[Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In FY2024, the company turned from profit to loss with revenue decreasing by 22.5% to RMB 2.76 billion and a net loss of RMB 264 million Key Profit or Loss Items for FY2024 | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 2,762,136 | 3,565,598 | -22.5% | | Gross Profit | 123,111 | 434,203 | -71.6% | | Operating (Loss) / Profit | (160,663) | 133,728 | From profit to loss | | (Loss) / Profit for the Year | (263,971) | 36,817 | From profit to loss | | (Loss) / Profit Attributable to Owners of the Company | (270,424) | 40,944 | From profit to loss | | (Loss) / Earnings Per Share (RMB fen) | (22.54) | 3.41 | From profit to loss | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive expense for the year was RMB 264 million, consistent with the net loss, indicating no other significant comprehensive items - Total comprehensive expense for the year was **RMB 264 million**, matching the net loss, indicating no other significant gains or losses not recognized in the profit or loss statement[5](index=5&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of end-2024, total assets decreased by 13.1% to RMB 7.90 billion, and total equity by 14.2% to RMB 1.59 billion, with persistent short-term borrowing pressure Key Balance Sheet Items as of End-2024 | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Total Assets | 7,896,525 | 9,085,205 | -13.1% | | Total Liabilities | 6,302,455 | 7,227,164 | -12.8% | | Total Equity | 1,594,070 | 1,858,041 | -14.2% | | Net Current Assets | 1,674,036 | 1,772,534 | -5.6% | | Cash and Cash Equivalents | 253,342 | 274,808 | -7.8% | - The company's core asset, 'Properties held for sale or under development', decreased from **RMB 7.52 billion** to **RMB 6.60 billion**, reflecting the impact of property sales and value impairment[6](index=6&type=chunk) - Of total borrowings, current liabilities due within one year amounted to **RMB 647 million**, accounting for **60.8%** of total borrowings, indicating short-term repayment pressure[7](index=7&type=chunk)[64](index=64&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) [Basis of Preparation and Going Concern](index=6&type=section&id=2%20Basis%20of%20Preparation) Auditors highlighted material uncertainty regarding going concern due to annual loss, low cash, high short-term liabilities, and potential financial guarantee outflows - The auditor's report highlighted significant doubts about the company's going concern ability, primarily due to: an annual loss of approximately **RMB 264 million**, cash and equivalents of only **RMB 253 million**, short-term borrowings of **RMB 647 million** due within the next 12 months, and potential cash outflows of approximately **RMB 6.84 billion** from financial guarantees[11](index=11&type=chunk)[89](index=89&type=chunk) - Management plans to implement four measures to address liquidity risks: 1. Actively adjust sales and pre-sale activities to accelerate cash collection 2. Negotiate payment arrangements with major contractors and suppliers 3. Actively communicate with banks to obtain project loans or discuss better repayment plans 4. Obtain written funding commitments from related parties and non-controlling shareholders, who will not demand repayment of approximately **RMB 47.12 million** in payables[13](index=13&type=chunk) [Revenue and Segment Information](index=10&type=section&id=4%20Revenue) 2024 total revenue was RMB 2.76 billion, dominated by property sales, with all revenue and non-current assets originating from China 2024 Revenue Breakdown | Revenue Source | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Property Sales | 2,746,959 | 3,554,210 | | Service Income | 5,371 | 2,668 | | Rental Income | 9,806 | 8,720 | | **Total** | **2,762,136** | **3,565,598** | - The Group's business is highly concentrated, primarily engaged in property development in China, thus no operating segments are identified. All revenue and non-current assets are located in China[20](index=20&type=chunk) [Earnings per Share and Dividends](index=13&type=section&id=11%20Earnings%20per%20Share) Basic and diluted loss per share for 2024 was RMB 22.54 fen, a turn from prior year's profit, with no dividend recommended - Basic and diluted loss per share was **RMB 22.54 fen**, compared to a profit of **RMB 3.41 fen** in the prior year[24](index=24&type=chunk) - The Board did not recommend any dividend for the year 2024[25](index=25&type=chunk) [Capital Commitments and Contingent Liabilities](index=15&type=section&id=17%20Commitments) As of end-2024, the Group had RMB 840 million in capital commitments and significant contingent liabilities including mortgage and shareholder loan guarantees - Total capital expenditures committed but not yet incurred by the Group amounted to **RMB 842 million**, primarily for properties under development for sale[32](index=32&type=chunk) - The Group has several contingent liabilities, including: - Mortgage loan guarantees provided to homebuyers - Guarantees for the repayment of a shareholder loan of approximately **RMB 229 million** for an associate - Pledges of investment properties and properties under development for third-party borrowings of approximately **RMB 101 million**[68](index=68&type=chunk)[69](index=69&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Chairman's Statement](index=16&type=section&id=Chairman's%20Statement) The Chairman's Statement highlights 2024 as a challenging year, with focus on 'ensuring timely delivery' and utilizing financing mechanisms, expecting market stabilization in 2025 - Facing industry difficulties, the company prioritized 'ensuring timely delivery of properties' as its primary social responsibility[34](index=34&type=chunk) - The company actively utilized the real estate financing coordination mechanism, ensuring all 'white list' projects were approved to alleviate funding pressure[34](index=34&type=chunk) - Looking ahead to 2025, the company believes policy support is expected to stabilize the market, and it will focus on project delivery, quality services, and integration of the entire industry chain resources[40](index=40&type=chunk) [Industry Review](index=19&type=section&id=Industry%20Review) The report reviews the severe downturn in China's and Henan's real estate markets in 2024, with significant declines across key indicators despite policy support Key National Real Estate Market Data Changes in 2024 | Indicator | YoY Change | | :--- | :--- | | Real Estate Development Investment | -10.6% | | New Construction Starts Area | -23.0% | | Completed Construction Area | -27.7% | Key Henan Province Real Estate Market Data Changes in 2024 | Indicator | YoY Change | | :--- | :--- | | Real Estate Development Investment | -7.5% | | Completed Construction Area | -44.5% | | New Commercial Property Sales Area | -11.0% | | New Commercial Property Sales Value | -13.8% | [Business Overview](index=20&type=section&id=Business%20Overview) In 2024, the Group achieved RMB 1.87 billion in contracted sales, a 29.1% decrease, with a land bank of 3.03 million sqm primarily in Xuchang - In 2024, the Group's cumulative contracted sales amounted to approximately **RMB 1.87 billion**, with a contracted sales area of approximately **324 thousand square meters**[48](index=48&type=chunk) - As of end-2024, the Group's total land bank was approximately **3.03 million square meters**, primarily concentrated in various districts and counties under Xuchang City, Henan Province[49](index=49&type=chunk) 2024 Contracted Sales Performance | Indicator | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Contracted Sales Value (RMB millions) | 1,867.9 | 2,634.2 | -29.1% | | Contracted Sales Area (square meters) | 323,710 | 437,621 | -26.0% | | Average Selling Price (RMB per square meter) | 5,608 | 5,822 | -3.7% | [Financial Review](index=24&type=section&id=Financial%20Review) FY2024 saw significant financial deterioration with revenue down 22.5%, gross margin plummeting, and gearing ratio rising to 66.8%, intensifying financial risks Financial Performance Summary | Indicator | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue (RMB millions) | 2,762.1 | 3,565.6 | -22.5% | | Gross Profit (RMB millions) | 123.1 | 434.2 | -71.6% | | Gross Profit Margin | 4.5% | 12.2% | -7.7 percentage points | | (Loss) / Profit for the Year (RMB millions) | (264.0) | 36.8 | -817.4% | - Property sales gross profit margin decreased from **12.0%** in 2023 to **4.2%** in 2024, primarily due to the residential property sales gross profit margin falling from **12.8%** to **4.7%**[56](index=56&type=chunk)[57](index=57&type=chunk) Key Financial Ratios | Ratio | 2024 | 2023 | | :--- | :--- | :--- | | Return on Assets | -3.1% | 0.4% | | Return on Equity | -15.3% | 2.0% | | Gearing Ratio | 66.8% | 51.1% | | Debt-to-Equity Ratio | 50.9% | 36.3% | [Key Risk Factors](index=31&type=section&id=Key%20Risk%20Factors) Main risks include high reliance on Henan's property market, intense competition, macroeconomic impacts, and interest/exchange rate fluctuations - Business is highly dependent on the property market performance in Xuchang City and Henan Province, making it susceptible to local economic, policy, and market supply-demand changes[72](index=72&type=chunk) - The