Financial Performance - Total revenue and net investment income for 2022 was RMB 1.6 billion, a decrease of 37% year-on-year[9] - Total revenue for 2022 was RMB 1,585,380 thousand, a decrease of 9.1% compared to RMB 1,744,483 thousand in 2021[15] - Net loss attributable to the company's owners in 2022 was RMB 429,901 thousand, compared to a profit of RMB 1,624,362 thousand in 2021[15] - Total revenue and net investment income decreased by 36.6% to RMB 1,586,889 thousand in 2022 from RMB 2,504,011 thousand in 2021[19] - Operating loss in 2022 was RMB 103,866 thousand, compared to an operating profit of RMB 862,804 thousand in 2021[20] - The company's pre-tax loss for the year ended December 31, 2022, was RMB 383.0 million, compared to a pre-tax profit of RMB 1,855.9 million in the same period in 2021[53] - The company's net loss attributable to owners for the year ended December 31, 2022, was RMB 429.9 million, compared to a net profit of RMB 1,624.4 million in 2021[54] - The company's adjusted net loss attributable to owners (excluding unrealized net carried interest) for 2022 was RMB 234.4 million, compared to an adjusted net profit of RMB 842.9 million in 2021[55] - Total revenue for 2022 was RMB 1,585.38 million, a decrease from RMB 1,744.48 million in 2021[106] - The company reported a net loss of RMB 453.98 million in 2022, compared to a net profit of RMB 1,645.39 million in 2021[106] Investment Management Business - Investment management business contributed 53% of the group's total revenue and net investment income in 2022[10] - Asset management scale reached RMB 26.9 billion at the end of the reporting period, driven by new fundraising from USD Fund IV and Huaxing New Economy RMB Fund IV[10] - Total assets under management (AUM) for the investment management business reached RMB 42.9 billion by the end of the reporting period[10] - Investment management revenue decreased by 6.9% to RMB 847,531 thousand in 2022 from RMB 910,540 thousand in 2021[19] - Investment management operating profit decreased by 67.6% to RMB 174,897 thousand in 2022 from RMB 540,201 thousand in 2021[20] - Investment management fees increased by 21.3% to RMB 495.0 million in 2022 from RMB 408.0 million in 2021[26] - Assets under management generating management fees grew to RMB 26.9 billion in 2022 from RMB 23.8 billion in 2021[28] - Internal rate of return for self-managed private equity funds was 25.3% in 2022, while third-party private equity funds achieved 23.2%[27] - Total committed capital for investment management reached RMB 36.6 billion in 2022, up from RMB 32.7 billion in 2021[28] - The total committed capital increased by 11.7% from RMB 32.7 billion in 2021 to RMB 36.6 billion in 2022, driven by the completion of the initial fundraising for the Huaxing New Economy USD Fund IV in September 2021 and the Huaxing New Economy RMB Fund IV in April 2022[32] - Management fees for the investment management segment increased by 21.3% from RMB 408.0 million in 2021 to RMB 495.0 million in 2022[32] - The net investment loss for the investment management segment was RMB 70.3 million in 2022, compared to a net investment gain of RMB 473.7 million in 2021, primarily due to market volatility affecting mark-to-market valuations[32] - The investment management segment's operating expenses increased from RMB 370.3 million in 2021 to RMB 672.6 million in 2022, mainly due to higher impairment losses under the expected credit loss model and increased carried interest provisions[33] - The investment management segment's operating profit decreased from RMB 540.2 million in 2021 to RMB 174.9 million in 2022[34] Investment Banking Business - Huaxing Securities achieved a record high investment banking income of RMB 127 million in 2022[11] - Investment banking revenue decreased by 61.6% to RMB 422,824 thousand in 2022 from RMB 1,100,656 thousand in 2021[19] - Huaxing Securities revenue decreased by 50.0% to RMB 204,820 thousand in 2022 from RMB 409,633 thousand in 2021[19] - Huaxing Securities operating loss was RMB 147,526 thousand in 2022, compared to an operating profit of RMB 78,005 thousand in 2021[20] - Investment banking revenue and net investment income decreased by 61.6% to RMB 422.8 million in 2022 compared to 2021, primarily due to a significant decline in IPO issuance scale in the Hong Kong and US markets and reduced activity in the private financing market[23] - Investment banking advisory services revenue dropped by 50.0% to RMB 268.8 million in 2022 from RMB 537.9 million in 2021[21] - Equity underwriting revenue plummeted by 94.9% to RMB 17.9 million in 2022 from RMB 348.9 million in 2021[21] - Total transaction value for investment banking services decreased by 81.5% to RMB 4.14 billion in 2022 from RMB 22.35 billion in 2021[22] - Huaxing Securities' segment revenue increased by 16.6% from RMB 151.1 million in 2021 to RMB 176.2 million in 2022, driven by higher stock underwriting income from IPOs on the STAR Market and ChiNext[36] - Huaxing Securities' net investment income decreased by 88.9% from RMB 258.5 million in 2021 to RMB 28.6 million in 2022, primarily due to reduced investment income from proprietary investments and follow-on investments in STAR Market IPOs[36] - Huaxing Securities' operating expenses increased by 6.2% from RMB 331.6 million in 2021 to RMB 352.3 million in 2022, mainly due to higher compensation and benefits and other operating expenses[37] - Huaxing Securities' operating profit turned into a loss of RMB 147.5 million in 2022, compared to a profit of RMB 78.0 million in 2021[38] Wealth Management and Alternative Assets - The wealth management business increased its alternative asset scale to RMB 3.8 billion by the end of the reporting period[11] - The Duoduo Gold app, launched in November 2022, gained over 120,000 registered users and nearly 50,000 account-opening clients[11] Carried Interest and Fund Exits - Realized carried interest in 2022 totaled RMB 402 million (net carried interest of RMB 143 million), significantly higher than the same period in 2021[10] - The group completed RMB 6.7 billion in fund project exits during the reporting period[10] - Unrealized carried interest totaled RMB 3.7 billion (net unrealized carried interest of RMB 1.1 billion) at the end of the reporting period[10] - Realized carried interest income surged by 1,296.3% to RMB 402.4 million in 2022 from RMB 28.8 million in 2021[26] - Realized carried interest income increased significantly from RMB 28.8 million in 2021 to RMB 402.4 million in 2022, generated from three main funds and five special funds[32] - The total carried interest received by the general partners of the relevant investment funds for the year ended December 31, 2022, was RMB 151,051,098[83] - The company retained at least 25% of the distributable carried interest for each of the 22 relevant investment funds[82] - The general partner of Huaxing New Economy USD Fund I received RMB 9,334,948 in carried interest for the year ended December 31, 2022[84] - The general partner of Huaxing New Economy USD Fund II received RMB 29,801,131 in carried interest for the year ended December 31, 2022[84] - The general partner of the Project Fund received RMB 111,915,019 in carried interest for the year ended December 31, 2022[84] - RMB 2,345,343 of carried interest from Huaxing New Economy USD Fund I was distributed to the company, while RMB 2,623,081 was distributed to related investment team members[84] - RMB 8,205,019 of carried interest from Huaxing New Economy USD Fund II was distributed to the company, while RMB 3,211,030 was distributed to related investment team members[86] - RMB 53,118,226 of carried interest from the Project Fund was distributed to the company, with no distribution to related investment team members[87] - The carried interest distribution framework agreement is valid from the date of the agreement until December 31, 2030[81] - The independent non-executive directors confirmed that the carried interest distribution framework agreement was entered into under normal commercial terms and is fair and reasonable[89] Debt and Financial Management - The company actively repaid syndicated loans in Q1 2023 to further reduce debt levels and financial costs[13] - The company's debt-to-asset ratio decreased to 31.6% as of December 31, 2022, compared to 35.3% in 2021[62] - The company's cash and cash equivalents totaled RMB 1,537.7 million as of December 31, 2022, with RMB 1,442.3 million excluding Huaxing Securities[56] - The company's net cash used in operating activities for 2022 was RMB 738.0 million, primarily due to a pre-tax loss of RMB 383.0 million and adjustments for non-cash and non-operating items of RMB 699.2 million[57] - The company's net cash generated from operating activities in 2021 was RMB 1,697.8 million, driven by a pre-tax profit of RMB 1,855.9 million and adjustments for non-cash and non-operating items of RMB 1,469.1 million[58] - Net cash inflow from investing activities in 2022 was RMB 327.8 million, primarily due to proceeds from investments in associates (RMB 158.1 million), disposal of financial assets at fair value through profit or loss (RMB 566.2 million), and foreign exchange forward contracts (RMB 43.8 million), partially offset by net placement of term deposits (RMB 262.5 million) and pledged bank deposits (RMB 34.2 million)[59] - Net cash outflow from financing activities in 2022 was RMB 619.1 million, mainly due to dividend payments to shareholders (RMB 201.1 million), net repayment of bank borrowings (RMB 261.2 million), and interest payments (RMB 92.8 million), partially offset by net proceeds from income certificates (RMB 76.2 million)[60] Corporate Governance and Board Changes - Key management changes include the resignation of Mr. Fan Bao as Executive Director and Chairman effective February 2, 2024, and the appointment of Mr. Yijing Xie as Chairman and Mr. Jiachang Lin as Vice Chairman[72] - Significant board changes occurred on February 2, 2024, including the resignation of Mr. Bao Fan as Executive Director, Chairman, and CEO, and the appointment of Mr. Xie Yijing as Chairman and CEO, among other key appointments[133] - Non-executive directors Mr. Li Shimuo and Mr. Liu Xing, who resigned in July 2023, are associated with Chengwei Capital and Sequoia Capital China, respectively, which may have overlapping investments with the company's funds[134] - The company has a board of directors consisting of 9 members, including 4 executive directors, 2 non-executive directors, and 3 independent non-executive directors[140] - During the reporting period, the company held 5 board meetings, approving key resolutions such as the 2021 annual report, 2022 interim report, and the adoption of a new share incentive plan[142] - The company adheres to the Corporate Governance Code and has implemented internal control measures to enhance transparency and accountability to shareholders[136] - The company has a strategic planning process to identify opportunities and challenges, and develop action plans to create sustainable long-term value for shareholders[139] - The company has strengthened its corporate culture framework through various initiatives in 2022, focusing on integrity, entrepreneurial spirit, openness, and pursuit of excellence[138] - The company has adopted the Standard Code as its securities trading code to regulate transactions by directors and relevant employees[137] - The company has a policy to avoid conflicts of interest in investment decisions, with certain directors abstaining from voting in cases of potential conflicts[135] - The company's chairman and CEO roles are currently held by the same person, with the board believing this arrangement ensures consistent leadership and efficient decision-making[141] - The Audit Committee held 3 meetings in 2022, approving key resolutions including the 2021 annual report, 2022 interim report, and 2022 annual report audit plan[150] - The Remuneration Committee held 1 meeting in 2022, approving resolutions on 2021 and 2022 executive compensation, restricted share units, and internal promotions[151] - Senior management (excluding directors and top executives) had 1 member earning over HKD 6,000,001 and 5 members earning between HKD 0-6,000,000 in 2022[152] - Bao Fan resigned as executive director on February 2, 2024, while Du Yongbo and Lin Jiachang were appointed as executive directors on the same date[144] - Li Shimuo and Liu Xing resigned as non-executive directors on July 14, 2023, while Sun Qianhong was appointed as non-executive director on February 2, 2024[144] - Independent non-executive directors confirmed their independence and had their terms extended for 3 years starting June 30, 2021[146] - The Board of Directors is responsible for overseeing the company's business, strategic decisions, and performance[148] - The company has established 5 board committees: Audit, Remuneration, Nomination, Executive, and ESG Committees[149] - Non-executive director Lin Ning has a 3-year term starting August 24, 2021, while Sun Qianhong has a 3-year term starting February 2, 2024[145] - All directors must retire and be re-elected at the AGM, with one-third required to retire each year[147] - The Nomination Committee held one meeting in 2022, focusing on the re-election of retiring directors, the independence of independent non-executive directors, and the Board Diversity Policy[153] - The Executive Committee, consisting of four executive directors and three senior management members, held three meetings in 2022 to discuss major strategies and significant matters[154] - The Environmental, Social, and Governance (ESG) Committee held two meetings in 2022, reviewing the ESG report for 2021, summarizing ESG work for 2022, and planning for 2023[155] - The company's Board Diversity Policy aims to achieve diversity in gender, age, cultural and educational background, professional qualifications, and industry experience, with a goal to maintain at least the current proportion of female directors[156] - As of December 31, 2022, the company had 754 full-time employees, with a gender ratio of 53% female to 47% male, reflecting a basic achievement of gender diversity[157] - The company's dividend policy allows dividends to be paid only from legally distributable profits and reserves, with no fixed payout ratio, and the Board has absolute discretion on dividend payments[158] - The Nomination Policy ensures a balance of skills, experience, and diversity in the Board, with the Nomination Committee evaluating candidates based on reputation, professional skills, independence, and diversity[159] - The Nomination Committee reviewed the Nomination Policy in 2022 and will continue to propose revisions as needed to ensure its effectiveness[160] - The company's Board of Directors is primarily composed of non-executive and independent non-executive directors, ensuring independence from senior management[161] - Independent non-executive directors are subject to annual reviews of their time commitment and independence, with attendance records disclosed in the 2022 annual report[161] - The company's Audit Committee and Remuneration Committee are chaired by independent non-executive directors[161] - The company paid a total of RMB 8,542,000 for audit and non-audit services in 2022, with audit services accounting for RMB 8,460,000[165] - The company appointed Zhonghui Anda CPA Limited as the new auditor effective December 13, 2023, following the resignation of Deloitte[165] - The Board of Directors is responsible for the company's risk management and internal control systems, which are deemed effective and adequate[166] - The company established an Operational Committee in 2018 to enhance control over significant risks, chaired by the CEO[167] - The company has a three-line defense risk management framework, including front-line business units, dedicated legal and compliance departments, and an independent internal audit department[167] - Risk issues identified by front-line business units are escalated through a clear reporting procedure, with significant risks reported to the Operational Committee and Executive Committee[168] - The company's risk management and internal control systems have been effective and adequate throughout the year ending December 31, 2022, with no significant changes since the IPO[169] - The company has adopted an insider information disclosure policy and an information barrier policy to ensure the confidentiality of client information[169] - Shareholders holding at least one-tenth of the company's paid-up share capital with voting rights can request a special general meeting[170][171]

