Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 99.7 million, a decrease of 84.5% compared to RMB 641.6 million in 2023[3] - The gross loss for 2024 was RMB 17.1 million, representing an improvement of 89.6% from a gross loss of RMB 164.5 million in 2023[3] - Loss attributable to equity shareholders for 2024 was RMB 113.8 million, a reduction of 76.4% from RMB 482.3 million in 2023[3] - Basic and diluted loss per share for 2024 was RMB 15.18, down 76.4% from RMB 64.30 in 2023[3] - Total comprehensive loss for the year was RMB 148.4 million, compared to RMB 610.1 million in 2023, indicating a significant reduction[5] - The company reported a pre-tax loss of RMB 20,640,000 for 2024, compared to a pre-tax loss of RMB 80,987,000 in 2023, indicating an improvement[33] - The company recorded a total of RMB 100,424,000 in loans to third parties, including accrued interest, as of December 31, 2024[49] - The company recorded a loss attributable to equity shareholders of approximately RMB 113.8 million for the fiscal year 2024, a reduction of about 76.4% compared to the previous fiscal year[55] Revenue Sources - For the year ending December 31, 2024, property sales revenue was RMB 94,374,000, a significant decrease of 85.2% compared to RMB 637,108,000 in 2023[26] - Total rental income for 2024 was RMB 5,336,000, an increase of 17.8% from RMB 4,526,000 in 2023[26] - Revenue from property sales for the fiscal year 2024 was approximately RMB 94.4 million, a decrease of about 85.2% compared to RMB 637.1 million in fiscal year 2023[63] - Rental income from investment properties and inventory for fiscal year 2024 totaled approximately RMB 5.3 million, an increase of about 17.8% from RMB 4.5 million in fiscal year 2023[64] Assets and Liabilities - Total assets decreased to RMB 1,441.2 million in 2024 from RMB 1,672.4 million in 2023[6] - Current liabilities decreased to RMB 735.6 million in 2024 from RMB 819.3 million in 2023[6] - The net asset value for 2024 was RMB 701.5 million, down from RMB 849.9 million in 2023[7] - The total specified non-current assets decreased to RMB 290,864,000 in 2024 from RMB 410,349,000 in 2023, reflecting a decline of 29.0%[30] - The company's financial liabilities measured at amortized cost were RMB 429.8 million in 2024, down from RMB 447.2 million in 2023[14] Inventory and Sales - As of December 31, 2024, the total inventory amounted to RMB 566,369,000, a decrease from RMB 660,304,000 in 2023, with completed properties for sale valued at RMB 492,524,000[43] - The cost of sold inventory for the year was RMB 116,839,000, significantly lower than RMB 806,135,000 in 2023, indicating a reduction in inventory write-downs[44] - Contract liabilities related to property sales decreased to RMB 48,539,000 from RMB 78,161,000 in 2023, reflecting a reduction in prepayments received from customers[48] Corporate Governance and Compliance - The company adhered to the corporate governance code and maintained high standards of corporate governance throughout the fiscal year 2024[96] - The audit committee, consisting of three independent non-executive directors, reviewed and approved the consolidated financial statements for the fiscal year 2024[101] - The company's auditor, KPMG, confirmed that the preliminary announcement of the consolidated financial position and results for the fiscal year 2024 matched the audited financial statements[102] Future Outlook and Strategy - The company anticipates that the real estate market will gradually stabilize and operate moderately, with a focus on high-quality development[56] - The government is expected to continue implementing policies to stabilize the real estate market, including reducing restrictive measures and promoting the acquisition of existing commercial housing[56] - The company plans to explore and develop potential investment opportunities in sustainable projects to create long-term value for shareholders and investors[56] Dividends and Shareholder Returns - The company did not declare a final dividend for the year ended December 31, 2024[3] - The group has not declared any final dividends for the fiscal year 2024, consistent with the previous year[94] Employee and Operational Costs - The total employee costs for the fiscal year 2024 were approximately RMB 18.2 million, a decrease from RMB 31 million in 2023[90] Miscellaneous - The company has no single customer contributing over 10% of total revenue for 2024, maintaining a diversified customer base[26] - The company is currently evaluating the potential impact of new accounting standards that will take effect after January 1, 2025, but does not expect significant effects on the consolidated financial statements[24] - The group has no significant events occurring after the fiscal year ending December 31, 2024[89]

Economic Overview - The gross domestic product (GDP) of China experienced a solid growth rate of approximately 5.0% year-on-year in the first half of 2024[5]. - The overall macro-economy in China is showing a stable and forward-looking trend despite facing negative external factors[5]. Real Estate Market Performance - The total sales area of commercial housing in China amounted to approximately 479 million sq.m., representing a decrease of approximately 19.5% compared to the same period last year[6]. - The sales volume of commercial housing decreased by approximately 25.3% year-on-year to approximately RMB 4.71 trillion in the first half of 2024[6]. - Total investment in the real estate sector in the first half of 2024 amounted to approximately RMB 5.25 trillion, representing a year-on-year decrease of approximately 10.3%[6]. - Market confidence in the real estate sector remains low, with cautious purchasing behavior and a strong wait-and-see sentiment among buyers[6]. - The real estate sector continues to face challenges of insufficient market demand and deleveraging, with an overall downtrend remaining unchanged[6]. Government Policies and Market Outlook - The central government has implemented stimulus policies in the real estate sector, including reducing the down payment ratio and lowering interest rates for housing loans[9]. - The policies to support the real estate sector aim to gradually restore stable development and build a new model for real estate development[9]. - The pace of market recovery is expected to be constrained due to weak demand, and it will take time to consume the excess inventory[9]. - The central government is expected to continue easing regulatory policies in the real estate sector to promote healthy market development and accelerate inventory reduction[15][18]. - The Group anticipates that inflation will ease and interest rates will gradually decline, which may improve market conditions in the second half of 2024[15][18]. Financial Performance of the Group - The Group recorded a revenue of approximately RMB 46.1 million for the first half of 2024, representing a decrease of approximately 85.9% compared to RMB 327.7 million in the same period of 2023[12][19]. - The loss attributable to equity shareholders for the first half of 2024 was approximately RMB 61.7 million, compared to a profit of approximately RMB 0.7 million in the corresponding period of 2023[12][19]. - The Group's aggregated contracted sales value for the first half of 2024 was approximately RMB 106.2 million, with a total gross floor area (GFA) of approximately 15,200 sq.m.[12][19]. - The cost of sales for the first half of 2024 was approximately RMB 31.4 million, a decrease of approximately 84.5% from RMB 202.5 million in the same period of 2023[20]. - The gross profit for the first half of 2024 was approximately RMB 14.8 million, down 88.2% from RMB 125.2 million in the previous year[20]. - Revenue from property sales for the six months ended June 30, 2024, was approximately RMB 43.5 million, a decrease of approximately 86.6% compared to RMB 325.8 million for the same period in 2023[24]. Changes in Assets and Liabilities - Total assets decreased to RMB 1,574,851,000 as of June 30, 2024, down from RMB 1,672,400,000 at the end of 2023, representing a decline of approximately 5.8%[121]. - Total equity attributable to equity shareholders decreased to RMB 625,609,000 from RMB 685,421,000, reflecting a decline of approximately 8.7%[122]. - The company reported a loss for the period of RMB 61,722,000 for the six months ended June 30, 2024, compared to a profit of RMB 730,000 for the same period in 2023[125]. - Cash and cash equivalents decreased to RMB 314,416,000 from RMB 363,294,000, a reduction of about 13.5%[121]. - Trade and other receivables increased significantly to RMB 233,550,000 from RMB 150,095,000, marking a rise of approximately 55.6%[121]. Corporate Governance and Compliance - The Board is committed to maintaining high standards of corporate governance and has complied with all mandatory code provisions for the six months ended June 30, 2024[82]. - All Directors confirmed full compliance with the Model Code and the Company's code of conduct for the six months ended June 30, 2024[86]. - The Audit Committee reviewed the unaudited interim financial information for the six months ended June 30, 2024, which was also reviewed by external auditor KPMG[89]. Shareholder Information - Mr. Wong Ting Chung holds 562,500,000 ordinary shares, representing approximately 75.0% of the issued share capital of the Company[96]. - The total number of issued ordinary shares is 750,000,000[5]. - The Company has not entered into any arrangements to enable Directors to acquire benefits through the acquisition of shares or debentures during the six months ended June 30, 2024[100]. Employee and Management Compensation - The Group's total staff costs were approximately RMB 12.4 million, down from RMB 17.7 million for the same period in 2023[73]. - The Group's key management personnel received short-term employee benefits totaling RMB 3,215,000 for the six months ended June 30, 2024, down from RMB 3,543,000 in the same period of 2023[197].

