Core Viewpoint - After divesting its real estate development business, Midea Real Estate has achieved double growth in revenue and profit from its retained operations [1] Group 1: Financial Performance - Midea Real Estate reported a revenue of 3.73 billion yuan, a year-on-year increase of 33% [1] - Gross profit reached 1.331 billion yuan, up 38.7% year-on-year, with a gross margin of 35.7%, an increase of 1.3 percentage points [1] - The core net profit attributable to shareholders from continuing operations was 500 million yuan, reflecting a year-on-year growth of 25% [1] Group 2: Business Segmentation - The company’s revenue sources post-restructuring include development services, property management services, asset operations, and real estate technology [1] - Property management services generated 1.839 billion yuan, a 12.6% increase, accounting for 49.3% of total revenue [1] - Asset operations revenue was 987 million yuan, up 91.8%, while real estate technology revenue was 606 million yuan, down 6.2% [1] - Development services revenue was 293 million yuan, representing only 7.9% of total revenue [1] Group 3: Future Outlook - Midea Real Estate's management anticipates a compound annual growth rate (CAGR) of at least 25% in revenue and 20% in net profit attributable to shareholders by 2025 [3] - The company plans to maintain a balanced revenue contribution from property management and development services, targeting a 70% share from these two segments over the next three years [3] - The management highlighted the potential for growth in development services, which currently accounts for a small portion of revenue but is expected to increase as the company confirms more projects [2][3]

Core Viewpoint - After restructuring, Midea Real Estate has strategically positioned itself to leverage its brand, capital, and synergies within the Midea ecosystem, aiming to recreate a new Midea Real Estate within three years [1] Financial Performance - In 2024, Midea Real Estate achieved revenue of 3.73 billion yuan, a year-on-year increase of 33% [1] - The core net profit attributable to shareholders reached 500 million yuan, up 25% year-on-year, with a gross margin of 35.7% [1] - As of the end of 2024, total assets were 9.72 billion yuan, net assets were 5.08 billion yuan, and the debt-to-asset ratio was 47.7% [1] Business Structure and Strategy - Midea Real Estate has shifted focus from real estate development to a light-asset model, with a business structure comprising four main segments: development services, property management services, asset operation, and real estate technology [1][2] - The management anticipates a compound annual growth rate (CAGR) of no less than 25% in revenue and 20% in net profit attributable to shareholders by 2025 [2] Property Management and Development - In 2024, property management services generated approximately 1.84 billion yuan, accounting for 49% of total revenue, with expectations for a growth rate of no less than 10% in 2025 [2] - Development services recognized revenue of 290 million yuan in 2024, representing only 8% of total revenue due to the timing of the restructuring [2] Asset Operation and Technology - The asset operation segment generated 600 million yuan in revenue from 13 commercial properties, with a focus on enhancing operational efficiency and rental income [3] - The real estate technology segment, led by Ruizhu Development, achieved revenue of 610 million yuan in 2024, with a 100% contribution from third-party projects [3] Management Philosophy - The management emphasizes the importance of adapting strategic models based on resource endowments and market conditions to ensure sustainable and controllable operations [3][4]

Core Viewpoint - Midea Real Estate aims for a compound annual growth rate (CAGR) of at least 25% in revenue and 20% in net profit attributable to shareholders by 2025, focusing on a mixed asset-light and heavy model post-restructuring [1][2]. Group 1: Business Strategy and Restructuring - The company plans to divest its real estate development business and undergo asset restructuring to significantly reduce interest-bearing liabilities while integrating high-quality assets [1][2]. - After restructuring, the business will consist of four main segments: development services, property management services, asset operation, and real estate technology [2][3]. - The company will maintain a balanced revenue contribution from property management and development services, which are expected to account for about 70% of the total revenue over the next three years [1][2]. Group 2: Financial Performance - In 2024, the retained business generated revenue of 3.73 billion yuan, a year-on-year increase of 33%, with a gross margin of 35.7% and a core net profit of 500 million yuan, up 25% [2]. - The property management segment contributed 1.84 billion yuan in revenue, reflecting a 13% increase, while the asset operation segment saw a significant growth of 91.8%, reaching 987 million yuan [2]. - Despite the high revenue contribution from property management and asset operation, the development services segment is expected to provide new growth opportunities starting in 2025 [3][4]. Group 3: Market Position and Future Outlook - The company emphasizes that it will not solely become a property management or commercial management firm post-restructuring, as it aims to leverage its full value chain in real estate development [3]. - The focus on value extraction from the existing market and competitive positioning will require a comprehensive service capability beyond just property management [3]. - The property management segment is projected to remain a crucial part of the business, with its revenue share expected to stabilize around 40% in 2025 [4].

