financial reporting processes and internal controls, and has reviewed the Group's unaudited condensed consolidated financial statements - The Audit Committee comprises **three** independent non-executive directors, with Mr. Liu Xuewei as the chairman[188](index=188&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the reporting period[188](index=188&type=chunk) [Standard Code for Securities Transactions by Directors](index=35&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a securities dealing code and confirmed that all directors complied with it during the reporting period - The Company has adopted a securities dealing code, the terms of which are no less exacting than those set out in the Model Code contained in Appendix 10 of the Listing Rules[188](index=188&type=chunk) - All Directors confirmed their compliance with the securities dealing code throughout the period from the beginning of the reporting period up to the date of this announcement[188](index=188&type=chunk) [Publication of Information](index=36&type=section&id=Publication%20of%20Information) This announcement has been published on the Company's and HKEX websites, and the interim report will be dispatched to shareholders in due course - This announcement has been published on the Company's website (http://www.aiel-holdings.com/) and the HKEX website (www.hkexnews.hk)[210](index=210&type=chunk) - The Company's interim report for the reporting period will be dispatched to the Company's shareholders in due course and will be available on the aforementioned websites[210](index=210&type=chunk)

Share Issuance and Financing - The company completed a share placement and subscription, issuing a total of 47,160,000 placement shares at HKD 3.52 per share and 143,754,000 subscription shares at the same price, raising a net amount of HKD 669.6 million, of which HKD 417.0 million (USD 53.5 million) was utilized as of December 31, 2022[7] - The placement and subscription price of HKD 3.52 per share represented a discount of approximately 19.82% to the closing price on the date of the agreements and a 16.19% discount to the average closing price over the preceding five trading days[7] - The company completed the placement and subscription of new shares on December 14, 2022, with net proceeds of approximately HKD 669.6 million[173] Contingent Liabilities and Investments - The company has no significant contingent liabilities as of December 31, 2022, compared to none in 2021[7] - The company has no significant investments, including those accounting for 5% or more of the group's total assets, as of December 31, 2022[4] Risk Management and Internal Controls - The company's credit risk management includes a comprehensive risk management system, with measures such as customer due diligence, independent data review, and multiple approval processes[13] - The company's risk management framework for its higher education business includes a decision-making structure led by the president, with measures to address internal control violations and improve future operations[13] - The company's internal control and risk management principles aim to prevent risks and strengthen asset monitoring, ensuring robust business development and diversification[33] - The company's internal control system was reviewed by an external internal control consultant, and no significant risks or control deficiencies were identified during the reporting period[114] - The company's board of directors and audit committee reviewed and were satisfied with the adequacy and effectiveness of the company's risk management and internal control systems for the year ended December 31, 2022[117] Financing Lease Business - The company's financing lease business will focus on quality over quantity, aiming for steady growth while adapting to market changes and industry regulations[21] - The company's financing lease business faces risks from lessees' financial deterioration or negative cash flow, even with sufficient collateral, particularly for assets with overdue payments exceeding 90 days but less than or equal to 150 days[6] - The company is focusing on expanding and diversifying its financial leasing business, with an emphasis on risk management and asset quality[171] - The company's financing lease receivables increased by approximately 6.1% from RMB 2,020.0 million as of December 31, 2021, to RMB 2,142.6 million as of December 31, 2022[96] - The company's financing lease receivables as of December 31, 2022, consisted of (i) total financing lease receivables of approximately RMB 2,668.6 million, (ii) unearned financing income of approximately RMB 266.8 million, and (iii) impairment loss provisions of approximately RMB 259.2 million[129] - The company's financing lease receivables as of December 31, 2021, consisted of (i) total financing lease receivables of approximately RMB 2,590.6 million, (ii) unearned financing income of approximately RMB 310.2 million, and (iii) impairment loss provisions of approximately RMB 260.5 million[129] Corporate Governance and Board Committees - The company has established several board committees including the Strategic Investment Committee, Audit Committee, Remuneration Committee, and Nomination Committee, each operating under terms of reference set by the board[41] - The company's amended and restated memorandum and articles of association were adopted on February 20, 2019, and became effective on March 15, 2019, with no significant changes during the reporting period[31] - A second amended and restated memorandum and articles of association became effective on February 14, 2023, to comply with the latest legal and regulatory requirements[31] - The board has decision-making authority over all major matters, including policy issues, strategy and budget, internal control and risk management, significant transactions, financial data, and appointment of directors[40] - The company has appointed independent non-executive directors who bring extensive knowledge and business experience, ensuring objective oversight of the company's performance[47] - Directors are required to retire by rotation at each annual general meeting, with each director (including those appointed for a specified term) required to retire at least once every three years[48] - The company has received annual written confirmations from independent non-executive directors confirming their independence in accordance with the guidelines set out in the Listing Rules[47] - The company's board committees operate under terms of reference that have been published on the company's website and the Stock Exchange's website[41] - The company has established a mechanism to ensure independent insights and recommendations are available to the Board, with its implementation and effectiveness assessed annually[61] - The Board of Directors consists of 12 members, including 4 non-executive directors and 5 independent non-executive directors, with changes in composition occurring in 2022 and 2023[58] - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial statements and overseeing the financial reporting process, internal