[Financial Summary and Key Financial Statements](index=1&type=section&id=Financial%20Summary%20and%20Key%20Financial%20Statements) This section presents the Group's condensed consolidated interim financial statements, including the statements of profit or loss, comprehensive income, and financial position, highlighting key financial performance and position indicators [Financial Summary](index=1&type=section&id=Financial%20Summary) The Group's financial performance for the six months ended June 30, 2024, significantly deteriorated, with substantial declines in revenue and gross profit, shifting from a profit in the prior period to a loss per share of RMB 8.2 cents | Indicator | For the six months ended June 30, 2024 (RMB millions) | For the six months ended June 30, 2023 (RMB millions) | Change (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 46.1 | 327.7 | –281.6 | –85.9% | | Gross profit | 14.8 | 125.2 | –110.4 | –88.2% | | Gross profit margin | 32.0% | 38.2% | Not applicable | –6.2% | | (Loss)/Profit attributable to owners of the Company | (61.7) | 0.7 | –62.4 | Not applicable | | (Loss)/Earnings per share (RMB cents) | (8.2) | 0.1 | –8.3 | Not applicable | | Interim dividend per share (RMB cents) | — | — | — | Not applicable | [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group shifted from profit to loss in the first half of 2024, primarily due to an 85.9% revenue decline to RMB 46,119 thousand, leading to a sharp reduction in gross profit, and recognition of losses from associates and income tax expenses | Indicator | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 46,119 | 327,663 | | Cost of sales | (31,362) | (202,467) | | Gross profit | 14,757 | 125,196 | | Gain on fair value measurement of investment properties | 1,048 | 23,724 | | Net other income | 7,836 | 4,187 | | Impairment loss on other receivables | (1,341) | — | | Selling expenses | (3,724) | (32,924) | | Administrative expenses | (23,047) | (21,370) | | Other expenses | (309) | (842) | | Operating (loss)/profit | (4,780) | 97,971 | | Finance costs | (5) | (4,488) | | Share of profits less losses of associates | (38,006) | (15,179) | | (Loss)/Profit before tax | (42,791) | 78,304 | | Income tax | (22,442) | (66,243) | | (Loss)/Profit for the period | (65,233) | 12,061 | | Attributable to owners of the Company | (61,722) | 730 | | Non-controlling interests | (3,511) | 11,331 | | Basic and diluted (loss)/earnings per share (RMB cents) | (8.23) | 0.10 | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group recorded a total comprehensive loss of RMB 66,889 thousand in the first half of 2024, a significant deterioration from the RMB 5,370 thousand total comprehensive income in the prior period, primarily due to the loss for the period and exchange differences | Indicator | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | (Loss)/Profit for the period | (65,233) | 12,061 | | Other comprehensive income for the period: | | | | Exchange differences on translation of financial statements: | | | | — Associates | (517) | (2,286) | | — Hong Kong and overseas subsidiaries | (1,139) | (4,405) | | Other comprehensive income for the period | (1,656) | (6,691) | | Total comprehensive income for the period | (66,889) | 5,370 | | Attributable to owners of the Company | (59,812) | 1,492 | | Non-controlling interests | (7,077) | 3,878 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets were RMB 1,574,851 thousand, a decrease from the end of 2023, with net assets falling to RMB 783,006 thousand, mainly due to reduced non-current assets and changes in current liabilities structure | Indicator | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 45,657 | 46,164 | | Investment properties | 57,560 | 54,850 | | Interests in associates | 196,387 | 211,602 | | Deferred tax assets | 62,977 | 59,769 | | Other non-current assets | — | 97,733 | | **Total non-current assets** | 362,581 | 470,118 | | **Current assets** | | | | Inventories and other contract costs | 646,083 | 660,304 | | Trade and other receivables | 233,550 | 150,095 | | Prepaid taxes | 2,807 | 11,948 | | Pledged and restricted deposits | 15,414 | 16,641 | | Cash and cash equivalents | 314,416 | 363,294 | | **Total current assets** | 1,212,270 | 1,202,282 | | **Total assets** | 1,574,851 | 1,672,400 | | **Current liabilities** | | | | Contract liabilities | 68,299 | 78,161 | | Trade and other payables | 499,187 | 499,599 | | Lease liabilities | 129 | 28 | | Tax payable | 219,937 | 223,427 | | Provisions | — | 18,108 | | **Total current liabilities** | 787,552 | 819,323 | | Net current assets | 424,718 | 382,959 | | Total assets less current liabilities | 787,299 | 853,077 | | **Non-current liabilities** | | | | Lease liabilities | 619 | — | | Deferred tax liabilities | 3,674 | 3,182 | | **Total non-current liabilities** | 4,293 | 3,182 | | **Net assets** | 783,006 | 849,895 | | **Capital and reserves** | | | | Share capital | 6,605 | 6,605 | | Reserves | 619,004 | 678,816 | | Total equity attributable to owners of the Company | 625,609 | 685,421 | | Non-controlling interests | 157,397 | 164,474 | | **Total equity** | 783,006 | 849,895 | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the condensed consolidated interim financial information, covering general information, accounting policy changes, revenue and segment data, and other financial disclosures [General Information and Basis of Preparation](index=6&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) This condensed consolidated interim financial information, presented in RMB thousands, was approved for issue by the Board on August 26, 2024, prepared in accordance with HKAS 34 and HKEX Listing Rules, using consistent accounting policies with the 2023 annual financial statements, and has been reviewed by KPMG but not audited - This condensed consolidated interim financial information is presented in **RMB thousands** and was approved for issue by the Board on August 26, 2024[6](index=6&type=chunk) - It is prepared in accordance with the HKEX Listing Rules and HKAS 34, adopting the **same accounting policies as the 2023 annual financial statements**[7](index=7&type=chunk) - This information is **unaudited but has been reviewed by KPMG** in accordance with HKSRE 2410[7](index=7&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=Changes%20in%20Accounting%20Policies) The Group has adopted amendments to HKFRS, including HKAS 1 and HKFRS 16, but these changes have no material impact on the results or financial position for the current or prior periods - The Group has adopted amendments to **HKAS 1** (Classification of Liabilities, Non-current Liabilities with Covenants) and **HKFRS 16** (Lease Liability in a Sale and Leaseback)[8](index=8&type=chunk) - These changes in accounting policies have **no material impact** on the results or financial position for the current or prior periods[8](index=8&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The Group's primary revenue is derived from property development and sales in Mainland China, with a significant 85.9% decline in revenue in the first half of 2024, and management considers the Group to have only one operating segment concentrated in Huizhou, Tianjin, and Zhumadian - The Group's principal activities are **property development and sales in China**[9](index=9&type=chunk) - Management considers the Group to have **only one operating segment**, as resource allocation and performance assessment are focused on overall property development[10](index=10&type=chunk)[54](index=54&type=chunk) [Revenue Breakdown](index=7&type=section&id=Revenue%20Breakdown) The Group's total revenue for the first half of 2024 was RMB 46,119 thousand, a substantial 85.9% year-on-year decrease, primarily due to reduced property sales revenue, while property rental income increased | Revenue Source | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Property sales (recognized at a point in time) | 43,498 | 325,846 | | Gross property rental | 2,621 | 1,817 | | **Total Revenue** | **46,119** | **327,663** | [Operating Segments and Geographical Information](index=8&type=section&id=Operating%20Segments%20and%20Geographical%20Information) The Group's operating segment is identified as a single segment, with major revenue and designated non-current assets concentrated in Huizhou, followed by Tianjin and Zhumadian, where Huizhou's revenue significantly decreased year-on-year | Region | For the six months ended June 30, 2024 Revenue (RMB thousands) | For the six months ended June 30, 2023 Revenue (RMB thousands) | As of June 30, 2024 Designated non-current assets (RMB thousands) | As of December 31, 2023 Designated non-current assets (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Huizhou | 44,449 | 302,711 | 158,976 | 267,210 | | Tianjin | 1,670 | 24,952 | 54,198 | 52,235 | | Zhumadian | — | — | 86,374 | 90,848 | | Others | — | — | 56 | 56 | | **Total** | **46,119** | **327,663** | **299,604** | **410,349** | [Net Other Income](index=8&type=section&id=Net%20Other%20Income) The Group's net other income increased to RMB 7,836 thousand in the first half of 2024, a substantial 87.2% year-on-year growth, primarily driven by increased interest income from bank deposits and loans | Income Source | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 4,610 | 1,851 | | Interest income from loans | 1,951 | 1,904 | | Net exchange gain/(loss) | 279 | (90) | | Others | 996 | 522 | | **Total** | **7,836** | **4,187** | - Net other income **increased by 87.2%** year-on-year, primarily due to increased interest income[13](index=13&type=chunk)[38](index=38&type=chunk) [Components of (Loss)/Profit Before Tax](index=9&type=section&id=Components%20of%20(Loss)%2FProfit%20Before%20Tax) The Group's loss before tax was primarily influenced by a significant decrease in finance costs, reduced staff costs, and other items such as reversal of inventory write-downs [Finance Costs](index=9&type=section&id=Finance%20Costs) The Group's finance costs for the first half of 2024 significantly decreased by 99.9% to RMB 5 thousand, mainly because all bank loans were repaid before December 31, 2023 | Finance Costs | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank borrowings | — | 