[Financial Highlights](index=2&type=section&id=%E8%B2%A1%E5%8B%99%E6%A6%82%E8%A6%81) [Core Financial Performance](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A6%81) In H1 2024, the Group's revenue declined, but net loss narrowed significantly due to effective cost control and a high prior-year base affected by non-cash items Summary of Condensed Consolidated Statement of Profit or Loss | Indicator | Six Months Ended June 30, 2024 (in thousands of RMB) | Six Months Ended June 30, 2023 (in thousands of RMB) | | :--- | :--- | :--- | | Total revenue | 328,921 | 536,575 | | Total revenue and net investment income | 359,527 | 584,406 | | Operating (loss) profit | (87,736) | 32,447 | | Loss before tax | (73,619) | (112,193) | | Loss for the period | (85,967) | (163,173) | | Loss for the period attributable to owners of the Company | (73,822) | (180,132) | Non-IFRS Measure: Adjusted Net Loss | Indicator | Six Months Ended June 30, 2024 (in thousands of RMB) | Six Months Ended June 30, 2023 (in thousands of RMB) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (73,822) | (180,132) | | Add: Share-based compensation expenses | 28,308 | 41,280 | | Add: Fair value change of share options | — | 152,990 | | Add: Reversal of unrealized net carried interest | (72,382) | (175,367) | | **Adjusted net loss attributable to owners of the Company** | **(117,896)** | **(161,229)** | [Management Discussion and Analysis](index=4&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review](index=4&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) Amid a sluggish market in H1 2024, the Group's revenue declined, leading to an 8% staff reduction, while focusing on investment exits and maintaining strengths in specific advisory areas - In H1 2024, total revenue and net investment income amounted to **RMB 360 million**, a **39% YoY decrease**, with a net loss attributable to owners of **RMB 74 million**[8](index=8&type=chunk) - The Group proactively adjusted its workforce, reducing the number of employees to **521** by the end of the period, an **8% decrease** from the end of 2023[8](index=8&type=chunk) - The investment management business focused on exits and post-investment management, achieving **RMB 893 million** in fund distributions, with AUM at **RMB 34.8 billion** by period-end[8](index=8&type=chunk) - Huaxing Securities remained stable, with its institutional research and retail business revenues growing by **63%** and **117%** YoY, respectively[9](index=9&type=chunk) [Business Outlook](index=5&type=section&id=%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) The company will continue to serve new economy enterprises by focusing on its core investment management and investment banking businesses, preparing for future growth despite challenges - The company initiated a new chapter with a board transition in early 2024, and its overall business and operations remain stable[10](index=10&type=chunk) - Future focus will remain on the core businesses of investment management and investment banking, leveraging its expertise in valuing new economy assets to identify promising projects[10](index=10&type=chunk) [Segment Performance](index=6&type=section&id=%E5%88%86%E9%83%A8%E8%A1%A8%E7%8F%BE) All business segments experienced a decline in revenue and net investment income, with the investment management segment being the most significantly impacted Revenue and Net Investment Income by Segment (in thousands of RMB) | Business Segment | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Investment Banking | 97,570 | 112,770 | -13.5% | | Investment Management | 131,366 | 306,468 | -57.1% | | Huaxing Securities | 103,466 | 119,685 | -13.6% | | Others | 27,125 | 45,483 | -40.4% | | **Total** | **359,527** | **584,406** | **-38.5%** | Operating (Loss) Profit by Segment (in thousands of RMB) | Business Segment | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Investment Banking | (61,548) | (27,624) | 122.8% | | Investment Management | 39,531 | 126,247 | -68.7% | | Huaxing Securities | (42,494) | (41,865) | 1.5% | | Others | (23,225) | (24,311) | -4.5% | | **Total** | **(87,736)** | **32,447** | **N/A** | [Investment Banking Segment](index=7&type=section&id=%E6%8A%95%E8%B3%87%E9%8A%80%E8%A1%8C) The investment banking segment's revenue decreased by 13.5% to RMB 97.6 million, and its operating loss widened to RMB 61.5 million despite a significant rise in equity underwriting income Investment Banking Segment Performance (in thousands of RMB) | Indicator | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Advisory services revenue | 37,873 | 54,295 | -30.2% | | Equity underwriting revenue | 32,164 | 3,744 | 759.1% | | Sales, trading and brokerage revenue | 27,533 | 54,466 | -49.4% | | **Segment total revenue and net investment income** | **97,570** | **112,770** | **-13.5%** | | **Segment operating loss** | **(61,548)** | **(27,624)** | **122.8%** | - Despite the revenue decline, segment operating expenses decreased by **22.8%** YoY after excluding the impact of bonus reversals and credit loss provisions, reflecting effective cost optimization[17](index=17&type=chunk) [Investment Management Segment](index=9&type=section&id=%E6%8A%95%E8%B3%87%E7%AE%A1%E7%90%86) The investment management segment's revenue and net investment loss totaled RMB 131.4 million, a sharp 57.1% YoY decrease, driven by lower management fees and realized carried interest Investment Management Segment Performance (in thousands of RMB) | Indicator | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Management fees | 154,704 | 227,544 | -32.0% | | Realized carried interest income | 10,107 | 94,218 | -89.3% | | **Segment revenue and net investment loss** | **131,366** | **306,468** | **-57.1%** | | **Segment operating profit** | **39,531** | **126,247** | **-68.7%** | | **Segment operating profit margin** | **30.1%** | **41.2%** | - | - Fee-earning AUM decreased from RMB 22.9 billion at the end of 2023 to **RMB 17.4 billion** by the end of June 2024, which was the primary reason for the decline in management fee income[21](index=21&type=chunk)[24](index=24&type=chunk) - As of June 30, 2024, total AUM was **RMB 34.8 billion**, down from RMB 36.7 billion at the end of 2023[21](index=21&type=chunk) [Huaxing Securities Segment](index=13&type=section&id=%E8%8F%AF%E8%88%88%E8%AD%89%E5%88%B8) Huaxing Securities' revenue and net investment income was RMB 103.5 million, down 13.6% YoY, while its operating loss remained stable due to reduced compensation expenses Huaxing Securities Segment Performance (in thousands of RMB) | Indicator | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | **Segment revenue and net investment income** | **103,466** | **119,685** | **-13.6%** | | Segment operating expenses | (145,960) | (161,550) | -9.7% | | **Segment operating loss** | **(42,494)** | **(41,865)** | **1.5%** | - The revenue decline was mainly due to reduced investment income from co-investments in STAR Market IPOs, partially offset by increased gains from proprietary investments[28](index=28&type=chunk) [Others Segment](index=14&type=section&id=%E5%85%B6%E4%BB%96) The Others segment's revenue decreased by 40.4%, but its operating loss narrowed slightly due to significant reductions in compensation and financing costs Others Segment Performance (in thousands of RMB) | Indicator | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | **Segment revenue and net investment income** | **27,125** | **45,483** | **-40.4%** | | Segment operating expenses | (50,350) | (69,794) | -27.9% | | **Segment operating loss** | **(23,225)** | **(24,311)** | **-4.5%** | [Overall Operating Performance Analysis](index=16&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) The Group's total revenue and net investment income fell 38.5% to RMB 360 million, leading to an operating loss, though net loss narrowed due to a large non-cash expense in the prior year [Revenue and Net Investment Income](index=16&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E6%B7%A8%E6%8A%95%E8%B3%87%E6%94%B6%E7%9B%8A) Total revenue and net investment income decreased by 38.5% to RMB 360 million, with realized carried interest income experiencing the largest decline of 89.3% Breakdown of Revenue and Net Investment Income (in thousands of RMB) | Type | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Transaction and advisory fees | 136,063 | 153,175 | -11.2% | | Management fees | 159,859 | 239,380 | -33.2% | | Interest income | 22,892 | 49,802 | -54.0% | | Realized carried interest income | 10,107 | 94,218 | -89.3% | | **Total revenue** | **328,921** | **536,575** | **-38.7%** | | Net investment income | 30,606 | 47,831 | -36.0% | | **Total revenue and net investment income** | **359,527** | **584,406** | **-38.5%** | [Operating Expenses](index=17&type=section&id=%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Total operating expenses decreased by 19.0% to RMB 447 million, driven by lower staff costs, financing costs, and accrued carried interest expenses - Staff costs and benefits decreased by **12.0%** YoY to RMB 282 million[35](index=35&type=chunk) - Finance costs significantly decreased by **81.5%** YoY to RMB 7.7 million[35](index=35&type=chunk) - Expected credit losses shifted from a reversal of RMB 33.6 million in the prior period to a provision of **RMB 5.9 million** in the current period[35](index=35&type=chunk) [Operating (Loss) Profit](index=17&type=section&id=%E7%B6%93%E7%87%9F%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E5%88%A9%E6%BD%A4) The Group shifted from an operating profit of RMB 32.4 million to an operating loss of RMB 87.7 million as the revenue decline outpaced cost savings - The operating loss for the six months ended June 30, 2024 was **RMB 87.7 million**, compared to an operating profit of RMB 32.4 million in the same period last year[36](index=36&type=chunk) [Net Loss Analysis](index=18&type=section&id=%E6%9C%9F%E5%85%A7%E8%99%A7%E6%90%8D%E5%8F%8A%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E6%9C%9F%E5%85%A7%E8%99%A7%E6%90%8D) Net loss attributable to owners narrowed significantly to RMB 73.8 million from RMB 180.1 million, primarily due to the absence of a large, non-cash share option expense recorded in the prior year Comparison of Loss Indicators (in millions of RMB) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Loss before tax | (73.6) | (112.2) | | Loss for the period | (86.0) | (163.2) | | Loss attributable to owners of the Company | (73.8) | (180.1) | - The H1 2023 results included a **RMB 153 million** loss from the fair value change of share options, a non-cash, non-operating item that significantly inflated the prior-year loss base[40](index=40&type=chunk)[57](index=57&type=chunk) [Capital and Liquidity](index=19&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The Group maintained a solid capital structure and sufficient liquidity, with over RMB 4 billion in cash and highly liquid assets and a low gearing ratio of 12.9% - As of June 30, 2024, the Group held **RMB 1.765 billion** in cash, term deposits, and highly liquid wealth management products, plus **RMB 2.330 billion** in highly liquid financial assets[44](index=44&type=chunk) - The gearing ratio (total liabilities to total assets, with exclusions) was **12.9%**, remaining stable compared to 12.6% at the end of 2023, indicating low financial leverage[45](index=45&type=chunk) - In March 2024, the company entered into a settlement agreement to acquire certain equity investment interests from Huaxing New Economy Fund IV for approximately **RMB 791 million**[47](index=47&type=chunk) [Human Resources](index=21&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2024, the Group had 521 full-time employees, an 8% decrease from year-end 2023, with total staff costs declining by 12.0% YoY Employee Headcount by Function (as of June 30, 2024) | Function | Number of Employees | Percentage | | :--- | :--- | :--- | | Investment Banking | 122 | 23% | | Investment Management | 51 | 10% | | Huaxing Securities | 263 | 51% | | Others | 12 | 2% | | Group Middle and Back Office | 73 | 14% | | **Total** | **521** | **100%** | - Total staff costs (including share-based compensation) for H1 2024 were **RMB 282 million**, a **12.0% decrease** from the same period last year[50](index=50&type=chunk) [Dividend, Corporate Governance, and Subsequent Events](index=22&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board did not recommend an interim dividend, a deviation from the corporate governance code exists, and a post-period exit agreement was reached - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024[52](index=52&type=chunk) - The company deviates from the Corporate Governance Code provision separating the roles of chairman and chief executive, with Mr. XIE Yijing currently holding both positions[54](index=54&type=chunk) - On August 30, 2024, a subsidiary entered into an exit agreement involving the sale of a 10% stake in Xuntou for **RMB 202 million** and the purchase of a stake in another company[56](index=56&type=chunk) [Condensed Consolidated Financial Statements and Notes](index=25&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=25&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This section presents the Group's unaudited consolidated income statement, showing a loss attributable to owners of RMB 73.8 million and a basic loss per share of RMB 0.15 Loss Per Share | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (in thousands of RMB) | (73,822) | (180,132) | | Weighted average number of ordinary shares | 506,507,683 | 502,642,560 | | **Basic and diluted loss per share (RMB)** | **(0.15)** | **(0.36)** | [Condensed Consolidated Statement of Financial Position](index=27&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This section provides the Group's detailed balance sheet, showing total assets of RMB 9.36 billion and net assets of RMB 7.13 billion as of June 30, 2024 Key Balance Sheet Items (in thousands of RMB) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Non-current assets** | **2,981,262** | **3,192,831** | | **Current assets** | **6,375,598** | **6,147,529** | | **Total assets** | **9,356,860** | **9,340,360** | | **Current liabilities** | **2,158,348** | **2,085,055** | | **Non-current liabilities** | **65,444** | **78,362** | | **Net assets** | **7,133,068** | **7,176,943** | | Equity attributable to owners of the Company | 6,108,383 | 6,139,409 | [Notes to the Condensed Consolidated Financial Statements](index=29&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The notes detail segment performance, related party transactions, and a contingent liability related to the investigation involving the former chairman, Mr. Bao Fan - The segment information note explains that unrealized carried interest is included in the investment management segment's results for internal reporting but not recognized in the consolidated income statement[67](index=67&type=chunk)[68](index=68&type=chunk) - The related party transactions note shows the largest receivable is **RMB 904 million** from Huaxing New Economy Fund IV, related to management fees and portfolio transfers[92](index=92&type=chunk)[93](index=93&type=chunk) - The contingent liabilities note discloses that approximately **RMB 78.13 million** in restricted funds have been paid in connection with the investigation involving Mr. Bao Fan, with no provision made due to uncertainty[106](index=106&type=chunk)