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue from continuing operations was RMB 3,725.80 million, representing a year-on-year growth of 33.3%[5] - The gross profit for the same period was RMB 1,331.69 million, with a gross margin of 35.7%, an increase of 1.3 percentage points year-on-year[5] - The company reported a core net loss of RMB 2,284.27 million, with a loss attributable to shareholders of RMB 1,993.77 million[5] - The company achieved a profit from continuing operations of RMB 503.85 million[5] - The company reported a total comprehensive income of (2,350,407) thousand RMB for the year, compared to 2,125,068 thousand RMB in the previous year, reflecting a significant loss[10] - The company reported a core net loss attributable to shareholders of RMB 1,993.77 million, with a significant decline from a net profit of RMB 627.81 million in 2023, mainly due to a downturn in real estate sales and increased impairment provisions[83] Revenue Breakdown - The property management services revenue was RMB 1,839.22 million, showing a year-on-year increase of 12.6%[5] - The asset operation revenue surged to RMB 987.20 million, marking a significant year-on-year growth of 91.8%[5] - The revenue from real estate technology decreased by 6.2% to RMB 606.47 million[5] - The development services segment generated revenue of RMB 292,915,000, which is a new addition as it did not report revenue in the previous year[27] - The property management service revenue was RMB 1,839.22 million, a 12.6% increase from RMB 1,632.74 million in 2023, primarily due to an increase in managed property area[73] - The asset operation revenue surged by 91.8% to RMB 978.20 million from RMB 514.77 million in 2023, mainly due to the delivery of new properties[74] Expenses and Liabilities - The total operating expenses increased, with selling and marketing expenses at RMB 137.29 million and administrative expenses at RMB 347.96 million[8] - Total liabilities increased to 9,724,500 thousand RMB in 2024 from 201,579,205 thousand RMB in 2023, indicating a significant rise[13] - Total equity attributable to the company decreased from RMB 5,150,983,000 in 2023 to RMB 2,742,629,000 in 2024, representing a decline of approximately 47.3%[15] - The total operating expenses for the company in 2024 were RMB 2,879,360,000, compared to RMB 2,325,345,000 in 2023, indicating an increase of 24%[34] Cash Flow and Assets - Cash and cash equivalents decreased to 1,033,953 thousand RMB in 2024 from 17,553,071 thousand RMB in 2023, indicating a decline of about 94%[13] - The company’s non-current assets were valued at 4,863,369 thousand RMB in 2024, down from 6,199,032 thousand RMB in 2023, representing a decrease of approximately 22%[13] - The total cash and bank deposits as of December 31, 2024, amounted to RMB 1,102.94 million, with cash and cash equivalents at RMB 1,033.95 million[84] Dividends and Shareholder Returns - The company proposed a final dividend of HKD 0.27 per share for the fiscal year ending December 31, 2024[4] - The company declared a total dividend of RMB 357,614,000 for 2024, down from RMB 468,287,000 in 2023, representing a decrease of 23.6%[44] - The proposed final dividend for the year ending December 31, 2024, is HKD 0.27 per share, down from HKD 0.36 per share in 2023[117] Strategic Focus and Future Plans - The company plans to continue focusing on its core business segments, including property management and asset operations, while exploring new market opportunities[6] - The company aims to focus on light assets and deepen its real estate value chain products and services to create higher profit margins in the future[71] - The company aims to reduce debt and mitigate credit risk associated with real estate development by restructuring and divesting its real estate business[58] - The company plans to continue seeking certainty in its operations amidst industry changes, emphasizing resilience and determination in its growth strategy[57] Employee and Corporate Governance - As of December 31, 2024, the group employed 9,213 full-time employees, primarily located in China[98] - The company has adhered to all provisions of the Corporate Governance Code as of December 31, 2024, except for the separation of roles between the Chairman and CEO[109] - The roles of Chairman and CEO were held by the same individual until October 21, 2024, but the board believes this structure benefits the execution of strategic objectives[110] Market and Operational Insights - The company primarily engages in providing property management services, asset operation, real estate technology, and development services after the completion of the physical distribution[23] - The group focuses on four major business segments: development services, property management services, asset operation, and real estate technology[59] - The company has begun evaluating the impact of new or revised accounting standards, with no significant effect expected on current or future financial performance[21]