4,484 | | Interest on lease liabilities | 5 | 4 | | **Total** | **5** | **4,488** | - Finance costs **decreased by 99.9%** year-on-year, primarily due to the repayment of all bank loans before December 31, 2023[14](index=14&type=chunk)[42](index=42&type=chunk) [Staff Costs](index=9&type=section&id=Staff%20Costs) The Group's staff costs (net of capitalized portion) decreased to RMB 11,632 thousand in the first half of 2024, a 20.4% reduction from the prior period, reflecting lower salaries, wages, and other benefits | Staff Costs | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Salaries, wages and other benefits | 11,905 | 17,206 | | Contributions to defined contribution retirement plans | 479 | 534 | | Less: Staff costs capitalized to inventories | (752) | (3,132) | | **Total** | **11,632** | **14,608** | [Other Items](index=9&type=section&id=Other%20Items) Other items for the Group in the first half of 2024 included depreciation, a reversal of inventory write-down of RMB 443 thousand (compared to a write-down of RMB 36,222 thousand in the prior period), impairment of other receivables of RMB 1,341 thousand, and increased rental income from investment properties | Item | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Depreciation — Property, plant and equipment | 1,332 | 1,589 | | Depreciation — Right-of-use assets | 26 | 59 | | Inventories (write-down reversal)/write-down | (443) | 36,222 | | Impairment of other receivables | 1,341 | — | | Rental income from investment properties | (1,322) | (990) | [Income Tax](index=10&type=section&id=Income%20Tax) The Group's total income tax for the first half of 2024 was RMB 22,442 thousand, a significant 66.2% decrease from the prior period, primarily due to reduced operating profit, with both corporate income tax and land appreciation tax provisions declining | Tax Type | For the six months ended June 30, 2024 (RMB thousands) | For the six months ended June 30, 2023 (RMB thousands) | | :--- | :--- | :--- | | Current tax: | | | | Provision for corporate income tax | 10,080 | 17,803 | | Provision for land appreciation tax | 15,078 | 40,202 | | **Total current tax** | **25,158** | **58,005** | | Deferred tax: | | | | Origination and reversal of temporary differences | (2,716) | 8,238 | | **Total income tax** | **22,442** | **66,243** | - Total income tax **decreased by 66.2%** year-on-year, primarily due to reduced operating profit[15](index=15&type=chunk)[43](index=43&type=chunk) [Corporate Income Tax and Hong Kong Profits Tax](index=10&type=section&id=Corporate%20Income%20Tax%20and%20Hong%20Kong%20Profits%20Tax) The Group's principal subsidiaries in Mainland China are subject to a 25% corporate income tax rate, while Hong Kong subsidiaries had no assessable profits and thus no Hong Kong profits tax provision was recognized for the period - Principal subsidiaries in Mainland China are subject to a **25% corporate income tax rate**[16](index=16&type=chunk) - Hong Kong subsidiaries had **no assessable profits** for the period, and thus no Hong Kong profits tax provision was recognized[16](index=16&type=chunk) [Land Appreciation Tax](index=10&type=section&id=Land%20Appreciation%20Tax) Land Appreciation Tax is levied at progressive rates from 30% to 60%, calculated based on proceeds from property sales less deductible expenditures - Land Appreciation Tax is levied at **progressive rates from 30% to 60%**, calculated based on proceeds from property sales less deductible expenditures[17](index=17&type=chunk) [Cayman Islands and British Virgin Islands Taxation](index=10&type=section&id=Cayman%20Islands%20and%20British%20Virgin%20Islands%20Taxation) The Group is not subject to any income tax in the Cayman Islands and British Virgin Islands under relevant regulations - The Group is **not subject to any income tax** in the Cayman Islands and British Virgin Islands[17](index=17&type=chunk) [Loss/Earnings Per Share](index=11&type=section&id=Loss%2FEarnings%20Per%20Share) The Group's basic and diluted loss per share for the first half of 2024 was RMB 8.23 cents, compared to earnings per share of RMB 0.10 cents in the prior period, primarily due to the loss attributable to owners of the Company | Indicator | For the six months ended June 30, 2024 | For the six months ended June 30, 2023 | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company | RMB 61,722,000 (Loss) | RMB 730,000 (Profit) | | Weighted average number of ordinary shares in issue | 750,000,000 shares | 750,000,000 shares | | Basic and diluted (loss)/earnings per share (RMB cents) | (8.23) | 0.10 | [Basic Loss/Earnings Per Share](index=11&type=section&id=Basic%20Loss%2FEarnings%20Per%20Share) For the six months ended June 30, 2024, basic loss per share was RMB 8.23 cents, calculated based on the loss attributable to owners of the Company of RMB 61,722,000 and 750,000,000 weighted average ordinary shares in issue - Basic loss per share was **RMB 8.23 cents**, calculated based on the loss attributable to owners of the Company of RMB 61,722,000 and 750,000,000 weighted average ordinary shares in issue[18](index=18&type=chunk) [Diluted Loss/Earnings Per Share](index=11&type=section&id=Diluted%20Loss%2FEarnings%20Per%20Share) Diluted loss/earnings per share for the six months ended June 30, 2024 and 2023 was the same as basic loss/earnings per share, as the share options granted had an anti-dilutive effect - Diluted loss/earnings per share is **the same as basic loss/earnings per share** due to the anti-dilutive effect of share options granted[19](index=19&type=chunk) [Dividends](index=11&type=section&id=Dividends) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2024, consistent with the prior period - The Board resolved **not to declare an interim dividend** for the six months ended June 30, 2024[20](index=20&type=chunk) [Investment Properties](index=11&type=section&id=Investment%20Properties) The Group's investment properties were revalued at fair value by an independent valuer as of June 30, 2024, recording a fair value gain of RMB 1,048 thousand for the period, a significant decrease from the prior period - Investment properties were **revalued at fair value by an independent valuer**, Brightway Surveyors & Valuers Limited[21](index=21&type=chunk) - A fair value gain of **RMB 1,048 thousand** was recorded for the period, a significant decrease from RMB 23,724 thousand in the prior period[21](index=21&type=chunk)[37](index=37&type=chunk) - Inventories with a carrying amount of **RMB 1,662 thousand** were transferred to investment properties, and a corresponding deferred tax of **RMB 262 thousand** was recognized[21](index=21&type=chunk) [Other Non-current Assets](index=11&type=section&id=Other%20Non-current%20Assets) The Group's loan of RMB 96,500,000 (at 4% annual interest) to a borrower and its accrued interest of RMB 1,951,000 were reclassified as "Other receivables" under current assets as of June 30, 2024 - The Group provided a loan of **RMB 96,500,000** to a borrower at an annual interest rate of 4% for a term of three years[22](index=22&type=chunk) - As of June 30, 2024, the outstanding principal and accrued interest of **RMB 98,451,000** were reclassified as "Other receivables" under current assets[22](index=22&type=chunk) [Trade and Other Receivables](index=12&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2024, the Group's total trade and other receivables were RMB 233,550 thousand, a significant increase from the end of 2023, primarily due to a substantial rise in other receivables (net of loss allowance) | Item | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Within 1 month | 53 | — | | 1 to 3 months | 4 | 1 | | 3 to 6 months | 313 | 2 | | Over 6 months | — | 311 | | **Trade receivables (net of loss allowance)** | **370** | **314** | | Amounts due from associates | 18,000 | 18,000 | | Amounts due from non-controlling interests | 62,841 | 64,411 | | Other receivables (net of loss allowance) | 137,293 | 48,236 | | Financial assets measured at amortized cost | 218,504 | 130,961 | | Deposits | 288 | 869 | | Prepayments | 14,758 | 18,265 | | **Total** | **233,550** | **150,095** | - As of June 30, 2024, there were **no overdue trade receivables**, and management believes no loss allowance is required[23](index=23&type=chunk) - Loss allowance for other receivables was **RMB 1,341,000** (December 31, 2023: nil)[24](index=24&type=chunk) [Trade and Other Payables](index=13&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2024, the Group's total trade and other payables were RMB 499,187 thousand, largely consistent with the end of 2023, with the aging analysis of trade payables showing most are over 12 months, and the Group provided several financial guarantees for associates | Item | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 215 | 1,737 | | 3 to 6 months | — | 1,606 | | 6 to 12 months | 1,162 | 2,724 | | Over 12 months | 65,600 | 68,356 | | **Trade payables** | **66,977** | **74,423** | | Other payables and accrued expenses | 50,320 | 59,794 | | Amounts due to related parties | 316,194 | 312,984 | | Financial liabilities measured at amortized cost | 433,491 | 447,201 | | Financial guarantees issued | 17,394 | 4,096 | | Amounts due to controlling shareholder and non-controlling interests | 48,302 | 48,302 | | **Total** | **499,187** | **499,599** | - The Group provided a **counter-guarantee for 30% equity proportion** to its associate, Longguang Junhong, involving total bank loans of **RMB 23,100,000**[26](index=26&type=chunk) - The Group provided a guarantee for its associate, Huigang China Knot, for an existing loan owed to Longguang Shenzhen, amounting to **RMB 13,427,000**[27](index=27&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the market, business performance, future outlook, and a detailed financial review, including liquidity, capital resources, and risk management [Market Review](index=15&type=section&id=Market%20Review) In the first half of 2024, global economic recovery was weak, while China's economy progressed steadily, but the Chinese property sector remained in an adjustment cycle with insufficient demand, declining sales, and weak investment sentiment, despite government stimulus policies - In the first half of 2024, global