[Annual Results Announcement](index=1&type=section&id=%E5%B9%B4%E5%BA%A6%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A) [2023 Annual Consolidated Results Summary](index=2&type=section&id=2023%E5%B9%B4%E5%BA%A6%E7%B6%9C%E5%90%88%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%81) The company faced severe market challenges in fiscal year 2023, with significant reductions in total revenue and net investment income, and an expanded net loss attributable to owners of the company. To supplement IFRS, the company introduced adjusted net loss to better reflect operating performance - Huaxing Capital Holdings Limited announced its audited consolidated results for the year ended December 31, 2023[1](index=1&type=chunk) - This announcement refers to the company's previous announcement on March 28, 2024, regarding the delay in publishing the audited 2023 annual results[1](index=1&type=chunk) [Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A6%81) The company experienced a significant decline in total revenue and net investment income in 2023, leading to an increased operating loss and net loss attributable to owners of the company 2023 and 2022 Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 1,006,094 | 1,585,380 | -36.5% | | Total Revenue and Net Investment Income or Loss | 797,944 | 1,586,889 | -49.7% | | Total Operating Expenses | (995,761) | (1,690,755) | -41.1% | | Operating Loss | (197,817) | (103,866) | +90.5% | | Loss for the Year | (460,993) | (453,978) | +1.5% | | Loss for the Year Attributable to Owners of the Company | (471,903) | (429,901) | +9.8% | [Adjustments for Non-IFRS Measures](index=2&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F%E6%8C%87%E6%A8%99%E8%AA%BF%E6%95%B4) The company uses "Adjusted Net Loss Attributable to Owners of the Company" as a non-IFRS measure to better reflect operating performance by adjusting for non-recurring and certain non-cash items - The company adopted "Adjusted Net Loss Attributable to Owners of the Company" as a non-IFRS measure, adjusting for non-recurring and certain non-cash items to better reflect operating performance[2](index=2&type=chunk) Adjusted Net Loss Attributable to Owners of the Company (Unaudited) | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Loss for the Year Attributable to Owners of the Company | (471,903) | (429,901) | | Add: Share-based Payment Expenses | 61,432 | 113,478 | | Add: Fair Value Change of Share Options | 154,048 | 82,000 | | Subtotal before Carried Interest Related Adjustments | (256,423) | (234,423) | | Add: Unrealized Net Carried Interest Reversal | (336,023) | (216,630) | | **Adjusted Net Loss Attributable to Owners of the Company** | **(592,446)** | **(451,053)** | - Unrealized net carried interest reversal is primarily calculated based on fair value changes of funds managed by the investment management business, with cumulative unrealized gross carried interest of **RMB 2.6 billion** (net carried interest of **RMB 0.8 billion**) as of December 31, 2023[4](index=4&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review](index=4&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) In 2023, the company faced a challenging market, resulting in a significant decline in total revenue and net investment income, and an expanded net loss attributable to owners of the company, while its investment banking and wealth management businesses showed resilience and growth in specific areas - The market environment was severe in 2023, with a decline in both the transaction value and number of private equity deals across the market, and a sluggish IPO market[6](index=6&type=chunk) 2023 Group Overall Performance Overview | Indicator | Amount (RMB) | YoY Change | | :--- | :--- | :--- | | Total Revenue | RMB 1 billion | Reduced by approximately 37% | | Total Revenue and Net Investment Income | Approximately RMB 0.8 billion | Reduced by approximately 50% | | Net Loss Attributable to Owners of the Company | RMB 472 million | Expanded | | Number of Employees | 566 | Reduced by 25% | - Investment management business accounted for **34% of total revenue**, with **RMB 3.1 billion** in exited fund projects, and DPI for RMB Phase I, Phase II, USD Phase I, Phase II, and Healthcare Phase I funds all exceeding **100%**[6](index=6&type=chunk) - Huaxing New Economy RMB Phase IV Fund and USD Phase IV Fund's fundraising and investment periods were terminated early due to Mr. Bao Fan's situation[6](index=6&type=chunk) - Investment banking revenue declined, with a significant drop in private placement business, but secondary market equity sales and trading business showed high resilience, accounting for **46% of investment banking revenue**[6](index=6&type=chunk) - Huaxing Securities' total revenue and net investment income reached **RMB 261 million**, a **27% year-on-year increase**, accounting for **33% of the Group's total revenue and net investment income**[7](index=7&type=chunk) - Huaxing Securities' Duoduo Gold APP saw cumulative registered users and opened accounts grow by **64%** and **82%** respectively, with client asset under management growing by approximately **4.7 times**[7](index=7&type=chunk) [Business Outlook](index=5&type=section&id=%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) Looking ahead to 2024, with Mr. Bao Fan's resignation and the board's re-election, Huaxing Capital will continue to focus on its core investment management and investment banking businesses, actively integrate into national development strategies, and seek development amidst adjustments to support strategic emerging industries - In early 2024, Mr. Bao Fan resigned, and Huaxing Capital's board of directors was re-elected, marking a new chapter[8](index=8&type=chunk) - The Group will uphold its original mission of serving new economy enterprises, rooted in its core investment management and investment banking businesses, seeking development amidst adjustments[8](index=8&type=chunk) [Financial Review](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) [Segment Performance](index=6&type=section&id=%E5%88%86%E9%83%A8%E8%A1%A8%E7%8F%BE) In 2023, the Group's business segments showed mixed performance, with investment banking and investment management experiencing significant declines in revenue and net investment income, both recording operating losses, while Huaxing Securities was the only segment to achieve revenue growth and a substantial reduction in operating loss 2023 and 2022 Revenue and Net Investment Income or Loss by Reporting Segment | Business Segment | 2023 (RMB thousands) | 2022 (RMB thousands) | Change (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | :--- | | Investment Banking | 192,194 | 422,824 | (230,630) | -54.5% | | Investment Management | 270,015 | 847,531 | (577,516) | -68.1% | | Huaxing Securities | 261,043 | 204,820 | 56,223 | 27.4% | | Others | 74,692 | 111,714 | (37,022) | -33.1% | | **Total Revenue and Net Investment Income or Loss** | **797,944** | **1,586,889** | **(788,945)** | **-49.7%** | 2023 and 2022 Operating (Loss) / Profit by Reporting Segment | Business Segment | 2023 (RMB thousands) | 2022 (RMB thousands) | Change (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | :--- | | Investment Banking | (69,287) | (61,384) | (7,903) | 12.9% | | Investment Management | (12,277) | 174,897 | (187,174) | N/A | | Huaxing Securities | (86,726) | (147,526) | 60,800 | -41.2% | | Others | (29,527) | (69,853) | 40,326 | -57.7% | | **Operating Loss** | **(197,817)** | **(103,866)** | **(93,951)** | **90.5%** | [Investment Banking Business](index=7&type=section&id=%E6%8A%95%E8%B3%87%E9%8A%80%E8%A1%8C) The investment banking segment experienced a significant decline in revenue and net investment income in 2023, primarily due to reduced advisory services and equity underwriting, leading to an increased operating loss despite reduced operating expenses 2023 and 2022 Investment Banking Segment Revenue and Net Investment Income | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Advisory Services | 90,344 | 268,832 | -66.4% | | Equity Underwriting | 13,061 | 17,873 | -26.9% | | Sales, Trading and Brokerage | 88,422 | 134,739 | -34.4% | | Segment Revenue | 191,827 | 421,444 | -54.5% | | Net Investment Income | 367 | 1,380 | -73.4% | | **Segment Revenue and Net Investment Income** | **192,194** | **422,824** | **-54.5%** | 2023 and 2022 Investment Banking Transaction Value | Transaction Type | 2023 (RMB millions) | 2022 (RMB millions) | Change % | | :--- | :--- | :--- | :--- | | Advisory Services | 15,905 | 38,607 | -58.8% | | Equity Underwriting | 580 | 2,839 | -79.6% | | **Total** | **16,485** | **41,446** | **-60.2%** | - Segment operating expenses decreased by **46.0%** to **RMB 261.5 million**, primarily due to reduced staff costs and benefits[14](index=14&type=chunk) - Segment operating loss increased from **RMB 61.4 million** in 2022 to **RMB 69.3 million** in 2023[15](index=15&type=chunk) [Investment Management Business](index=9&type=section&id=%E6%8A%95%E8%B3%87%E7%AE%A1%E7%90%86) The investment management segment experienced a substantial decline in revenue and net investment loss in 2023, primarily driven by reduced realized carried interest income and increased net investment losses, despite a decrease in operating expenses 2023 and 2022 Investment Management Segment Revenue and Net Investment Loss | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Management Fees | 434,252 | 495,036 | -12.3% | | Realized Carried Interest Income | 151,855 | 402,353 | -62.3% | | Net Investment Loss | (346,819) | (70,252) | +393.7% | | **Segment Revenue and Net Investment Loss** | **270,015** | **847,531** | **-68.1%** | 2023 and 2022 Changes in Investments in Self-Managed Private Equity Funds and Third-Party Private Equity Funds | Fund Type | Balance as of December 31, 2023 (RMB thousands) | Balance as of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Investments in Self-Managed Funds | 1,261,600 | 1,363,650 | | Investments in Third-Party Funds | 659,907 | 1,092,716 | - As of December 31, 2023, the internal rate of return for self-managed private equity funds and third-party private equity funds was **21.2%** and **16.3%** respectively[17](index=17&type=chunk) 2023 and 2022 Investment Management Segment Operating Data | Indicator | As of December 31, 2023 (RMB millions) | As of December 31, 2022 (RMB millions) | | :--- | :--- | :--- | | AUM generating management fees | 22,945 | 26,904 | | Total AUM | 36,694 | 42,896 | - The increase in net investment loss was primarily due to the depreciation in the value of investments in third-party private equity funds and convertible bonds, with a **RMB 110.7 million** decrease in the fair value of convertible bonds issued by Worbey Medical Holdings Limited[21](index=21&type=chunk) - Segment operating expenses decreased by **58.0%** to **RMB 282.3 million**, mainly due to reduced carried interest provision for management teams and other parties, staff costs and benefits, and impairment provisions for expected credit losses[22](index=22&type=chunk) [Huaxing Securities Business](index=13&type=section&id=%E8%8F%AF%E8%88%88%E8%AD%89%E5%88%B8) Huaxing Securities segment achieved a 27.4% increase in revenue and net investment income in 2023, primarily driven by a significant rise in net investment income, leading to a substantial reduction in operating loss 2023 and 2022 Huaxing Securities Segment Revenue and Net Investment Income | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Transaction and Advisory Fees | 121,116 | 157,428 | -23.1% | | Interest Income | 10,682 | 18,751 | -43.0% | | Net Investment Income | 129,245 | 28,641 | +351.3% | | **Segment Revenue and Net Investment Income** | **261,043** | **204,820** | **+27.4%** | - Segment operating expenses decreased by **1.3%** to **RMB 347.8 million**, primarily due to reduced staff costs and benefits, partially offset by increased other operating expenses for innovative brokerage business[25](index=25&type=chunk) - Segment operating loss narrowed from **RMB 147.5 million** in 2022 to **RMB 86.7 million** in 2023[26](index=26&type=chunk) [Other Businesses](index=14&type=section&id=%E5%85%B6%E4%BB%96) The Other Businesses segment experienced a decline in revenue and net investment income in 2023, but significantly reduced its operating loss due to substantial decreases in operating expenses, particularly staff costs and financing costs 2023 and 2022 Other Segment Revenue and Net Investment Income | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Segment Revenue | 65,635 | 69,974 | -6.2% | | **Segment Revenue and Net Investment Income** | **74,692** | **111,714** | **-33.1%** | - Segment operating expenses decreased by **42.6%** to **RMB 104.2 million**, primarily due to significant reductions in staff costs and benefits and financing costs[27](index=27&type=chunk)[28](index=28&type=chunk) - Segment operating loss narrowed from **RMB 69.9 million** in 2022 to **RMB 29.5 million** in 2023[29](index=29&type=chunk) [Consolidated Revenue and Net Investment Income or Loss](index=16&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E6%B7%A8%E6%8A%95%E8%B3%87%E6%94%B6%E7%9B%8A%E6%88%96%E8%99%A7%E6%90%8D) In 2023, the Group's total revenue and net investment income or loss significantly decreased by 49.7% to RMB 797.9 million, primarily due to substantial declines in transaction and advisory fees, management fees, and carried interest income, with net investment turning from income to loss 2023 and 2022 Revenue and Net Investment Income or Loss by Type | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Transaction and Advisory Fees | 312,943 | 578,872 | -45.9% | | Management Fees | 456,432 | 529,032 | -13.7% | | Interest Income | 84,864 | 75,123 | +13.0% | | Carried Interest Income | 151,855 | 402,353 | -62.3% | | **Total Revenue** | **1,006,094** | **1,585,380** | **-36.5%** | | Net Investment (Loss) / Income | (208,150) | 1,509 | N/A | | **Total Revenue and Net Investment Income or Loss** | **797,944** | **1,586,889** | **-49.7%** | - Net investment turned from an income of **RMB 1.5 million** in 2022 to a loss of **RMB 208.2 million** in 2023, primarily from investments in self-managed private equity funds, third-party private equity funds, and convertible bonds[31](index=31&type=chunk) [Operating Expenses](index=17&type=section&id=%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Total operating expenses decreased by 41.1% to RMB 995.8 million in 2023, driven by significant reductions in staff costs and benefits, financing costs, and impairment provisions for expected credit losses, including a reversal of bonus expense provisions 2023 and 2022 Changes in Key Operating Expenses | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Total Operating Expenses | 995,761 | 1,690,755 | -41.1% | | Staff Costs and Benefits | 478,176 | 753,232 | -36.5% | | Share-based Payment Expenses | 61,432 | 113,478 | -45.9% | | Financing Costs | 50,553 | 112,453 | -55.0% | | Impairment Provisions for Expected Credit Losses | 16,815 | 244,501 | -93.1% | | Carried Interest Provision for Management Teams and Other Parties | 111,773 | 259,288 | -56.9% | - In 2023, a total of **RMB 166.1 million** in bonus expense provisions was reversed, reflecting an assessment of market conditions, company performance, and future forecasts[32](index=32&type=chunk) [Operating Loss and Other Profit or Loss Items](index=17&type=section&id=%E7%B6%93%E7%87%9F%E8%99%A7%E6%90%8D) Operating loss expanded by 90.5% to RMB 197.8 million in 2023. Other income, gains or losses turned from a loss to a gain, but fair value changes of share options and certain incidental and auxiliary investment losses continued to negatively impact performance, while loss before tax and loss for the year both narrowed 2023 and 2022 Operating Loss and Other Profit or Loss Items | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Operating Loss | (197,817) | (103,866) | +90.5% | | Other Income, Gains or Losses | 28,140 | (19,408) | Turned from loss to gain | | Losses from Certain Incidental and Auxiliary Investments | (18,311) | (171,489) | -89.3% | | Fair Value Change of Share Options Loss | (154,048) | (82,000) | +87.9% | | Loss Before Tax | (340,650) | (383,007) | -11.1% | | Income Tax Expense | (120,343) | (70,971) | +69.6% | | Loss for the Year | (460,993) | (453,978) | +1.5% | | Loss for the Year Attributable to Owners of the Company | (471,903) | (429,901) | +9.8% | - Fair value change of share options loss increased to **RMB 154.0 million**, primarily due to share options for the acquisition of non-controlling interests in Huaxing Securities being recognized at fair value through profit or loss[36](index=36&type=chunk) [Capital Structure and Balance Sheet](index=19&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The Group actively reduced its debt levels in 2023, with no outstanding bank borrowings at year-end and sufficient cash and highly liquid financial assets, resulting in a significantly reduced asset-liability ratio of 12.6%, indicating an improved financial structure - The Group actively reduced its debt levels in 2023, with no