control systems, and risk management systems[71] - The Remuneration Committee held two meetings during the reporting period, with all three members attending, and reviewed the current remuneration of all directors, providing recommendations to the Board[72] - The company has implemented corporate governance procedures in compliance with the Corporate Governance Code, including policies on director and senior management training, compliance with laws and regulations, and codes of conduct for employees and directors[65] - The Strategic Investment Committee was established on January 16, 2023, and did not hold any meetings during the reporting period[71] - The company's senior management (excluding directors) received remuneration below HKD 1,000,000 for one individual and between HKD 1,000,000 to HKD 1,500,000 for another individual during the reporting period[76] - The Board of Directors held 4 meetings during the reporting period, with all directors attending all eligible meetings, except for newly appointed directors who attended 1 out of 1 eligible meeting[69] - The company has adopted a memorandum specifying the delegation of functions to management, including the management and daily operations of the group, subject to periodic review by the Board[50] - Independent non-executive directors have signed three-year appointment letters, which can be terminated with one month's written notice and are subject to retirement and re-election at annual general meetings[68] Financial Performance and Metrics - The company's net profit for the year ended December 31, 2022, was approximately RMB 372.1 million, a significant increase of about 4.7 times compared to RMB 78.9 million in the previous year, primarily due to the consolidation of Yantai Nanshan College and a one-time bargain purchase gain of RMB 270.5 million[100] - The company's cash and cash equivalents as of December 31, 2022, were approximately RMB 125.8 million, compared to RMB 141.8 million in the previous year[95] - The company's total equity as of December 31, 2022, was approximately RMB 2,598.0 million, compared to RMB 1,273.5 million in the previous year[95] - The company's asset-liability ratio as of December 31, 2022, was approximately 11.3%, a decrease from 38.5% in the previous year, mainly due to a reduction in borrowings relative to the company's business scale[95] - The company's impairment loss provision decreased slightly by approximately 0.5% from RMB 260.5 million as of December 31, 2021, to RMB 259.2 million as of December 31, 2022[96] - The company's operating capital (current assets minus current liabilities) as of December 31, 2022, was approximately RMB 563.6 million, compared to RMB 983.9 million in the previous year[95] - The company's total borrowings as of December 31, 2022, were RMB 329.3 million, compared to RMB 795.9 million in the previous year[95] - The company's board of directors does not recommend paying any final dividend for the year ended December 31, 2022[101] - The company did not recommend the payment of any final dividend for the year ended December 31, 2022[127] - Financial costs decreased by 14.3% from RMB 89.8 million in 2021 to RMB 77.0 million in 2022, primarily due to a 48.1% reduction in borrowing costs from RMB 68.6 million to RMB 35.6 million[138] - The company's gross profit for the year ended December 31, 2022, was approximately RMB 256.0 million, with a gross profit margin of 69.4%, representing a 10.4% increase compared to the previous year[172] - The company's other income, gains, or losses increased from RMB 16.3 million in 2021 to RMB 28.2 million in 2022, primarily due to government subsidies, investment and interest income, and losses from the disposal of plant and equipment[172] - Revenue increased by 59.1% from approximately RMB 231.8 million in 2021 to approximately RMB 368.8 million in 2022, primarily due to the acquisition of Yantai Nanshan College[188] - Yantai Nanshan College contributed approximately RMB 159.9 million in revenue from tuition, accommodation, and other educational services from August 18, 2022, to December 31, 2022[188] - The top five customers accounted for approximately 38.18% of the company's total revenue in 2022, with the largest customer contributing approximately 10.91%[195] - Service costs for 2022 were approximately RMB 112.8 million, mainly from the operations of Yantai Nanshan College[194] Higher Education Business - The company acquired a 70% stake in Yantai Nanshan College on August 18, 2022, and now operates dual business segments: higher education and financial leasing[160] - The company completed the acquisition of Yantai Nanshan College, resulting in a one-time bargain purchase gain of approximately RMB 270.5 million[93] - Yantai Nanshan College's total enrollment increased from 29,047 in the 2021/2022 academic year to 34,958 in the 2023/2024 academic year, with tuition fees for undergraduate programs rising from RMB 12,800 to RMB 15,800[168] - The company expects continued growth in demand for higher education in China due to increasing income levels and societal emphasis on higher education[169] - Yantai Nanshan College offers 49 undergraduate programs and 40 diploma programs across 30 departments, focusing on practical training and employment prospects[181] - The company expects to consolidate Yantai Nanshan College's full fiscal year financial results in 2023, compared to only 4 months in 2022[198] Environmental and Social Responsibility - Total greenhouse gas emissions increased significantly from 112.74 tons of CO2 equivalent in 2021 to 8,342.88 tons in 2022, with scope 2 emissions accounting for the majority at 8,079.65 tons[143] - Greenhouse gas emission intensity per employee decreased from 3.64 tons of CO2 equivalent in 2021 to 4.93 tons in 2022[143] - The company's greenhouse gas emissions are primarily from indirect sources, and it encourages the use of teleconferencing and direct flights to reduce carbon footprint[190] Market and Industry Trends - China's GDP reached RMB 121.0 trillion in 2022, with a year-on-year growth rate of 3%[162] - China's higher education industry's total revenue increased from RMB 997.3 billion in 2016 to RMB 1,382.7 billion in 2020, with a compound annual growth rate of 8.5%[163] - The company's customer base is primarily in the healthcare and aviation industries, with stable market conditions in 2022[193] - The company has established strong relationships with financial institutions for interest-bearing loans and asset-backed securities[195] Credit Risk and Impairment - The company's default loss rate is determined based on regulatory benchmarks, peer company practices, recovery efficiency, and expert experience[2] - The company recorded impairment provisions for nine customers (eight in healthcare and one in aviation) who failed to repay lease fees in 2022, compared to one customer in aviation in 2021[136] - The company's expected credit loss model follows a three-stage approach under new financial instrument standards, with provisions calculated based on 12-month expected credit losses unless credit risk increases significantly[137]