economic recovery was weak, while China's economy progressed steadily, with **GDP growing by approximately 5.0%**[28](index=28&type=chunk) - The Chinese property sector remained in an adjustment cycle with insufficient market demand, as commercial housing sales area **decreased by 19.5%** and sales value **decreased by 25.3%** year-on-year in the first half[28](index=28&type=chunk) - The central government intensified stimulus policies, including **lowering down payments, loan interest rates, removing commercial housing loan interest rate floors, and easing purchase restrictions**, but market confidence and recovery pace remain constrained[28](index=28&type=chunk) [Business Review](index=16&type=section&id=Business%20Review) During a period of deep adjustment in the real estate industry, the Group focused on financial stability, inventory reduction, cash flow improvement, and cost control, resulting in revenue of approximately RMB 46.1 million in the first half of 2024, an 85.9% year-on-year decrease, and a loss attributable to owners of the Company of approximately RMB 61.7 million - The Group focused on **maintaining a sound financial position, reducing inventory, improving cash flow, and controlling costs**[29](index=29&type=chunk) - Revenue for the first half of 2024 was approximately **RMB 46.1 million**, a **decrease of 85.9%** year-on-year, primarily from sales of Huizhou Wancheng Mingzuo Phase III and Huangguan Haoyuan commercial properties[29](index=29&type=chunk) - The Group recorded a **loss attributable to owners of the Company of approximately RMB 61.7 million** for the period, compared to a profit of approximately RMB 0.7 million in the prior period[29](index=29&type=chunk) - Total contracted sales for the first half of 2024 were approximately **RMB 106.2 million**, with a total sold gross floor area of approximately **15,200 square meters**, mainly from Huizhou Jiujingtai and Henan Julongwan projects[29](index=29&type=chunk) [Future Prospects and Outlook](index=16&type=section&id=Future%20Prospects%20and%20Outlook) The Group plans to reduce future losses by divesting underperforming projects and will continue to explore high-return, sustainable development opportunities, anticipating market stabilization in the second half of the year with global interest rate cuts and continued supportive Chinese government real estate policies - The Group will reduce future losses by **disposing of projects with unsatisfactory net asset value or expected continuous losses**[30](index=30&type=chunk) - In the second half of the year, with major global economies entering an interest rate cut cycle and the Chinese government continuing to strengthen macroeconomic support and real estate policies, the market is expected to **bottom out and stabilize**[30](index=30&type=chunk) - The Group will continue to **explore potential business opportunities**, prioritizing efficiency in project investments to create long-term value[30](index=30&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) The Group's financial performance significantly deteriorated in the first half of 2024, with substantial declines in revenue, gross profit, gain on fair value measurement of investment properties, and operating profit, leading to a loss attributable to owners of the Company, primarily due to sharp reductions in property sales revenue, increased losses from associates, and impairment of other receivables - The Group's revenue primarily comes from **property sales and rental**, with property sales revenue accounting for a significant portion[31](index=31&type=chunk) - The **loss attributable to owners of the Company** for the period was approximately **RMB 61.7 million**, a decrease of approximately **RMB 62.4 million** from the profit in the prior period[43](index=43&type=chunk) - The loss was primarily due to a **significant decrease in revenue** from subsidiaries and associates, impairment loss on other receivables from associates, and accrued interest expenses from associates[44](index=44&type=chunk) [Revenue Analysis](index=17&type=section&id=Revenue%20Analysis) The Group's revenue significantly decreased in the first half of 2024, primarily impacted by a sharp decline in property sales revenue, although rental income showed some growth [Contracted Sales](index=17&type=section&id=Contracted%20Sales) For the six months ended June 30, 2024, the Group (including associates) recorded total property contracted sales of approximately RMB 106.2 million, with a sold gross floor area of approximately 15,200 square meters - Total property contracted sales were approximately **RMB 106.2 million**, with a sold gross floor area of approximately **15,200 square meters**[31](index=31&type=chunk) [Land Bank](index=17&type=section&id=Land%20Bank) As of June 30, 2024, the Group's total land bank had a gross floor area of approximately 1,306,627 square meters, comprising completed properties held for sale, unsold properties under development, and properties held for future development - Total land bank had a gross floor area of approximately **1,306,627 square meters**, including **381,755 square meters** of completed properties held for sale, **89,503 square meters** of unsold properties under development, and **835,369 square meters** of properties held for future development[32](index=32&type=chunk) [Property Sales Revenue](index=17&type=section&id=Property%20Sales%20Revenue) For the six months ended June 30, 2024, property sales revenue was approximately RMB 43.5 million, a substantial 86.6% year-on-year decrease, primarily because the prior period included sales of newly completed and delivered properties, while the current period mainly involved inventory sales - Property sales revenue was approximately **RMB 43.5 million**, a **decrease of 86.6%** year-on-year[33](index=33&type=chunk) - Revenue primarily came from **inventory sales** of Huizhou Wancheng Mingzuo Phase III and Huangguan Haoyuan commercial properties, rather than newly completed and delivered properties[33](index=33&type=chunk) [Rental Income](index=18&type=section&id=Rental%20Income) For the six months ended June 30, 2024, total rental income from investment properties and inventories was approximately RMB 2.6 million, a 44.4% year-on-year increase, mainly due to increased rental income from car parks and investment properties - Total rental income was approximately **RMB 2.6 million**, an **increase of 44.4%** year-on-year[34](index=34&type=chunk) - The increase was primarily due to **increased rental income from car parks and investment properties**[34](index=34&type=chunk) [Cost of Sales](index=18&type=section&id=Cost%20of%20Sales) For the six months ended June 30, 2024, cost of sales was approximately RMB 31.4 million, an 84.5% year-on-year decrease, primarily due to reduced property sales revenue and no inventory write-downs in the current period - Cost of sales was approximately **RMB 31.4 million**, a **decrease of 84.5%** year-on-year[35](index=35&type=chunk) - The decrease was primarily due to **reduced property sales revenue and no inventory write-downs** in the current period[35](index=35&type=chunk) [Gross Profit and Gross Profit Margin](index=18&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) For the six months ended June 30, 2024, gross profit was approximately RMB 14.8 million, an 88.2% year-on-year decrease, with the gross profit margin falling from 38.2% to 32.0%, primarily impacted by reduced revenue - Gross profit was approximately **RMB 14.8 million**, an **88.2% decrease** year-on-year[36](index=36&type=chunk) - Gross profit margin **decreased from 38.2% to 32.0%**[36](index=36&type=chunk) [Gain on Fair Value Measurement of Investment Properties](index=18&type=section&id=Gain%20on%20Fair%20Value%20Measurement%20of%20Investment%20Properties) For the six months ended June 30, 2024, gain on fair value measurement of investment properties was approximately RMB 1.0 million, a decrease of approximately RMB 22.7 million year-on-year, primarily due to fewer new investment properties - Gain on fair value measurement of investment properties was approximately **RMB 1.0 million**, a **decrease of approximately RMB 22.7 million** year-on-year[37](index=37&type=chunk) - The decrease was primarily due to **fewer new investment properties**[37](index=37&type=chunk) [Net Other Income](index=18&type=section&id=Net%20Other%20Income) For the six months ended June 30, 2024, net other income was approximately RMB 7.8 million, an 87.2% year-on-year increase, primarily due to increased interest income - Net other income was approximately **RMB 7.8 million**, an **87.2% increase** year-on-year[38](index=38&type=chunk) - The increase was primarily due to **increased interest income**[38](index=38&type=chunk) [Selling Expenses](index=19&type=section&id=Selling%20Expenses) For the six months ended June 30, 2024, selling expenses were approximately RMB 3.7 million, an 88.7% year-on-year decrease, primarily due to reduced revenue - Selling expenses were approximately **RMB 3.7 million**, an **88.7% decrease** year-on-year[39](index=39&type=chunk) - The decrease was primarily due to **reduced revenue**[39](index=39&type=chunk) [Administrative Expenses](index=19&type=section&id=Administrative%20Expenses) For the six months ended June 30, 2024, administrative expenses were approximately RMB 23.0 million, close to RMB 21.4 million in the prior period - Administrative expenses were approximately **RMB 23.0 million**, close to **RMB 21.4 million** in the prior period[40](index=40&type=chunk) [Share of Profits Less Losses of Associates](index=19&type=section&id=Share%20of%20Profits%20Less%20Losses%20of%20Associates) For the six months ended June 30, 2024, share of losses of associates was approximately RMB 38.0 million, an increase of approximately RMB 22.8 million in losses compared to the prior period, primarily due to a significant decrease in associates' revenue, impairment loss on other receivables, and accrued interest expenses - Share of losses of associates was approximately **RMB 38.0 million**, an **increase of approximately RMB 22.8 million** in losses compared to the prior period[41](index=41&type=chunk) - The increased loss was primarily