outstanding bank borrowings as of December 31, 2023[39](index=39&type=chunk) Group Liquidity Assets as of December 31, 2023 | Indicator | Amount (RMB millions) | | :--- | :--- | | Cash and cash equivalents and highly liquid cash management products | 1,636.7 | | Highly liquid financial assets, primarily listed company bonds | 2,415.3 | - As of December 31, 2023, the asset-liability ratio (calculated as total liabilities divided by total assets) significantly decreased to **12.6%** from **31.6%** at the end of 2022[40](index=40&type=chunk) [Significant Investments](index=20&type=section&id=%E6%89%80%E6%8C%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of December 31, 2023, the total fair value of the Group's major investment activities decreased by 18.6% to RMB 2,397.4 million, with fair values of investments in both self-managed and third-party private equity funds declining 2023 and 2022 Fair Value of Major Investment Activities | Investment Type | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Investments in Self-Managed Private Equity Funds | 1,261,600 | 1,363,650 | -7.5% | | Investments in Third-Party Private Equity Funds | 659,907 | 1,092,716 | -39.6% | | Strategic Minority Equity Investments | 475,895 | 490,553 | -3.0% | | **Total** | **2,397,402** | **2,946,919** | **-18.6%** | - As of December 31, 2023, each investment individually accounted for less than **5%** of the Group's total assets[41](index=41&type=chunk) - Post-reporting period, on March 11, 2024, the company signed a settlement agreement with Huaxing New Economy RMB Phase IV Fund to acquire certain equity investment-related interests for approximately **RMB 790.8 million**[42](index=42&type=chunk) [Employees and Remuneration Policy](index=21&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of December 31, 2023, the Group had 566 full-time employees, with over 85% being consultants and investment professionals, and attracts and retains talent through basic salaries, cash performance bonuses, and equity incentive schemes 2023 Employee Count by Function as of December 31 | Function | Number of Employees | Percentage | | :--- | :--- | :--- | | Investment Banking | 145 | 26% | | Investment Management | 55 | 10% | | Huaxing Securities | 262 | 46% | | Others | 19 | 3% | | Group Middle and Back Office | 85 | 15% | | **Total** | **566** | **100%** | 2023 Employee Count by Region as of December 31 | Region | Number of Employees | Percentage | | :--- | :--- | :--- | | Beijing, China | 239 | 42% | | Shanghai, China | 214 | 38% | | Other Cities, China | 22 | 4% | | Hong Kong | 79 | 14% | | United States | 10 | 2% | | Singapore | 2 | —% | | **Total** | **566** | **100%** | - For the year ended December 31, 2023, total staff costs (including share-based payment expenses) amounted to **RMB 478.2 million**[45](index=45&type=chunk) [Other Financial Information](index=22&type=section&id=%E5%85%B6%E4%BB%96%E8%B2%A1%E5%8B%99%E4%BF%A1%E6%81%AF) [Foreign Exchange Risk](index=22&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's primary subsidiaries operate in China, with most transactions settled in RMB, and foreign currency risk mainly arises from overseas operations; as of December 31, 2023, the company had not hedged any financial instruments - The Group's main subsidiaries operate in China, with most transactions settled in RMB, and foreign currency risk arises from overseas operations[46](index=46&type=chunk) - As of December 31, 2023, the company had not hedged any financial instruments[46](index=46&type=chunk) [Pledge of Assets](index=22&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of December 31, 2023, the Group had not pledged any assets - As of December 31, 2023, the Group had not pledged any assets[46](index=46&type=chunk) [Contingent Liabilities](index=22&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of December 31, 2023, the Group had no other significant contingent liabilities apart from restricted funds related to Mr. Bao Fan's cooperation with investigations, as disclosed in note 27 of the annual report, and no provision was made due to the uncertainty of the matter - As of December 31, 2023, the Group had no significant contingent liabilities other than those disclosed in note 27[46](index=46&type=chunk) - The Group paid approximately **RMB 77,669,000** in restricted funds related to Mr. Bao Fan's cooperation with investigations, but no provision was made for the year ended December 31, 2023, due to uncertainty[127](index=127&type=chunk) [Final Dividend](index=22&type=section&id=%E6%9C%AB%E6%9C%9F%E8%82%A1%E6%81%AF) The Board recommended no final dividend for the year ended December 31, 2023; the company has adopted a dividend policy but currently has no fixed payout ratio, with dividend decisions depending on various factors - The Board recommended no final dividend for the year ended December 31, 2023[46](index=46&type=chunk) - For the year ended December 31, 2023, the company neither declared nor paid any dividends[46](index=46&type=chunk) Dividends Paid to Shareholders in 2022 | Indicator | 2022 (RMB thousands) | | :--- | :--- | | Dividends Paid to Shareholders | 201,114 | [Corporate Governance and Other Information](index=23&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Compliance with Corporate Governance Code](index=23&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87%E5%90%88%E8%A6%8F%E6%83%85%E6%B3%81) During the reporting period, the company complied with all applicable provisions of the HKEX Corporate Governance Code, with a deviation where the roles of Chairman and Chief Executive Officer were held by the same person, an arrangement the Board believes ensures leadership consistency and will be continuously reviewed - During the reporting period, the company complied with all applicable provisions of the HKEX Corporate Governance Code, but there was a deviation where the roles of Chairman and Chief Executive Officer were held by the same person[49](index=49&type=chunk) - As of the announcement date, Mr. Xie Yijing serves as the company's Chairman and Chief Executive Officer[49](index=49&type=chunk) [Directors' Compliance with Standard Securities Dealing Code](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E9%81%B5%E5%AE%88%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) Following inquiries, all directors and relevant employees confirmed compliance with the Standard Securities Dealing Code set out in Appendix C3 of the Listing Rules during the reporting period - After specific inquiries to all directors and relevant employees, they confirmed compliance with the Standard Code during the reporting period[50](index=50&type=chunk) [Auditor's Scope of Work and Audit Committee](index=24&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%A0%B8%E6%95%B8%E5%B8%AB%E7%9A%84%E5%B7%A5%E4%BD%9C%E7%AF%84%E5%9C%8D) The auditor has reconciled the financial information in the annual results announcement but has not expressed an assurance opinion; the Audit Committee has reviewed the audited consolidated financial statements and annual results, discussing accounting policies and internal controls with the auditor and senior management - The auditor, ZHONGHUI ANDA CPA Limited, has reconciled the financial information in the annual results announcement but has not performed an assurance engagement and therefore has not expressed any assurance opinion[51](index=51&type=chunk) - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's audited consolidated financial statements and annual results for 2023, and discussed accounting policies and internal controls[52](index=52&type=chunk) [Other Board Committees](index=24&type=section&id=%E5%85%B6%E4%BB%96%E8%91%A3%E4%BA%8B%E5%A7%94%E5%93%A1%E6%9C%83) In addition to the Audit Committee, the company has established a Nomination Committee, Remuneration Committee, Executive Committee, and Environmental, Social and Governance Committee - The company has established a Nomination Committee, Remuneration Committee, Executive Committee, and Environmental, Social and Governance Committee[53](index=53&type=chunk) [Changes in Directors' Information](index=25&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) Effective February 2, 2024, Mr. Bao Fan resigned from multiple positions, Mr. Xie Yijing was appointed Chairman and CEO, Mr. Lin Jiachang and Mr. Du Yongbo were appointed Executive Directors, Mr. Wang Lixing and Mr. Du Yongbo were appointed Co-Presidents, and Ms. Sun Qianhong was appointed Non-Executive Director - Effective February 2, 2024, Mr. Bao Fan resigned as Executive Director, Chairman of the Board, Chief Executive Officer, and other positions of the company[54](index=54&type=chunk) - Mr. Xie Yijing was appointed Chairman of the Board, Chief Executive Officer, and other positions of the company[54](index=54&type=chunk) - Mr. Lin Jiachang was appointed Executive Director and Vice Chairman of the Board, and Mr. Du Yongbo was appointed Executive Director[54](index=54&type=chunk) - Mr. Wang Lixing and Mr. Du Yongbo were appointed Co-Presidents of the Group, in addition to their existing roles as Executive Directors[54](index=54&type=chunk) - Ms. Sun Qianhong was appointed Non-Executive Director[54](index=54&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=25&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B3%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, except for acting as an agent for the company's restricted share unit scheme trustee - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, except for acting as an agent for the company's restricted share unit scheme trustee[55](index=55&type=chunk) [Major Litigation](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F) During the reporting period, the company was not involved in any major litigation or arbitration, and the directors were unaware of any pending or potential major litigation or claims against the Group - During the reporting period, the company was not involved in any major litigation or arbitration[56](index=56&type=chunk) [Use of Proceeds from Global Offering](index=26&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) As of December 31, 2023, the net proceeds of approximately HKD 2,517.6 million from the global offering had been fully utilized, consistent with the prospectus disclosure, primarily for expanding investment banking, investment management, private wealth management businesses, and technology development - As of December 31, 2023, the net proceeds of approximately **HKD 2,517.6 million** from the global offering had been fully utilized[57](index=57&type=chunk) Use of IPO Proceeds (as of December 31, 2023) | Purpose | % of Proceeds Used | Net IPO Proceeds (HKD millions) | Actual Amount Used as of Dec 31, 2022 (HKD millions) | Actual Amount Used During the Year Ended Dec 31, 2023 (HKD millions) | Balance of Net Proceeds as of Dec 31, 2023 (HKD millions) | | :--- | :--- | :--- | :--- | :--- | :--- | | Expansion of Investment Banking Business | 40% | 1,007.0 | 1,007.0 | — | — | | Expansion of Investment Management Business | 20% | 503.5 | 503.5 | — | — | | Development of Private Wealth Management Business | 20% | 503.5 | 503.5 | — | — | | Investment in Technology Development for All Business Lines | 10% | 251.8 | 215.4 | 36.4 | — | | General Corporate Purposes | 10% | 251.8 | 251.8 | — | — | | **Total** | | **2,517.6** | **2,481.2** | **36.4** | **—** | [Auditor's Qualified Opinion and Company's View](index=27&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E4%BF%9D%E7%95%99%E6%84%8F%E8%A6%8B) The auditor issued a qualified opinion on the 2023 consolidated financial statements due to insufficient appropriate audit evidence regarding the recoverability of restricted funds related to Mr. Bao Fan's investigation and whether a provision was needed; the company believes the qualified opinion may not be removed until the outcome of the event is clear or other appropriate evidence is obtained - The auditor issued a qualified opinion on the 2023 consolidated financial statements due to insufficient appropriate audit evidence to assess the recoverability of approximately **RMB 77,669,000** in restricted funds and whether a provision was needed[59](index=59&type=chunk)[60](index=60&type=chunk) - The company understands that the payment of restricted funds itself does not constitute a finding of illegality, and the paid funds may be partially or fully refunded or confiscated, or additional payments may be required[61](index=61&type=chunk) - The company believes that the audit qualified opinion may only be removed when the status or outcome of the restricted funds and related events become clearer, and/or when the auditor can obtain other appropriate evidence[61](index=61&type=chunk) [Events After Reporting Period](index=28&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, the company entered into a settlement agreement with Huaxing New Economy RMB Phase IV Fund to acquire its equity investment interests for approximately RMB 790.8 million; additionally, a subsidiary signed an exit agreement involving the repurchase of XunTou equity and Huaxing Financial's purchase of Huaxing Securities equity - On March 11, 2024, the company signed a settlement agreement with Huaxing New Economy RMB Phase IV Fund to acquire certain equity investment-related interests for approximately **RMB 790,772,000**[62](index=62&type=chunk) - On August 30, 2024, subsidiary Shanghai Huijia and Huaxing Financial signed an exit agreement with XunTou, involving Shanghai Huijia repurchasing **10%** of XunTou's equity for **RMB 202 million**, and Huaxing Financial purchasing **40.8163%** equity in a company (which holds approximately **3.49%** of Huaxing Securities' equity) for **RMB 100 million**[63](index=63&type=chunk) [Consolidated Financial Statements](index=29&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=29&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) In 2023, the Group's total revenue decreased by 36.5% year-on-year to RMB 1,006,094 thousand, and net investment turned from income to a loss of RMB 208,150 thousand, resulting in a 49.7% year-on-year decrease in total revenue and net investment income or loss, with both loss for the year and loss attributable to owners of the company expanding 2023 and 2022 Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Total Revenue | 1,006,094 | 1,585,380 | -36.5% | | Net Investment (Loss) / Income | (208,150) | 1,509 | N/A | | Total Revenue and Net Investment Income or Loss | 797,944 | 1,586,889 | -49.7% | | Operating Loss | (197,817) | (103,866) | +90.5% | | Loss for the Year | (460,993) | (453,978) | +1.5% | | Loss for the Year Attributable to Owners of the Company | (471,903) | (429,901) | +9.8% | | Basic and Diluted Loss Per Share | RMB (0.94) | RMB (0.85) | +10.6% | [Consolidated Statement of Financial Position](index=31&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of December 31, 2023, the Group's total assets decreased by 28.9% year-on-year to RMB 9,340,360 thousand, and total liabilities decreased by 60.9% to RMB 2,163,417 thousand; both non-current and current assets declined, but the significant reduction in liabilities maintained relatively stable net assets 2023 and 2022 Key Data from Consolidated Statement of Financial Position | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Non-current Assets | 3,192,831 | 4,093,724 | -22.1% | | Current Assets | 6,147,529 | 8,983,833 | -31.6% | | **Total Assets** | **9,340,360** | **13,077,557** | **-28.7%** | | Current Liabilities | 2,085,055 | 3,893,206 | -46.5% | | Non-current Liabilities | 78,362 | 1,645,071 | -95.2% | | **Total Liabilities** | **2,163,417** | **5,538,277** | **-60.9%** | | Net Assets | 7,176,943 | 7,539,280 | -4.8% | - Bank borrowings decreased from **RMB 2,124,493 thousand** in 2022 to zero in 2023, significantly improving the debt structure[67](index=67&type=chunk)[121](index=121&type=chunk) [Notes to the Consolidated Financial Statements](index=33&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [General Information](index=33&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Huaxing Capital Holdings Limited is incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily providing investment banking and investment management services, with financial statements presented in RMB, and Mr. Bao Fan as the former ultimate controlling party - The company was incorporated in the Cayman Islands, and