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依賴該等內容而引致的任何損失承擔任何責 任。 DREAMEAST GROUP LIMITED ⣊㜙㕡普⛀㚱旸℔⎠ （於百慕達註冊成立的有限公司， 並以「夢東方文化娛樂」名稱於香港經營業務） （強制清盤中） （股份代號：593） 截 至2023年12月31日止年度之 全年業績公告 全年業績 夢 東 方 集 團 有 限 公 司（「本公司」）本 公 司 共 同 及 各 別 清 盤 人（「清盤人」）謹 此 宣 佈 本 公 司 及 其 附 屬 公 司（統 稱「本集團」）截 至2023年12月31日 止 年 度（「本年度」）之 全 年 合 併 業 績（「業 績」），連 同 截 至2022年12月31日 止 年 度 之 相 應 對 比 數 字 如 下。 – 1 – 合併綜合收益表 截 至2023年12月31日止年度 | | | | | | | | | | 2023年 | 2022年 | | --- | -- ...

[Company Information and Report Overview](index=1&type=section&id=Company%20Information%20and%20Report%20Overview) This section provides essential company details and an overview of the unaudited interim results for the six months ended June 30, 2025 [Company Basic Information](index=1&type=section&id=Company%20Basic%20Information) This chapter outlines the company's name, stock code, place of incorporation, and the reporting period for its unaudited interim results - Company Name: MEDICARE, Stock Code: **383**[2](index=2&type=chunk) - Place of Incorporation: Bermuda[2](index=2&type=chunk) - Reporting Period: Unaudited interim results for the six months ended June 30, 2025[3](index=3&type=chunk) [Report Statement and Title](index=1&type=section&id=Report%20Statement%20and%20Title) This chapter details the disclaimer from Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited, along with the official title of the report - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement[1](index=1&type=chunk) - The report title is "UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2025 AND RE-DESIGNATION OF NOMINATION COMMITTEE ROLE"[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial performance and position of the Group for the reporting period [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's total revenue decreased by 4.67% to HK$783,132 thousand, and profit for the period significantly declined by 49.31% to HK$14,739 thousand, primarily due to reduced gross profit and lower income tax expense Condensed Consolidated Statement of Profit or Loss Key Data (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total revenue | 783,132 | 821,529 | -4.67% | | Cost of goods and services | (624,489) | (638,528) | -2.20% | | Gross profit | 158,643 | 183,001 | -13.20% | | Operating profit | 35,329 | 61,792 | -42.82% | | Profit before tax | 23,614 | 46,085 | -48.77% | | Income tax expense | (8,875) | (17,004) | -47.81% | | Profit for the period | 14,739 | 29,081 | -49.31% | | Profit attributable to owners of the Company | 11,979 | 21,659 | -44.69% | | Basic earnings per share | HK cents 1.11 | HK cents 1.99 | -44.19% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, total comprehensive income for the period was HK$26,254 thousand, a 9.72% decrease from HK$29,081 thousand in the prior year, mainly due to exchange differences arising on translation of foreign operations in 2025 which were absent in 2024 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 14,739 | 29,081 | -49.31% | | Exchange differences arising on translation of foreign operations | 11,515 | – | N/A | | Total comprehensive income for the period | 26,254 | 29,081 | -9.72% | | Total comprehensive income attributable to owners of the Company | 22,662 | 21,659 | +4.63% | | Total comprehensive income attributable to non-controlling interests | 3,592 | 7,422 | -51.60% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HK$3,439,335 thousand, a slight decrease from December 31, 2024, with non-current assets slightly increasing and net current assets improving from HK$193,511 thousand to HK$221,812 thousand Condensed Consolidated Statement of Financial Position Key Data | Metric | 2025 June 30 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 2,196,056 | 2,179,670 | +0.75% | | Current assets | 1,243,279 | 1,359,207 | -8.40% | | Total assets | 3,439,335 | 3,538,877 | -2.81% | | Current liabilities | 1,021,467 | 1,165,696 | -12.40% | | Non-current liabilities | 519,990 | 478,352 | +8.70% | | Total liabilities | 1,541,457 | 1,644,048 | -6.24% | | Net current assets | 221,812 | 193,511 | +14.63% | | Net assets | 1,897,878 | 1,894,829 | +0.16% | | Total equity | 1,897,878 | 1,894,829 | +0.16% | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the preparation basis, accounting policies, revenue breakdown, segment information, and other financial items of the Group [Basis of Preparation and Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The Group's condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and applicable disclosure requirements of