real estate market is highly competitive, and the company faces challenges in land acquisition, brand recognition, pricing, and design quality[72](index=72&type=chunk) - The Group faces interest rate risk (primarily from borrowings) and foreign exchange risk (primarily from HKD bank deposits), but currently has no hedging policy in place[73](index=73&type=chunk) [Future Outlook](index=33&type=section&id=Future%20Outlook) For 2025, the Group anticipates market stabilization, focusing on flexible sales, efficient fund management, strategic land acquisition, and high-quality project development - Sales Strategy: Focus on accelerating sales of commercial properties and parking spaces, and expanding customer reach through online and offline integration[81](index=81&type=chunk) - Fund Management: Fully utilize government stimulus policies to shorten subscription, signing, and cash collection cycles, reducing capital tie-up[81](index=81&type=chunk) - Development Strategy: Adhere to the strategy of 'deepening presence in Henan, intensive cultivation in Xuchang', steadily acquiring new land reserves guided by market demand and profit[82](index=82&type=chunk) [Other Important Matters](index=34&type=section&id=Other%20Important%20Matters) [Suspension of Trading and Resumption Guidance](index=36&type=section&id=Suspension%20of%20Trading%20and%20Resumption%20Guidance) Shares suspended since April 2, 2024, with Stock Exchange requiring independent investigation, management integrity proof, internal control review, and outstanding financial results for resumption - The company's shares have been suspended from trading since **April 2, 2024**, pending fulfillment of the Stock Exchange's resumption guidance[92](index=92&type=chunk) - The core requirements of the Stock Exchange's resumption guidance include: an independent investigation into prepayment issues, demonstration of management integrity, an independent internal control review, publication of all outstanding financial results, and demonstration of compliance with Listing Rule 13.24 (sufficient business operations or assets)[94](index=94&type=chunk)[99](index=99&type=chunk) - The company's former auditor, PricewaterhouseCoopers, has resigned, and the new auditor is Evergreen (Hong Kong) CPA Limited[93](index=93&type=chunk)[97](index=97&type=chunk)

[Financial Statements](index=2&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, the company's revenue slightly decreased, gross profit significantly declined, and it reported a net loss of RMB 36.1 million, reversing from a profit in the prior year | Indicator | H1 2024 (RMB thousands) | H1 2023 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,467,599 | 1,488,151 | -1.4% | | Gross Profit | 139,051 | 259,227 | -46.3% | | Operating Profit | 13,216 | 131,773 | -89.9% | | (Loss)/Profit for the Period | (36,099) | 69,176 | Reversed to Loss | | (Loss)/Profit Attributable to Owners of the Company | (50,718) | 60,763 | Reversed to Loss | | (Loss)/Earnings Per Share (RMB cents) | (4.23) | 5.06 | Reversed to Loss | [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2024, the company reported total comprehensive expenses of RMB 36.1 million, aligning with the period's net loss, a reversal from comprehensive income in the prior year | Item | H1 2024 (RMB thousands) | H1 2023 (RMB thousands) | | :--- | :--- | :--- | | (Loss)/Profit and Total Comprehensive (Expense)/Income for the Period | (36,099) | 69,176 | | Total Comprehensive (Expense)/Income Attributable to Owners of the Company | (50,718) | 60,763 | [Unaudited Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, total assets and liabilities decreased, total equity slightly declined, and cash and cash equivalents reduced while bank borrowings increased | Balance Sheet Item | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Assets | 8,333,641 | 9,085,205 | -8.3% | | Of which: Cash and Cash Equivalents | 238,467 | 274,808 | -13.2% | | Of which: Properties Held for Sale or Under Development | 6,956,459 | 7,521,685 | -7.5% | | **Liabilities** | | | | | Total Liabilities | 6,511,699 | 7,227,164 | -9.9% | | Of which: Bank Borrowings (Current + Non-current) | 670,910 | 415,400 | +61.5% | | Of which: Contract Liabilities | 3,382,407 | 3,956,814 | -14.5% | | **Equity** | | | | | Total Equity | 1,821,942 | 1,858,041 | -1.9% | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) [Basis of Preparation and Going Concern](index=6&type=section&id=2%20Basis%20of%20Preparation) The financial statements' basis of preparation has significant uncertainty due to the company's reported loss, low cash, substantial short-term debt, and potential guarantee-related outflows, raising material doubts about its going concern ability - The Group incurred a loss of approximately **RMB 36.1 million** during the reporting period, with cash and cash equivalents of only approximately **RMB 238.5 million**[14](index=14&type=chunk) - The Group faces approximately **RMB 6.13 billion** in current liabilities, including **RMB 749 million** in bank and other borrowings due within one year, approximately **RMB 948 million** in capital commitments, and potential cash outflows of approximately **RMB 6.74 billion** from financial guarantees[14](index=14&type=chunk) - Management's mitigating actions include actively adjusting sales, negotiating payment terms with suppliers, communicating with banks for financing, and securing funding support commitments from related parties and non-controlling shareholders[14](index=14&type=chunk) [Revenue Analysis](index=9&type=section&id=4%20Revenue) Total revenue for H1 2024 slightly decreased to RMB 1.468 billion, primarily driven by property sales which declined, while service income saw substantial growth from a small base, with all revenue sourced from China | Revenue Source | H1 2024 (RMB thousands) | H1 2023 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Sales of Properties | 1,457,879 | 1,481,189 | -1.6% | | Service Income | 4,951 | 1,365 | +262.7% | | Rental Income | 4,769 | 5,597 | -14.8% | | **Total** | **1,467,599** | **1,488,151** | **-1.4%** | - The vast majority of revenue (**RMB 1.458 billion**) is recognized at a point in time, primarily corresponding to the delivery and recognition of property sales[20](index=20&type=chunk) [Key Asset and Liability Items](index=13&type=section&id=12%20Properties%20Held%20for%20Sale%20or%20Under%20Development) As of June 30, 2024, the net book value of properties held for sale or under development decreased, alongside reductions in trade payables and contract liabilities, reflecting slower market activity and project delivery | Item | June 30, 2024 (RMB thousands) | Dec 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Properties Under Development for Sale | 4,796,537 | 5,295,466 | | Properties Held for Sale | 2,430,856 | 2,439,482 | | Less: Provision | (270,934) | (213,263) | | **Net Book Value** | **6,956,459** | **7,521,685** | - Total trade payables amounted to **RMB 1.32 billion**, with approximately **70% (RMB 925 million)** due within one year[31](index=31&type=chunk) - Contract liabilities (primarily pre-received property payments) decreased from **RMB 3.96 billion** at the beginning of the year to **RMB 3.38 billion**, to be recognized as revenue upon future transfer of property control[34](index=34&type=chunk) - Capital commitments for properties under development for sale amounted to **RMB 948 million**, a significant reduction from **RMB 1.334 billion** at the beginning of the year[35](index=35&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Review and Business Overview](index=17&type=section&id=Industry%20Review) In H1 2024, China's and Henan's real estate markets faced continued pressure with declining indicators, prompting the Group to focus on property delivery and inventory reduction, successfully completing 259,000 square meters of deliveries - In H1 2024, national real estate development investment decreased by **10.1%** year-on-year, and sales of new commercial properties declined by **25.0%**; Henan Province's real estate development investment decreased by **9.1%** year-on-year, with new commercial property sales down **22.6%**[36](index=36&type=chunk) - The Group's core tasks are "ensuring property delivery" and "reducing inventory," having completed planned deliveries of approximately **259,000 square meters** in the first half[38](index=38&type=chunk) - As of June 30, 2024, the Group's land reserve had a gross floor area of approximately **3.2 million square meters**[40](index=40&type=chunk) [Contracted Sales Performance](index=20&type=section&id=Contracted%20Sales) In H1 2024, the Group's total contracted sales significantly decreased by 46.8% to RMB 839.4 million, with residential sales dropping sharply and average selling prices declining due to market conditions | Contracted Sales | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | **Sales Value (RMB millions)** | | | | | Residential Units | 673.4 | 1,313.2 | -48.7% | | Commercial Units | 138.4 | 214.4 | -35.4% | | **Total** | **839.4** | **1,578.4** | **-46.8%** | | **Average Selling Price** | | | | | Saleable GFA (RMB/sqm) | 5,671 | 5,968 | -5.0% | | Parking Spaces (RMB/unit) | 38,114 | 47,442 | -19.7% | [Financial