its shares were listed on the Main Board of the Hong Kong Stock Exchange on September 27, 2018[68](index=68&type=chunk) - The Group's principal activities are the provision of investment banking and investment management services[68](index=68&type=chunk) - Financial statements are presented in RMB, and all amounts are rounded to the nearest thousand[68](index=68&type=chunk) - The former ultimate controlling party was Mr. Bao Fan, who resigned as the company's former Chairman and Executive Director on February 2, 2024[68](index=68&type=chunk) [Application of New and Revised IFRS](index=33&type=section&id=%E6%87%89%E7%94%A8%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%88%99) During the current year, the Group adopted all new and revised IFRS effective January 1, 2023, but their adoption did not result in significant changes to accounting policies, financial statement presentation, or reported amounts for the current and prior years - During the current year, the Group adopted all new and revised IFRS effective January 1, 2023[69](index=69&type=chunk) - The adoption of these new and revised IFRS did not result in significant changes to the Group's accounting policies, financial statement presentation, or reported amounts for the current and prior years[69](index=69&type=chunk) [Revenue and Segment Information](index=34&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group analyzes revenue and performance based on four reportable segments: Investment Banking, Investment Management, Huaxing Securities, and Other; in 2023, mainland China contributed the vast majority of revenue and non-current assets, with customer contract revenue primarily recognized at a point in time and over time [Segment Classification](index=34&type=section&id=%E5%88%86%E9%83%A8%E5%8A%83%E5%88%86) The Group's reportable segments include Investment Banking, Investment Management, Huaxing Securities, and Other businesses - The Group's reportable segments include Investment Banking, Investment Management, Huaxing Securities, and Other businesses[70](index=70&type=chunk) - The Huaxing Securities segment operates independently, focusing on the regulated securities market in mainland China, and has an independent risk control structure[70](index=70&type=chunk) [Segment Revenue and Performance Analysis](index=35&type=section&id=%E5%88%86%E9%83%A8%E6%94%B6%E5%85%A5%E5%8F%8A%E6%A5%AD%E7%B8%BE%E5%88%86%E6%9E%90) The segment analysis reveals that Investment Banking and Investment Management experienced operating losses, while Huaxing Securities and Other segments also recorded losses, with net investment turning into a loss for the Group 2023 Revenue and Net Investment Income or Loss by Segment | Segment | Transaction and Advisory Fees (RMB thousands) | Management Fees (RMB thousands) | Interest Income (RMB thousands) | Carried Interest Income (RMB thousands) | Net Investment Income / (Loss) (RMB thousands) | Operating Loss (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Investment Banking | 191,827 | — | — | — | 367 | (69,287) | | Investment Management | — | 434,252 | 30,727 | 151,855 | (346,819) | (12,277) | | Huaxing Securities | 121,116 | — | 10,682 | — | 129,245 | (86,726) | | Others | — | 22,180 | 43,455 | — | 9,057 | (29,527) | | **Total** | **312,943** | **456,432** | **84,864** | **151,855** | **(208,150)** | **(197,817)** | - Investment management segment performance incorporates unrealized carried interest income (calculated on a liquidation basis) into segment information, as it is a key indicator for measuring value creation[73](index=73&type=chunk) - For the year ended December 31, 2023, unrealized carried interest income reversal amounted to **RMB 1,133,465,000**, primarily based on fair value changes related to funds[73](index=73&type=chunk) [Geographical Information](index=38&type=section&id=%E5%9C%B0%E7%90%86%E8%B3%87%E6%96%99) Mainland China remains the primary source of the Group's revenue and non-current assets, although both have seen declines in 2023 compared to 2022 2023 and 2022 Revenue from External Customers and Non-Current Assets by Geographical Location | Region | 2023 Revenue from External Customers (RMB thousands) | 2022 Revenue from External Customers (RMB thousands) | 2023 Non-Current Assets (RMB thousands) | 2022 Non-Current Assets (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 862,258 | 1,301,970 | 160,605 | 233,128 | | Hong Kong | 125,660 | 246,731 | 13,821 | 25,765 | | United States | 18,176 | 36,679 | 1,986 | 2,558 | | **Total** | **1,006,094** | **1,585,380** | **176,412** | **261,451** | [Timing of Revenue Recognition from Customer Contracts and Performance Obligations](index=38&type=section&id=%E5%AE%A2%E6%88%B6%E5%90%88%E7%B4%84%E6%94%B6%E5%85%A5%E7%9A%84%E7%A2%BA%E8%AA%8D%E6%99%82%E9%96%93) Customer contract revenue is recognized both at a point in time and over time, with a significant portion recognized at a point in time, and the transaction price of unsatisfied performance obligations related to management fees has decreased 2023 and 2022 Timing of Customer Contract Revenue Recognition | Recognition Method | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | At a point in time | 464,798 | 981,225 | | Over time | 456,432 | 529,032 | | **Total** | **921,230** | **1,510,257** | 2023 and 2022 Transaction Price of Unsatisfied Performance Obligations Related to Management Fees | Term | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 11,804 | 13,775 | | Over one year but not exceeding two years | 109 | 3,445 | | Over two years but not exceeding three years | — | 685 | | **Total** | **11,913** | **17,905** | [Other Segment Information and Major Customers](index=40&type=section&id=%E5%85%B6%E4%BB%96%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) Depreciation and amortization expenses are allocated across all segments, with Huaxing Securities showing an increase in 2023, and one major customer in the investment management business contributing over 10% of the Group's total revenue 2023 and 2022 Depreciation and Amortization by Segment | Segment | 2023 Depreciation and Amortization (RMB thousands) | 2022 Depreciation and Amortization (RMB thousands) | | :--- | :--- | :--- | | Investment Banking | 33,982 | 33,583 | | Investment Management | 14,827 | 19,078 | | Huaxing Securities | 36,911 | 29,192 | | Others | 2,844 | 4,290 | | **Total** | **88,564** | **86,143** | - In 2023, Customer A (investment management business) contributed **RMB 140,019 thousand** in revenue, accounting for over **10%** of the Group's total revenue[81](index=81&type=chunk) [Net Investment (Loss) / Income](index=41&type=section&id=%E6%B7%A8%E6%8A%95%E8%B3%87%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%EF%BC%8F%E6%94%B6%E7%9B%8A) In 2023, net investment turned from income to a loss of RMB 208,150 thousand, primarily due to net losses from convertible bonds and unlisted investment funds classified as financial assets at fair value through profit or loss, as well as total losses from investments in associates 2023 and 2022 Net Investment (Loss) / Income Details | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Realized and Unrealized Net Gains or Losses on Financial Assets at FVTPL | | | | — Wealth Management Related Products | 7,385 | (17,408) | | — Asset Management Schemes | 53,435 | 51,218 | | — Investments in Listed Equity Securities | 82,960 | 5,647 | | — Convertible Bonds | (110,655) | 12,736 | | — Unlisted Investment Funds Measured at Fair Value | (207,860) | (87,045) | | Total Losses from Investments in Associates | (47,386) | (154,193) | | **Total** | **(208,150)** | **1,509** | - In 2023, convertible bonds generated a net loss of **RMB 110,655 thousand**, and unlisted investment funds generated a net loss of **RMB 207,860 thousand**[82](index=82&type=chunk) [Other Operating Expenses](index=42&type=section&id=%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Total other operating expenses in 2023 were RMB 359,688 thousand, a slight increase from 2022, with professional service fees, project-related and business development expenses, technology expenses, and depreciation and amortization being the main components 2023 and 2022 Other Operating Expenses Details | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Professional Service Fees | 84,672 | 77,156 | | Project-Related and Business Development Expenses | 67,844 | 62,377 | | Office Expenses | 29,284 | 46,489 | | Technology Expenses | 40,940 | 39,171 | | Depreciation and Amortization | 88,564 | 86,143 | | Auditor's Remuneration | 13,010 | 8,460 | | **Total** | **359,688** | **354,860** | [Financing Costs](index=42&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Financing costs in 2023 significantly decreased by 55.0% to RMB 50,553 thousand, primarily due to substantial reductions in interest on bank borrowings, lease liabilities, and financial assets sold under repurchase agreements 2023 and 2022 Financing Costs Details | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 32,063 | 87,685 | | Interest on Lease Liabilities | 2,138 | 4,028 | | Interest on Financial Assets Sold Under Repurchase Agreements | 10,496 | 13,532 | | Interest on Income Certificates | 5,856 | 7,208 | | **Total** | **50,553** | **112,453** | [Impairment Losses Under Expected Credit Loss Model, Net of Reversals](index=43&type=section&id=%E9%A0%90%E6%9C%9F%E4%BF%A1%E7%94%A8%E8%99%A7%E6%90%8D%E6%A8%A1%E5%BC%8F%E4%B8%8B%E7%9A%84%E6%B8%9B%E5%80%BC%E8%99%A7%E6%90%8D%EF%BC%8C%E6%89%A3%E9%99%A4%E6%92%A5%E5%9B%9E) Impairment losses under the expected credit loss model significantly decreased to RMB 16,815 thousand in 2023, a substantial improvement from RMB 244,501 thousand in 2022, mainly due to reduced impairment losses on trade receivables, loans to third parties, and amounts due from related parties 2023 and 2022 Impairment Losses Details | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | (28,187) | 38,331 | | Loans to Third Parties | 24,463 | 115,599 | | Amounts Due from Related Parties | 24,197 | 90,685 | | **Total** | **16,815** | **244,501** | - Impairment provision of **RMB 142,024 thousand** was made for loans to third-party Worbey Medical Holdings Limited, with **RMB 24,463 thousand** recognized in 2023[103](index=103&type=chunk) [Other Income, Gains or Losses](index=43&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E3%80%81%E5%88%A9%E5%BE%97%E6%88%96%E8%99%A7%E6%90%8D) In 2023, other income, gains or losses turned from a loss of RMB 19,408 thousand in 2022 to a gain of RMB 28,140 thousand, primarily benefiting from government grants and a reduction in net exchange losses 2023 and 2022 Other Income, Gains or Losses Details | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Government Grants | 25,657 | 37,553 | | Net Exchange Losses | (7,248) | (53,282) | | Gain on Partial Disposal of an Associate | — | 24,837 | | Impairment Loss on Investment in a Joint Venture | — | (37,492) | | **Total** | **28,140** | **(19,408)** | - Government grants primarily include tax incentives and industry support funds provided by local governments in Shanghai, China, and employment support scheme grants from the Hong Kong government[87](index=87&type=chunk) [Investment Losses from Certain Incidental and Auxiliary Investments](index=44&type=section&id=%E8%92%90%E5%B9%B9%E9%99%84%E5%B8%B6%E5%8F%8A%E8%BC%94%E5%8A%A9%E6%8A%95%E8%B3%87%E7%94%A2%E7%94%9F%E7%9A%84%E6%8A%95%E8%B3%87%E8%99%A7%E6%90%8D) Investment losses from certain incidental and auxiliary investments significantly decreased to RMB 18,311 thousand in 2023, a substantial improvement from RMB 171,489 thousand in 2022, mainly due to reduced losses from investments in unlisted debt securities 2023 and 2022 Investment Losses from Certain Incidental and Auxiliary Investments Details | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Losses from Investments in Unlisted Debt Securities | (18,311) | (144,878) | | Investments in Unlisted Equity Securities | — | 3,590 | | Convertible Bonds | — | (30,201) | | **Total** | **(18,311)** | **(171,489)** | - These investments primarily include investments in the form of preferred shares of other companies and other equity holdings and derivative instruments in non-associates[89](index=89&type=chunk) [Income Tax Expense](index=44&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense increased to RMB 120,343 thousand in 2023, a 69.6% increase from 2022, primarily due to increased current tax in mainland China and the impact of non-deductible expenses and unrecognized tax losses 2023 and 2022 Income Tax Expense Details | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Current Tax - Mainland China | 90,413 | 48,581 | | Current Tax - Hong Kong | 1,040 | 13,991 | | Deferred Tax | 28,890 | 8,399 | | **Total Income Tax Expense** | **120,343** | **70,971** | - Reconciliation of income tax expense to loss before tax shows the impact of non-deductible expenses at **RMB 110,203 thousand** and unrecognized tax losses at **RMB 123,757 thousand**[92](index=92&type=chunk) [Loss for the Year](index=45&type=section&id=%E5%B9%B4%E5%85%A7%E8%99%A7%E6%90%8D) Loss for the year in 2023 was RMB 460,993 thousand, a slight increase from 2022, with total staff costs significantly decreasing and depreciation and amortization slightly increasing 2023 and 2022 Total Staff Costs | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Directors' Remuneration | 22,585 | 34,094 | | Other Staff Costs | 455,591 | 719,138 | | **Total Staff Costs** | **478,176** | **753,232** | 2023 and 2022 Depreciation and Amortization | Indicator | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of Property and Equipment | 60,702 | 68,659 | | Amortization of Intangible Assets | 27,862 | 17,484 | [Loss Per Share](index=46&type=section&id=%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) Basic and diluted loss per share in 2023 was RMB (0.94), an increase from RMB (0.85) in 2022 2023 and 2022 Loss Per Share Data | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Loss for the Year Attributable to Owners of the Company (RMB thousands) | (471,903) | (429,901) | | Weighted Average Number of Ordinary Shares | 504,515,369 | 507,207,390 | | **Basic and Diluted Loss Per Share (RMB)** | **(0.94)** | **(0.85)** | - Given the anti-dilutive effect of share options and restricted share units, these effects were not considered in calculating diluted loss per share[94](index=94&type=chunk) [Dividends](index=47&type=section&id=%E8%82%A1%E6%81%AF) For 2023, the Board recommended no final dividend, and the company neither declared nor paid any dividends, contrasting with a final dividend of RMB 0.38 per share paid in 2022 - For the year ended December 31, 2023, the directors recommended no final dividend, and the company neither declared nor paid any dividends[96](index=96&type=chunk) - In 2022, a final dividend of **RMB 0.38 per share** for the year ended December 31, 2021, totaling **RMB 201,114,000**, was declared and paid to owners of the company[96](index=96&type=chunk) [Investments in Associates](index=47&type=section&id=%E6%96%BC%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E7%9A%84%E6%8A%95%E8%B3%87) As of December 31, 2023, the Group's total investments in associates amounted to RMB 1,291,656 thousand, a decrease from 2022, with fair value changes in fund investments contributing RMB 329,929 thousand 2023 and 2022 Total Investments in Associates | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Investments in Unlisted Companies | 14,967 | 13,353 | | Investments in Funds | 1,276,689 | 1,404,604 | | **Total** | **1,291,656** | **1,417,957** | 2023 and 2022 Details of Investments in Funds | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Cost of Investments in Funds | 883,562 | 936,720 | | Fair Value Changes of Funds | 329,929 | 414,148 | | Exchange Adjustments | 63,198 | 53,736 | | **Total** | **1,276,689** | **1,404,604** | [Financial Assets at Fair Value Through Profit or Loss](index=48&type=section&id=%E6%8C%89%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of December 31, 2023, total financial assets mandatorily measured at fair value through profit or loss decreased from 2022 to RMB 4,472,031 thousand, with increases in listed financial bonds offset by reductions in unlisted cash management products, money market funds, convertible bonds, and unlisted investment funds 2023 and 2022 Details of Financial Assets Mandatorily Measured