Financial Performance - Revenue for the first half of 2024 was RMB 25,134.1 million, a decrease of 30.6% compared to RMB 36,334.6 million in the same period of 2023[4] - Gross profit for the first half of 2024 was RMB 2,321.0 million, down from RMB 4,792.3 million in the previous year, reflecting a significant decline in profitability[4] - Core net profit for the first half of 2024 was RMB 642.5 million, while profit attributable to the company's owners was RMB 375.9 million, down from RMB 1,750.4 million in the previous year[4] - Operating profit fell to RMB 351.32 million, down 86.5% from RMB 2,609.93 million year-on-year[17] - The profit attributable to the company's owners was RMB 375.87 million, a decline of 51.9% from RMB 782.10 million in the previous year[17] - Basic and diluted earnings per share were RMB 0.26, down from RMB 0.58 in the previous year[17] - The core profit decreased by 63.3% to RMB 642.47 million from RMB 1,750.41 million in the same period last year[17] - The total profit for the six months ended June 30, 2023, was RMB 782,097 thousand, indicating a decrease in profitability compared to the previous year[104] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 178,998.0 million, a decrease of 11.2% from RMB 201,579.2 million at the end of 2023[5] - Total liabilities decreased to RMB 131,849,953 thousand, down 13.0% from RMB 151,460,458 thousand at the end of 2023[102] - The total land reserve area as of June 30, 2024, was approximately 25 million square meters, covering 315 property development projects[21] - The total liabilities as of June 30, 2024, amounted to RMB 96,216,422, with short-term borrowings of RMB 6,549,630 and long-term borrowings of RMB 26,426,256[119] Cash Flow and Financial Position - Total cash and bank deposits decreased by 33.0% to RMB 13,490.0 million from RMB 20,141.7 million[5] - The net debt ratio improved to 50.1% from 75.1% in the previous year, indicating a stronger financial position[5] - The net cash used in operating activities for the six months ended June 30, 2024, was RMB (3,853,882) thousand, compared to RMB 1,440,420 thousand for the same period in 2023[106] - The company reported a significant increase in investments in joint ventures and associates, totaling RMB 24,185,762 thousand, compared to RMB 23,746,947 thousand at the end of 2023[101] - The company maintained sufficient cash and cash equivalents to ensure financial flexibility amid potential economic challenges[117] Business Strategy and Restructuring - The company plans to restructure its real estate development business to reduce debt and credit risk, focusing on a model of development, property management, asset operation, and real estate technology[8] - The restructuring is expected to simplify business operations and focus on light-asset, professional service-oriented businesses, reducing cyclical risks in the real estate market[15] - The company aims to enhance the quality of property management services and improve asset operation capabilities in response to the new normal in the real estate industry[9] - The company emphasizes a long-term perspective and strategic framework to ensure sustainable growth and value creation for society[9] Property Development and Sales - Contract sales amounted to approximately RMB 20.21 billion, with a total construction area of about 17.73 million square meters[18] - The company's property development and sales revenue for the reporting period was RMB 24,104.75 million, a decrease of 32.0% compared to RMB 35,466.74 million in the same period of 2023, primarily due to a reduction in the confirmed sales area[33] - The total confirmed sales area was 2.277 million square meters, down 32.9% from 3.391 million square meters in the same period of 2023[33] Market Engagement and Expansion - The company signed contracts worth 320 million yuan in the current year, with 130 million yuan from the Hong Kong and Macau markets, indicating strong market engagement[13] - The company is actively pursuing market opportunities in the Hong Kong and Macau regions, with a strategic shift towards modular construction and smart home solutions[13] - The company aims to expand its development management services, targeting public hospitals and schools, while also exploring third-party project management opportunities[14] Corporate Governance and Management - The company has committed to maintaining high levels of corporate governance, adhering to the updated corporate governance code as per the Hong Kong Stock Exchange[57] - The board of directors is responsible for establishing the company's future development direction and overall strategy, with senior management authorized to handle daily operations[58] - The chairman and CEO, Mr. Hao Hengle, has been fulfilling both roles, which the board believes is beneficial for executing the company's long-term strategic goals[60] Shareholder Matters and Dividends - The company did not declare an interim dividend for the six months ended June 30, 2024, compared to no dividend declared in the same period of 2023[96] - The proposed distribution aims to allow shareholders to realize their investment in the company while reducing investment risks associated with the real estate development business[54] - The proposed distribution and potential sale of shares are subject to approval at a special general meeting scheduled for September 2, 2024[54] Stock Options and Share Awards - The company has issued stock options and reward shares to incentivize eligible participants[56] - The company terminated the 2020 Share Option Scheme and the 2021 Share Award Scheme, adopting new 2024 Share Option and Share Award Schemes approved by shareholders on May 24, 2024[68] - The 2024 Share Plan aims to attract, retain, and incentivize eligible participants to contribute to the company's growth and development[83] Financial Risks and Challenges - The group faces various financial risks, including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since December 31, 2023[116] - The group has experienced a continuous decline in pre-sale performance since June 30, 2024, impacting cash flow and liquidity[109] - The company is committed to controlling sales, marketing, and administrative expenses actively[110]

Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1]. Core Views - The company is undergoing a restructuring process to divest its real estate development business, focusing on a new business model that includes development, property management, asset operation, and real estate technology [4]. - For the first half of 2024, the company reported a revenue of RMB 25.134 billion, a year-on-year decrease of 30.8%, and a net profit attributable to the parent company of RMB 376 million, down 51.9% year-on-year [4][8]. - The company aims to leverage its strong financing capabilities and explore new industry models, projecting an EPS of RMB 0.71 for 2024, with a valuation range of HKD 7.73 to HKD 9.28 per share [10]. Summary by Sections Business Restructuring - The company announced plans to implement a physical distribution of shares in a private company to shareholders, effectively separating its real estate development business [4]. - The restructuring aims to create a business model that integrates development, property management, asset operation, and real estate technology, without changing the essence of its operations [4]. Financial Performance - For the first half of 2024, total revenue was RMB 25.134 billion, down 30.83% from RMB 36.335 billion in the same period of 2023 [8]. - The total profit for the first half of 2024 was RMB 1.224 billion, a decrease of 55.51% year-on-year [8]. - The company reported a net profit margin of 2.4% for the first half of 2024, down from 4.6% in the same period of 2023 [9]. Service and Commercial Operations - The company’s property management segment, 美置服务, has a contracted area of 92.18 million square meters and is expanding into industrial parks and healthcare services [4]. - The commercial segment operates 13 projects, with a focus on integrating quality assets and enhancing operational efficiency [4]. Future Projections - The company forecasts a revenue of RMB 51.112 billion for 2024, with a projected net profit of RMB 1.020 billion [12]. - The expected EPS for 2024 is RMB 0.71, with a PE ratio of 10-12 times, indicating a market capitalization range of HKD 111 billion to HKD 133 billion [10].

Investment Rating - The report does not explicitly state an investment rating for the company [1]. Core Insights - The real estate industry in 2024 is still facing deep adjustments, and the proactive exploration and effectiveness of the company in response to industry changes are noteworthy. The company is committed to a service-oriented approach, seeking stability while embracing change, and is transitioning towards a model of "development agency + property management services + asset operation + real estate technology" to achieve higher profit margins and a more scientific development model [2][4]. Summary by Sections 1. Strategic Transformation and Business Model Exploration - The company is actively reshaping its strategy and exploring new business transformation models during a period of industry clearing and transition. It maintains confidence in the real estate sector and is embracing changes to achieve better operational development. The focus is on a low-leverage, light-asset approach to deepen its involvement across the entire real estate development value chain [5][6]. 2. Strong Foundation and Future Potential - The company has a solid foundation and clear advantages in property management, commercial, industrial parks, and real estate technology. With the support of its controlling shareholder and a wealth of experience across the entire chain, the future potential is vast [6][7]. 3. Positive Profitability and Strong Financing Capability - In the first half of 2024, the company maintained positive profitability with a net profit of 596 million yuan and a core net profit of 642 million yuan, while most real estate companies faced losses. The company has a competitive dividend policy, having distributed approximately 9 billion HKD since its listing in 2018, with a payout ratio consistently above 40% [18][20]. - The company has successfully issued bonds totaling 4.12 billion yuan with interest rates below 5%, and plans to issue additional bonds at a rate as low as 2.8%. Its average financing cost has decreased to 4.54%, placing it in the top tier of credit ratings [20][21]. - The company has reduced interest-bearing liabilities by approximately 19.2 billion yuan from 2021 to mid-2024, achieving a total of 37.1 billion yuan, the lowest in its history, with a manageable debt repayment schedule [22][23]. 4. Business Segments and Development Focus - The company is focusing on three main areas: asset operation, light asset management, and real estate technology, all of which have broad prospects. It aims to expand quality light asset commercial projects and enhance asset management capabilities [16][17]. - In property management, the company is extending its services beyond residential to include industrial parks and healthcare, with a focus on creating a comprehensive service system that combines basic services with value-added operations [8][9]. - The real estate technology segment is centered on modular construction products, with plans to expand into the prefabricated interior market, indicating a shift towards sustainable development practices [11][12]. 5. Overall Outlook - The company is expected to become a more promising and valuable listed entity, supported by a resilient corporate culture and the backing of its controlling shareholder [23].