the Listing Rules, maintaining consistency with the accounting policies and methods used in the 2024 annual financial statements - Preparation basis: Hong Kong Accounting Standard **34** "Interim Financial Reporting" and the Listing Rules of the Stock Exchange[9](index=9&type=chunk) - Accounting policy consistency: Consistent with those used in the annual financial statements for the year ended December 31, 2024[9](index=9&type=chunk) [Adoption of New and Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group has adopted amendments to Hong Kong Financial Reporting Standards, including HKAS 21 (Amendments) – Lack of Exchangeability, with no significant impact on the financial position or performance for the current and prior periods - Adopted HKAS **21** (Amendments) – Lack of Exchangeability[10](index=10&type=chunk) - The adoption of new standards has no material impact on the Group's financial position and performance[10](index=10&type=chunk) [Revenue Breakdown](index=6&type=section&id=Revenue%20Breakdown) For the six months ended June 30, 2025, the Group's total revenue was HK$783,132 thousand, primarily from contracts with customers (HK$779,792 thousand), with hospital fees and charges being the largest component but showing a year-on-year decrease, while revenue from elderly care related services and nutritional product sales increased Revenue Source Breakdown (Six Months Ended June 30) | Revenue Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Hospital fees and charges | 756,739 | 800,390 | -5.45% | | Building management fees | 2,019 | 261 | +673.56% | | Provision of elderly care related services and sales of nutritional products | 21,034 | 17,528 | +19.99% | | Total revenue from contracts with customers | 779,792 | 818,179 | -4.70% | | Rental income | 3,340 | 3,350 | -0.30% | | Total revenue | 783,132 | 821,529 | -4.67% | [Segment Information](index=7&type=section&id=Segment%20Information) The Group identifies six operating and reportable segments under HKFRS 8: healthcare, elderly care, property development, property investment, financial services, and securities trading and investment, which are regularly reviewed by executive directors for resource allocation and performance assessment - The primary operating decision maker is the Company's executive directors, responsible for resource allocation and performance assessment[13](index=13&type=chunk) - Six operating and reportable segments identified: healthcare, elderly care, property development, property investment, financial services, and securities trading and investment[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) [Identification of Operating Segments](index=7&type=section&id=Identification%20of%20Operating%20Segments) The Group's operating segments include hospitals in China (healthcare), property development and management for elderly care and retirement communities (elderly care), property development and sales, property leasing (property investment), provision of loan financial services (financial services), and securities trading and investment - Healthcare segment: Operates hospitals in China[14](index=14&type=chunk) - Elderly care segment: Engages in property development and management for elderly care and retirement communities in China, including nursing homes and serviced apartments[14](index=14&type=chunk) - Property development segment: Develops and sells properties and land located in China[14](index=14&type=chunk) - Property investment segment: Leases residential and office properties[15](index=15&type=chunk) - Financial services segment: Provides loan financial services[16](index=16&type=chunk) - Securities trading and investment segment: Trades securities in Hong Kong and overseas markets[17](index=17&type=chunk) [Segment Revenue and Results Analysis](index=8&type=section&id=Segment%20Revenue%20and%20Results%20Analysis) The healthcare segment remains the primary revenue source but saw declines in both revenue and profit, while elderly care, property development, and property investment segments recorded losses, and the securities trading and investment segment turned from loss to gain; net exchange gains in unallocated items positively impacted overall profit before tax Segment Revenue and Profit/(Loss) (Six Months Ended June 30) | Segment | 2025 Revenue (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | 2025 Segment Profit/(Loss) (HK$ Thousand) | 2024 Segment Profit/(Loss) (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Healthcare | 756,739 | 800,390 | 57,559 | 