Financial Performance - Revenue increased significantly by approximately 94.5% to about RMB 40,770,075,000[2] - The company reported a loss attributable to the parent company of approximately RMB 7,863,349,000[2] - The total comprehensive loss for the year amounted to approximately RMB 8,407,463,000[6] - The company experienced a net loss before tax of approximately RMB 8,211,620,000[3] - The company reported a net loss attributable to shareholders of RMB 7,863,349 thousand for the year ending December 31, 2024, compared to a loss of RMB 7,991,050 thousand in the previous year, indicating a slight improvement[7] - Total comprehensive loss for the year was RMB 8,407,463 thousand, down from RMB 8,900,799 thousand in the previous year, reflecting a reduction in overall losses[7] - The group recorded a loss attributable to equity holders of approximately RMB 7.863 billion as of December 31, 2024[18] - The group reported a pre-tax loss of RMB 530,406,000 for the year 2024, compared to RMB 725,878,000 in 2023, indicating a decrease of approximately 26.9%[30] Revenue Sources - Total revenue for the group reached RMB 40,770,075 thousand, a significant increase from RMB 20,960,968 thousand[28] - Revenue from property sales amounted to RMB 38,843,471 thousand, compared to RMB 19,095,549 thousand in the previous year, reflecting a growth of approximately 103%[28] - Other income and gains totaled RMB 286,830 thousand, up from RMB 660,818 thousand, indicating a decrease in this segment[28] - The company reported a net income from rental income of RMB 30,969 thousand, compared to RMB 26,782 thousand previously, marking an increase of approximately 15%[28] - The total amount of management fee income was RMB 103,727 thousand, which is a decrease from RMB 171,555 thousand[28] Cost and Expenses - The cost of sales increased to RMB 34,534,538,000, reflecting the growth in revenue[3] - Financial expenses totaled RMB 1,893,627 thousand, an increase from RMB 1,492,343 thousand, showing a rise of about 27%[29] - The company's total financial liabilities interest amounted to RMB 2,806,275 thousand, slightly up from RMB 2,709,362 thousand[29] - The company's total capitalized interest decreased to RMB (912,648) thousand from (1,217,019) thousand, indicating a reduction in capitalized costs[29] - The total tax expense for the year was RMB 937,852,000, compared to RMB 189,504,000 in the previous year, showing a significant increase[32] Assets and Liabilities - Non-current assets increased to RMB 49,227,234 thousand in 2024 from RMB 37,923,422 thousand in 2023, showing a growth of approximately 30%[10] - Current assets rose to RMB 118,662,453 thousand in 2024, compared to RMB 90,361,804 thousand in 2023, representing an increase of about 31%[10] - The company’s total liabilities increased to RMB 118,662,453 thousand in 2024, compared to RMB 90,361,804 thousand in 2023, indicating a rise of approximately 31%[10] - The company’s total equity attributable to shareholders decreased to RMB 7,934,472 thousand in 2024 from RMB 8,401,124 thousand in 2023, reflecting a decline of about 5.5%[7] - The group has triggered multiple defaults or cross-default events on its offshore preferred notes and certain interest-bearing bank and other loans since October 2023, with defaults totaling approximately RMB 19.671 billion and accrued interest of RMB 2.302 billion[18] Market and Strategy - The company plans to explore new strategies for market expansion and product development in the upcoming fiscal year[3] - The group plans to adjust its sales strategy to accelerate property pre-sales and sales, as well as expedite the collection of sales proceeds[21] - The group aims to sell certain investment properties and non-core businesses to generate additional cash inflow[21] - The group anticipates that the Chinese real estate market will enter a prolonged bottoming phase by 2025, with expectations for more favorable policies from the government to boost market confidence[48] - The real estate market in China continues to adjust, with government policies aimed at stabilizing the market by relaxing purchase restrictions and lowering down payment ratios[42] Shareholder Information - The group did not declare any final dividend for the year ending December 31, 2024, consistent with the previous year[33] - The basic loss per share for the year was calculated based on 4,222,986,126 shares, unchanged from the previous year[34] - The company has not engaged in any purchase, redemption, or sale of its listed securities during the year, and does not hold any treasury shares[73] Governance and Compliance - The Audit Committee was established on January 6, 2010, consisting of three independent non-executive directors, ensuring compliance with listing rules[70] - The company has adhered to the Corporate Governance Code, with the roles of Chairman and CEO being held by the same individual, which the board believes enhances operational efficiency[74] - The consolidated financial statements for the year ending December 31, 2024, have been reviewed and are consistent with the draft financial statements[71]

Company Overview - As of June 30, 2024, the Group owned a land bank with an aggregate planned gross floor area of approximately 26.30 million square meters[4]. - The Company was awarded the "2024 Top 500 of China Real Estate Developers" recognition[4]. - The Group's property projects are distributed across 56 cities, including major locations such as Beijing, Shanghai, and Shenzhen[4]. - The major businesses of the Group include property development, commercial management, property management, and long-term rental apartments[4]. - The Company emphasizes its mission of "Creating Smart Living to Help Seize Happiness" as part of its value proposition[4]. - The Group's operational headquarters is located in Shanghai, focusing on strategic development in the Yangtze River Delta Economic Zone and other key areas[4]. - The Company has a diversified product range, including high-rise residential buildings, offices, shopping malls, and long-term rental apartments[4]. - The Group continues to expand its market presence while maintaining a focus on sustainable and responsible development practices[4]. - The Company aims to secure a regional leading position by implementing more proactive and prudent development strategies in key economic zones[4]. Financial Performance - For the six months ended June 30, 2024, the Group achieved a revenue of RMB 24,816.5 million, representing a year-on-year increase of 161.7% compared to RMB 9,481.9 million in the same period of 2023[16]. - The gross profit for the same period was RMB 4,460.0 million, reflecting a 171.7% increase from RMB 1,641.4 million in the prior year[16]. - The Group reported a loss attributable to owners of the parent of RMB (3,682.3) million, a significant increase of 227.3% from RMB (1,125.0) million in the previous year[16]. - Contracted sales amounted to approximately RMB 6.131 billion, with a significant year-on-year decrease of approximately 69.5%[23]. - The average selling price of properties during the period was RMB 9,028 per sq.m[23]. - The Group recognized property sales income of approximately RMB 23.926 billion, representing a year-on-year increase of 177.9%[37]. - The delivered property area was approximately 1.51 million sq.m., reflecting a year-on-year increase of 62.2%[37]. - Income from property sales rose by 177.9% from approximately RMB 8,609,731,000 in the first half of 2023 to approximately RMB 23,925,857,000 in the first half of 2024, driven by a 62.2% increase in delivered property area and a rise in average unit selling price from RMB 9,228 per sq.m. to RMB 15,810 per sq.m.[52][56]. - Gross profit increased by 171.7% from approximately RMB 1,641,389,000 in the first half of 2023 to approximately RMB 4,459,982,000 in the first half of 2024, with the gross profit margin rising from 17.3% to 18.0%[62][67]. Asset and Liability Management - Total assets decreased by 14.5% to RMB 143,507.6 million from RMB 167,889.7 million as of December 31, 2023[17]. - Total liabilities decreased by 12.9% to RMB 128,403.3 million from RMB 147,407.4 million as of December 31, 2023[17]. - The Group's cash and bank balances decreased by 27.9% to RMB 4,647.8 million from RMB 6,448.9 million as of December 31, 2023[17]. - The Group's land bank has an aggregate planned GFA of approximately 26.30 million sq.m., with 21.93 million sq.m. attributable to the Group[42]. - The Group's total borrowings increased to approximately RMB 36,519,694,000 as of June 30, 2024, from RMB 35,907,119,000 as of December 31, 2023[87]. - The Group's net gearing ratio increased to approximately 211.0%, up from 143.8% on December 31, 2023[95][97]. - The Group's total assets pledged for securing bank borrowings and domestic bonds amounted to RMB 64,301,648,000 as of June 30, 2024, compared to RMB 63,579,208,000 on December 31, 2023[94]. Operational Challenges - Contracted sales in Hangzhou amounted to approximately RMB 1.501 billion, the highest among first- and second-tier cities[33]. - The Yangtze River Delta Economic Zone ranked first in contracted sales with approximately RMB 2.638 billion, accounting for 43.0% of total contracted sales[33]. - The Group expects more supportive policies from the government to stabilize the market and reduce inventory in the second half of 2024[46]. - The Group anticipates that the real estate market will gradually recover as government policies aimed at stabilizing the market and reducing inventory are implemented[48][49]. - The increase in loss attributable to owners of the parent was mainly due to fair value losses of investment properties and write-downs to net realizable value of completed properties held for sale[78]. - The Group's cash position reflects a significant decrease in cash and bank balances, indicating potential liquidity challenges moving forward[83]. - The company is facing challenges in managing its offshore debt situation and is exploring solutions to ease liquidity issues[170]. Shareholder Information - Mr. Wong Chiu Yeung held 2,120,500,000 shares, representing 50.21% of the Company's issued share capital[116]. - Mr. Chen Yuanlai held 250,230,000 shares, representing 5.93% of the Company's issued share capital[116]. - Mr. Cheng Hiu Lok held 230,230,000 shares, representing 5.45% of the Company's issued share capital[116]. - The company is controlled by Mr. Wong, who holds a 50.21% interest through his wholly-owned company[122]. - The interests of substantial shareholders are recorded in compliance with Section 336 of the SFO[128]. Corporate Governance - The Company has committed to high standards of corporate governance, ensuring compliance with the Corporate Governance Code during the reporting period[147][148]. - The Audit Committee, comprising three independent non-executive Directors, has reviewed the unaudited interim report for the six months ended June 30, 2024[149][150]. Debt and Financing - The company has multiple outstanding senior notes, including US$500 million due in April 2024 and US$450 million due in September 2024[169]. - The company has not made a payment on an installment of principal and interest amounting to approximately US$61 million under the 2021 Facility Agreement, resulting in an event of default[168]. - The company has appointed Haitong International Securities Company Limited as its financial adviser to assist with evaluating the Group's current capital structure and liquidity[170]. - The company has pledged 504,000,000 shares, representing approximately 26.0% of its issued share capital, as collateral under the financing agreements[166]. Employee and Training Initiatives - The Group established China SCE College to provide employees with training programs, including business courses, quality skills, and cultural identity[108]. - The total number of employees as of June 30, 2024, was 6,774, down from 6,845 employees as of December 31, 2023, indicating a reduction of about 1.0%[108]. - The total cost of employment during the review period was approximately RMB 348,461,000, compared to RMB 454,266,000 for the six months ended June 30, 2023, reflecting a decrease of approximately 23.3%[109].