Performance Review](index=21&type=section&id=Financial%20Review) In H1 2024, the company faced severe financial challenges, reporting a net loss of RMB 36.1 million due to a significant 46.3% decline in gross profit and a reduced gross profit margin, despite a slight revenue decrease [Overall Performance](index=21&type=section&id=Overall%20Performance) In H1 2024, the Group's revenue slightly decreased, gross profit sharply declined by 46.3% with a reduced margin, resulting in a net loss of RMB 36.1 million | Financial Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (RMB millions) | 1,467.6 | 1,488.2 | -1.4% | | Gross Profit (RMB millions) | 139.1 | 259.2 | -46.3% | | Gross Profit Margin | 9.5% | 17.4% | -7.9 percentage points | | Net (Loss)/Profit (RMB millions) | (36.1) | 69.2 | Reversed to Loss | [Revenue and Gross Profit Analysis](index=21&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Property sales, the core revenue source, declined, and gross profit margins for both residential and commercial properties significantly deteriorated due to lower average selling prices and increased costs | Property Type | H1 2024 Gross Profit Margin | H1 2023 Gross Profit Margin | | :--- | :--- | :--- | | Residential | 8.5% | 18.4% | | Commercial | 7.5% | 16.1% | | **Total Property Sales** | **9.1%** | **17.2%** | - The primary reasons for the decline in gross profit margin were the decrease in average selling prices of delivered residential properties and increased costs for commercial properties[48](index=48&type=chunk) [Expenses and Taxation](index=24&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses decreased by 17.8% to RMB 58.1 million, administrative expenses remained stable, and income tax expense declined by 21.5% due to reduced gross profit - Selling and marketing expenses decreased by **17.8%** year-on-year, primarily due to reduced advertising and promotional costs and sales agent commissions[51](index=51&type=chunk) - Administrative expenses slightly increased by **0.7%** year-on-year to **RMB 56.6 million**[52](index=52&type=chunk) - Income tax expense decreased by **21.5%** year-on-year to **RMB 49.2 million**, primarily due to reduced gross profit[55](index=55&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Resources) As of June 30, 2024, the Group's liquidity was tight, with reduced cash, increased borrowings, and significantly higher gearing and debt-to-equity ratios, leading the Board to conserve cash by not declaring an interim dividend | Indicator | June 30, 2024 (RMB millions) | Dec 31, 2023 (RMB millions) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 238.5 | 274.8 | | Total Borrowings | 1,092.0 | 948.6 | | - Due within one year | 748.5 | 678.6 | | Key Financial Ratios | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 1.3 | 1.3 | | Gearing Ratio | 59.9% | 51.1% | | Debt-to-Equity Ratio | 46.8% | 36.3% | - The increase in the gearing ratio was primarily due to new borrowings obtained during the period[65](index=65&type=chunk) - The Board does not recommend the payment of an interim dividend[66](index=66&type=chunk) [Principal Risk Factors](index=28&type=section&id=Principal%20Risk%20Factors) The Group faces multiple risks, including high geographical concentration in Henan, intense market competition, interest rate fluctuations, macroeconomic and policy uncertainties, and potential impacts from force majeure events - Business is highly dependent on the property market performance in Henan Province (especially Xuchang City), making it susceptible to local economic conditions, policies, and market supply-demand dynamics[63](index=63&type=chunk) - The real estate market is highly competitive, with competition from large national and local developers in land acquisition, funding, branding, and other aspects[63](index=63&type=chunk) - The Group faces interest rate fluctuation risk, as floating-rate borrowings expose it to cash flow interest rate risk, with no hedging activities undertaken[64](index=64&type=chunk) [Outlook](index=30&type=section&id=Outlook) Management anticipates continued real estate market pressure in H2, but expects gradual stabilization with policy support, focusing on strict fund management, marketing innovation, and integrating environmental considerations to ensure sustainable operations - New home sales are expected to see a narrower year-on-year decline in the second half, but the market remains in a downturn, requiring time for confidence to recover[71](index=71&type=chunk) - The Group's top priority for the second half is strict monitoring of fund allocation management to ensure efficient fund utilization and stable cash flow[71](index=71&type=chunk) - The Group will intensify marketing strategy innovation and integrate environmental protection and carbon neutrality concepts into design and construction to enhance competitiveness and fulfill social responsibility[71](index=71&type=chunk)[72](index=72&type=chunk) [Other Information](index=31&type=section&id=Other%20Information) [Events After the Reporting Period](index=31&type=section&id=Events%20After%20the%20Reporting%20Period) Post-reporting period, the company's shares were suspended from trading on April 2, 2024, pending fulfillment of resumption guidance including an independent investigation, and a new auditor was appointed following the resignation of the previous one - The company's shares have been suspended from trading on the Stock Exchange since **April 2, 2024**, and will remain suspended[73](index=73&type=chunk) - The Stock Exchange has issued resumption guidance, requiring the company to conduct an independent investigation into advance payment issues, demonstrate management integrity, conduct an internal control review, and publish all outstanding financial results, among other requirements[75](index=75&type=chunk)[80](index=80&type=chunk) - Former auditor PricewaterhouseCoopers resigned on **August 9, 2024**, and Evergreen (Hong Kong) CPA Limited was appointed as the new auditor on **September 25, 2024**[74](index=74&type=chunk)[78](index=78&type=chunk) [Corporate Governance](index=33&type=section&id=Corporate%20Governance) The company emphasizes corporate transparency and accountability, with the Board confirming compliance with corporate governance codes and the interim financial report reviewed by the Audit Committee but not audited by the company's auditor - The Board believes the company has complied with all applicable code provisions contained in Appendix C1 of the Listing Rules on Corporate Governance Code[81](index=81&type=chunk) - The interim financial statements have been reviewed by the Audit Committee but have not been audited or reviewed by the company's auditor[84](index=84&type=chunk)[85](index=85&type=chunk)

[Financial Statements Summary](index=2&type=section&id=Financial%20Statements) In 2023, revenue grew 24.6% to RMB 3.57 billion, but net profit sharply declined 52.7% to RMB 36.82 million, with significant short-term debt raising going concern uncertainties [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In 2023, revenue increased 24.6% to RMB 3.57 billion, but gross profit only grew 3.0%, while profit for the year plummeted 52.7% to RMB 36.82 million due to increased expenses and taxes 2023 Consolidated Statement of Profit or Loss Key Data | Indicator | 2023 (RMB Thousands) | 2022 (RMB Thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 3,565,598 | 2,861,771 | +24.6% | | Gross Profit | 434,203 | 421,376 | +3.0% | | Operating Profit | 133,728 | 154,409 | -13.4% | | Profit for the Year | 36,817 | 77,769 | -52.7% | | Profit Attributable to Owners of the Company | 40,944 | 84,812 | -51.7% | | Basic and Diluted Earnings Per Share (RMB Cents) | 3.41 | 7.07 | -51.8% | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of 2023 year-end, total assets decreased 9.4% to RMB 9.09 billion, and total liabilities decreased 11.4% to RMB 7.23 billion, with significant liquidity pressure due to high current liabilities and low cash balances 2023 Year-End Consolidated Statement of Financial Position Key Data | Indicator | 2023 (RMB Thousands) | 2022 (RMB Thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Total Assets | 9,085,205 | 10,029,496 | -9.4% | | Total Liabilities | 7,227,164 | 8,156,029 | -11.4% | | Total Equity | 1,858,041 | 1,873,467 | -0.8% | | Net Current Assets | 1,772,534 | 1,814,111 | -2.3% | | Cash and Cash Equivalents | 274,808 | 221,059 | +24.3% | [Summary of Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Financial%20Statements) Notes reveal significant going concern uncertainties due to low cash, substantial short-term debt, and high financial guarantees, alongside details on revenue, dividends, EPS, and post-reporting period events [Going Concern Ability](index=7&type=section&id=Going%20Concern%20Ability) The report highlights significant going concern uncertainties due to low cash, high short-term debt, and substantial financial guarantees, despite management's mitigating actions and assessment of appropriate financial statement preparation - Significant uncertainties exist that may cast substantial doubt on the Group's ability to continue as a going concern, primarily due to[11](index=11&type=chunk) - Cash and cash equivalents of approximately **RMB 275 million**, while bank and other borrowings due within the next twelve months amount to **RMB 679 million**[11](index=11&type=chunk) - Potential cash outflows of approximately **RMB 7.19 billion** from financial guarantees provided[11](index=11&type=chunk) - Capital commitments for properties under development and land use rights of approximately **RMB 1.33 billion**[11](index=11&type=chunk) - Management's mitigating measures include[13](index=13&type=chunk) - Actively adjusting sales and pre-sale activities to monitor cash collection[13](index=13&type=chunk) - Negotiating payment arrangements with major contractors and suppliers[13](index=13&type=chunk) - Proactively communicating with financial institutions to secure project development loans or better repayment schedules[13](index=13&type=chunk) - Obtaining written commitments for financial support from related parties and non-controlling shareholders, who will not demand repayment of approximately **RMB 98.84 million**[13](index=13&type=chunk) [Revenue and Segment Information](index=10&type=section&id=Revenue%20and%20Segment%20Information) In 2023, total revenue was RMB 3.57 billion, predominantly from property sales (99.7%), with all revenue and non-current assets originating from China, leading to a single reporting segment 2023 Revenue Composition | Revenue Source | 2023 (RMB Thousands) | 2022 (RMB Thousands) | Proportion (2023) | | :--- | :--- | :--- | :--- | | Property Sales | 3,554,210 | 2,850,035 | 99.7% | | Rental Income | 8,720 | 6,832 | 0.2% | | Service Income | 2,668 | 4,904 | 0.1% | | **Total** | **3,565,598** | **2,861,771** | **100.0%** | - The Group primarily engages in a single business in China, property development, thus management reviews operations as one reporting segment, and no segment information is presented[21](index=21&type=chunk) - All of the Group's revenue is derived from China, and all non-current assets are located in China[22](index=22&type=chunk) [Dividends and Earnings Per Share](index=13&type=section&id=Dividends%20and%20Earnings%20Per%20Share) The Board recommends no dividend for 2023, with basic and diluted EPS significantly declining from RMB 7.07 cents to RMB 3.41 cents due to lower profit, and diluted EPS equaling basic EPS - The Board does not recommend the payment of any dividend for the year ended December 31, 2023[30](index=30&type=chunk)[44](index=44&type=chunk) Earnings Per Share | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (RMB Thousands) | 40,944 | 84,812 | | Weighted Average Number of Ordinary Shares in Issue (Thousands of Shares) | 1,200,000 | 1,200,000 | | Basic and Diluted Earnings Per Share (RMB Cents) | 3.41 | 7.07 | [Post-Reporting Period Events (Notes)](index=16&type=section&id=Post-Reporting%20Period%20Events%20(Notes)) Post-reporting period, the Group sold its 41% equity in Xuchang Hengzhu for zero consideration in April 2024, incurring no gain or loss, and also early repaid RMB 90 million in other long-term borrowings to reduce interest expenses - On April 17, 2024, the Group disposed of its **41%** equity interest in associate Xuchang Hengzhu to the controlling shareholder for zero consideration, ceasing to be an associate of the Group[38](index=38&type=chunk) - In April 2024, the Group early repaid other long-term borrowings of **RMB 90 million** to reduce interest expenses[39](index=39&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) Management reports 2023 revenue growth of 24.6% despite a weak property market, but profit sharply declined 52.7% due to price drops and cost increases, with heightened financial risk from a significantly increased leverage ratio [Chairman's Report](index=17&type=section&id=Chairman%27s%20Report) The Chairman's report highlights the Group's focus on sales in a challenging 2023 property market, achieving 24.6% revenue growth but a 52.7% net profit decline, with plans for market refinement and financial efficiency in 2024 - In 2023, the Group prioritized sales, increasing marketing incentives and assessments, achieving relatively good results among local property developers[41](index=41&type=chunk) 2023 Annual Performance Summary | Indicator | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. **RMB 3,565.6 million** | Approx. **RMB 2,861.8 million** | +24.6% | | Net Profit | Approx. **RMB 36.8 million** | Approx. **RMB 77.8 million** | -52.7% | - Looking ahead to 2024, the Group will address challenges by coordinating fund allocation, deepening product R&D, adjusting marketing strategies, and improving risk management systems[46](index=46&type=chunk) [Industry Review and Business Overview](index=21&type=section&id=Industry%20Review%20and%20Business%20Overview) The 2023 property market saw declines in investment and sales, yet the Group achieved 23.5% growth in contracted sales to RMB 2.63 billion, holding 3.5 million sqm of land reserves primarily in Xuchang, despite a drop in average selling price - In 2023, national real estate development investment decreased by **9.6%**, new housing starts by **20.4%**, and commercial housing sales by **8.5%**, indicating a deep market adjustment period[49](index=49&type=chunk)[50](index=50&type=chunk) 2023 Contract Sales Performance | Indicator | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Contract Sales Value (RMB Millions) | 2,634.2 | 2,132.3 | +23.5% | | Contracted Saleable GFA (Square Meters) | 437,621 | 337,623 | +29.6% | | Average Selling Price per Saleable GFA (RMB/Square Meter) | 5,822 | 6,152 | -5.4% | - As of December 31, 2023, the Group's total land bank amounted to approximately **3.5 million square meters** of GFA, primarily located in Xuchang City (**98.19%**)[54](index=54&type=chunk) [Financial Review](index=25&type=section&id=Financial%20Review) Revenue grew 24.6% due to increased confirmed GFA, but gross margin fell from 14.7% to 12.2% due to lower property ASP and negative margins on parking/storage, while sales expenses and income tax rose, and the leverage ratio significantly increased to 51.1% - Revenue increased by **24.6%** to **RMB 3.57 billion**, primarily due to an increase in recognized GFA of residential properties from **439,000 square meters** to **605,000 square meters**[60](index=60&type=chunk) - Gross profit margin decreased from **14.7%** to **12.2%**, mainly due to lower gross profit margin for residential properties and a negative gross profit margin of **-66.8%** on sales of parking spaces and storage rooms[57](index=57&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - As of 2023 year-end, total borrowings increased to **RMB 949 million** (2022: RMB 673 million), with **RMB 679 million** classified as current liabilities due within one year[69](index=69&type=chunk)[70](index=70&type=chunk) Key Financial Ratios | Ratio | 2023 | 2022 | | :--- | :--- | :--- | | Return on Assets (ROA) | 0.4% | 0.8% | | Return on Equity (ROE) | 2.0% | 4.2% | | Leverage Ratio | 51.1% | 35.9% | | Debt-to-Equity Ratio | 36.3% | 24.1% | [Key Risk Factors](index=32&type=section&id=Key%20Risk%20Factors) The company faces significant risks including high geographical concentration in Henan Province, intense market competition from other developers, and interest rate risk from floating-rate borrowings without hedging policies - Geographical concentration risk: All projects are located in China's Henan Province, making business performance highly dependent on the property market in Xuchang City and Henan Province[78](index=78&type=chunk) - Market competition risk: Facing intense competition from large national and local developers in land acquisition, financial resources, brand recognition, and pricing[79](index=79&type=chunk) - Interest rate risk: Borrowings bearing floating interest rates expose the Group to cash flow interest rate risk, and the company has no hedging policy[79](index=79&type=chunk) [Human Resources](index=34&type=section&id=Human%20Resources) As of 2023 year-end, the Group had 616 employees, a decrease from 755 in 2022, with compensation policies reviewed by the Remuneration Committee, and benefits including medical and social insurance, alongside a share option scheme - As of December 31, 2023, the Group had a total of **616** employees, a decrease from **755** in the previous year[86](index=86&type=chunk) - The company has a Remuneration Committee to determine directors' remuneration and provides employees with medical insurance, social insurance, and other benefits, along with a share option scheme for incentives[86](index=86&type=chunk)[87](index=87&type=chunk) [Corporate Governance and Other Information](index=36&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section reveals severe governance and operational challenges, including a qualified auditor's opinion on going concern, share trading suspension since April 2024, auditor resignation, and stringent HKEX resumption guidance indicating internal control and management integrity issues [Auditor's Opinion on Material Uncertainty Related to Going Concern](index=37&type=section&id=Auditor%27s%20Opinion%20on%20Material%20Uncertainty%20Related%20to%20Going%20Concern) The auditor's report highlights a material uncertainty regarding the Group's going concern ability due to low cash, significant short-term