at Fair Value Through Profit or Loss | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Unlisted Cash Management Products | 58,243 | 456,515 | | Money Market Funds | 468,329 | 579,909 | | Listed Financial Bonds | 2,415,343 | 1,854,255 | | Investments in Listed Equity Securities | — | 216,611 | | Convertible Bonds | 61,335 | 186,852 | | Unlisted Investment Funds Measured at Fair Value | 680,854 | 1,092,716 | | Share Options to Acquire Non-Controlling Interests | 282,032 | 436,080 | | **Total** | **4,472,031** | **5,365,153** | - The fair value of convertible bonds decreased from **RMB 186,852 thousand** to **RMB 61,335 thousand**, primarily due to the extension of the maturity date of loans to the investee Worbey Medical Holdings Limited and a debt moratorium agreement[99](index=99&type=chunk)[100](index=100&type=chunk)[103](index=103&type=chunk) - The fair value of share options to acquire non-controlling interests decreased from **RMB 436,080 thousand** to **RMB 282,032 thousand**, based on the fair value of Huaxing Securities' corresponding net assets and an estimate of the exercise timing of the share options[99](index=99&type=chunk)[101](index=101&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=50&type=section&id=%E6%8C%89%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E5%85%A5%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of December 31, 2023, total financial assets at fair value through other comprehensive income, primarily listed financial bonds, significantly decreased to RMB 49,629 thousand from 2022 2023 and 2022 Financial Assets at Fair Value Through Other Comprehensive Income | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Listed Financial Bonds | 49,629 | 357,672 | | **Total** | **49,629** | **357,672** | - As of December 31, 2023, the expected credit loss for financial bonds was **RMB 12,000**[102](index=102&type=chunk) [Loans to Third Parties](index=50&type=section&id=%E6%8F%90%E4%BE%9B%E4%BA%88%E7%AC%AC%E4%B8%89%E6%96%B9%E7%9A%84%E8%B2%B8%E6%AC%BE) As of December 31, 2023, net loans to third parties amounted to RMB 67,822 thousand, primarily consisting of loans to Worbey Medical Holdings Limited, for which an impairment provision of RMB 142,024 thousand has been made 2023 and 2022 Loans to Third Parties | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Worbey Medical Holdings Limited | 209,846 | 192,717 | | Song Huanping | — | 11,418 | | Less: Impairment Loss Provision | (142,024) | (117,561) | | **Net Amount** | **67,822** | **86,574** | - The loan to Worbey was extended to April 2025 in February 2024, and there is evidence of credit impairment[103](index=103&type=chunk) - The loan to Song Huanping was repaid early in 2023[104](index=104&type=chunk) [Trade and Other Receivables](index=51&type=section&id=%E6%87%89%E6%94%B6%E8%B3%A6%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of December 31, 2023, net trade and other receivables amounted to RMB 885,586 thousand, a decrease from 2022, with receivables from unsettled transactions and restricted funds being the main components 2023 and 2022 Trade and Other Receivables Details | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 44,398 | 93,032 | | Receivables from Unsettled Transactions | 599,807 | 977,380 | | Restricted Funds | 77,669 | — | | Employee Loans | 28,179 | 45,482 | | **Total (Net of Impairment Provision)** | **885,586** | **1,252,730** | 2023 Trade Receivables Aging (Net of Impairment Loss Provision) | Aging | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | 0–30 Days | 30,232 | 39,473 | | 31–60 Days | 2,593 | 2,680 | | 61–90 Days | 2,239 | 4,365 | | 91–180 Days | 4,904 | 5,279 | | 181–360 Days | 1,594 | 1,815 | | Over one year | 411 | 1,067 | | **Total** | **41,973** | **54,679** | - Restricted funds of approximately **RMB 77,669,000** are related to Mr. Bao Fan's cooperation with investigations[105](index=105&type=chunk)[127](index=127&type=chunk) [Financial Assets Purchased Under Resale Agreements](index=52&type=section&id=%E8%B2%B7%E5%85%A5%E8%BF%94%E5%94%AE%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of December 31, 2023, financial assets purchased under resale agreements were zero, compared to RMB 4,715 thousand in 2022, primarily consisting of debt securities 2022 Financial Assets Purchased Under Resale Agreements | Indicator | 2022 (RMB thousands) | | :--- | :--- | | Debt Securities | 4,713 | | Accrued Interest | 2 | | **Total** | **4,715** | - As of December 31, 2023, financial assets purchased under resale agreements were zero[66](index=66&type=chunk) [Amounts Due from Related Parties](index=52&type=section&id=%E6%87%89%E6%94%B6%E9%97%9C%E8%81%AF%E6%96%B9%E6%AC%BE%E9%A0%85) As of December 31, 2023, total amounts due from related parties significantly decreased to RMB 875,618 thousand from 2022, primarily including amounts due from Huaxing New Economy RMB Phase IV Fund, for which impairment provisions have been made 2023 and 2022 Amounts Due from Related Parties (Nature of Transaction) | Related Party | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Huaxing New Economy RMB Phase IV Fund | 893,907 | 1,076,392 | | Shenzhen Huasheng Lingxiang Equity Investment Partnership | 34,441 | 44,331 | | Huaxing Growth Capital IV, L.P. | 30,698 | 20,425 | | Less: Impairment Loss Provision | (116,344) | (92,206) | | **Total** | **868,478** | **1,324,781** | - Transaction balance refers to the total carrying amount of receivables for fund management services and carried interest of **RMB 103,979 thousand**, and receivables from the transfer of investment portfolios to Huaxing New Economy RMB Phase IV Fund of **RMB 880,843 thousand**[111](index=111&type=chunk) - As of December 31, 2023, an impairment provision of **RMB 115,366 thousand** was made for trade receivables that had incurred credit impairment[112](index=112&type=chunk) 2023 Aging of Amounts Due from Related Parties (Nature of Transaction) | Aging | 2023 (RMB thousands) | 2022 (RMB thousands) | | :--- | :--- | :--- | | 0–30 Days | 46,817 | 274,438 | | 181–360 Days | 7,715 | 1,001,429 | | Over one year | 807,447 | 24,156 | [Trade and Other Payables](index=55&type=section&id=%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of December 31, 2023, total trade and other payables significantly decreased to RMB 904,923 thousand from 2022, primarily due to reductions in salaries, bonuses, and other benefits payable, as well as payables from unsettled transactions 2023 and 2022 Trade and Other Payables Details | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Salaries, Bonuses and Other Benefits Payable | 102,551 | 385,574 | | Payables from Unsettled Transactions | 628,104 | 979,576 | | Carried Interest to Management Teams and Other Parties | 46,077 | 238,122 | | **Total** | **904,923** | **1,718,928** | - As of December 31, 2023, carried interest to management teams and other parties measured at fair value was zero, compared to **RMB 31,158 thousand** in 2022[117](index=117&type=chunk) [Financial Assets Sold Under Repurchase Agreements](index=56&type=section&id=%E8%B3%A3%E5%87%BA%E5%9B%9E%E8%B3%BC%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E6%AC%BE) As of December 31, 2023, financial assets sold under repurchase agreements increased significantly to RMB 482,578 thousand from 2022, primarily consisting of debt securities with an effective annual interest rate ranging from 2.39% to 2.60% 2023 and 2022 Financial Assets Sold Under Repurchase Agreements Details | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Debt Securities | 482,034 | 150,000 | | Accrued Interest | 544 | 65 | | **Total** | **482,578** | **150,065** | - The effective annual interest rate for financial assets sold under repurchase agreements ranged from **2.39% to 2.60%** (2022: 3.50% to 3.95%)[118](index=118&type=chunk) 2023 and 2022 Carrying Amounts of Transferred Financial Assets and Related Liabilities | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Carrying Amount of Transferred Assets | 1,031,640 | 838,457 | | Carrying Amount of Related Liabilities | (482,578) | (150,065) | | **Net Position** | **549,062** | **688,392** | [Income Certificates](index=57&type=section&id=%E6%94%B6%E7%9B%8A%E6%86%91%E8%AD%89) As of December 31, 2023, total income certificates significantly decreased to RMB 93,806 thousand from 2022, with annual interest rates ranging from 3.10% to 3.30% 2023 and 2022 Income Certificates | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Income Certificates | 93,806 | 236,648 | - As of December 31, 2023, the annual interest rate for income certificates ranged from **3.10% to 3.30%** (2022: 3.30% to 6.08%)[120](index=120&type=chunk) [Bank Borrowings](index=57&type=section&id=%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE) As of December 31, 2023, the Group had no bank borrowings, a significant reduction from RMB 2,124,493 thousand in 2022, which included both fixed and variable rate borrowings 2023 and 2022 Bank Borrowings | Indicator | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Unsecured Bank Borrowings at Fixed Interest Rates | — | 339,462 | | Unsecured Bank Borrowings at Variable Interest Rates | — | 1,785,031 | | **Total** | **—** | **2,124,493** | - As of December 31, 2023, the Group had no bank borrowings[67](index=67&type=chunk)[121](index=121&type=chunk) [Lease Liabilities](index=58&type=section&id=%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of December 31, 2023, total lease liabilities decreased to RMB 53,024 thousand from 2022, with RMB 35,540 thousand due for settlement within one year 2023 and 2022 Lease Liabilities | Term | As of December 31, 2023 (RMB thousands) | As of December 31, 2022 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 35,540 | 55,366 | | Over one year but not exceeding two years | 12,364 | 38,269 | | Over two years but not exceeding five years | 5,120 | 16,191 | | **Total** | **53,024** | **109,826** | - The weighted average incremental borrowing rate applied to lease liabilities was **2.87%** (2022: 2.98%)[123](index=123&type=chunk) [Share Capital](index=59&type=section&id=%E8%82%A1%E6%9C%AC) As of December 31, 2023, the company's authorized share capital was 2,000,000,000 shares with a par value of USD 0.000025 per share, and issued share capital was 568,397,776 shares, amounting to RMB 93,194 thousand 2023 and 2022 Share Capital Information | Indicator | As of December 31, 2023 | As of December 31, 2022 | | :--- | :--- | :--- | | Authorized Shares | 2,000,000,000 | 2,000,000,000 | | Issued Shares | 568,397,776 | 568,397,776 | | Share Capital (RMB thousands) | 93,194 | 93,194 | - In 2022, **12,000,000** shares were issued to the trust, and **6,033,000** share options were exercised[126](index=126&type=chunk) [Contingent Liabilities](index=59&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The Group paid approximately RMB 77,669,000 in restricted funds related to Mr. Bao Fan's cooperation with inve

[Supplementary Announcement Context](index=1&type=section&id=Supplementary%20Announcement%20Context) [Introduction and Re-statement](index=1&type=section&id=Introduction%20and%20Re-statement) This announcement is a supplementary announcement to China Renaissance Holdings Limited's 2023 interim results, aiming to disclose the restatement of the opening balances and related financial data for the 2023 interim results due to adjustments made after the completion of the 2022 annual results audit - The 2023 interim results have been restated based on adjustments made after the completion of the 2022 annual results audit[1](index=1&type=chunk) - The restated interim results are unaudited but have been reviewed by the company's audit committee[1](index=1&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [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) For the six months ended June 30, 2023, the company's total revenue decreased year-on-year, but net investment income turned from loss to profit, driving operating profit to turn profitable; however, loss for the period and loss attributable to owners of the company both expanded, leading to an increase in loss per share Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 536,575 | 603,705 | -11.12% | | **Net Investment Income (Loss)** | 47,831 | (91,418) | Turned from loss to profit | | **Operating Profit (Loss)** | 32,447 | (73,336) | Turned from loss to profit | | **Loss for the Period** | (163,173) | (198,038) | Loss narrowed by 17.50% | | **Loss Attributable to Owners of the Company** | (180,132) | (153,735) | Loss expanded by 17.17% | | **Basic and Diluted Loss Per Share** | RMB (0.36) | RMB (0.30) | Loss expanded by 20.00% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the company's total assets and total liabilities both decreased compared to the end of 2022, with a reduction in net current assets; net assets and equity attributable to owners of the company slightly decreased, but the overall financial structure remained stable Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Total Assets** | 10,137,779 | 13,077,557 | -22.56% | | **Net Current Assets** | 3,774,527 | 5,090,627 | -25.86% | | **Total Assets Less Current Liabilities** | 7,618,259 | 9,184,351 | -17.05% | | **Net Assets** | 7,521,651 | 7,539,280 | -0.23% | | **Equity Attributable to Owners of the Company** | 6,470,226 | 6,501,490 | -0.48% | - Accounts receivable and other receivables significantly decreased from **RMB 1,252,730 thousands** to **RMB 454,924 thousands**, a **63.69% reduction**[4](index=4&type=chunk) - Cash and cash equivalents decreased from **RMB 1,537,730 thousands** to **RMB 1,083,185 thousands**, a **29.69% reduction**[4](index=4&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Preparation and Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the Listing Rules of the Hong Kong Stock Exchange, using historical cost and fair value measurements; revisions to International Financial Reporting Standards first applied in the current period had no significant impact on financial position and performance - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[6](index=6&type=chunk) - Revisions to International Financial Reporting Standards first applied in the current interim period had no significant impact on the Group's financial position and performance[9](index=9&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The company's chief operating decision maker segments its business into four reportable segments based on business models: Investment Banking, Investment Management, Huaxing Securities, and Others; for the six months ended June 30, 2023, Investment Management segment revenue and operating profit significantly increased, while Investment Banking and Huaxing Securities segment revenues decreased, and Investment Banking segment operating loss expanded - The Group's reportable segments include Investment Banking, Investment Management, Huaxing Securities, and Others[10](index=10&type=chunk) Segment Revenue and Operating Profit (Loss) (For the six months ended June 30) | Segment | 2023 Revenue (RMB thousands) | 2022 Revenue (RMB thousands) | Y-o-Y Revenue Change | 2023 Operating Profit (Loss) (RMB thousands) | 2022 Operating Profit (Loss) (RMB thousands) | Y-o-Y Operating Profit Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Investment Banking** | 112,505 | 231,250 | -51.35% | (27,624) | (1,683) | Loss expanded | | **Investment Management** | 336,452 | 290,086 | +16.00% | 126,247 | 75,398 | Profit increased by 67.45% | | **Huaxing Securities** | 47,346 | 59,733 | -20.73% | (41,865) | (107,889) | Loss narrowed by 61.20% | | **Others** | 40,272 | 22,636 | +77.91% | (24,311) | (39,162) | Loss narrowed by 37.93% | | **Consolidated Total** | 536,575 | 603,705 | -11.12% | 32,447 | (73,336) | Turned from loss to profit | - Carried interest income recognition is based on fund performance and requires reaching a minimum income level; unrealized carried interest income is adjusted based on changes in fund fair value[13](index=13&type=chunk) [Geographical Information](index=11&type=section&id=Geographical%20Information) The Group primarily operates in Mainland China and Hong Kong; for the six months ended June 30, 2023, revenue from external customers in all major geographical regions decreased, and non-current assets also showed a downward trend Revenue from External Customers (For the six months ended June 30) | Region | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Mainland