Financial Performance - Revenue increased significantly by 161.7% to approximately RMB 24,816,532,000[2] - The company reported a loss attributable to equity holders of approximately RMB 3,682,268,000[2] - The net loss for the period was RMB 3,424,126,000, compared to RMB 1,022,165,000 in the previous year[3] - Basic and diluted loss per share was RMB 87.2 cents, compared to RMB 26.6 cents in the previous year[5] - Loss attributable to equity holders of the parent increased by 227.3% from approximately RMB 1,124,981,000 in the first half of 2023 to approximately RMB 3,682,268,000 in the first half of 2024[46] Sales and Revenue - Contract sales amounted to approximately RMB 6,131,433,000[1] - The group's revenue from customer contracts for property sales reached RMB 23,925,857 thousand for the six months ending June 30, 2024, compared to RMB 8,609,731 thousand for the same period in 2023, representing a significant increase[16] - The total revenue for the group amounted to RMB 24,816,532 thousand for the six months ending June 30, 2024, compared to RMB 9,481,871 thousand for the same period in 2023, indicating a substantial growth[16] - The company's contract sales for the first half of 2024 reached approximately RMB 6.131 billion, a significant decline of 69.5% year-on-year, with an average sales price of RMB 9,028 per square meter[27] - Property sales revenue surged from approximately RMB 8.61 billion in the first half of 2023 to approximately RMB 23.93 billion in the first half of 2024, a rise of 177.9%[35] Costs and Expenses - The cost of sales was RMB 20,356,550,000, compared to RMB 7,840,482,000 in the same period last year[2] - The financial expenses totaled RMB 861,384 thousand for the six months ended June 30, 2024, compared to RMB 453,892 thousand for the same period in 2023, indicating an increase of approximately 90.5%[18] - Selling and marketing expenses decreased by 33.1% from approximately RMB 591,170,000 in the first half of 2023 to approximately RMB 395,676,000 in the first half of 2024[41] - Administrative expenses decreased by 11.0% from approximately RMB 705,255,000 in the first half of 2023 to approximately RMB 627,537,000 in the first half of 2024[42] Assets and Liabilities - Non-current assets totaled RMB 41,880,790,000, down from RMB 49,227,234,000 year-on-year[6] - Current assets amounted to RMB 101,626,774,000, compared to RMB 118,662,453,000 in the previous year[6] - As of June 30, 2024, the total current liabilities amounted to RMB 114,979,271 thousand, a decrease from RMB 131,532,808 thousand in the previous year, representing a reduction of approximately 12.5%[7] - Non-current liabilities totaled RMB 13,424,036 thousand, a decrease from RMB 15,874,553 thousand, which is a reduction of approximately 15.4%[7] - The equity attributable to the parent company was RMB 15,104,257 thousand, down from RMB 20,482,326 thousand, indicating a decline of around 26.3%[7] Cash Flow and Liquidity - Cash and cash equivalents were approximately RMB 3.288 billion, reflecting the company's liquidity position[10] - The company has outstanding debts of approximately RMB 6.1 million related to a syndicated loan agreement that has led to a default event[10] - The total amount of defaulted or cross-defaulted principal for the company's offshore preferred shares and loans was approximately RMB 17.8 billion[10] - The group has taken measures to alleviate liquidity pressure and improve its financial situation, including evaluating its current capital structure and liquidity[11] Market and Strategy - The real estate market in the first half of 2024 saw new residential sales drop by 26.9% year-on-year, with total sales amounting to approximately RMB 47.133 billion[27] - The company has over 80 projects for sale across more than 50 cities, focusing on second and third-tier cities to enhance liquidity and sales performance[28] - The company has implemented flexible pricing strategies to ensure competitiveness in the market, particularly in first and second-tier cities[28] - The group plans to actively communicate with foreign creditors, particularly noteholders and banks, to explore feasible debt restructuring plans[11] Other Financial Metrics - The company recorded other income and gains of RMB 201,550,000, down from RMB 391,443,000 year-on-year[2] - Bank interest income decreased to RMB 18,379 thousand in the first half of 2024 from RMB 64,239 thousand in the same period of 2023, a decline of about 71.4%[17] - The income tax expense for the six months ended June 30, 2024, was RMB 696,437 thousand, compared to a tax benefit of RMB (28,964) thousand for the same period in 2023[21] - The company recorded a net foreign exchange loss of RMB (127,186) thousand for the six months ended June 30, 2024, compared to a loss of RMB (133,935) thousand for the same period in 2023[19]

Business Performance - Revenue for the year ended December 31, 2023, was RMB 20,960,968, a decrease of 21.5% from RMB 26,705,112 in 2022[42]. - Gross profit for 2023 was RMB 2,630,992, down 51.4% from RMB 5,410,308 in the previous year[42]. - The company reported a loss attributable to owners of the parent of RMB (7,991,050) compared to a profit of RMB 24,544 in 2022[42]. - Total assets decreased by 13.4% to RMB 167,889,687 from RMB 193,964,068 in 2022[47]. - Cash and bank balances fell by 57.1% to RMB 6,448,926 from RMB 15,016,058 in the previous year[47]. - Total liabilities decreased by 6.3% to RMB 147,407,361 from RMB 157,338,827 in 2022[47]. - The year 2023 was marked by a shrinking transaction volume in the national new home market[33]. - The Company faced significant challenges but worked to uphold its business fundamentals and progress with all tasks in an orderly manner[33]. Property Development and Management - The total delivered property area during the year amounted to approximately 2.34 million sq.m[33]. - The Group's land bank has an aggregate planned gross floor area (GFA) of approximately 29.90 million sq.m[8]. - The market-oriented expansion business has achieved breakthrough development, significantly increasing the total GFA under management of residential properties[33]. - The company delivered approximately 2.34 million square meters of properties during the year, focusing on "ensuring delivery" amid market challenges[45]. - The management area of residential properties saw significant growth, indicating a breakthrough in market expansion efforts[45]. - The Company operates with a regional focused development strategy in key economic zones including the Yangtze River Delta and the Bohai Rim[8]. - The outlook for 2024 includes a focus on overcoming industry challenges and maintaining operational stability[44]. Corporate Governance - The company has maintained compliance with the Corporate Governance Code throughout the year, ensuring high operational efficiency and safeguarding shareholder interests[73]. - The board is responsible for overseeing major company matters, including management strategies, internal controls, financial performance, and monitoring senior management[107]. - The company emphasizes high standards of corporate governance to promote operational efficiency and protect shareholder interests[74]. - The company has confirmed that all directors adhered to the standards set by the code throughout the year[75]. - The company has adopted a Board Diversity Policy, focusing on measurable targets in areas such as expertise, experience, and independence to enhance board effectiveness[78]. - The independent non-executive director has significant accounting and financial management expertise, meeting regulatory requirements[104]. - The company has a structured approach to nominations, periodically reviewing its policy to align with business needs and regulatory requirements[78]. - The board composition includes a mix of executive and independent non-executive directors, ensuring diverse perspectives in decision-making[102]. Share Options and Employee Incentives - The company granted 382,000,000 share options under the 2018 Scheme to employees, including directors, during the year[156]. - As of December 31, 2023, the total outstanding share options were 286,000,000, with an exercise price of HK$2.78 per share[158]. - The number of share options available for further grant under the 2018 Scheme was nil at the end of the year, as the scheme was terminated during the year[160]. - The total number of shares available for issue under the 2018 Scheme was 286,000,000 shares, representing approximately 6.8% of the total number of issued shares[162]. - The 2018 Scheme was adopted on April 23, 2018, and had a lifespan of 10 years, expiring on April 22, 2028[167]. - The maximum number of shares issuable under share options granted to each eligible participant in the 2018 Scheme within any 12-month period is limited to 1% of the shares of the Company in issue[167]. - The total number of shares that may be issued upon exercise of all options under the 2018 Scheme must not exceed 30% of the number of shares in issue from time to time[167]. - The exercise price of the share options is determined by the Board but shall not be less than the highest of the closing price on the date of the offer, the average closing price for the preceding five trading days, or the nominal value of the Company's shares[170]. Board Diversity and Composition - The Nomination Committee held one meeting during the year to discuss the composition and diversity policy of the Board[182]. - As of December 31, 2023, the Board has achieved measurable goals under the Board Diversity Policy, ensuring at least 35% of members have over 10 years of experience in real estate development[184]. - The Company aims to appoint at least one female Director by December 31, 2024, to enhance gender diversity on the Board[184]. - The Board has set a target for at least 60% of its members to have attained a Bachelor's degree or higher level of education[186]. - The Company has established a policy to ensure the age distribution of Board members includes individuals from at least three decades[186]. - The Company has a policy to recruit employees based on merit, regardless of gender, to ensure a diverse pipeline for potential successors[186]. - The Board has adopted a policy to ensure at least two members have obtained accounting or other professional qualifications[184]. - The Company regularly reviews its nomination policy to monitor progress towards achieving the set diversity goals[182].