Summary of the Conference Call Company Overview - The conference call is regarding Midea Real Estate's 2024 half-year performance release, conducted online with the presence of key management representatives including Chairman and CEO Hao Hengle and Executive Director and CEO Wang Dazhai [1] Key Points and Arguments - The call marks the company's mid-year performance review, indicating a focus on financial results and strategic direction for the upcoming period [1] Other Important Content - The format of the meeting is online, which reflects a trend in corporate communications, especially in the real estate sector, adapting to digital platforms for broader accessibility [1]

Financial Data and Key Metrics Changes - In the first half of 2024, the company's operating revenue was 25.1 billion, with a gross profit margin of 9.2%. The core net profit was 400 million, a decline of over 50% year-on-year [3][4] - The net debt ratio stood at 50.1%, with a cash-to-short-term debt ratio of 1.26. The total cash amount was 13.5 billion, maintaining a stable credit rating of 3A [3][4] - The average financing cost decreased to 4.54%, down 15 basis points year-on-year [4] Business Line Data and Key Metrics Changes - The company signed contracts worth 20.2 billion, with an average sales price of 11,398 per unit. The remaining land area was 24.69 million square meters, with an equity ratio of 73% [4][5] - The property management segment generated revenue of 1.7 billion, with a managed area of 69.89 million square meters [13][14] Market Data and Key Metrics Changes - The commercial projects generated revenue of 400 million, with 13 operational projects covering over 700,000 square meters [16][17] - The industrial park projects contributed 100 million in revenue, with a rental rate exceeding 92% [17] Company Strategy and Development Direction - The company aims to focus on perfect delivery, with a total of 26,000 units delivered in the first half of 2024 and an expected 28,000 units in the second half [11][12] - The restructuring plan involves spinning off the development business to allow for a more agile operation and better resource allocation [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the real estate sector despite current challenges, emphasizing the need for unconventional strategies to navigate the transitional phase [30][31] - The company targets a compound annual growth rate of at least 25% in revenue and 20% in net profit margin over the next few years [22][35] Other Important Information - The restructuring plan includes a cash alternative for shareholders at a price of 5.9 HKD, representing a 57.33% premium over the last trading day's closing price [5][6] - The company has a clear plan for future asset management and operational improvements, particularly in commercial properties [37][39] Q&A Session All Questions and Answers Question: Will the dividend distribution be more stable after the restructuring? - Management confirmed that the company has maintained an attractive dividend policy since its listing, with a payout ratio exceeding 40% and a total of 9 billion HKD distributed to shareholders [27][28] Question: Why choose restructuring over privatization? - Management explained that the restructuring allows the company to retain a public platform while addressing the challenges in the real estate sector, ensuring better resource utilization and flexibility [30][31] Question: What are the future plans for the commercial property segment? - Management indicated that the focus will be on enhancing the value of existing commercial assets and improving customer experience, with a target of maintaining a net profit margin above 65% [17][39] Question: How will the company ensure sustainable growth in third-party services? - Management highlighted the importance of building a strong reputation and customer base in the development and construction sectors, aiming for third-party services to account for over 20% of total development activities in the coming years [55][56]

Financial Performance - For the six months ended June 30, 2024, the group's revenue was RMB 25,134.11 million, with a gross profit of RMB 2,321.03 million[2]. - The core net profit for the period was RMB 642.47 million, with the attributable core net profit to the company amounting to RMB 418.56 million[2]. - The net profit before tax for the period was RMB 1,223.92 million, down from RMB 2,750.83 million in the previous year[6]. - The total comprehensive income for the period was RMB 596.18 million, compared to RMB 1,665.50 million in the same period last year[6]. - The company's profit attributable to shareholders for the six months ended June 30, 2024, is RMB 375,869,000, a decrease of 52% from RMB 782,097,000 in the same period of 2023[32]. - The basic earnings per share for the six months ended June 30, 2024, is RMB 0.26, down from RMB 0.58 in the same period of 2023, reflecting a decline of 55%[32]. - Operating profit fell by 86.5% to RMB 351.32 million, down from RMB 2,609.93 million in the same period of 2023[58]. - The group's gross profit decreased by 51.6% to RMB 2,321.03 million, down from RMB 