China** | 443,532 | 461,461 | -3.89% | | **Hong Kong** | 83,104 | 121,859 | -31.79% | | **United States** | 9,939 | 20,385 | -51.24% | | **Total** | 536,575 | 603,705 | -11.12% | Non-current Assets (As of June 30) | Region | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Mainland China** | 199,067 | 233,128 | -14.61% | | **Hong Kong** | 20,510 | 25,765 | -20.39% | | **United States** | 592 | 2,558 | -76.86% | | **Total** | 220,169 | 261,451 | -15.79% | [Net Investment Income (Loss)](index=12&type=section&id=Net%20Investment%20Income%20(Loss)) For the six months ended June 30, 2023, net investment income turned from a loss in the prior period to a profit, primarily due to improved realized and unrealized net gains from investments in listed equity securities and unlisted investment funds measured at fair value Composition of Net Investment Income (Loss) (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Realized and Unrealized Net Gains (Losses) from Financial Assets at Fair Value Through Profit or Loss** | | | | | - Listed equity securities investments | 82,401 | (55,161) | Turned from loss to profit | | - Unlisted investment funds measured at fair value | 3,934 | (81,360) | Turned from loss to profit | | **Total** | 47,831 | (91,418) | Turned from loss to profit | [Other Income, Gains or Losses](index=13&type=section&id=Other%20Income%2C%20Gains%20or%20Losses) For the six months ended June 30, 2023, other income, gains or losses turned from a loss in the prior period to a profit, primarily due to the positive impact of increased government grants and reduced net exchange losses Other Income, Gains or Losses (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Government grants** | 19,596 | 15,753 | +24.39% | | **Net exchange losses** | (13,475) | (39,771) | Loss narrowed by 66.09% | | **Total** | 7,920 | (5,384) | Turned from loss to profit | [Investment Losses from Certain Incidental and Ancillary Investments](index=13&type=section&id=Investment%20Losses%20from%20Certain%20Incidental%20and%20Ancillary%20Investments) For the six months ended June 30, 2023, investment losses from certain incidental and ancillary investments significantly decreased from RMB 30,201 thousands in the prior period to zero Investment Losses from Certain Incidental and Ancillary Investments (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Investment losses** | — | (30,201) | Loss significantly reduced | [Income Tax Expense](index=14&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2023, income tax expense decreased year-on-year, primarily due to deferred tax turning from an expense to income, despite a significant increase in current tax in Mainland China Composition of Income Tax Expense (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Current tax - Mainland China** | 54,876 | 11,255 | +387.59% | | **Deferred tax** | (5,371) | 72,824 | Turned from expense to income | | **Total income tax expense** | 50,980 | 84,079 | -39.37% | [Dividends](index=15&type=section&id=Dividends) The company did not declare or pay any dividends for the six months ended June 30, 2023, whereas a final dividend of RMB 0.38 per share was paid in the prior period - The company did not declare or pay any dividends for the six months ended June 30, 2023[22](index=22&type=chunk) - For the six months ended June 30, 2022, a total final dividend of **RMB 201,114 thousands** (RMB 0.38 per share) was declared to the owners of the company[22](index=22&type=chunk) [Loss Per Share](index=15&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2023, the basic and diluted loss per share attributable to owners of the company was RMB (0.36), an expansion from RMB (0.30) in the prior period Loss Per Share (For the six months ended June 30) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Loss Attributable to Owners of the Company (RMB thousands)** | (180,132) | (153,735) | | **Weighted average number of ordinary shares** | 502,642,560 | 507,132,222 | | **Basic and Diluted Loss Per Share (RMB)** | (0.36) | (0.30) | [Investments in Associates](index=16&type=section&id=Investments%20in%20Associates) As of June 30, 2023, the company's total investments in associates slightly decreased, primarily due to a reduction in investments in funds Investments in Associates (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Investments in unlisted companies** | 14,284 | 13,353 | +6.97% | | **Investments in funds** | 1,333,866 | 1,404,604 | -5.04% | | **Total** | 1,348,150 | 1,417,957 | -4.92% | [Financial Assets at Fair Value Through Profit or Loss](index=17&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2023, the total financial assets at fair value through profit or loss decreased, with significant reductions in listed equity securities investments and unlisted cash management products, but an increase in listed financial bond investments Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Total Current Assets** | 3,145,196 | 3,315,794 | -5.15% | | - Listed equity securities investments | 12 | 216,611 | -99.99% | | - Unlisted cash management products | 205,293 | 456,515 | -55.09% | | - Listed financial bonds | 2,257,525 | 1,854,255 | +21.75% | | **Total Non-current Assets** | 1,966,075 | 2,049,359 | -4.06% | | - Options to acquire non-controlling interests | 283,090 | 436,080 | -35.10% | - The fair value of options to acquire non-controlling interests decreased, primarily due to the re-determination of the fair value of options held by Huaxing Securities' non-controlling shareholders[29](index=29&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=18&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2023, the total financial assets at fair value through other comprehensive income significantly decreased, primarily due to a reduction in listed financial bonds Financial Assets at Fair Value Through Other Comprehensive Income (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Listed financial bonds** | 143,714 | 357,672 | -59.81% | | **Less: Non-current portion** | (71,425) | (111,908) | -36.17% | | **Total** | 72,289 | 245,764 | -70.60% | [Loans to Third Parties](index=19&type=section&id=Loans%20to%20Third%20Parties) As of June 30, 2023, the total loans to third parties increased, but a significant impairment provision was made for the loan to Woby Medical Holdings Limited Loans to Third Parties (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Woby Medical Holdings Limited** | 198,733 | 192,717 | +3.12% | | **Zhejiang Shengze Credit Management Co., Ltd.** | 27,772 | — | Newly added | | **Less: Impairment loss allowance** | (117,564) | (117,561) | +0.00% | | **Total** | 108,941 | 86,574 | +25.84% | - An impairment allowance of **RMB 117,548 thousands** has been made for the loan to Woby Medical Holdings Limited due to indications of credit impairment[32](index=32&type=chunk) [Accounts Receivable and Other Receivables](index=20&type=section&id=Accounts%20Receivable%20and%20Other%20Receivables) As of June 30, 2023, the total accounts receivable and other receivables significantly decreased, primarily due to a substantial reduction in receivables from unsettled transactions, with a corresponding decrease in impairment loss allowance Accounts Receivable and Other Receivables (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Accounts receivable** | 49,979 | 93,032 | -46.30% | | **Receivables from unsettled transactions** | 249,482 | 977,380 | -74.47% | | **Less: Impairment loss allowance** | (9,467) | (38,688) | -75.55% | | **Total** | 454,924 | 1,252,730 | -63.69% | [Amounts Due from Related Parties](index=21&type=section&id=Amounts%20Due%20from%20Related%20Parties) As of June 30, 2023, the total amounts due from related parties decreased, primarily influenced by a reduction in receivables from Huaxing New Economy RMB Phase IV Fund; the company made impairment provisions for amounts due from related parties that showed credit impairment Amounts Due from Related Parties — Trading Nature (As of June 30) | Related Party | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Huaxing New Economy RMB Phase IV Fund** | 880,843 | 1,076,392 | -18.17% | | **Less: Impairment loss allowance** | (92,430) | (92,206) | +0.24% | | **Total Trading Nature** | 896,495 | 1,324,781 | -32.29% | - As of June 30, 2023, a total carrying amount of **RMB 880,843 thousands** was credit-impaired, and an impairment allowance of **RMB 90,072 thousands** was made[39](index=39&type=chunk) Amounts Due from Related Parties — Non-Trading Nature (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Total Non-Trading Nature** | 6,144 | 5,596 | +9.79% | [Impairment Assessment of Financial Assets under Expected Credit Loss Model](index=25&type=section&id=Impairment%20Assessment%20of%20Financial%20Assets%20under%20Expected%20Credit%20Loss%20Model) For the six months ended June 30, 2023, the total impairment loss (reversal) recognized by the company turned from a loss last year to a reversal, primarily benefiting from the impairment reversal of accounts receivable and other receivables Impairment Loss (Reversal) Recognition (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Accounts receivable and other receivables** | (33,841) | (87) | Significant reversal | | **Loans to third parties** | (8) | 5,056 | Turned from loss to reversal | | **Amounts due from related parties** | 288 | 2,181 | Loss narrowed | | **Total** | (33,583) | 7,130 | Turned from loss to reversal | [Accounts Payable and Other Payables](index=25&type=section&id=Accounts%20Payable%20and%20Other%20Payables) As of June 30, 2023, the total accounts payable and other payables significantly decreased, primarily due to substantial reductions in payables from unsettled transactions and carried interest payable to management teams and other parties Accounts Payable and Other Payables (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Salaries, bonuses and other benefits payable** | 268,080 | 385,574 | -30.47% | | **Payables from unsettled transactions** | 257,543 | 979,576 | -73.71% | | **Carried interest payable to management teams and other parties** | 91,235 | 238,122 | -61.68% | | **Total** | 730,461 | 1,718,928 | -57.40% | [Financial Assets Sold Under Repurchase Agreements](index=26&type=section&id=Financial%20Assets%20Sold%20Under%20Repurchase%20Agreements) As of June 30, 2023, financial assets sold under repurchase agreements significantly increased, reflecting increased company activity in obtaining funds by selling securities with an agreement to repurchase them Financial Assets Sold Under Repurchase Agreements (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Analyzed by collateral type: Debt securities** | 398,000 | 150,000 | +165.33% | | **Total** | 398,155 | 150,065 | +165.34% | - The effective annual interest rate for financial assets sold under repurchase agreements ranged from **3.11% to 3.57%** (December 31, 2022: 3.50% to 3.95%), indicating a decrease in interest rates[47](index=47&type=chunk) [Structured Notes](index=27&type=section&id=Structured%20Notes) As of June 30, 2023, the balance of structured notes slightly decreased, and the annual interest rate range narrowed and lowered Structured Notes (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | **Structured notes** | 223,479 | 236,648 | -5.61% | - The annual interest rate for structured notes ranged from **3.10% to 3.30%** (December 31, 2022: 3.30% to 6.08%)[49](index=49&type=chunk) [Bank Borrowings](index=27&type=section&id=Bank%20Borrowings) During the interim period, new bank loans obtained by the company decreased, but bank loans repaid significantly increased, leading to a substantial reduction in total bank borrowings - New bank loans of **RMB 67,880 thousands** were obtained during the interim period, a **59.99% year-on-year decrease**[50](index=50&type=chunk) - Bank loans repaid amounted to **RMB 2,170,579 thousands**, a **1204.69% year-on-year increase**[50](index=50&type=chunk) - Loans bear interest at fixed market annual rates ranging from **4.35% to 4.50%**[50](index=50&type=chunk) [Share Capital](index=28&type=section&id=Share%20Capital) As of June 30, 2023, the company's authorized share capital and issued and fully paid share capital both remained unchanged Share Capital Information (As of June 30) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Number of issued and fully paid shares** | 568,397,776 | 568,397,776 | | **Share Capital (RMB thousands)** | 93 | 93 | [Major Differences between Preliminary and Supplementary Announcements](index=29&type=section&id=Major%20Differences%20between%20Preliminary%20and%20Supplementary%20Announcements) [Differences in Financial Position](index=29&type=section&id=Differences%20in%20Financial%20Position) Major differences in the consolidated statement of financial position between the preliminary interim results announcement and this announcement include loans to third parties, amounts due from related parties, deferred tax assets, accounts payable and other payables, and income tax payable, primarily stemming from updated impairment assessments, extended loan maturity dates, and adjustments to bonus expense provisions and their corresponding tax impacts Major Differences in Consolidated Statement of Financial Position (As of June 30, 2023) | Item | Disclosed in this announcement (RMB thousands) | Disclosed in preliminary interim results announcement (RMB thousands) | Difference (RMB thousands) | | :--- | :--- | :--- | :--- | | **Loans to third parties** | 108,941 | 226,366 | (117,425) | | **Amounts due from related parties** | 902,639 | 674,560 | 228,079 | | **Deferred tax assets** | 152,436 | 219,624 | (67,188) | | **Accounts payable and other payables** | (730,461) | (804,434) | 73,973 | | **Income tax payable** | (104,277) | (90,880) | (13,397) | - The difference in loans to third parties is due to updated impairment assessments and extended loan maturity dates[53](index=53&type=chunk) - The difference in amounts due from related parties is due to updated impairment assessments, particularly related to the settlement agreement with Huaxing New Economy RMB Phase IV Fund[54](index=54&type=chunk) [Differences in Profit or Loss and Other Comprehensive Income](index=29&type=section&id=Differences%20in%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Major differences in the consolidated statement of profit or loss and other comprehensive income are reflected in interest income, impairment losses under the expected credit loss model, and income tax expense, with these adjustments also related to the impairment assessment of amounts due from related parties and adjustments to bonus expense provisions and their tax impacts Major Differences in Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2023) | Item | Disclosed in this announcement (RMB thousands) | Disclosed in preliminary interim results announcement (RMB thousands) | Difference (RMB thousands) | | :--- | :--- | :--- | :--- | | **Interest income** | 49,802 | 76,528 | (26,726) | | **Impairment losses under expected credit loss model, net of reversal** | 33,583 | 37,835 | (4,252) | | **Income tax expense** | (50,980) | (52,043) | 1,063 | - Differences in deferred tax assets, income tax payable, and income tax expense are primarily due to the corresponding tax impacts arising from adjustments to impairment losses on amounts due from related parties and bonus expense provisions[55](index=55&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) [Publication of 2023 Interim Report](index=30&type=section&id=Publication%20of%202023%20Interim%20Report) The company's interim report for the six months ended June 30, 2023, will be published on the Stock Exchange and the company's website in due course and dispatched to shareholders - The 2023 interim report will be published on the Stock Exchange and the company's website and dispatched to shareholders in due course[56](index=56&type=chunk)

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。 CHINA RENAISSANCE HOLDINGS LIMITED 華興資本控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1911） 截至2022年12月31日止年度的 年度業績公告 茲提述華興資本控股有限公司（「本公司」，連同其子公司統稱「本集團」）日期為2023年3 月31日之公告，內容有關（其中包括）本集團截至2022年12月31日止年度之未經審計年度 業績（「未經審計年度業績公告」）。除非文義另有所指，否則本公告所用詞彙與未經審 計年度業績公告所界定者具有相同涵義。 截至2022年12月31日止年度之年度業績 董事會謹此宣佈本集團截至2022年12月31日止年度（「報告期」）之經審計綜合業績。 – 1 – 綜合損益及其他全面收益表概要 | --- | --- | --- | |-----------------------------------|---------------- ...