Financial Performance - The total comprehensive loss for the year ended December 31, 2023, amounted to RMB 8,900,799 thousand, compared to RMB 1,854,508 thousand in the previous year, indicating a significant increase in losses [6]. - The company recorded a revenue of approximately RMB 20.96 billion for the fiscal year ending December 31, 2023, down from RMB 26.71 billion in the previous year, representing a decrease of about 21.5% [20]. - The total sales revenue for the company was approximately RMB 27.77 billion for the fiscal year 2023 [19]. - The company reported a loss attributable to the parent company of approximately RMB 7.99 billion for the fiscal year 2023, compared to a profit of RMB 24.54 million in the previous year [22]. - The company's gross profit margin for the fiscal year 2023 was approximately 12.6%, compared to a significantly higher margin in the previous year [19]. - The company’s impairment loss on investments in associates was RMB 172,392 thousand in 2023, while there was no such loss reported in 2022 [56]. - The company’s revenue from property sales was 19,095,549, down from 24,739,180 in the previous year, reflecting a decline of approximately 22.9% [43]. - The group’s total other income and gains amounted to RMB 660,818 thousand, a decrease of 19.4% compared to RMB 820,387 thousand in the previous year [67]. Assets and Liabilities - The company's total liabilities as of December 31, 2023, reached RMB 131,532,808 thousand, up from RMB 123,650,889 thousand in the previous year, reflecting a growth of approximately 6.3% [10]. - The net asset value decreased to RMB 20,482,326 thousand from RMB 36,625,241 thousand, representing a decline of about 44% year-over-year [10]. - The company’s total assets decreased to RMB 36,356,879 thousand from RMB 70,313,179 thousand, reflecting a substantial reduction in asset base [10]. - The company has outstanding debts of approximately RMB 35.91 billion, with a default event occurring due to unpaid loan principal and interest of about USD 61 million [16]. - The company’s current liabilities included trade payables of RMB 11,650,518 thousand, which increased from RMB 10,821,534 thousand, marking a rise of approximately 7.7% [10]. - The company’s cash and cash equivalents decreased significantly, with a net cash position of RMB (12,870,355) thousand compared to RMB 9,532,567 thousand in the previous year, indicating liquidity challenges [10]. - The company’s cash and cash equivalents amounted to approximately RMB 4.88 billion as of December 31, 2023 [16]. - The company’s cash and cash equivalents were approximately RMB 4,885 million as of December 31, 2023, compared to RMB 3,907 million in the previous year, showing an increase of about 25% [63]. - The net debt ratio increased to approximately 143.8% as of December 31, 2023, compared to 79.6% on December 31, 2022 [147]. Operational Challenges and Strategies - The company plans to adjust its sales strategy to accelerate property pre-sales and collections, aiming to improve cash flow over the next 12 months [18]. - The company is currently assessing its capital structure and liquidity to address existing liquidity pressures [17]. - The group plans to continue seeking refinancing or extending existing bank loans and other borrowings to improve its financial situation [48]. - The group aims to accelerate property pre-sales and sales to enhance cash inflow [49]. - The group has taken measures to alleviate liquidity pressure, including communication with overseas creditors for potential debt restructuring [47]. - The group will continue to look for potential buyers to sell certain investment properties and non-core businesses to generate more cash flow [48]. - The company is actively pursuing measures to alleviate liquidity issues, including overseas debt restructuring and selling non-core assets [87]. Market Conditions and Future Outlook - The real estate market is expected to remain in a bottoming phase in 2024, with government policies likely to continue optimizing to support quality developers [102]. - The company anticipates that demand for real estate in high-tier cities will provide some support despite overall weak purchasing sentiment among residents [102]. - The company sees opportunities in residential development in defined "deep cultivation" areas and expects rapid growth in the operation and service of existing assets [103]. Financial Management and Compliance - The company has not adopted the new Hong Kong Financial Reporting Standards that would impact its financial statements [34]. - The group has implemented a mandatory temporary exemption due to the introduction of new accounting standards, which does not affect its financial statements [40]. - The annual consolidated financial statements as of December 31, 2023, have been audited by the external auditor, confirming consistency with the draft financial statements [154]. - The company has adopted the "Standards for Directors' Securities Transactions" as per the listing rules, ensuring compliance throughout the year [156]. Shareholder Information - The group did not declare any final dividend for the year ending December 31, 2023 [71]. - The annual general meeting of shareholders is scheduled for May 31, 2024 [149].