due to a **significant decrease in associates' revenue**, impairment loss on other receivables, and accrued interest expenses from Longguang Shenzhen[41](index=41&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) For the six months ended June 30, 2024, finance costs were approximately RMB 5 thousand, a substantial 99.9% year-on-year decrease, primarily because all bank loans were repaid before December 31, 2023 - Finance costs were approximately **RMB 5 thousand**, a **99.9% decrease** year-on-year[42](index=42&type=chunk) - The decrease was primarily due to the **repayment of all bank loans** before December 31, 2023[42](index=42&type=chunk) [Income Tax](index=19&type=section&id=Income%20Tax) For the six months ended June 30, 2024, income tax was approximately RMB 22.4 million, a decrease of approximately RMB 43.8 million year-on-year, primarily due to reduced operating profit - Income tax was approximately **RMB 22.4 million**, a **decrease of approximately RMB 43.8 million** year-on-year[43](index=43&type=chunk) - The decrease was primarily due to **reduced operating profit**[43](index=43&type=chunk) [Loss/Profit for the Period Attributable to Owners of the Company](index=19&type=section&id=Loss%2FProfit%20for%20the%20Period%20Attributable%20to%20Owners%20of%20the%20Company) For the six months ended June 30, 2024, the loss for the period attributable to owners of the Company was approximately RMB 61.7 million, a decrease of approximately RMB 62.4 million from the profit in the prior period, primarily due to a significant decrease in revenue, impairment loss on other receivables from associates, and accrued interest expenses - The loss for the period attributable to owners of the Company was approximately **RMB 61.7 million**, a **decrease of approximately RMB 62.4 million** from the profit in the prior period[43](index=43&type=chunk) - The loss was primarily due to a **significant decrease in revenue** from subsidiaries and associates, impairment loss on other receivables from associates, and accrued interest expenses from Longguang Shenzhen[44](index=44&type=chunk) [Other Financial Information](index=20&type=section&id=Other%20Financial%20Information) The Group maintained a sound liquidity position in the first half of 2024 with no bank loans and a zero gearing ratio, actively managing financial risks with low foreign exchange risk and interest rate risk primarily from bank cash, ensuring sufficient liquidity through strict collection policies and bad debt provisions, while capital expenditure and commitments decreased, and asset pledges and contingent liabilities were disclosed - The Group had **no bank loans** and a **zero gearing ratio** as of June 30, 2024, and December 31, 2023[45](index=45&type=chunk) - Management has adopted policies to **manage financial risks**, including funding requirements, interest rate risk, credit risk, and liquidity risk[46](index=46&type=chunk) - The Group has **only one operating segment**, with revenue and results primarily derived from property development[54](index=54&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2024, the Group's cash and cash equivalents were approximately RMB 314.4 million, primarily denominated in HKD (19.4%) and RMB (80.6%), and the Company's subsidiaries had no bank loans, resulting in a zero gearing ratio - The Group's cash and cash equivalents were approximately **RMB 314.4 million**, denominated in **HKD (19.4%) and RMB (80.6%)**[45](index=45&type=chunk) - The Company's subsidiaries had **no bank loans**, resulting in a **zero gearing ratio**[45](index=45&type=chunk) [Financial Risk Management Objectives and Policies](index=20&type=section&id=Financial%20Risk%20Management%20Objectives%20and%20Policies) The Group's management has established financial risk management policies aimed at ensuring appropriate funding strategies to meet short-term and long-term capital needs, while mitigating interest rate risk, credit risk, and liquidity risk - Management has adopted policies to ensure **appropriate funding strategies** and to mitigate interest rate risk, credit risk, and liquidity risk[46](index=46&type=chunk) [Foreign Exchange Risk](index=20&type=section&id=Foreign%20Exchange%20Risk) The Group primarily operates in Hong Kong and Mainland China, with most transactions settled in HKD and RMB, and foreign exchange risk is minimal as all sales, assets, and liabilities are denominated in RMB - The Group primarily operates in **Hong Kong and Mainland China**, with most transactions settled in HKD and RMB[47](index=47&type=chunk) - Foreign exchange risk is **minimal** as all sales, assets, and liabilities are denominated in RMB[47](index=47&type=chunk) [Interest Rate Risk](index=21&type=section&id=Interest%20Rate%20Risk) The Group repaid all bank loans by December 31, 2023, resulting in very low interest rate risk, which currently only arises from floating interest rates on bank cash - The Group **repaid all bank loans by December 31, 2023**, resulting in very low interest rate risk[48](index=48&type=chunk) - Interest rate risk only arises from **floating interest rates on bank cash**, and no interest rate risk was hedged during the period[48](index=48&type=chunk) [Credit Risk](index=21&type=section&id=Credit%20Risk) The Group has low credit risk due to no significant overdue trade receivables and full payment collection before property delivery and title transfer, with a bad debt provision of RMB 1,341,000 for other receivables during the period - The Group has **no significant overdue trade receivables** and collects full payment before property delivery, resulting in low credit risk[49](index=49&type=chunk) - A bad debt provision of **RMB 1,341,000** was made for other receivables for the six months ended June 30, 2024[49](index=49&type=chunk) - All bank balances and deposits are held with **financial institutions of high credit quality**[49](index=49&type=chunk) [Liquidity Risk](index=21&type=section&id=Liquidity%20Risk) The Group manages liquidity risk by regularly monitoring funding requirements, complying with borrowing covenants, and maintaining sufficient cash reserves to ensure adequate standby facilities for both long-term and short-term needs - The Group **regularly monitors liquidity requirements** and ensures sufficient cash reserves and standby facilities are maintained[50](index=50&type=chunk) - The Group has **not encountered, nor does it expect to encounter, any difficulties** in meeting its credit obligations when due[50](index=50&type=chunk) [Capital Expenditure](index=22&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2024, capital expenditure for the purchase of property, plant, and equipment was RMB 199 thousand, a decrease from RMB 814 thousand in the prior period - Capital expenditure for the purchase of property, plant, and equipment was **RMB 199 thousand**, compared to **RMB 814 thousand** in the prior period[51](index=51&type=chunk) [Capital Commitments](index=22&type=section&id=Capital%20Commitments) As of June 30, 2024, the Group's capital commitments were approximately RMB 3.8 million, a decrease from RMB 4.5 million at the end of 2023, primarily related to development costs for properties under development - Capital commitments were approximately **RMB 3.8 million**, primarily related to **development costs for properties under development**[52](index=52&type=chunk) [Pledge of Assets](index=22&type=section&id=Pledge%20of%20Assets) As of June 30, 2024, certain completed properties with a carrying amount of RMB 5,765,000 were restricted as collateral for litigation - Certain completed properties with a carrying amount of **RMB 5,765,000** were **restricted as collateral for litigation** as of June 30, 2024[53](index=53&type=chunk) [Contingent Liabilities](index=22&type=section&id=Contingent%20Liabilities) As of June 30, 2024, the Group provided guarantees to banks for certain buyers' mortgage loans, with outstanding bank guarantees of approximately RMB 110 million, a significant decrease from the end of 2023, and the directors believe the Group will not incur significant losses as banks have the right to sell the properties - Outstanding bank guarantees were approximately **RMB 110 million**, a **significant decrease from RMB 373.8 million** as of December 31, 2023[53](index=53&type=chunk) - Directors believe the Group will **not incur significant losses** from buyers' defaults, as banks have the right to sell the properties[53](index=53&type=chunk) [Other Information and Corporate Governance](index=23&type=section&id=Other%20Information%20and%20Corporate%20Governance) This section covers post-reporting period events, human resources, interim dividends, securities transactions, and adherence to corporate governance and directors' securities trading codes [Events After Reporting Period](index=23&type=section&id=Events%20After%20Reporting%20Period) On July 30, 2024, the Company published a circular, and on August 19, 2024, independent shareholders passed a resolution approving the subscription for the allotment and issue of 99 new shares of the target company to Ruixun Investment Limited - A circular was published on **July 30, 2024**, seeking independent shareholders' approval for the allotment and issue of 99 new shares of the target company to Ruixun Investment Limited[55](index=55&type=chunk) - On **August 19, 2024**, the relevant subscription agreement and the transactions contemplated thereunder were **approved by independent shareholders**[55](index=55&type=chunk) [Human Resources](index=23&type=section&id=Human%20Resources) As of June 30, 2024, the Group employed 45 full-time employees, with total staff costs of approximately RMB 12.4 million, and its remuneration policy is based on performance and experience, offering training programs for employee development - As of June 30, 2024, the Group employed **45 full-time employees** (December 31, 2023: 60 employees)[56](index=56&type=chunk) - Total staff costs were approximately **RMB 12.4 million** (prior period: RMB 17.7 million), of which approximately **RMB 0.8 million was capitalized**[56](index=56&type=chunk) [Human Resources and Remuneration Policy](index=23&type=section&id=Human%20Resources%20and%20Remuneration%20Policy) The