debt, and potential financial guarantee outflows, though their opinion remains unmodified - The auditor's report draws attention to a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern, but the auditor's opinion is not modified in respect of this matter[95](index=95&type=chunk) - Specific factors causing uncertainty include: low cash balance (approx. **RMB 275 million**), substantial short-term liabilities (borrowings due within 12 months approx. **RMB 679 million** and capital commitments approx. **RMB 1.33 billion**), and potential cash outflows from financial guarantees (approx. **RMB 7.19 billion**)[95](index=95&type=chunk) [Material Post-Reporting Period Events](index=38&type=section&id=Material%20Post-Reporting%20Period%20Events) Significant post-reporting events include share trading suspension since April 2024, the resignation of former auditor PwC and appointment of a new one, and HKEX resumption guidance requiring independent investigations and internal control reviews - The Company's shares have been suspended from trading on the Stock Exchange since **9:00 a.m. on April 2, 2024**, and will remain suspended[99](index=99&type=chunk) - Former auditor PricewaterhouseCoopers has resigned, and Evergreen (Hong Kong) CPA Limited has been appointed as the new auditor[100](index=100&type=chunk)[104](index=104&type=chunk) - The Stock Exchange has issued resumption guidance requiring the Company to[101](index=101&type=chunk)[107](index=107&type=chunk) - Conduct an independent investigation into prepayment issues[101](index=101&type=chunk)[107](index=107&type=chunk) - Demonstrate management's integrity[101](index=101&type=chunk)[107](index=107&type=chunk) - Conduct an independent internal control review[101](index=101&type=chunk)[107](index=107&type=chunk) - Publish all outstanding financial results[101](index=101&type=chunk)[107](index=107&type=chunk) - Demonstrate compliance with Listing Rule **13.24**[101](index=101&type=chunk)[107](index=107&type=chunk) - Inform the market of all material information[101](index=101&type=chunk)[107](index=107&type=chunk) [Continued Suspension of Trading](index=40&type=section&id=Continued%20Suspension%20of%20Trading) The company's shares remain suspended from trading on the Hong Kong Stock Exchange since April 2, 2024, and will continue until further notice, with a caution to shareholders and potential investors - The Company's shares have been suspended from trading since **April 2, 2024**, and will remain suspended until further notice[109](index=109&type=chunk)

Sales Performance - In the first half of 2023, the Group's contracted sales amounted to approximately RMB1,578.4 million, with residential properties accounting for approximately RMB1,313.2 million and commercial properties for approximately RMB214.4 million[17]. - For the six months ended 30 June 2023, the Group's contracted sales amounted to approximately RMB1,578.4 million, representing a 77.2% increase compared to RMB890.7 million in the same period of 2022[27]. - Residential units contributed RMB1,313.2 million to contracted sales, a 67.8% increase from RMB782.6 million in the previous year, while commercial units saw a significant increase of 162.7% to RMB214.4 million from RMB81.6 million[27]. - The sales of commodity housing in China amounted to approximately RMB6,309,200 million, showing an increase of approximately 1.1% year-on-year, with residential property sales increasing by approximately 3.7%[12]. - Approximately 595.15 million sq.m. of commodity housing was sold in the first half of 2023, reflecting a decrease of approximately 5.3% year-on-year[12]. - The pace of recovery in the real estate industry slowed significantly in the second quarter of 2023, leading to a decline in the Group's sales[16]. Financial Performance - The Group's revenue for the six months ended 30 June 2023 was approximately RMB1,488.2 million, a substantial increase of 214.4% from RMB473.3 million in the same period of 2022[30]. - Gross profit for the same period was approximately RMB259.2 million, reflecting a 137.8% increase from RMB109.0 million in the previous year, with a gross profit margin of 17.4%[31]. - The net profit for the period was approximately RMB69.2 million, a turnaround from a net loss of RMB22.4 million in the same period of 2022, marking an increase of approximately RMB91.6 million[32]. - For the six months ended June 30, 2023, total revenue increased by approximately RMB1,014.9 million or 214.4% to approximately RMB1,488.2 million, primarily driven by a RMB938.7 million increase in residential property sales[41]. - Profit for the six months ended June 30, 2023, was approximately RMB69.2 million, an increase of approximately RMB91.6 million compared to a loss of RMB22.4 million for the same period in 2022[47]. Market Conditions - The real estate investment in China for the first half of 2023 was RMB5,855,000 million, representing a decrease of approximately 7.9% compared to the same period last year[12]. - The new construction area in China decreased by approximately 24.3% year-on-year, totaling approximately 498.80 million sq.m.[12]. - Government policies have been implemented to stimulate consumer confidence in property ownership, including the reduction of Loan Prime Rates (LPR) by 10 basis points[13]. - The Group's real estate business experienced a short rebound due to the relaxation of regulatory and monetary policies, but overall market recovery remains slow[16]. - The real estate market in China experienced a lack of consumer confidence in the second quarter of 2023, following increased activity in the first quarter[105]. Operational Strategies - The sales strategy was adjusted with increased sales bonuses and performance assessments to encourage teams to meet sales targets[17]. - The Group plans to enhance its market presence amid intense competition from both national and local property developers in the cities where it operates[84]. - The Group will adjust marketing strategies with higher sales bonuses and performance assessments to ensure annual sales targets are met[106]. - The Group aims to enhance cash flow and capital allocation to support robust development in the second half of 2023[106]. - Continuous communication with major constructors and suppliers is being maintained to ensure timely payments and construction progress[199]. Financial Position - As of 30 June 2023, cash and cash equivalents amounted to approximately RMB160.7 million, a decrease from RMB221.1 million as of 31 December 2022[63]. - Total borrowings increased to approximately RMB999.1 million as of 30 June 2023 from RMB672.8 million as of 31 December 2022[65]. - The debt to equity ratio as of June 30, 2023, was 42.6%, compared to 24.1% as of December 31, 2022, indicating a significant increase in leverage[80]. - The gearing ratio increased to approximately 50.8%, up by 14.9 percentage points from 35.9% as of December 31, 2022, primarily due to new borrowings during the period[90]. - The Group's current ratio improved to 1.3 from 1.2 as of December 31, 2022, indicating better short-term liquidity[80]. Employee and Governance - As of June 30, 2023, the Group had a total workforce of 658 employees, down from 775 employees as of June 30, 2022, indicating a reduction of approximately 15.2%[99]. - The Group's remuneration policy for directors is reviewed periodically, considering performance and market conditions[99]. - The Group emphasizes the importance of corporate governance and has complied with all applicable code provisions as of June 30, 2023[114]. Shareholder Information - Mr. Li Xiaobing holds 855,000,000 ordinary shares, representing 71.25% of the Company's shareholding[138]. - The total number of shares available for issue under the Share Option Scheme was 120,000,000 shares, representing approximately 10% of the issued share capital of the Company[134]. - The Company has not disclosed any new product or technology developments during the reporting period[134]. - The Company has not reported any market expansion or acquisition strategies in the interim report[134]. Cash Flow and Investments - Net cash used in operating activities for the six months ended June 30, 2023, was RMB 159,016, significantly higher than RMB 81,577 for the same period in 2022, indicating a deterioration in cash flow from operations[179]. - Cash flow from financing activities generated a net cash inflow of RMB 249,704 for the six months ended June 30, 2023, compared to RMB 43,878 for the same period in 2022, showing an increase of approximately 468%[181]. - The net cash used in investing activities for the six months ended June 30, 2023, was RMB 151,017, compared to RMB 14,155 for the same period in 2022, highlighting a significant increase in cash outflow for investments[179].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 Ever Reach Group (Holdings) Company Limited 恒 達 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：3616） 截至2023年6月30日止六個月中期業績 業績 恒達集團（控股）有限公司（「本公司」）董事會（「董事會」）欣然宣佈本公司及其 附屬公司（統稱「本集團」）截至2023年6月30日止六個月的未經審核簡明綜合業 績，連同2022年同期的未經審核比較數字如下： – 1 – 未經審核簡明綜合損益表 截至2023年6月30日止六個月 | --- | --- | |-------|--------------| | | 2022年 | | | （未經審核） | | 附註 | 人民幣千元 | 收入 4 1,488,151 473,261 銷售成本 5 (1,228,924) (364,293) | --- | --- | --- | ...