Company Performance - For the six months ended June 30, 2023, the Group reported revenue of approximately RMB9.48 billion, a decrease of 38.4% compared to RMB15.39 billion in the same period of 2022[28]. - Gross profit for the same period was RMB1.45 billion, down 57.7% from RMB3.42 billion year-on-year[28]. - The Group's contracted sales amounted to approximately RMB20.08 billion, representing a year-on-year decrease of 38.4%[40]. - Revenue decreased significantly by 38.4% from approximately RMB 15,385,385,000 in the first half of 2022 to approximately RMB 9,481,871,000 in the first half of 2023, primarily due to a decrease in property sales income[125]. - Income from property sales decreased by 39.4% from approximately RMB 14,203,127,000 in the first half of 2022 to approximately RMB 8,609,731,000 in the first half of 2023, attributed to a significant decrease in the area of properties delivered[128]. - Delivered property area decreased by 38.2% from 1,509,724 sq.m. in the first half of 2022 to 933,050 sq.m. in the first half of 2023[128]. - Average unit selling price decreased from RMB 9,408 per sq.m. in the first half of 2022 to RMB 9,228 per sq.m. in the first half of 2023[128]. - Gross profit decreased significantly by 57.7% from approximately RMB 3,418,158,000 in the first half of 2022 to approximately RMB 1,445,896,000 in the first half of 2023, with gross profit margin decreasing from 22.2% to 15.2%[144]. - Profit attributable to owners of the parent changed from a profit of approximately RMB1,274,185,000 in the first half of 2022 to a loss of approximately RMB1,124,981,000 in the first half of 2023[160]. - Core profit attributable to owners of the parent changed from a profit of approximately RMB1,208,523,000 in the first half of 2022 to a loss of approximately RMB122,991,000 in the first half of 2023[160]. Financial Position - Total assets as of June 30, 2023, were RMB190.35 billion, a decrease of 1.9% from RMB193.96 billion at the end of 2022[29]. - Cash and bank balances decreased by 17.1% to RMB12.44 billion from RMB15.02 billion[29]. - Total debts decreased by 14.1% to RMB37.93 billion from RMB44.16 billion[29]. - The total equity of the Group was RMB31.79 billion, down 13.2% from RMB36.63 billion[29]. - As of June 30, 2023, the Group's total cash and bank balances were approximately RMB12,444,654,000, down from RMB15,016,058,000 as of December 31, 2022[169]. - Total borrowings decreased from approximately RMB44,157,148,000 as of December 31, 2022, to approximately RMB37,934,889,000 as of June 30, 2023[176]. - Borrowings within one year or on demand decreased from approximately RMB10,742,959,000 as of December 31, 2022, to approximately RMB8,372,559,000 as of June 30, 2023[176]. Land Bank and Projects - As of June 30, 2023, the company and its joint ventures owned a land bank with a planned gross floor area of approximately 31.64 million square meters, sufficient for development over the next two to three years[1]. - The land bank as of June 30, 2023, had an aggregate planned GFA of approximately 31.64 million sq.m., with 25.40 million sq.m. attributable to the Group[90]. - The Group holds a total of 53 investment properties with a gross floor area (GFA) of approximately 4.00 million sq.m., of which 27 properties have commenced operation[109]. - The Group's land reserves are distributed across 60 cities, with a total planned construction area of approximately 31.64 million sq.m., of which the Group's attributable area is about 25.40 million sq.m.[92]. - The cost distribution of land reserves is 35.2% in the Yangtze River Delta, 21.1% in the Bohai Rim, 23.8% in the West Taiwan Strait, 9.1% in the Guangdong-Hong Kong-Macao Greater Bay Area, and 10.8% in the Central Western Region[92]. - The Group's land reserve cost distribution by city tier is 11.0% in first-tier cities, 54.7% in second-tier cities, and 34.3% in third and fourth-tier cities[92]. - The Group had over 80 projects for sale in more than 50 cities during the first half of 2023[42]. Market Conditions - The real estate market showed signs of recovery post-Spring Festival, but buyer confidence declined sharply in April 2023[32]. - The mainland real estate market is expected to remain under pressure, with significant divergence between first-tier cities and other markets, particularly affecting third and fourth-tier cities[114]. - The outlook for the second half of 2023 anticipates continued optimization of real estate control policies by central and local governments, particularly in first-tier and popular second-tier cities[114]. Recognition and Strategy - The company was recognized in 2023 as one of the "Best 30 of China Real Estate Listed Companies with Comprehensive Strengths" and "TOP 30 of China Real Estate Developers"[1]. - The company aims to enhance its competitive position in the PRC real estate market through proactive and prudent development strategies[1]. - The strategic plan "One Body Two Wings" will be further deepened to secure regional leadership[1]. - The company operates in key economic regions including the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area[2]. Expenses and Costs - Selling and marketing expenses increased by 11.2% from approximately RMB 531,629,000 in the first half of 2022 to approximately RMB 591,170,000 in the first half of 2023[146]. - Administrative expenses increased by 27.4% from approximately RMB 553,489,000 in the first half of 2022 to approximately RMB 705,255,000 in the first half of 2023, mainly due to the inclusion of a loss on disposal of joint ventures[151]. - Project management income decreased significantly by 43.9% from approximately RMB 100,718,000 in the first half of 2022 to approximately RMB 56,552,000 in the first half of 2023[143]. - Property management fees increased by 9.0% from approximately RMB 506,672,000 in the first half of 2022 to approximately RMB 552,071,000 in the first half of 2023, attributed to an increase in the number and floor area of properties under management[130]. - Finance costs increased by 10.8% from approximately RMB409,751,000 in the first half of 2022 to approximately RMB453,892,000 in the first half of 2023[158]. - Total interest expenses decreased by 16.5% from approximately RMB1,808,033,000 in the first half of 2022 to approximately RMB1,509,545,000 in the first half of 2023[158]. - Income tax changed from an expense of approximately RMB648,415,000 in the first half of 2022 to a credit of approximately RMB28,964,000 in the first half of 2023[159].

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，並明確表示概不就 因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損 失承擔任何責任。 CHINA SCE GROUP HOLDINGS LIMITED 中 駿 集 團 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1966） 截 至 二 零 二 三 年 六 月 三 十 日 止 六 個 月 中 期 業 績 公 告 財務摘要 • 合同銷售金額減少38.4%至約人民幣20,084,204,000元。 • 收益減少38.4%至約人民幣9,481,871,000元。 • 毛利率為15.2%。 • 母公司擁有人應佔虧損約人民幣1,124,981,000元。 • 母公司擁有人應佔核心虧損1約人民幣122,991,000元。 • 於二零二三年六月三十日，淨負債比率約80.2%。 ...

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 26,705,112, a decrease of 29.2% compared to RMB 37,737,447 in 2021[18] - Gross profit for 2022 was RMB 4,420,333, down 45.9% from RMB 8,173,622 in 2021[18] - Profit attributable to owners of the parent was RMB 24,544, a significant decline of 99.2% from RMB 3,070,022 in the previous year[18] - Basic earnings per share decreased to RMB 0.6 cents from RMB 72.7 cents, reflecting a 99.2% drop[18] - The Group achieved a contracted sales amount of approximately RMB59.023 billion and a contracted sales area of approximately 4.91 million sq.m., representing decreases of approximately 43.5% and 34.2% year-over-year, respectively[27] - The Group's profit attributable to owners of the parent substantially declined to approximately RMB24.54 million due to decreased revenue from property sales and impairment provisions[26] - Revenue from property sales decreased significantly by approximately 31.6% from approximately RMB36,154 million in 2021 to approximately RMB24,739 million in 2022, with delivered area decreasing by approximately 22.0%[93] - The average unit selling price decreased from approximately RMB10,955 per sq.m. in 2021 to approximately RMB9,608 per sq.m. in 2022[93] - The sales amount of national commodity houses in 2022 was approximately RMB13,330.8 billion, a decrease of 26.7% year-on-year, with residential housing sales declining by 28.3%[55] - The sales area of national commodity houses was approximately 1.36 billion sq.m., a decline of 24.3% year-on-year, including a 26.8% decrease in residential housing sales area[55] Assets and Liabilities - Total assets as of 31 December 2022 were RMB193.964 billion, a decrease of 0.5% from RMB195.013 billion in 2021[20] - Cash and bank balances decreased by 24.9% to RMB15.016 billion from RMB20.006 billion in 2021[20] - Total equity declined by 14.2% to RMB36.625 billion from RMB42.707 billion in 2021[20] - The Group's cash position as of December 31, 2022, included approximately RMB 14,855,496,000 in Renminbi, RMB 77,676,000 in Hong Kong dollars, and RMB 82,886,000 in US dollars[124] - Total borrowings decreased from approximately RMB 50,198,334,000 in 2021 to approximately RMB 44,157,148,000 in 2022, with bank and other borrowings also showing a decline[134] - The share of profits and losses of joint ventures and associates shifted from profits of approximately RMB 640,636,000 in 2021 to losses of approximately RMB 454,266,000 in 2022, mainly due to operating losses and fair value losses of investment properties[114] - As of December 31, 2022, the net gearing ratio was approximately 79.6%, an increase from 70.7% in 2021[137][140] Strategic Initiatives - The Company aims to deepen its strategic plan of "One Body Two Wings" to secure a leading position in the regional market[4] - Future strategies include more proactive and prudent development approaches to enhance competitiveness in the PRC property market[4] - The