Group's remuneration policy is based on employee performance and experience, offering benefits such as performance-linked bonuses, insurance, medical coverage, and share options, while also providing discretionary training programs for continuous employee development - Remuneration policy is based on **employee performance and experience**, aligned with salary trends in Hong Kong and Mainland China[56](index=56&type=chunk) - Benefits include **performance-linked bonuses, insurance, medical coverage, and share options**[56](index=56&type=chunk) - Discretionary **training programs** are provided to ensure continuous employee development and skill enhancement[56](index=56&type=chunk) [Remuneration Policy for Directors and Senior Management](index=23&type=section&id=Remuneration%20Policy%20for%20Directors%20and%20Senior%20Management) Remuneration for directors and senior management includes salaries and discretionary bonuses linked to Group performance, with the Remuneration Committee regularly reviewing and determining their compensation based on market levels, responsibilities, and Group results - Directors and senior management receive **salaries and discretionary bonuses linked to the Group's performance**[57](index=57&type=chunk) - The Remuneration Committee regularly reviews and determines remuneration based on **market levels, responsibilities, and the Group's results**[57](index=57&type=chunk) [Interim Dividends](index=24&type=section&id=Interim%20Dividends) The Directors do not recommend the payment of any interim dividend for the six months ended June 30, 2024, consistent with the prior period - The Directors **do not recommend the payment of any interim dividend** for the six months ended June 30, 2024[58](index=58&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) For the six months ended June 30, 2024, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor its subsidiaries **purchased, sold, or redeemed any of the Company's listed securities** for the six months ended June 30, 2024[59](index=59&type=chunk) [Corporate Governance Code](index=24&type=section&id=Corporate%20Governance%20Code) The Company has adopted the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules and is committed to maintaining high standards of corporate governance practices, with directors believing the Company has complied with all statutory code provisions during the reporting period - The Company has adopted the **Corporate Governance Code** set out in Appendix C1 of the HKEX Listing Rules[60](index=60&type=chunk) - The Directors believe the Company has **complied with all statutory code provisions** of the Corporate Governance Code for the six months ended June 30, 2024[60](index=60&type=chunk) [Standard Code for Securities Transactions by Directors](index=24&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules as the code for directors' securities transactions and confirms that all directors fully complied with it during the reporting period, with relevant employees also required to adhere to guidelines no less exacting than the Standard Code - The Company has adopted the **Standard Code** set out in Appendix C3 of the Listing Rules as the code for directors' securities transactions[61](index=61&type=chunk) - All Directors confirm **full compliance with the Standard Code** and the Company's code of conduct during the reporting period[61](index=61&type=chunk) - Relevant employees who may possess inside information are also required to comply with guidelines **no less exacting than the Standard Code**[61](index=61&type=chunk) [Audit Committee](index=25&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, is responsible for providing independent advice on financial reporting, internal controls, and risk management systems, and has reviewed the Group's unaudited interim financial information for the six months ended June 30, 2024 - The Audit Committee comprises **three independent non-executive directors**, with Mr. Li Yinquan as Chairman[62](index=62&type=chunk) - Its primary responsibility is to assist the Board in providing **independent advice on financial reporting, internal controls, and risk management systems**[62](index=62&type=chunk) - It has **reviewed the Group's unaudited interim financial information** for the six months ended June 30, 2024, which was also reviewed by KPMG[62](index=62&type=chunk) [Publication of Interim Results and Interim Report](index=25&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The interim results announcement has been published on the HKEX and the Company's website, and the interim report for the six months ended June 30, 2024, will be dispatched to shareholders and published on the website in due course - The interim results announcement has been **published on the HKEX website and the Company's website**[63](index=63&type=chunk) - The interim report for the six months ended June 30, 2024, will be **dispatched to shareholders and published on the website** in due course[63](index=63&type=chunk)

Financial Performance - Revenue for 2023 reached RMB 641.6 million, representing a 12.3% increase from RMB 571.2 million in 2022[14]. - Profit attributable to shareholders for 2023 was RMB (482.3) million, compared to RMB 69.2 million in 2022, indicating a significant loss[14]. - Earnings per share (EPS) decreased to (64.3) RMB cents in 2023 from 9.2 RMB cents in 2022[14]. - For FY2023, the Group recorded a revenue of approximately RMB 641.6 million, a 12.3% increase compared to RMB 571.2 million in FY2022[29][54]. - The Group reported a significant loss attributable to equity shareholders of approximately RMB 482.3 million for FY2023, compared to a profit of approximately RMB 69.2 million in FY2022[29][54]. - The gross loss for FY2023 was approximately RMB 164.5 million, a decrease of approximately RMB 439.6 million compared to a gross profit of approximately RMB 275.1 million in FY2022[104]. Market Conditions - The total sales area of commercial housing in China decreased by approximately 17.7% year-on-year to about 1.12 billion square meters in 2023[22]. - The monetary value of commercial housing sales fell by approximately 12.5% year-on-year to around RMB 11.7 trillion in 2023[22]. - Total investment in the real estate sector decreased by approximately 16.6% year-on-year to RMB 11.1 trillion in 2023[22]. - The economic downturn and property market slump have led to a conservative and uncertain attitude among potential buyers, delaying their purchasing decisions[64]. - The overall market environment remains challenging, impacting both property valuations and sales velocity[64]. Company Strategy and Outlook - The Group anticipates a gradual return to normalized operations in the real estate market due to supportive financial measures[23]. - The Group expects that city-based policies will support reasonable housing demand and ensure project delivery[23]. - The central government is expected to adjust and optimize real estate-related policies, which may lead to a gradual market recovery with increased transaction volume and prices[35][37]. - The Group plans to explore investment opportunities, including sustainable development projects, to create long-term value for shareholders[36][38]. - The Group's management continues to monitor market conditions closely to adapt strategies for property sales and development[74]. Property Development and Valuation - As of December 31, 2023, the total GFA of the Group's land bank was approximately 1,321,119 sq.m., including 390,541 sq.m. of unsold completed properties, 95,209 sq.m. of unsold and under construction properties, and 835,369 sq.m. reserved for future development[67]. - Significant impairment recorded in FY2023 was primarily driven by a drop in prices per square meter due to various economic and market factors, leading to a general decrease in unit prices in the localities of the Group's properties[64]. - The Group maintained the same valuation methodology as in the 2022 fiscal year, which involves adjustments based on recent comparable property sales[61]. - The total unsold gross floor area across completed projects indicates a significant opportunity for future sales and revenue generation[79]. - The ongoing development projects are strategically positioned to capitalize on market trends and consumer demand in the real estate sector[82]. Financial Costs and Expenses - The cost of sales increased significantly to RMB 806.1 million in FY2023, representing a 172.3% increase from RMB 296.1 million in FY2022[54]. - The Group experienced a gross loss of approximately RMB 164.5 million in FY2023, compared to a gross profit of RMB 275.1 million in FY2022, marking a 159.8% decline[54]. - The Group's finance costs rose to RMB 6.4 million in FY2023, a 37.7% increase from RMB 4.6 million in FY2022[54]. - Selling expenses for FY2023 were approximately RMB 57.3 million, an increase of approximately 63.6% from RMB 35.0 million in FY2022, primarily due to increased sales commissions and advertising fees[112]. - Administrative expenses for FY2023 were approximately RMB 49.6 million, a decrease of approximately 21.8% from RMB 63.4 million in FY2022, mainly due to project cancellations and reductions in professional and entertainment expenses[113]. Shareholder Information - As of December 31, 2023, Mr. Wong Ting Chung holds 562,500,000 shares, representing 75.0% of the issued share capital of the Company[156]. - The Company has a Share Option Scheme that allows for the issuance of options not exceeding 30% of the issued share capital at any time[168]. - The interests of directors and chief executives in shares and underlying shares were recorded, with Mr. Lau Ka Keung also holding 562,500,000 shares, equivalent to 75.0%[156]. - The Company confirmed compliance with non-competition agreements by its controlling shareholders during the year ended December 31, 2023[163]. - The total maximum number of shares that may be issued upon exercise of all outstanding share options is capped at 30% of the issued share capital[168]. Environmental, Social, and Governance (ESG) Initiatives - The Group is committed to improving its ESG performance by reducing greenhouse gas emissions and energy consumption[185].