Financial Performance - For the year ended December 31, 2022, the Group's total revenue was approximately RMB 2,861.8 million, representing an increase of approximately 3.4% from RMB 2,767.7 million in 2021[23]. - The net profit for the year ended December 31, 2022, was approximately RMB 77.8 million, a decrease of approximately 74.3% from RMB 303.2 million in 2021[23]. - The Board did not recommend the payment of a final dividend for the year ended December 31, 2022[24]. - Gross profit decreased by approximately RMB430.1 million, or about 50.5%, to approximately RMB421.4 million in 2022, with a gross profit margin of approximately 14.7% compared to 30.8% in 2021[70][73]. - Profit for the year decreased by approximately RMB225.4 million, or 74.3%, from approximately RMB303.2 million in 2021 to approximately RMB77.8 million in 2022[71][73]. - The total contracted sales for the Group was RMB2,132.3 million, down 50.6% from RMB4,312.1 million in 2021[66]. - Property sales amounted to approximately RMB2,850.0 million, representing a 3.5% increase from RMB2,753.4 million in 2021[75]. - Rental income increased by 28.8% to RMB6.8 million from RMB5.3 million in 2021[75]. - Service income decreased by 45.4% to RMB4.9 million from RMB9.0 million in 2021[75]. - The average selling price (ASP) for saleable GFA decreased by 8.3% to approximately RMB6,152 per square meter in 2022, primarily due to a decline in market prices in Henan Province[67]. - The average selling price (ASP) for residential properties decreased from RMB6,018 per sq.m. in 2021 to RMB5,716 per sq.m. in 2022[81]. - The ASP for commercial properties increased from RMB7,884 per sq.m. in 2021 to RMB8,840 per sq.m. in 2022, despite a 29.1% decrease in GFA recognized[82]. - The Group's return on assets decreased to 0.8% in 2022 from 3.2% in 2021, and return on equity fell to 4.2% from 18.0%[124]. - The net profit margin declined to 2.7% in 2022 compared to 11.0% in 2021[124]. Market Conditions - In 2022, the Group faced significant challenges in the real estate industry, with sales plunging due to low consumer confidence and the impact of COVID-19[12]. - The real estate industry faced significant challenges in 2022, with all aspects recording substantial declines due to market confidence issues[25]. - The real estate industry in China faced significant pressure due to the COVID-19 pandemic and a lack of confidence among homebuyers[44]. - The property market in Henan Province remains competitive, with significant competition from both national and local developers[126]. - Looking towards 2023, the economic recovery is expected to improve gradually, supported by adjustments in pandemic prevention policies and economic stabilization measures[26]. - The real estate market is expected to see positive changes in 2023 due to supportive policies, despite currently being in an adjustment stage[151][153]. Corporate Strategy and Operations - The Group's development strategy focuses on integrity management and fulfilling promises to achieve a win-win situation for customers, society, employees, and investors[19]. - The Group plans to upgrade its marketing strategy and enhance product competitiveness to clear excess inventory and improve sales[31]. - A comprehensive cost management system will be established to enhance cost control capabilities throughout the project development cycle[31]. - The Group aims to strengthen employee training programs to improve overall skills and productivity[31]. - The Group will actively explore new methods of real estate development to capture opportunities during the recovery period[32]. - The Group adjusted its marketing strategies, increasing online promotion and reducing selling costs to maximize sales potential[55]. - The Group focused on improving product quality and customer satisfaction by updating product compatibility standards and standardizing floor plans[55]. - The Group aims to stabilize its business operations and improve capital investment for different projects in collaboration with government platform companies[155][156]. - The Group will focus on ensuring quality assurance as a foundation for future development while managing project construction and market delivery progress[155][157]. - The Group's management is confident in returning to a path of stable development with the implementation of favorable policies in the real estate sector[156][157]. Corporate Social Responsibility - The Group donated approximately RMB 5.6 million to charity in 2022, fulfilling its corporate social responsibilities[13]. - The Group was recognized as one of the "200 Top Real Estate Companies in China" and received the "2022 Contribution Award for Urban Operation" at various industry summits[17]. Acquisitions and Investments - The Group established and acquired equity interests in Xuchang Hengrun Real Estate Company Limited and Xuchang Jian'an District Hengyu Industrial Company Limited in 2022[18]. - The Group increased its shareholding in Xuchang City Jian'an District Hengmu Property Company Limited from 51% to 100%[18]. - The Group acquired equity interests in several companies and increased its share ratio in one company from 51% to 100%[56]. - The Group acquired commercial and residential land in Xuchang with a gross floor area of approximately 160,000 square meters[56]. - The Group has not engaged in any material acquisitions or disposals during the year ended December 31, 2022[135]. - The Group has no current plans to acquire any material investments or capital assets outside of its ordinary property development business[136][140]. Management and Governance - Mr. LI Xiaobing has extensive experience in strategic planning and operational management in the property development business in China since joining the Group in October 2004[159]. - Mr. WANG Zhenfeng has been the chief executive officer of Xuchang Hengda since February 2013, with a strong background in financial management and corporate administration[161]. - Ms. QI Chunfeng has been a director and deputy chief executive officer of Xuchang Hengda since 2010, bringing extensive experience in financial supervision and operational management[166]. - Mr. WANG Quan has served as deputy chief executive officer since April 2005, focusing on operational management and corporate administration[171]. - Mr. LEE Kwok Lun, appointed as an independent non-executive Director in October 2018, has over 15 years of experience in accounting and financial management[175]. - The Group's management team has extensive experience in finance and investment, contributing to its strategic decision-making[188]. - The Group's independent non-executive directors bring over 17 years of experience in investment banking and corporate financing activities[183]. Compliance and Risk Management - The Group aims to maintain high integrity standards and has implemented various internal control measures and training across all business units[196]. - There was an unintentional non-compliance incident with Rule 14A.35 of the Listing Rules during the year, but no significant violations of laws and regulations occurred[196]. - The Group has been committed to ensuring compliance with applicable laws and regulatory requirements throughout its operations[200]. - The Group's exposure to interest rate changes is primarily due to its borrowings, with no hedging in place for cash flow or fair value interest rate risk[133]. - The majority of the Group's transactions and assets are denominated in Renminbi, limiting foreign currency risk[134].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 Ever Reach Group (Holdings) Company Limited 恒 達 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：3616） 截至2022年12月31日止年度全年業績 業績 恒達集團（控股）有限公司（「本公司」）董事（「董事」）會（「董事會」）宣佈本公司 截至2022年12月31日止年度的綜合業績，連同去年的比較數字如下： – 1 – 綜合損益表 截至2022年12月31日止年度 | --- | --- | |-------|------------| | | 日止年度 | | | 2021年 | | 附註 | 人民幣千元 | 收入 3 2,861,771 2,767,678 銷售成本 4 (2,440,395) (1,916,191) | --- | --- | --- | --- | |------------------------- ...