Group plans to upgrade its "One Body Two Wings" strategy to focus on core cities and regions where it has a competitive advantage[41] - The Group plans to focus on core cities and advantageous regions to enhance market penetration and customer engagement[43] - The company aims to develop an asset management model to reduce reliance on financing and improve coordination with property development[46] Customer Engagement and Satisfaction - The Company is focused on creating smart living solutions to improve customer satisfaction and happiness[3] - China SCE emphasizes customer satisfaction and has conducted residential customer satisfaction surveys to gather feedback and improve project quality and services[172] - Customer satisfaction is highly prioritized, with various measures taken to collect feedback and improve service quality[174] - The Group maintains close communication with suppliers to ensure the quality of its properties and responds properly to customer complaints[172] Market Presence and Development - The Company operates in 60 cities across China, including major cities like Beijing, Shanghai, and Chengdu[3] - The Group held 53 investment properties with a total gross floor area of approximately 4.01 million sq.m. as of December 31, 2022[72] - The Group's investment properties are distributed across 26 cities, including major locations such as Beijing, Shanghai, and Hangzhou[74] - The Group had over 120 projects for sale in more than 50 cities, primarily in second-tier cities and high-potential third- and fourth-tier cities[60] Financial Management - The Group signed strategic cooperation agreements with several commercial banks, securing over RMB43 billion in loans for various financing services[39] - The Group issued offshore US$150 million senior notes with a coupon rate of 5.95% due in September 2024, and successfully issued RMB1.5 billion medium-term notes with a coupon rate of 4.1% in January 2023[34] - The Group provided financial guarantees for mortgage facilities amounting to RMB 25,482,461,000 as of December 31, 2022, compared to RMB 21,647,437,000 in 2021[144] - The Group's share of financial guarantees for joint ventures and associates was RMB 4,433,874,000 in 2022, down from RMB 5,437,686,000 in 2021[146] Operational Efficiency - Administrative expenses decreased by approximately 13.4% from approximately RMB 2,056,594,000 in 2021 to approximately RMB 1,781,374,000 in 2022, mainly due to strict cost control and streamlined workforce[111] - Selling and marketing expenses increased by approximately 19.2% from approximately RMB 1,039,303,000 in 2021 to approximately RMB 1,239,106,000 in 2022, primarily due to increased promotional efforts during the pandemic[110] - Finance costs rose by approximately 11.5% from approximately RMB 825,919,000 in 2021 to approximately RMB 921,124,000 in 2022, with total interest expenses slightly increasing from approximately RMB 3,356,562,000 to approximately RMB 3,380,997,000[113] Future Outlook - Future outlook remains positive with a strong pipeline of projects across various economic zones, indicating robust growth potential[191] - The company provided an optimistic outlook for the next quarter, projecting a revenue growth of 20%[194] - The company is expanding its market presence in the Guangdong — Hong Kong — Macao Greater Bay Area, targeting a 30% market share by 2025[194] - The company is committed to sustainability initiatives, aiming to reduce carbon emissions by 25% over the next five years through innovative building practices[197]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) This section presents a concise overview of the company's key financial performance indicators and financial position | Metric | Amount (RMB) | | :--- | :--- | | Contract Sales Amount | 59.02 billion | | Revenue | 26.71 billion | | Gross Profit Margin | 16.6% | | Profit Attributable to Owners of the Parent | 24.54 million | | Cash and Bank Balances (Dec 31, 2022) | 15.02 billion | | Net Gearing Ratio (Dec 31, 2022) | 79.6% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section details the company's financial performance, including profit or loss and other comprehensive income for the year [Profit/(Loss) for the Year](index=2&type=section&id=Profit%2F(Loss)%20for%20the%20Year) The Group recorded a **RMB 200.69 million** loss for 2022, a significant decline from 2021's profit, driven by reduced revenue and lower gross margin | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 26,705,112 | 37,737,447 | -29.2% | | Cost of Sales | (22,284,779) | (29,563,825) | -24.7% | | Gross Profit | 4,420,333 | 8,173,622 | -45.9% | | Profit Before Tax | 819,428 | 5,735,925 | -85.7% | | Tax Expense | (1,020,120) | (2,067,114) | -50.7% | | Profit/(Loss) for the Year | (200,692) | 3,668,811 | -105.5% | - Share of profits/(losses) of joint ventures and associates changed from a profit of **RMB 640.64 million** in 2021 to a loss of **RMB 454.27 million** in 2022[5](index=5&type=chunk)[93](index=93&type=chunk) [Other Comprehensive Income/(Loss)](index=3&type=section&id=Other%20Comprehensive%20Income%2F(Loss)) In 2022, the Group recorded an other comprehensive loss of **RMB 1.65 billion**, primarily due to exchange differences on translation of overseas operations | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | | Share of Other Comprehensive Income/(Loss) of Joint Ventures | 7,865 | (3,368) | | Exchange Differences on Translation of Overseas Operations | (1,630,309) | 494,563 | | Other Comprehensive Income/(Loss) for the Year | (1,653,816) | 491,221 | | Total Comprehensive Income/(Loss) for the Year | (1,854,508) | 4,160,032 | [Profit Attributable to Owners of the Parent and Earnings Per Share](index=4&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Parent%20and%20Earnings%20Per%20Share) Profit attributable to owners of the parent significantly decreased by **99.2%** to **RMB 24.54 million**, leading to basic earnings per share of **RMB 0.6 cents** | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | | Profit Attributable to Owners of the Parent | 24,544 | 3,070,022 | | Profit/(Loss) Attributable to Non-controlling Interests | (225,236) | 598,789 | | Basic Earnings Per Share Attributable to Ordinary Equity Holders of the Parent | RMB 0.6 cents | RMB 72.7 cents | | Diluted Earnings Per Share Attributable to Ordinary Equity Holders of the Parent | RMB 0.6 cents | RMB 72.2 cents | [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section provides an overview of the company's assets, liabilities, and equity as of the reporting date [Assets Overview](index=5&type=section&id=Assets%20Overview) Total non-current assets increased to **RMB 60.78 billion** as of December 31, 2022, driven by investment properties and properties under development, while current assets slightly decreased | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | | Total Non-current Assets | 60,780,612 | 56,673,596 | | Total Current Assets | 133,183,456 | 138,339,390 | | Investment Properties | 39,216,242 | 34,050,031 | | Properties Under Development (Non-current) | 10,169,792 | 9,437,268 | | Properties Under Development (Current) | 92,717,968 | 90,011,728 | | Cash and Cash Equivalents | 9,118,953 | 15,677,587 | [Liabilities and Equity Overview](index=6&type=section&id=Liabilities%20and%20Equity%20Overview) Increased current liabilities led to a significant drop in net current assets, while non-current liabilities decreased and total equity declined due to reduced parent-attributable reserves | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | | Total Current Liabilities | 123,650,889 | 112,859,707 | | Total Non-current Liabilities | 33,687,938 | 39,446,168 | | Net Current Assets | 9,532,567 | 25,479,683 | | Total Equity | 36,625,241 | 42,707,111 | | Equity Attributable to Owners of the Parent | 19,710,689 | 21,786,360 | | Non-controlling Interests | 16,914,552 | 20,920,751 | [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the company's accounting policies and financial statement items [Company Information and Basis of Preparation](index=7&type=section&id=Company%20Information%20and%20Basis%20of%20Preparation) Incorporated in the Cayman Islands, the company primarily engages in property development, investment, and management in China, with financial statements prepared under HKFRS and presented in RMB - The Group primarily engages in property development, property investment, property management, land development, and project management in China[17](index=17&type=chunk) - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and presented in RMB[18](index=18&type=chunk) [Changes in Accounting Policies and Disclosures](index=8&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) The Group adopted several revised HKFRS standards, including HKFRS 3, HKFRS 16, HKAS 16, HKAS 37, and HKFRS 9 improvements, none materially impacting financial position or performance - The adoption of HKFRS 3 (Revised) replaced the previous framework with the 2018 Conceptual Framework for Financial Reporting, having no impact on the Group's financial position and performance[24](index=24&type=chunk) - The adoption of HKFRS 16 (Revised) extended the practical expedient for COVID-19 related rent concessions by 12 months, but as the Group did not receive such concessions, there was no impact[26](index=26&type=chunk) - The adoption of HKAS 16 (Revised) prohibits deducting proceeds from selling items produced before an asset is available for use from the cost of property, plant, and equipment, with no impact on the Group[27](index=27&type=chunk) - The adoption of HKAS 37 (Revised) clarified the costs of fulfilling an onerous contract, having no impact on the Group[28](index=28&type=chunk) - The adoption of HKFRS 9 (Revised) clarified the fees included when assessing whether the terms of a financial liability are substantially different, having no impact on the