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 641.6 million, representing a 12.3% increase from RMB 571.2 million in 2022[3] - The company reported a gross loss of RMB 164.5 million for 2023, compared to a gross profit of RMB 275.1 million in 2022, indicating a significant decline of 159.8%[3] - The net loss attributable to equity shareholders for 2023 was RMB 482.3 million, a drastic decrease from a profit of RMB 69.2 million in 2022, reflecting a change of 796.9%[3] - Basic and diluted loss per share for 2023 was RMB 64.30, compared to earnings of RMB 9.2 per share in 2022, marking a decline of 798.9%[3] - The total comprehensive loss for the year was RMB 610.1 million, compared to a total comprehensive income of RMB 98.6 million in 2022[6] Assets and Liabilities - Total assets decreased to RMB 1,672.4 million in 2023 from RMB 2,754.4 million in 2022, a reduction of approximately 39.3%[8] - Current liabilities decreased to RMB 819.3 million in 2023 from RMB 1,282.9 million in 2022, a decline of 36.2%[9] - The company's equity attributable to equity shareholders decreased to RMB 685.4 million in 2023 from RMB 1,167.5 million in 2022, a decline of 41.2%[9] - The group's total designated non-current assets decreased to RMB 410.349 million from RMB 683.529 million in 2022[34] - Trade and other payables decreased significantly to RMB 499,599,000 in 2023 from RMB 781,928,000 in 2022, a reduction of about 36.1%[63] Cash Flow and Financing - The company’s cash and cash equivalents increased to RMB 363.3 million in 2023 from RMB 205.6 million in 2022, an increase of 76.5%[8] - Financing costs decreased significantly to RMB 6,363,000 in 2023 from RMB 26,574,000 in 2022, a reduction of approximately 76%[37] - The company had a debt ratio of 0% as of December 31, 2023, down from approximately 10.9% on December 31, 2022, due to the repayment of all outstanding bank loans during the fiscal year 2023[97] Revenue Sources - Property sales revenue was RMB 637.108 million, up from RMB 538.068 million in 2022, reflecting a growth of 18.5%[30] - Total rental income increased to RMB 4.526 million from RMB 3.089 million, representing a growth of 46.6%[30] - Revenue from external customers in Huizhou was RMB 596.101 million, a rise of 16.5% from RMB 511.672 million in 2022[34] - Interest income from bank deposits rose to RMB 4.783 million, compared to RMB 3.592 million in 2022, marking a 33.2% increase[35] - The group reported a net income from other sources of RMB 21.289 million, significantly up from RMB 6.458 million in 2022[35] Inventory and Write-downs - Total inventory as of December 31, 2023, was RMB 660,304,000, down from RMB 1,455,589,000 in 2022, representing a decrease of about 54%[52] - The company reported a significant increase in inventory write-downs to RMB 475,069,000 in 2023 from RMB 40,997,000 in 2022, marking an increase of over 1,100%[52] - The expected recoverable amount of inventory beyond one year decreased to RMB 594,187,000 in 2023 from RMB 1,400,743,000 in 2022, a decline of approximately 58%[52] Corporate Governance and Compliance - The audit committee, consisting of three independent non-executive directors, reviewed the financial statements for the fiscal year 2023[131] - The company's auditor, KPMG, confirmed that the financial data disclosed in the preliminary announcement matched the audited financial statements for the fiscal year 2023[132] - The company has adopted the corporate governance code and has complied with all statutory provisions during the fiscal year 2023[126] - The board will continue to strengthen corporate governance practices to ensure compliance with the latest developments[127] Market Outlook and Strategy - The company aims to stabilize operations, enhance sales, and control costs to maintain business stability amid challenges in the real estate sector[71] - The People's Bank of China and financial regulators extended certain policies to support the real estate sector until the end of 2024, aiming to alleviate financial pressures[70] - The company anticipates a gradual market recovery with increased transaction volumes and prices due to policy easing and economic recovery[74] Employee and Operational Metrics - The total employee costs for fiscal year 2023 were approximately RMB 31 million, a decrease from RMB 41.8 million in fiscal year 2022[117] - The company employed a total of 60 full-time employees as of December 31, 2023, down from 130 in the previous year[117]

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分內容 而產生或因依賴該等內容而引致的任何損失承擔任何責任。 萬 城 控 股 有 限 公 司 MILLION CITIES HOLDINGS LIMITED （於開曼群島註冊成立的有限公司） （股份代號：2892） 截至2023年6月30日止六個月之 未經審計綜合中期業績公告 財務摘要 截至6月30日止六個月 2023年 2022年 變動 人民幣百萬元 人民幣百萬元 人民幣百萬元 % （未經審計） （未經審計） 收入 327.7 82.0 245.7 299.7% 毛利 125.2 23.1 102.1 442.1% 毛利率 38.2% 28.2% 不適用 +10.0p.p. ...

Financial Performance - In 2022, the revenue of Million Cities Holdings Limited was RMB 166.4 million, representing a decrease of 58.4% compared to RMB 402.4 million in 2021[15]. - Profit attributable to shareholders for 2022 was RMB 69.2 million, down 57.7% from RMB 163.5 million in 2021[15]. - The company's earnings per share (EPS) decreased to 9.22 RMB cents in 2022 from 22.18 RMB cents in 2021[17]. - For FY2022, the Group recorded a revenue of approximately RMB 571.2 million, representing a year-on-year decrease of about 57.7%[32]. - The net profit attributable to equity shareholders decreased to approximately RMB 69.2 million, a decline of approximately 58.4% year-on-year[32]. - Revenue from property sales for FY2022 amounted to approximately RMB568.1 million, representing a decrease of approximately 57.7% compared to RMB1,345.4 million in FY2021[85]. - Gross profit for FY2022 was approximately RMB275.1 million, down approximately 12.2% from RMB313.4 million in FY2021, with a gross profit margin increasing to approximately 48.2%[88][89]. - The Group's profit before taxation decreased by 18.1% to RMB 237,055,000 from RMB 289,562,000 in FY2021[58]. Market Conditions - The total sales area of commercial housing in China decreased by approximately 24.3% to 1.36 billion square meters in 2022 compared to the previous year[26]. - The sales volume of commercial housing in monetary terms fell by approximately 26.7% to RMB 13.3 trillion in 2022[26]. - Total investment in the real estate sector in 2022 was approximately RMB 13.3 trillion, reflecting a year-on-year decrease of about 10.0%[26]. - The easing of pandemic prevention measures in 2023 is expected to spur rapid economic recovery and bolster consumer confidence[35]. - The government has gradually relaxed funding restrictions on real estate enterprises, which is anticipated to relieve cash flow tightness for developers[35]. - The central government continues to emphasize that "houses are built to be inhabited but not for speculation" as a guiding principle for the real estate market[27]. - The GDP of China grew by 3% in 2022 despite the challenging economic environment[22]. Financial Management - The debt ratio improved to 47.0% in 2022 from 55.2% in 2021, indicating better financial stability[17]. - Finance costs significantly reduced by 80.6% to RMB 4,622,000 from RMB 23,845,000, indicating improved financial management[58]. - The Group's gearing ratio as of December 31, 2022, was approximately 10.9%, down from approximately 23.7% as of December 31, 2021, primarily due to bank loan repayments[113]. - Cash and cash equivalents as of December 31, 2022, amounted to approximately RMB 205.6 million, with 79.1% denominated in RMB and 20.9% in HKD[114]. - The Group's bank loans as of December 31, 2022, were interest-bearing at one-year Loan Prime Rate plus 1.95% per annum[127]. Development Projects - The Group achieved an aggregated contracted sales value of approximately RMB 487.0 million with a total gross floor area of approximately 40,800 sq.m. in FY2022[32]. - The estimated completion dates for several development projects are set for 2026, indicating ongoing expansion efforts[68]. - As of December 31, 2022, the total GFA of the Group's land bank was approximately 1,581,176 sq.m., including 409,997 sq.m. of unsold completed properties[62]. - The total unsold GFA across all completed projects is 409,997 sq.m., indicating a significant inventory that may impact future revenue[77]. - The Group's completed development projects include 55% ownership interest in Million Cities Tycoon Place Phase 3 and 4, with 10,001 sq.m. and 7,743 sq.m. unsold GFA respectively[74]. Employee Management - The Group had a total of 130 full-time employees as of December 31, 2022, down from 200 in 2021[155]. - The Group's total staff costs for FY2022 were approximately RMB41.8 million, down from RMB48.8 million in 2021, with about RMB13.5 million capitalized into inventories[155]. - The Group emphasizes employee training programs to maintain and enhance its rich experience in property development[165]. - The compensation policy for the Group's employees is based on individual performance and experience, aligning with salary trends in Hong Kong and China[165]. Governance and Management - The company has a strong board of directors with members holding significant positions in various listed companies, enhancing its governance and oversight capabilities[191]. - The company is committed to maintaining high standards of financial management and internal controls, as evidenced by the expertise of its board members[196]. - The management team includes independent non-executive directors responsible for providing independent opinions to the board[200]. - Mr. Wong Ting Chung, the Chairman and Executive Director, has over 19 years of experience in property investment and development, primarily responsible for the Group's strategic planning[169]. - Mr. Lau Ka Keung, the CEO, has been with the Group since 2006 and is responsible for executing strategic planning and general management[173].