Real Estate Market Trends - In the first half of 2022, investment in real estate development in China amounted to approximately RMB 6,831,400 million, representing a decrease of approximately 5.4% compared to the same period last year[12]. - The total construction area of new properties in China was 664,230,000 sq.m., reflecting a decrease of approximately 34.4% year-on-year[12]. - Sales of commodity properties in China totaled approximately RMB 6,607,200 million, down approximately 28.9% from the previous year, with residential sales decreasing by approximately 31.8%[12]. - The company noted immense downward pressure on the real estate industry due to a lack of buyer confidence, despite government policy adjustments aimed at stimulating the market[17]. - Major banks in China lowered home loan interest rates in early 2022 to support the housing market[17]. - The Zhengzhou municipal government introduced housing vouchers for resettlement, which may help boost consumer confidence in the housing market[17]. - The relaxation of real estate policies is expected to slow down the decline in the national real estate market, with local governments implementing measures such as lowering mortgage rates and down payment ratios[133]. Company Financial Performance - The Group's contracted sales for the first half of 2022 amounted to approximately RMB890.7 million, a decrease of 50.8% compared to RMB1,809.6 million in the same period of 2021[24]. - Contracted sales from residential units were RMB782.6 million, down 50.5% from RMB1,579.8 million year-on-year[24]. - The Group's revenue for the first half of 2022 was approximately RMB473.3 million, representing a decrease of 36.3% from RMB742.5 million in the same period of 2021[29]. - Gross profit decreased to approximately RMB109.0 million, down 58.1% from RMB259.9 million year-on-year, with a gross profit margin of 23.0% compared to 35.0% in the previous year[30]. - The net result for the period was a loss of approximately RMB22.4 million, compared to a net profit of RMB44.9 million in the first half of 2021, reflecting a decrease of approximately RMB67.4 million[31]. - Revenue for the six months ended June 30, 2022, was RMB 473,261,000, a decrease of 36.3% from RMB 742,536,000 in the same period of 2021[190]. - Gross profit for the same period was RMB 108,968,000, down 58.1% from RMB 259,896,000 year-on-year[190]. - The company reported a net loss of RMB 22,443,000 for the six months ended June 30, 2022, compared to a profit of RMB 44,947,000 in the prior year[190]. Sales and Marketing - Selling and marketing expenses decreased by approximately 30.0% from RMB62.9 million for the six months ended June 30, 2021, to RMB44.1 million for the same period in 2022[78]. - The company incurred selling and marketing expenses of RMB 44,064,000 for the six months ended June 30, 2022, down 29.9% from RMB 62,944,000 in the same period of 2021[190]. Assets and Liabilities - The Group's total assets as of June 30, 2022, were approximately RMB 10,839.2 million, up from RMB 10,300.0 million as of December 31, 2021[98]. - Total liabilities as of June 30, 2022, amounted to RMB 9,059,205,000, an increase from RMB 8,454,526,000 as of December 31, 2021[187]. - The Group's current liabilities were approximately RMB 8,735.6 million as of June 30, 2022, up from RMB 8,015.3 million as of December 31, 2021[98]. - The Group's net assets decreased from approximately RMB 1,845.5 million as of December 31, 2021, to approximately RMB 1,780.0 million as of June 30, 2022[98]. Cash Flow and Investments - Net cash generated from operations for the six months ended June 30, 2022, was RMB 126,411,000, compared to RMB 162,817,000 for the same period in 2021, representing a decrease of approximately 22.4%[200]. - Net cash used in operating activities increased to RMB 81,577,000 for the six months ended June 30, 2022, from RMB 63,932,000 in 2021, indicating a rise of about 27.6%[200]. - Net cash used in investing activities was RMB 14,155,000 for the six months ended June 30, 2022, a significant decrease from RMB 487,814,000 in 2021, reflecting a reduction of approximately 97.1%[200]. Employee and Corporate Governance - The Group's workforce increased to 775 employees as of June 30, 2022, compared to 764 employees as of June 30, 2021[124]. - The Company has complied with all applicable code provisions as set out in the Corporate Governance Code during the six months ended June 30, 2022[140]. - The Group participates in defined contribution retirement plans for eligible employees in the PRC and a mandatory provident fund scheme for employees in Hong Kong[175]. Share Option Scheme - The maximum number of shares available for issue under the Share Option Scheme must not exceed 10% of the shares in issue immediately following the IPO, totaling 120,000,000 shares[149]. - The Share Option Scheme is valid for 10 years from November 12, 2018, and aims to provide incentives to eligible persons contributing to the Group[142]. - No options were granted under the Share Option Scheme from January 1, 2022, to June 30, 2022[155]. - No options were exercised, cancelled, or lapsed under the Share Option Scheme during the reporting period[157].