Group[29](index=29&type=chunk) [Operating Segment Information](index=10&type=section&id=Operating%20Segment%20Information) The Group primarily operates in property development and investment in China, consolidating smaller segments, with all revenue and most non-current assets originating domestically - Property management, land development, and project management segments are consolidated with property development and investment segments, as their revenue, results, and assets are less than **10%** of the Group's consolidated revenue, profit, and assets[33](index=33&type=chunk) - The Group's revenue from external customers is solely derived from its operations in China, where the vast majority of its non-current assets are also located[34](index=34&type=chunk) [Revenue, Other Income and Gains](index=10&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) Total revenue in 2022 was **RMB 26.71 billion**, mainly from property sales which significantly decreased, while other income and gains totaled **RMB 820.39 million**, boosted by subsidiary disposals | Source of Revenue | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Property Sales | 24,739,180 | 36,154,258 | | Property Management Fees | 989,751 | 895,682 | | Land Development Income | 201,893 | – | | Project Management Income | 260,618 | 234,225 | | Rental Income | 513,670 | 453,282 | | **Total Revenue** | **26,705,112** | **37,737,447** | | **Total Other Income and Gains** | **820,387** | **769,663** | | Of which: Gain on Disposal of Subsidiaries | 415,139 | – | [Finance Costs](index=11&type=section&id=Finance%20Costs) Total finance costs in 2022 increased to **RMB 921.12 million** from 2021, primarily due to certain funds not being capitalized | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | | Interest on Bank and Other Borrowings, Senior Notes and Domestic Bonds | 3,357,323 | 3,327,947 | | Interest on Lease Liabilities | 20,162 | 25,512 | | Accretion of Discount on Provision for Major Overhaul | 3,512 | 3,103 | | Less: Interest Capitalized | (2,459,873) | (2,530,643) | | **Total Finance Costs** | **921,124** | **825,919** | [Profit Before Tax](index=12&type=section&id=Profit%20Before%20Tax) Profit before tax is stated after deducting various expenses, including cost of properties sold, employee benefit expenses, and a significant increase in property impairment provisions | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | | Cost of Properties Sold | 21,173,548 | 28,805,002 | | Employee Benefit Expenses (Net) | 810,269 | 1,242,026 | | Impairment of Completed Properties Held for Sale | 495,045 | 234,884 | | Impairment of Properties Under Development | 494,930 | 342,910 | [Tax Expense](index=13&type=section&id=Tax%20Expense) Tax expense in 2022 significantly decreased by **50.7%** to **RMB 1.02 billion**, primarily due to reduced property sales revenue and lower gross profit margin leading to decreased tax provisions | Metric | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | | PRC Enterprise Income Tax | 1,217,326 | 2,125,003 | | PRC Land Appreciation Tax | 99,356 | 364,116 | | Deferred Tax Credited for the Year | (296,562) | (248,897) | | **Total Tax Expense for the Year** | **1,020,120** | **2,067,114** | [Dividends](index=13&type=section&id=Dividends) The Board recommended no final dividend for 2022, contrasting with interim and final dividends declared in 2021 - The Directors recommended no final dividend for the year ended December 31, 2022[48](index=48&type=chunk) | Dividend Type | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Interim Dividend | – | 421,436 | | Proposed Final Dividend | – | 206,665 | | **Total** | **–** | **628,101** | [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=13&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) Both basic and diluted earnings per share were **RMB 0.6 cents** in 2022, a significant decrease from 2021, primarily due to a substantial reduction in profit attributable to owners of the parent | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Parent (RMB thousand) | 24,544 | 3,070,022 | | Weighted Average Number of Ordinary Shares for Basic EPS Calculation | 4,222,437,098 | 4,222,133,380 | | Weighted Average Number of Ordinary Shares for Diluted EPS Calculation | 4,222,437,098 | 4,249,644,840 | - For the year ended December 31, 2022, unexercised share options had an anti-dilutive effect on the presented basic earnings per share, thus no adjustment was made[49](index=49&type=chunk) [Trade Receivables](index=14&type=section&id=Trade%20Receivables) Trade receivables, primarily from property sales, leasing, and property management services, totaled **RMB 466.35 million** at the end of 2022, with most being current - The Group's trade receivables arise from the sale of properties, leasing of investment properties, and provision of property management services[54](index=54&type=chunk) | Aging | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Current to 90 days | 441,486 | 484,234 | | 91 to 180 days | 15,320 | 38,079 | | 181 to 365 days | 2,933 | 6,247 | | Over 365 days | 6,611 | 9,401 | | **Total** | **466,350** | **537,961** | [Trade Payables and Bills](index=15&type=section&id=Trade%20Payables%20and%20Bills) Total trade payables and bills amounted to **RMB 10.82 billion** at the end of 2022, a decrease from 2021, with most due within one year - Trade payables and bills are unsecured, interest-free, and generally settled according to construction progress[57](index=57&type=chunk) | Aging | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 10,409,743 | 14,440,800 | | Over one year | 411,791 | 341,500 | | **Total** | **10,821,534** | **14,782,300** | [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the company's operational and financial performance, market conditions, and future outlook [Market Review](index=16&type=section&id=Market%20Review) China's real estate market faced unprecedented challenges in 2022, with national commercial property sales value down **26.7%** and area down **24.3%**, despite government support, market confidence remains fragile - In 2022, national commercial property sales value was approximately **RMB 13.33 trillion**, a year-on-year decrease of **26.7%**, with residential sales value decreasing by **28.3%**[59](index=59&type=chunk) - National commercial property sales area was approximately **1.36 billion square meters**, a year-on-year decrease of **24.3%**, with residential sales area decreasing by **26.8%**[59](index=59&type=chunk) - The government introduced measures to support private real estate enterprises in bond refinancing and debt extensions, along with easing purchase restrictions, lowering down payments, and reducing mortgage rates to boost demand[59](index=59&type=chunk) [Business Review](index=17&type=section&id=Business%20Review) The Group's contract sales value and area significantly decreased in 2022, but its investment property portfolio expanded, with sufficient land reserves for **2-3 years** of development, and land acquisitions were paused for liquidity [Contract Sales](index=17&type=section&id=Contract%20Sales) In 2022, the Group's contract sales were approximately **RMB 59.02 billion**, a **43.5%** year-on-year decrease, with sales area of **4.91 million square meters** down **34.2%**, led by the Yangtze River Delta Economic Zone | Metric | 2022 | | :--- | :--- | | Contract Sales Amount | Approx. RMB 59.02 billion | | Contract Sales Area | Approx. 4.91 million square meters | | Average Property Sales Price | RMB 12,016 per square meter | | Year-on-Year Decrease (Amount) | Approx. 43.5% | | Year-on-Year Decrease (Area) | Approx. 34.2% | | Region | Contract Sales Amount (RMB million) | Share (%) | | :--- | :--- | :--- | | Yangtze River Delta Economic Zone | 24,609 | 41.7 | | West Coast of Taiwan Straits Economic Zone | 11,036 | 18.7 | | Bohai Rim Economic Zone | 11,001 | 18.7 | | Central and Western Regions | 7,220 | 12.2 | | Guangdong-Hong Kong-Macao Greater Bay Area | 5,157 | 8.7 | | **Total** | **59,023** | **100.0** | | City Tier | Contract Sales Amount (RMB million) | Share (%) | | :--- | :--- | :--- | | Tier 1 Cities | 9,219 | 15.6 | | Tier 2 Cities | 31,103 | 52.7 | | Tier 3 and 4 Cities | 18,701 | 31.7 | | **Total** | **59,023** | **100.0** | [Investment Properties](index=19&type=section&id=Investment%20Properties) As of year-end 2022, the Group held **53** investment properties with a total GFA of **4.01 million square meters**, **27** of which were operational, including shopping malls, long-term rental apartments, and offices - The Group, together with its joint ventures and associates, held a total of **53** investment properties with a total GFA of approximately **4.01 million square meters** (attributable GFA of approximately **3.66 million square meters**)[72](index=72&type=chunk) - Of these, **27** investment properties have commenced operations, with business formats covering shopping malls, long-term rental apartments, office buildings, commercial streets, and retail shops[72](index=72&type=chunk) [Land Bank](index=20&type=section&id=Land%20Bank) The Group paused land acquisitions in 2022 for liquidity, with a year-end land bank of **33.87 million square meters** GFA, expected to support **2-3 years** of future development - The Group paused land acquisitions in 2022 to maintain ample liquidity[75](index=75&type=chunk) - As of December 31, 2022, the total planned GFA of the land bank was **33.87 million square meters** (the Group's attributable share was **26.68 million square meters**), distributed across **60** cities[75](index=75&type=chunk) - The existing land bank is expected to support the Group's development for the next **two to three years**[75](index=75&type=chunk) | Region | Share of Total Land Bank Cost (%) | | :--- | :--- | | Yangtze River Delta Economic Zone | 36.2 | | Bohai Rim Economic Zone | 20.8 | | West Coast of Taiwan Straits Economic Zone | 22.5 | | Guangdong-Hong Kong-Macao Greater Bay Area | 8.4 | | Central and Western Regions | 12.1 | | **Total** | **100.0** | | City Tier | Share of Total Land Bank Cost (%) | | :--- | :--- | | Tier 1 Cities | 12.5 | | Tier 2 Cities | 55.9 | | Tier 3 and 4 Cities | 31.6 | | **Total** | **100.0** | [Outlook](index=20&type=section&id=Outlook) The Group plans strategic iterations, focusing on core cities and advantageous regions, deepening market, customer, and product engagement, enhancing operational safety, and building a cash flow-driven model with asset management to reduce financing dependence - Future strategic iterations will focus more on core cities and advantageous regions, deepening engagement in markets, with customers, and on products[76](index=76&type=chunk) - The industry is anticipated to enter an era where customer value creation and product excellence are paramount, leading to increased focus on customer needs and product R&D[76](index=76&type=chunk) - Enhancing operational safety margins, building a business model driven by cash flow and operational quality, maintaining robust financial discipline, and promoting sustainable development[78](index=78&type=chunk) - Regarding the second business curve, the Group will seize development opportunities, focus on developing an asset management model to reduce financing dependence, and expand synergies with real estate[78](index=78&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) This section provides a detailed analysis of the company's financial performance, including revenue, profitability, and key expense items [Revenue](index=21&type=section&id=Revenue) Total revenue in 2022 decreased by **29.2%** to **RMB 26.71 billion**, mainly due to lower property sales, despite increases in property management, rental, and project management income - Full-year revenue decreased by approximately **29.2%** from **RMB 37.74 billion** in 2021 to **RMB 26.71 billion** in 2022, primarily due to reduced property sales revenue[79](index=79&type=chunk) | Revenue Type | 2022 (RMB thousand) | 2021 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Property Sales Revenue | 24,739,180 | 36,154,258 | -31.6% | | Property Management Fees | 989,751 | 895,682 | +10.5% | | Rental Income | 513,670 | 453,282 | +13.3% | | Land Development Income | 201,893 | – | N/A | | Project Management Income | 260,618 | 234,225 | +11.3% | [Gross Profit](index=22&type=section&id=Gross%20Profit) Gross profit significantly decreased by **45.9%** to **RMB 4.42 billion** in 2022, with the margin dropping from **21.7%** to **16.6%**, primarily due to lower property prices and increased impairment provisions - Gross profit significantly decreased by approximately **45.9%** from **RMB 8.17 billion** in 2021 to **RMB 4.42 billion** in 2022[88](index=88&type=chunk) - Gross profit margin decreased from approximately **21.7%** in 2021 to approximately **16.6%** in 2022, primarily due to lower property selling prices and increased impairment provisions for property projects[88](index=88&type=chunk) [Selling and Marketing Expenses](index=23&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses increased by **19.2%** to **RMB 1.24 billion** in 2022, mainly due to intensified promotional efforts during the pandemic - Selling and marketing expenses increased by approximately **19.2%** from **RMB 1.04 billion** in 2021 to **RMB 1.24 billion** in 2022[90](index=90&type=chunk) - This increase was primarily attributable to intensified promotional efforts during the pandemic[90](index=90&type=chunk) [Administrative Expenses](index=23&type=section&id=Administrative%20Expenses) Administrative expenses decreased by **13.4%** to **RMB 1.78 billion** in 2022, primarily benefiting from stringent cost control and streamlined human resources structure - Administrative expenses decreased by approximately **13.4%** from **RMB 2.06 billion** in 2021 to **RMB 1.78 billion** in 2022[91](index=91&type=chunk) - The decrease in administrative expenses was primarily due to the net effect of implementing stringent cost control and streamlining the human resources structure[91](index=91&type=chunk) [Finance Costs](index=23&type=section&id=Finance%20Costs_Financial%20Review) Finance costs increased by **11.5%** to **RMB 921.12 million** in 2022, with a slight increase in total interest despite reduced borrowings, due to rising funding costs - Finance costs increased by approximately **11.5%** from **RMB 825.92 million** in 2021 to **RMB 921.12 million** in 2022[87](index=87&type=chunk) - The finance costs were primarily incurred because certain funds were not used for project development, thus these financing costs could not be capitalized[87](index=87&type=chunk) [Share of Profits and Losses of Joint Ventures and Associates](index=23&type=section&id=Share%20of%20Profits%20and%20Losses%20of%20Joint%20Ventures%20and%20Associates) Share of profits from joint ventures and associates shifted from a 2021 profit to a **RMB 454.27 million** loss in 2022, mainly due to operating losses and investment property impairment - Share of profits and losses of joint ventures and associates changed from a profit of approximately **RMB 640.64 million** in 2021 to a loss of approximately **RMB 454.27 million** in 2022[93](index=93&type=chunk) - This loss was primarily due to operating losses and fair value impairment of investment properties recorded by certain joint ventures during the year[93](index=93&type=chunk) [Tax Expense](index=24&type=section&id=Tax%20Expense_Financial%20Review) Tax expense significantly decreased by **50.7%** to **RMB 1.02 billion** in 2022, primarily due to reduced property sales revenue and lower gross profit margin leading to decreased tax provisions - Tax expense significantly decreased by approximately **50.7%** from **RMB 2.07 billion** in 2021 to **RMB 1.02 billion** in 2022[95](index=95&type=chunk) - The decrease was primarily due to reduced property sales revenue and a decline in gross profit margin in 2022, leading to lower provisions for land appreciation tax and enterprise income tax[95](index=95&type=chunk) [Profit Attributable to Owners of the Parent](index=24&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Parent_Financial%20Review) Profit attributable to owners of the parent significantly decreased by **99.2%** to **RMB 24.54 million** in 2022, with basic earnings per share of **RMB 0.6 cents** - Profit attributable to owners of the parent significantly decreased by approximately **99.2%** from **RMB 3.07 billion** in 2021 to **RMB 24.54 million** in 2022[96](index=96&type=chunk) - Basic earnings per share for 2022 was approximately **RMB 0.6 cents**[96](index=96&type=chunk) [Liquidity, Financial and Capital Resources](index=24&type=section&id=Liquidity%2C%20Financial%20and%20Capital%20Resources) This section reviews the company's cash position, borrowings, gearing ratio, and exposure to foreign exchange risk [Cash Position](index=24&type=section&id=Cash%20Position) As of year-end 2022, the Group's cash and bank balances were **RMB 15.02 billion**, a decrease from 2021, with restricted cash at **RMB 3.87 billion** and pledged deposits at **RMB 2.03 billion** | Currency | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | RMB | 14,855,496 | 19,221,382 | | HKD | 77,676 | 711,128 | | USD | 82,886 | 73,359 | | **Cash and Bank Balances** | **15,016,058** | **20,005,869** | - As of December 31, 2022, restricted cash was approximately **RMB 3.87 billion**, and pledged deposits were approximately **RMB 2.03 billion**[97](index=97&type=chunk) [Borrowings](index=25&type=section&id=Borrowings) The Group's total borrowings amounted to **RMB 44.16 billion**, a decrease from 2021, with the majority denominated in RMB | Borrowing Type | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | Bank and Other Borrowings | 26,995,112 | 29,522,722 | | Senior Notes and Domestic Bonds | 17,162,036 | 20,675,612 | | **Total** | **44,157,148** | **50,198,334** | | Borrowing Currency | 2022 (RMB thousand) | 2021 (RMB thousand) | | :--- | :--- | :--- | | RMB | 21,655,224 | 23,987,110 | | HKD | 1,127,006 | 1,360,565 | | USD | 4,212,882 | 4,175,047 | | **Total** | **26,995,112** | **29,522,722** | [Gearing Ratio](index=26&type=section&id=Gearing%20Ratio) As of year-end 2022, the net gearing ratio was approximately **79.6%**, an increase from **70.7%** in 2021 - As of December 31, 2022, the net gearing ratio was approximately **79.6%** (December 31, 2021: approximately **70.7%**)[101](index=101&type=chunk) [Foreign Exchange Fluctuation Risk](index=26&type=section&id=Foreign%20Exchange%20Fluctuation%20Risk) Most operations are RMB-denominated, with exchange rate fluctuations having no significant impact on results, but foreign currency risk is closely monitored, with no hedging arrangements currently in place - The majority of the Group's revenue and operating expenses, as well as most assets and liabilities, are denominated in RMB[102](index=102&type=chunk) - Fluctuations in the RMB exchange rate against other foreign currencies are not expected to have a material adverse impact on the Group's operating results[102](index=102&type=chunk) - As of December 31, 2022, the Group had no foreign currency hedging arrangements in place and will continue to closely monitor foreign currency exchange rate fluctuation risk[102](index=102&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) This section covers corporate governance, shareholder matters, auditor information, and securities trading policies [Annual General Meeting and Dividends](index=26&type=section&id=Annual%20General%20Meeting%20and%20Dividends) The AGM will be held on May 30, 2023, with no final dividend proposed for 2022, and share transfer registration suspended from May 24-30, 2023, to determine voting eligibility - The Company's upcoming Annual General Meeting will be held on Tuesday, May 30, 2023[103](index=103&type=chunk) - The