4,792.27 million in the same period of 2023, mainly due to higher costs of recognized projects and increased impairment provisions for property development projects[65]. Revenue Breakdown - For the six months ended June 30, 2024, total revenue from property development and sales was RMB 24,104,751, a decrease of 32% from RMB 35,466,736 for the same period in 2023[19]. - Revenue from property management services increased to RMB 840,101, up 16% from RMB 724,887 in the previous year[19]. - The group's property development and sales recognized revenue was RMB 24,104.75 million, a decrease of 32.0% compared to RMB 35,466.74 million in the same period of 2023, primarily due to a reduction in recognized sales area[61]. - The group's property management service revenue increased by 15.9% to RMB 840.10 million, up from RMB 724.89 million in the same period of 2023, mainly due to an increase in the managed property area[62]. - The group's commercial property investment and operation revenue rose by 32.4% to RMB 189.26 million, compared to RMB 142.96 million in the same period of 2023, driven by property leasing services and cultural tourism project development[63]. Debt and Liabilities - As of June 30, 2024, the total interest-bearing debt was RMB 37.11 billion, a decrease of 2.5% compared to the end of the previous year[2]. - The company's total equity as of June 30, 2024, is CNY 47,148,088, a decrease from CNY 50,118,747 as of December 31, 2023, representing a decline of approximately 3.86%[9]. - Total liabilities decreased to CNY 131,849,953 from CNY 151,460,458, indicating a reduction of about 12.97%[10]. - The total liabilities as of June 30, 2024, were RMB 55,404,974,000, a decrease from RMB 59,525,590,000 as of December 31, 2023[44]. - The company's bank and other borrowings decreased to CNY 17,405,140 from CNY 19,202,605, a reduction of about 9.36%[10]. - The group's total borrowings were RMB 37,105.17 million, with a net debt ratio of 50.1%, up from 35.8% as of December 31, 2023, primarily due to a decrease in total cash and bank deposits[73]. Cash Flow and Financial Management - The company plans to accelerate the pre-sale and sale of properties under construction and completed properties to improve cash flow, which has been negatively impacted by the ongoing decline in the Chinese real estate market since 2021[12]. - The average actual interest rate on total borrowings during the reporting period was 4.54%[2]. - The company will continue to control sales and marketing expenses as well as administrative costs to manage cash flow effectively[12]. - The total amount of non-controlling interests decreased to CNY 21,949,151 from CNY 24,809,433, a decline of approximately 11.48%[9]. - The company has confirmed that its major shareholder intends to provide ongoing financial support to ensure the company can meet its financial obligations[12]. Market and Strategic Initiatives - The company is actively exploring new models for real estate development to adapt to the ongoing market adjustments and ensure high-quality growth[46]. - The company is focusing on providing quality housing and services as a strategy to navigate the challenging real estate market[46]. - The company aims to restructure its real estate development business to reduce debt and credit risk, focusing on a new business model that integrates development, property management, asset operation, and real estate technology[48]. - The company plans to integrate five self-operated commercial entities into its commercial business segment to enhance asset operation and management capabilities[52]. - The company is committed to exploring new value-added services in residential, industrial park, and healthcare sectors, aiming to create a comprehensive service system[50]. Corporate Governance and Compliance - The company has established an Audit Committee to assist the Board in the independent review of financial statements, risk management, and internal control systems[96]. - The company has complied with the Corporate Governance Code throughout the six months ended June 30, 2024, except for the separation of roles between the Chairman and CEO[94]. - The Chairman and CEO, Mr. Hao Hengle, has been serving in both roles, which the Board believes is beneficial for executing the company's long-term strategic goals[94]. - The company has appointed external internal control consultants annually to conduct a top ten risk assessment to identify and mitigate potential risks[95]. Employee and Shareholder Matters - As of June 30, 2024, the company employed 9,593 full-time employees, primarily located in China[85]. - The company has issued stock options and reward shares to incentivize eligible participants under the 2020 and 2021 plans, which have now been terminated in favor of new plans[86]. - The total number of new shares that can be granted under the 2024 Share Option Plan is capped at 143,541,148 shares, representing approximately 10% of the total shares issued as of May 24, 2024[91]. - The company did not declare an interim dividend for the six months ended June 30, 2024, compared to no dividend declared in the same period of 2023[97].