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分內容 而產生或因依賴該等內容而引致的任何損失承擔任何責任。 萬 城 控 股 有 限 公 司 MILLION CITIES HOLDINGS LIMITED （於開曼群島註冊成立的有限公司） （股份代號：2892） 截至2022年12月31日止年度全年業績 財務摘要 截至12月31日止年度 2022年 2021年 變動 人民幣百萬元 人民幣百萬元 人民幣百萬元 % （概約） （概約） （概約） （概約） 收入 571.2 1,348.5 (777.3) –57.7% 毛利 275.1 313.4 (38.3) –12.2% 毛利率 48.2% 23.2% 不適用 25.0% 本公司權益股東應佔 ...

Economic Overview - The GDP of the People's Republic of China increased by approximately 2.5% in the first half of 2022 compared to the same period last year[12]. - The Central Government has implemented various supportive policies to stabilize the economy and has seen positive results in economic indicators[12]. - The real estate sector is expected to remain essential for housing demand despite current market challenges, with strong rigid demand anticipated due to urbanization[24][26]. Real Estate Market Performance - The total sales area of commercial buildings sold in the first half of 2022 was approximately 690.0 million square meters, representing a year-on-year decrease of approximately 22.0%[13]. - The sales value of commercial buildings in the first half of 2022 amounted to approximately RMB6.6 trillion, reflecting a year-on-year decrease of approximately 28.9%[13]. - Total investment in the real estate sector for the first half of 2022 was approximately RMB6.8 trillion, representing a year-on-year decrease of approximately 5.4%[13]. - Multiple real estate projects that were previously suspended have resumed construction as of July 2022[18]. - Local governments have introduced measures to ease the real estate market and support reasonable housing demand[18]. Financial Performance of the Group - The Group recorded a revenue of approximately RMB 82.0 million for the first half of 2022, representing an 87.1% year-on-year decrease from RMB 636.0 million in the same period last year[23][35]. - Profit attributable to equity shareholders decreased to approximately RMB 39.8 million, reflecting a year-on-year decline of approximately 66.6% from RMB 119.2 million[23][35]. - Total properties contracted sales amounted to approximately RMB 307.0 million with a total gross floor area of approximately 28,000 sq.m. in the first half of 2022[23][25]. - The gross profit for the first half of 2022 was approximately RMB 23.1 million, down 84.3% from RMB 147.0 million in the same period last year[39]. - Revenue from property sales for the six months ended June 30, 2022, was approximately RMB 80.4 million, representing a significant decrease of 87.3% from RMB 634.5 million for the same period in 2021[55]. Cost and Expense Management - Cost of sales decreased by approximately 88.0% to RMB 58.9 million, down from RMB 489.0 million in the previous year[57]. - Selling expenses decreased by approximately 75.9% to RMB 6.6 million, down from RMB 27.2 million in the previous year[66]. - Administrative expenses increased by approximately 5.3% to RMB 31.7 million, compared to RMB 30.1 million reported for the same period in 2021[67]. - Finance costs for the six months ended June 30, 2022, were approximately RMB 0.5 million, a decrease of approximately 97.7% compared to RMB 23.1 million for the same period in 2021[76][80]. Shareholder and Corporate Governance - The Directors do not recommend any payment of interim dividend for the six months ended June 30, 2022, consistent with the previous year[129]. - The company has adopted the corporate governance code as per Appendix 14 of the Listing Rules, maintaining compliance with all statutory provisions for the six months ended June 30, 2022[137]. - The Audit Committee consists of three independent non-executive Directors, ensuring effective oversight of the financial reporting process and internal controls[144]. - No incidents of non-compliance with the guidelines by relevant employees were reported for the six months ended June 30, 2022[143]. Share Capital and Options - As of June 30, 2022, the total number of issued ordinary shares was 750,000,000[5]. - Fortune Speed Investments Limited holds 562,500,000 ordinary shares, representing approximately 75.0% of the issued share capital[169]. - The company has adopted a Share Option Scheme approved on November 26, 2018, allowing eligible participants to be granted share options[174]. - The balance of share options exercised during the six months ended June 30, 2022, was zero[177]. Liquidity and Financial Position - The Group's cash and cash equivalents amounted to approximately RMB 208.8 million, with 76.2% in RMB and 23.8% in HKD[86]. - The Group's total bank loans due for repayment as of June 30, 2022, were approximately RMB 160 million, down from RMB 322.5 million as of December 31, 2021[88]. - The Group has maintained a strong liquidity position and does not expect to encounter difficulties in meeting credit obligations when they fall due[108].

Financial Performance - Revenue for 2021 reached RMB 1,348.5 million, representing an increase of 8.6% compared to RMB 1,241.4 million in 2020[13] - Earnings per share (EPS) increased by 47.6% to RMB 166.4 cents in 2021, up from RMB 112.7 cents in 2020[15] - Profit attributable to shareholders for 2021 showed significant growth, reflecting the company's strong performance amidst market challenges[18] - For FY2021, the Group recorded a turnover of approximately RMB 1.35 billion, an increase of about 8.6% year-on-year[32] - The net profit attributable to equity shareholders of the Company was approximately RMB 166.4 million, achieving a year-on-year increase of approximately 47.6%[32] - Revenue from property sales for FY2021 amounted to approximately RMB1,345.4 million, representing an increase of approximately 8.6% compared to FY2020's RMB1,238.6 million[88] Market Conditions - The global economy continued to recover in 2021, with China's GDP growing approximately 8.1%, providing a favorable backdrop for the company's operations[21] - The Central Government is expected to implement proactive policies to stabilize the real estate market, with some banks already reducing down payment rates and mortgage rates[37] - In 2021, the total sales area of commercial housing in China was approximately 1.8 billion sq.m., representing a year-on-year increase of about 1.9%[25] - The sales amount of commercial housing increased by approximately 4.8% to around RMB 18.2 trillion, indicating a year-on-year increase in the average selling price of approximately 2.8%[25] Strategic Initiatives - The company is focused on expanding its market presence and enhancing its product offerings to capitalize on economic recovery trends[21] - New product development and technological advancements are key strategies for the company to drive future growth[21] - The company is actively exploring potential mergers and acquisitions to strengthen its market position and diversify its portfolio[21] - The Group is focusing on the Greater Bay Area (GBA) to capture fundamental housing demand, particularly in Huizhou[31] - The Group is exploring investment opportunities in green lifestyle and sustainable development projects to diversify revenue sources and create long-term value for shareholders[41] - The Group is exploring potential property development projects in other cities within the Greater Bay Area to enhance shareholder returns[43] Financial Position - The debt-to-asset ratio improved to 55.2% in 2021, a decrease of 10.4% from 65.6% in 2020[17] - The Group aims to maintain a robust financial position while pursuing strategic initiatives for long-term growth[21] - The Group's gearing ratio as of December 31, 2021, was approximately 23.7%, down from 31.5% as of December 31, 2020, due to reduced bank borrowings following project completions[114] - As of December 31, 2021, the Group's cash and cash equivalents amounted to approximately RMB 373.5 million, with 86.4% in RMB and 13.6% in HKD[115] Operational Challenges - Management remains cautious about potential challenges posed by international political and economic conflicts, as well as ongoing pandemic effects[21] - Selling expenses increased significantly by 211.2% to RMB 44,804,000 from RMB 14,396,000 in FY2020[58] - Finance costs rose by 181.5% to RMB 23,845,000 compared to RMB 8,470,000 in the previous year[58] - The increase in cost of sales was primarily due to higher development costs for Tianjin Projects, specifically Million Cities Tycoon Place Phases 3 and 4[90] Leadership and Governance - Mr. Lau Ka Keung has been the CEO and executive director of Million Cities Development Limited since August 2016, overseeing strategic planning and general management[180] - Mr. Li Wa Tat, appointed as CFO and company secretary on August 26, 2021, is responsible for financial management and strategy formulation[184] - The company has a strong leadership team with members holding significant positions in other listed companies, enhancing its governance and strategic oversight[191] - The company is committed to maintaining high standards of corporate governance through its independent non-executive directors[190] Development Projects - The Group's properties under development include 231,234 sq.m. of site area, with a total GFA of 454,070 sq.m. as of December 31, 2021[71] - The completed development projects as of December 31, 2021, include 46,462 sq.m. for Million Cities Tycoon Place Phase 3, with 11,623 sq.m. unsold, representing a 55% ownership interest[76] - The Group's ongoing projects reflect a mix of residential and commercial developments, with significant GFA planned for future phases[71] - The total unsold GFA across various projects indicates potential revenue opportunities for the Group moving forward[76]