Board recommended no final dividend for the year ended December 31, 2022[105](index=105&type=chunk) - To determine shareholders entitled to attend and vote at the Annual General Meeting, share transfer registration will be suspended from May 24 to May 30, 2023 (both dates inclusive)[106](index=106&type=chunk) [Audit Committee and Auditor's Scope of Work](index=27&type=section&id=Audit%20Committee%20and%20Auditor%27s%20Scope%20of%20Work) The Audit Committee, comprising three independent non-executive directors, reviewed accounting policies and financial statements, with external auditor Ernst & Young verifying the announcement's financial data - The Audit Committee comprises three independent non-executive directors, with Mr. Ding Lianghui as Chairman and Mr. Lu Hongde and Mr. Dai Yiyi as members[107](index=107&type=chunk) - The Audit Committee has reviewed the Group's adopted accounting policies, consolidated financial statements, and the annual results announcement[107](index=107&type=chunk) - The financial data contained in this announcement has been agreed by the external auditor, Ernst & Young, to the amounts set out in the Group's draft consolidated financial statements for the year[109](index=109&type=chunk) [Standard Code for Securities Transactions by Directors](index=28&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Standard Code for Securities Transactions by Directors as set out in Appendix 10 of the Listing Rules, with all directors confirming strict compliance during the review year - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all Directors have confirmed strict compliance throughout the review year[110](index=110&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=28&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) The company repurchased and cancelled **USD 154 million** in senior notes in early 2022, representing **30.8%** of the original issuance, with no other listed securities transactions during the year - From January 4 to February 28, 2022, the Company repurchased and cancelled senior notes with a total principal amount of **USD 154 million** out of the **USD 500 million 5.875%** senior notes due March 10, 2022[111](index=111&type=chunk) - The repurchased notes accounted for **30.8%** of the original issuance amount[111](index=111&type=chunk) - Save as disclosed above, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the year[111](index=111&type=chunk) [Corporate Governance](index=29&type=section&id=Corporate%20Governance) The company complied with the Corporate Governance Code in 2022, with the Chairman and CEO roles held by one individual, which the Board believes enhances business plan execution efficiency - The Company and the Board have complied with the code provisions of the Corporate Governance Code throughout 2022[112](index=112&type=chunk) - The roles of Chairman and Chief Executive Officer are performed by Mr. Huang Chaoyang, which the Board believes facilitates efficient and consistent execution of the company's business plans and decisions[114](index=114&type=chunk) [Publication of Information and Board Composition](index=29&type=section&id=Publication%20of%20Information%20and%20Board%20Composition) This annual results announcement has been published on the HKEX and company websites, with the Board comprising five executive directors and three independent non-executive directors - The Company's annual results announcement for the year ended December 31, 2022, has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.sce-re.com)[115](index=115&type=chunk) - The Board comprises five executive directors (Mr. Huang Chaoyang, Mr. Chen Yuanlai, Mr. Zheng Xiaole, Mr. Huang Youquan, and Mr. Huang Lun) and three independent non-executive directors (Mr. Ding Lianghui, Mr. Lu Hongde, and Mr. Dai Yiyi)[116](index=116&type=chunk)

Company Overview - The Company was recognized as one of the "2022 Best 30 of China Real Estate Listed Companies with Comprehensive Strengths" and "2022 TOP 50 of China Real Estate Developers" in 2022[4]. - China SCE aims to deepen its strategic plan of "One Body Two Wings" to secure a leading regional position through proactive and prudent development strategies[5]. - The Company is headquartered in Shanghai and implements key strategies in several economic zones, including the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area[3]. - China SCE's mission is to "Create Smart Living to Help Seize Happiness," reflecting its commitment to innovation in property development[4]. Property Development and Sales - As of June 30, 2022, the Group owned a land bank with an aggregate planned gross floor area of approximately 36.65 million square meters, sufficient for development over the next two to three years[5]. - The Group's property projects are distributed across 63 cities, including major urban centers such as Beijing, Shanghai, and Chengdu[4]. - The Company focuses on various property types, including high-rise residential buildings, offices, shopping malls, and long-term rental apartments[4]. - The Group had over 120 projects for sale in over 40 cities, focusing on second-tier cities and high-potential third- and fourth-tier cities[32]. - Contracted sales amount for the first half of 2022 was approximately RMB 32.581 billion, representing a year-on-year decrease of 44.8%[31]. - The average selling price of properties during the period was RMB 12,600 per sq.m[31]. - The total contracted sales amount reached RMB 32.581 billion, with the Yangtze River Delta Economic Zone contributing RMB 11.854 billion, accounting for 36.4% of total contracted sales[40][43]. - The average selling price of properties was approximately RMB 9,408 per sq.m.[48]. - Contracted sales in second-tier cities amounted to RMB 16.335 billion, representing 50.1% of total contracted sales[43]. - The Group delivered property area of approximately 1.51 million sq.m., a decrease of 30.4% year-on-year[48]. Financial Performance - Revenue for the first half of 2022 decreased by 24.5% to RMB 15,385.4 million compared to RMB 20,386.6 million in the same period of 2021[22]. - Gross profit fell by 33.1% to RMB 3,418.2 million, down from RMB 5,109.8 million year-on-year[22]. - Profit for the period decreased by 43.1% to RMB 1,543.2 million, compared to RMB 2,710.9 million in the previous year[22]. - The Group recognized property sales income of approximately RMB 14.203 billion, representing a year-on-year decrease of 27.9%[48]. - The sales amount of national commodity housing in the first half of 2022 was approximately RMB 6,607.2 billion, a decrease of 28.9% year-on-year[27]. - The sales area of national commodity housing was approximately 689 million sq.m., down 22.2% compared to the same period last year[27]. - The Group's revenue decreased by 24.5% from approximately RMB20,386,569,000 in the first half of 2021 to approximately RMB15,385,385,000 in the first half of 2022, primarily due to a decrease in property sales income[90]. - Income from property sales decreased by 27.9% from approximately RMB19,708,037,000 in the first half of 2021 to approximately RMB14,203,127,000 in the first half of 2022, with delivered property area decreasing by 30.4%[90]. Cost and Expenses - Selling and marketing expenses decreased by 6.1% from approximately RMB 566,028,000 in the first half of 2021 to approximately RMB 531,629,000 in the first half of 2022, attributed to a decrease in the number of projects for sale[96]. - Administrative expenses decreased by 28.3% from approximately RMB 771,500,000 in the first half of 2021 to approximately RMB 553,489,000 in the first half of 2022, mainly due to stringent cost control measures[97]. - Finance costs increased significantly by 61.6% from approximately RMB 253,481,000 in the first half of 2021 to approximately RMB 409,751,000 in the first half of 2022, with total interest expense rising by 7.5% from approximately RMB 1,681,613,000 to approximately RMB 1,808,033,000[107]. Assets and Liabilities - Total assets as of June 30, 2022, were RMB 193,732.7 million, a decrease of 0.7% from RMB 195,013.0 million at the end of 2021[23]. - Total equity decreased by 6.4% to RMB 39,962.1 million from RMB 42,707.1 million[23]. - The net gearing ratio of the Group was 79.8% as of June 30, 2022, with a coverage ratio of unrestricted cash to short-term debt at 1.07 times and a liability to asset ratio of 68.3%[67]. - The Group's total assets pledged to secure borrowings increased to RMB 46,301,497 as of June 30, 2022, from RMB 36,023,305 as of December 31, 2021, a growth of approximately 28.6%[171]. - The Group's investment properties pledged to secure borrowings rose to RMB 14,936,748 as of June 30, 2022, compared to RMB 10,714,425 as of December 31, 2021, an increase of about 39.5%[171]. Future Outlook - The Group expects the domestic economy to bottom out in the second half of 2022, with anticipated improvements in property purchaser confidence and transaction volumes[80]. - The Group's future strategy will focus on "One Body Two Wings," emphasizing residential development in first-tier and core second-tier cities and enhancing commercial management through the "SCE Funworld" brand[82]. Employee and Operational Strategy - The total employment cost for the Group was approximately RMB 575,061,000 for the six months ended June 30, 2022, compared to approximately RMB 735,539,000 for the same period in 2021, indicating a reduction of about 21.8%[190]. - The Group employed a total of 8,614 employees as of June 30, 2022, down from 9,770 employees as of December 31, 2021, representing a decrease of approximately 11.8%[190]. - There were no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period, indicating a stable operational strategy[191]. - The Group had not authorized any plans for material investments or additions of capital assets as of June 30, 2022, suggesting a cautious approach to future investments[192].