Financial Performance - Total revenue for the six months ended June 30, 2023, was RMB 563,301 thousand, a decrease of 6.7% from RMB 603,705 thousand in the same period of 2022[3]. - Total operating expenses decreased to RMB (547,707) thousand, down 6.5% from RMB (585,623) thousand year-over-year[3]. - Operating profit for the period was RMB 63,425 thousand, compared to an operating loss of RMB (73,336) thousand in the prior year[3]. - The loss attributable to owners of the company for the period was RMB (150,217) thousand, slightly improved from RMB (153,735) thousand in the same period last year[4]. - The company reported a pre-tax loss of RMB (81,215) thousand, an improvement from a pre-tax loss of RMB (113,959) thousand in the previous year[3]. - The adjusted net loss attributable to owners of the company was RMB (131,314) thousand, compared to RMB (171,034) thousand in the same period of 2022[4]. - The company recorded a significant improvement in operating profit, reaching RMB 63.43 million, compared to a loss of RMB 73.34 million in the same period last year[11]. - The company reported a net loss of RMB 133,258 thousand, an improvement from a net loss of RMB 198,038 thousand in the same period last year[59]. - The group reported a total loss for the period of RMB (133,258) thousand, reflecting challenges in various segments[67]. Revenue Breakdown - Total revenue and net investment income for the first half of 2023 reached RMB 611.13 million, a year-on-year increase of 19%[10]. - Investment management business contributed 54% to total revenue, with assets under management reaching RMB 40.1 billion, and management fees remaining stable despite market challenges[7]. - The investment banking segment experienced a significant decline, with revenue dropping by 51.5% to RMB 112.77 million due to a sluggish IPO market[10]. - The company reported a 77.1% increase in investment management revenue, amounting to RMB 333.19 million, compared to RMB 188.09 million in the same period last year[10]. - Revenue from private equity financing in new energy, new materials, and advanced manufacturing accounted for 49% of total private equity income, up from 3% year-on-year[7]. - The investment banking segment generated transaction and advisory fees of RMB 112,505 thousand, while the investment management segment reported management fees of RMB 227,544 thousand[67]. Operating Expenses - The company’s share-based payment expenses were RMB 41,280 thousand, down from RMB 70,923 thousand in the same period last year[4]. - Operating expenses for the investment banking segment decreased by 40.1% to RMB 140.4 million from RMB 234.3 million year-on-year, primarily due to a reduction in compensation and benefits expenses[15]. - Investment management segment operating expenses increased by 56.2% from RMB 112.7 million for the six months ended June 30, 2022, to RMB 176.0 million for the six months ended June 30, 2023[24]. - Employee compensation expenses for the six months ended June 30, 2023, amounted to RMB 320.4 million, a decrease of 15.6% compared to the same period in 2022[48]. - The company reported a decrease in salaries and other benefits payable to RMB 342,053,000 as of June 30, 2023, from RMB 459,404,000 at the end of 2022, a decline of 25.5%[99]. Investment Management - The company anticipates continued growth in investment management and plans to strengthen client relationships in technology and advanced manufacturing sectors[9]. - The internal rate of return for self-managed private equity funds was 22.6% as of June 30, 2023, while for third-party funds it was 21.4%[19]. - The total return multiple for the main fund as of June 30, 2023, was 1.9, with realized investments amounting to RMB 5,338 million and unrealized investments at RMB 18,455 million[21]. - The company has the right to collect performance fees due to exceeding the agreed return levels for two main funds and three special funds, with realized carried interest income increasing significantly to RMB 94.2 million from RMB 32.8 million year-on-year[23]. - The company’s total investment management assets under management decreased to RMB 40,077 million from RMB 42,896 million as of December 31, 2022[20]. Debt and Assets - The company's debt level decreased significantly, with outstanding bank borrowings at RMB 78.9 million as of June 30, 2023[44]. - The company's debt-to-asset ratio improved to 17.1% as of June 30, 2023, down from 32.4% as of December 31, 2022[45]. - Total assets decreased to RMB 10,094,313 thousand as of June 30, 2023, down from RMB 13,004,633 thousand at the end of 2022, reflecting a decline of 22.3%[60]. - The total liabilities as of June 30, 2023, were RMB 804,434,000, down from RMB 1,792,757,000 as of December 31, 2022, indicating a reduction of 55.2%[99]. - The company’s cash and cash equivalents stood at RMB 1,083,185 thousand, down from RMB 1,537,730 thousand, a decrease of 29.5%[60]. Employee and Operational Structure - As of June 30, 2023, the total number of full-time employees is 639, with over 85% being consultants and investment professionals[48]. - The employee distribution by function as of June 30, 2023, includes 164 in investment banking (26%), 65 in investment management (10%), and 287 in Huaxing Securities (45%)[48]. - The employee distribution by region shows 41% in Beijing, 35% in Shanghai, and 15% in Hong Kong as of June 30, 2023[49]. Regulatory and Compliance - The company continues to face challenges in achieving a clean audit opinion from its auditors, which may impact future financial reporting[1]. - The audit committee has reviewed the unaudited interim results for the six months ended June 30, 2023[56]. - The company is unable to publish its audited annual results for the year ending December 31, 2022, due to unresolved auditor inquiries regarding disclosures made on February 16 and 26, 2023[107]. - Trading of the company's shares has been suspended since April 3, 2023, until compliance with resumption guidance is met[108]. Other Financial Metrics - The company confirmed a loss of USD 16.7 million (approximately RMB 120.7 million) from the sale of certain non-listed investment funds, with realized investment gains of USD 10.7 million (approximately RMB 77.3 million) post-sale[57]. - The company received government subsidies amounting to RMB 19,596,000 for the six months ended June 30, 2023, compared to RMB 15,753,000 in the same period of 2022[74]. - The income tax expense for the six months ended June 30, 2023, was RMB 52,043,000, a decrease from RMB 84,079,000 in the same period of 2022[76].

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 1,585,380,000, a decrease of 9.1% from RMB 1,744,483,000 in 2021[5]. - Total income and net investment income for the same period was RMB 1,586,889,000, down 36.5% from RMB 2,504,011,000 in 2021[5]. - The company reported a net loss attributable to owners of RMB (563,792,000) for the year, compared to a profit of RMB 1,624,362,000 in 2021[6]. - The pre-tax loss for the year was RMB (598,428,000), a significant decline from a profit of RMB 1,855,904,000 in the previous year[5]. - The company reported a total loss for the year of RMB 587,750,000, with a pre-tax loss of RMB 598,428,000[76]. - The company reported a net loss of RMB 587,750,000 for the year, compared to a profit of RMB 1,645,385,000 in the previous year[67]. - The company incurred operating expenses of RMB 354,860,000 across various segments, with significant costs in salaries and benefits[76]. - The company reported an operating loss of RMB 319.3 million in 2022, down from an operating profit of RMB 862.8 million in 2021[38]. Investment Management - The investment management business contributed 53% to the total revenue, with assets under management increasing to RMB 26.9 billion, primarily from new fundraising in USD and RMB funds[9]. - The company recorded a significant increase in realized carried interest income, amounting to RMB 400 million, which accounted for 47% of the investment management segment's revenue during the reporting period[9]. - The net investment loss in the investment management segment was RMB 70.3 million, compared to a gain of RMB 473.7 million in 2021[19]. - The investment management segment experienced a net loss of RMB 227,618,000, while the investment banking segment reported a loss of RMB 76,152,000[76]. - The investment management segment's unrealized equity income was reported at a negative RMB 424,313,000, highlighting the volatility in the investment landscape[1]. Investment Banking - The investment banking segment generated RMB 422.8 million in revenue, a decline of 61.6% from RMB 1.1 billion in 2021[12]. - Investment banking revenue and net investment income for the year ended December 31, 2022, was RMB 422.8 million, a decrease of 61.6% compared to RMB 1,100.7 million in 2021[16]. - Total transaction value in investment banking decreased by 81.5% to RMB 41.4 million from RMB 223.5 million in 2021[15]. - The company reported a segment operating loss of RMB 76.2 million in investment banking for the year ended December 31, 2022, compared to a profit of RMB 309.3 million in 2021[18]. Operating Expenses - Operating expenses totaled RMB (1,906,176,000), an increase of 16.2% from RMB (1,641,207,000) in 2021[5]. - Operating expenses rose by 16.1% from RMB 1,641.2 million in 2021 to RMB 1,906.2 million in 2022[37]. - Total operating expenses for the year ended December 31, 2022, amounted to RMB 354,860,000, a decrease from RMB 371,659,000 in 2021, with professional service fees decreasing from RMB 98,274,000 to RMB 77,155,000[90]. Assets and Liabilities - Total assets under management decreased to RMB 42.9 billion from RMB 48.9 billion in the previous year[21]. - Total assets decreased to RMB 13,004,633 thousand from RMB 14,164,166 thousand in 2021[68]. - Current liabilities rose to RMB 3,954,055 thousand, compared to RMB 4,457,356 thousand in the previous year[69]. - The company's equity attributable to owners decreased to RMB 6,367,598 thousand from RMB 6,826,032 thousand in 2021[69]. - The group recognized an impairment loss provision of RMB 351,223,000 for receivables as of December 31, 2022, compared to RMB 898,000 in 2021[121]. Governance and Compliance - The company has complied with all applicable corporate governance codes as per the listing rules, except for the separation of the roles of Chairman and CEO, which are held by the same individual, Mr. Bao Fan[58]. - The company has established an audit committee consisting of three independent non-executive directors, with Ms. Yao Jue as the chairperson[60]. - The company has established several other committees, including the nomination committee, remuneration committee, executive committee, and environmental, social, and governance committee[61]. Dividends and Shareholder Returns - The company did not declare a final dividend for the year ended December 31, 2022, while the total dividend paid for the previous year was RMB 201.1 million[55][56]. - The company declared a final dividend of RMB 201,114 thousand for the year ended December 31, 2022, compared to RMB 197,319 thousand in 2021[102]. Employee and Compensation - Total employee compensation expenses, including share-based payments, were RMB 827.1 million for the year ended December 31, 2022[51]. - The company employed a total of 754 full-time employees as of December 31, 2022, with 42% based in Beijing and 33% in Shanghai[53]. - The group’s payable for salaries, bonuses, and other benefits was RMB 459,404,000, down from RMB 712,435,000 in 2021, reflecting a decrease of 35.4%[126]. Debt and Financing - As of December 31, 2022, the company's bank borrowings amounted to RMB 2,115.0 million, with total credit facilities of RMB 5,073.4 million[47]. - The company's debt-to-asset ratio was 32.4% as of December 31, 2022, down from 35.3% as of December 31, 2021[48]. - The company has initiated repayment of syndicated loans in Q1 2023 to further reduce debt levels and financial costs[11].