Corporate Social Responsibility - In 2021, the Group donated approximately RMB 5.29 million in response to the COVID-19 epidemic and the floods[14] - The Group participated in many charitable events, demonstrating its commitment to corporate social responsibility[14] Awards and Recognition - Xuchang Hengda was awarded the honorary title of "An Iconic Industrial Brand in China" at the China Brand Boao Summit in 2021[15] - The Beihai Longcheng project was named a "Good Exemplary Urban Project 2021–2022"[15] - The Hengda Heyuan and Yuzhou Binhefu projects were rated as "The Most Beautiful Construction Sites" in 2021[15] Financial Performance - For the year ended December 31, 2021, the Group's total revenue was approximately RMB 2,767.7 million, representing an increase of approximately 14.3% from RMB 2,422.1 million for the year ended December 31, 2020[21] - The net profit for the year ended December 31, 2021, was approximately RMB 303.2 million, reflecting an increase of approximately 7.3% from RMB 282.6 million for the year ended December 31, 2020[21] - The Board recommended a final dividend of HK6.0 cents per ordinary share, equivalent to approximately RMB 5.0 cents per ordinary share for the year ended December 31, 2021[21] - The Group recorded a gross profit of approximately RMB851.5 million, an increase of approximately RMB72.5 million or 9.3% from RMB779.0 million in 2020, with a gross profit margin of approximately 30.8%[68] - Profit for the year increased by approximately RMB20.6 million, or 7.3%, from approximately RMB282.6 million in 2020 to approximately RMB303.2 million in 2021[92] Market Conditions - The Chinese real estate industry continued to grow in sales, development, and investment scale despite a significant growth recession[13] - The real estate industry in the PRC faced unprecedented pressure in 2021, with a significant drop in the total construction area of new property projects and a slowdown in the growth rate of sales area of commercial properties[28] - The housing market in China is gradually moving towards a stage of stable, healthy, and quality development[13] - Looking ahead to 2022, the Group anticipates immense downward pressures on the Chinese economy but expects economic stability to remain a top priority for the real estate industry[29] Strategic Initiatives - The Group adopted a high-turnaround operation model to maintain stable and healthy growth amidst market challenges[14] - The Group actively integrated its marketing system to adapt to the complex property market conditions in 2021[14] - The Group plans to address operational challenges encountered in 2021 by promoting inventory clearance, improving business efficiency, and enhancing financial management in 2022[34] - The Group aims to increase brand influence and enhance digitalization as part of its strategic initiatives for 2022[34] - The Group's strategic focus for 2022 includes optimizing product designs and reducing project costs while increasing efficiency[34] Real Estate Development - In 2021, investment in real estate development in China amounted to approximately RMB 14,760,200 million, representing an increase of approximately 4.4% compared to the previous year[39] - The total construction area of new property projects in 2021 was approximately 1,988,950 thousand sq.m., a decrease of approximately 11.4% compared to 2020[40] - The total sales area of commercial properties increased by approximately 1.9% year-on-year, while the sales area of residential properties increased by approximately 1.1%[42] - The Group's projects, such as Xuchang Hengda Mingzhu and Hengda Xinzhu, were successfully rolled out in 2021[15] Challenges and Resilience - The Group faced challenges in 2021 due to repeated COVID-19 outbreaks and severe floods in Henan, but managed to achieve stable growth through timely strategy revisions[46] - Henan Province's economy remained stable in 2021 despite challenges from COVID-19 and floods, indicating resilience in the region[30] - The Group remains optimistic about the future of the real estate industry in central China despite the challenges faced in 2021[44] Operational Metrics - The Group's land reserves amounted to approximately 4.4 million sq.m. as of December 31, 2021[56] - Contracted sales for residential units were RMB3,742.8 million, a decrease of 1.9% from RMB3,816.1 million in 2020[63] - Contracted sales for commercial units were RMB373.4 million, a decrease of 6.3% from RMB398.6 million in 2020[63] - The average selling price (ASP) for saleable GFA decreased by 1.2% to approximately RMB6,709 per sq.m. in 2021[63] - The ASP for car parking spaces decreased by 15.1% to approximately RMB55,797 per lot in 2021[64] Employee and Management - The Group had a total workforce of 739 employees as of December 31, 2021, compared to 648 employees on December 31, 2020[133] - The company aims to enhance employee training and development through a series of programs to accelerate professional growth and confirm the capabilities of a diverse team[139] Financial Position - As of 31 December 2021, total borrowings amounted to approximately RMB693.0 million, an increase from RMB552.0 million in 2020, with approximately 55.4% classified as fixed interest rates[95] - Current assets increased to approximately RMB9,940.8 million as of 31 December 2021, compared to RMB8,183.7 million in 2020, while current liabilities rose to approximately RMB8,015.3 million from RMB6,702.1 million[104] - Total assets increased to approximately RMB10,300.0 million as of December 31, 2021, up from RMB8,508.6 million in 2020, with total liabilities rising to approximately RMB8,454.5 million from RMB6,978.5 million[105] Governance and Compliance - The Board reported no violations of relevant laws and regulations during the year[188] - The Group is committed to maintaining high standards of integrity in all business aspects[188]

Real Estate Market Performance - In the first half of 2021, the saleable area of commercial housing in China was approximately 886 million sq.m., representing a year-on-year increase of approximately 27.7%[11]. - The sales volume of commercial housing in China reached approximately RMB 9,293,100 million, reflecting an increase of approximately 38.9% compared to the previous year[11]. - The completed gross floor area (GFA) of real estate properties in China was approximately 365 million sq.m., which is an increase of approximately 25.7% year-on-year[11]. - The overall real estate market in China showed significant growth in the first half of 2021, indicating a positive trend for future investments and developments[11]. - The real estate market in Henan Province is expected to continue its steady growth, driven by urbanization and the development of new urban areas[13]. Investment and Development in Henan Province - In Henan Province, investment in real estate development amounted to approximately RMB 372,977 million, representing a year-on-year increase of approximately 11.5%[12]. - Investment in residential properties in Henan Province was approximately RMB 313,258 million, showing a year-on-year increase of 13.8%[12]. - The GFA of newly commenced projects in Henan Province was approximately 74.47 million sq.m., reflecting a year-on-year increase of approximately 7.3%[12]. - The completed GFA of real estate properties in Henan Province was approximately 25.12 million sq.m., representing a significant year-on-year increase of approximately 82.7%[12]. - The completed GFA of residential properties in Henan Province was approximately 19.77 million sq.m., which is a year-on-year increase of approximately 77.6%[12]. Financial Performance - The Group's revenue for the six months ended 30 June 2021 was approximately RMB 742.5 million, up 45.2% from RMB 511.2 million in the same period of 2020[33]. - Gross profit increased by approximately RMB 96.1 million, or 58.7%, to RMB 259.9 million, with a gross profit margin of 35.0%[34]. - Profit for the period rose by approximately RMB 13.1 million, or 41.0%, to RMB 44.9 million compared to RMB 31.9 million in the same period last year[35]. - Total contracted sales amounted to RMB 1,809.6 million, representing a 67.1% increase compared to RMB 1,083.2 million in the previous year[28]. - Contracted sales for residential units reached RMB 1,579.8 million, a 72.2% increase from RMB 917.3 million in the same period last year[28]. Cost and Expenses - Selling and marketing expenses rose by approximately 96.0% to RMB 62.9 million for the six months ended June 30, 2021, compared to RMB 32.1 million for the same period in 2020[58]. - Administrative expenses rose by approximately 26.3% from RMB 53.9 million for the six months ended June 30, 2020, to approximately RMB 68.1 million for the same period in 2021[64]. - Income tax expenses increased by approximately 87.7% from RMB 39.1 million for the six months ended June 30, 2020, to approximately RMB 73.4 million for the same period in 2021[64]. Assets and Liabilities - Total assets as of June 30, 2021, were approximately RMB 9,807.8 million, up from RMB 8,508.6 million as of December 31, 2020[75]. - Total liabilities as of June 30, 2021, were RMB 8,292,365, compared to RMB 6,978,477 as of December 31, 2020, indicating an increase of about 18.8%[173]. - The Group's net assets decreased from approximately RMB 1,530.1 million as of December 31, 2020, to approximately RMB 1,515.4 million as of June 30, 2021[75]. - The Group's trade and other receivables and prepayments increased significantly to RMB 851,061 as of June 30, 2021, compared to RMB 275,865 at the end of 2020, marking a rise of approximately 208.5%[171]. Cash Flow and Financing - Net cash generated from operating activities was RMB 162,817,000, contrasting with a net cash used of RMB 299,160,000 in the previous year[192]. - Cash flow from financing activities generated a net cash of RMB 236,173,000, a decrease from RMB 421,199,000 in the previous year[194]. - The company reported a net decrease in cash and cash equivalents of RMB 315,573,000, compared to a decrease of RMB 96,532,000 in the prior year[194]. - Proceeds from bank borrowings amounted to RMB 259,000,000, significantly higher than RMB 79,000,000 in the same period last year[194]. Corporate Governance and Shareholding - The Company has complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2021[123]. - The Group does not recommend the payment of an interim dividend for the six months ended June 30, 2021[98]. - As of June 30, 2021, Mr. LI Xiaobing holds 855,000,000 ordinary shares, representing approximately 71.25% of the company's shareholding[147]. - The total number of shares available for issue under the Share Option Scheme was 120,000,000 shares, representing approximately 10% of the issued share capital of the Company[144]. Future Outlook and Strategy - The Group plans to enhance marketing efforts and inventory clearance, control development costs, and improve product standardization in the second half of 2021[116]. - The Group aims to develop areas in Henan Province, focusing on Xuchang City and expanding into neighboring cities[117].