82,250 | | Elderly Care | 24,254 | 18,942 | (32,066) | (25,735) | | Property Development | – | – | (499) | (4,210) | | Property Investment | 2,139 | 2,197 | (12,212) | (6,096) | | Financial Services | – | – | (2) | (18) | | Securities Trading and Investment | – | – | 53 | (363) | | Consolidated Total Revenue | 783,132 | 821,529 | N/A | N/A | | Consolidated Profit Before Tax | N/A | N/A | 23,614 | 46,085 | - Net exchange gains of **HK$8,907 thousand** were recorded in the first half of 2025, compared to net exchange losses of HK$2,933 thousand in the same period of 2024[18](index=18&type=chunk) [Segment Assets and Liabilities](index=9&type=section&id=Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the Group's consolidated assets totaled HK$3,439,335 thousand and consolidated liabilities were HK$1,541,457 thousand, with the healthcare segment holding the largest share of both segment assets and liabilities Segment Assets and Liabilities (As at June 30) | Segment | 2025 Segment Assets (HK$ Thousand) | 2024 Segment Assets (HK$ Thousand) | 2025 Segment Liabilities (HK$ Thousand) | 2024 Segment Liabilities (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Healthcare | 1,867,989 | 1,906,411 | 931,050 | 1,032,871 | | Elderly Care | 633,400 | 667,677 | 558,828 | 553,099 | | Property Development | 50,868 | 52,184 | 42,437 | 46,612 | | Property Investment | 186,909 | 200,499 | 1,853 | 1,569 | | Financial Services | 129 | 621 | 1,115 | 1,515 | | Securities Trading and Investment | 6,461 | 5,223 | – | – | | Consolidated Assets | 3,439,335 | 3,538,877 | N/A | N/A | | Consolidated Liabilities | N/A | N/A | 1,541,457 | 1,644,048 | [Other Gains and Losses and Other Income](index=10&type=section&id=Other%20Gains%20and%20Losses%20and%20Other%20Income) For the six months ended June 30, 2025, the Group recorded net other gains and losses and other income of a loss of HK$11,779 thousand, an increase from the HK$8,743 thousand loss in the prior year, mainly due to increased fair value losses on investment properties, partially offset by net exchange gains and interest income from bank deposits Other Gains and Losses and Other Income Breakdown (Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Fair value gains/(losses) on investments held for trading | 77 | (326) | | Loss on disposal and write-off of property, plant and equipment | (454) | – | | Fair value losses on investment properties | (25,744) | (11,797) | | Net exchange gains/(losses) | 8,907 | (2,933) | | Interest income from bank deposits | 12,914 | 16,739 | | Total | (11,779) | (8,743) | - Government grants primarily refer to subsidies for operating costs of hospitals in China, without specific and unfulfilled conditions[21](index=21&type=chunk) [Finance Costs](index=10&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs decreased by 25.35% to HK$11,715 thousand from HK$15,707 thousand in the prior year, mainly due to reduced interest on bank and other borrowings and lease liabilities, coupled with increased capitalized interest Finance Costs Breakdown (Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 16,289 | 16,616 | | Interest on lease liabilities | 59 | 1,537 | | Less: Interest capitalised | (4,633) | (2,446) | | Total finance costs | 11,715 | 15,707 | [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense significantly decreased by 47.81% to HK$8,875 thousand year-on-year, primarily comprising China corporate income tax calculated at a 25% rate, with no Hong Kong profits tax provision due to sufficient tax losses or no assessable profits Income Tax Expense (Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | China corporate income tax | 8,875 | 17,004 | | Hong Kong profits tax provision | – | – | - China corporate income tax rate is **25%**[24](index=24&type=chunk) - Hong Kong profits tax two-tiered rates: **8.25%** on the first HK$2 million of assessable profits and **16.5%** on profits above that amount[25](index=25&type=chunk) [Components of Profit for the Period](index=12&type=section&id=Components%20of%20Profit%20for%20the%20Period) Profit for the period is stated after deducting items such as depreciation of property, plant and equipment, depreciation of right-of-use assets, and cost of inventories sold and properties held for sale, with property, plant and equipment depreciation at HK$43,173 thousand and cost of inventories and properties sold at HK$310,753 thousand Profit for the Period Deductions (Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 43,173 | 45,512 | | Depreciation of right-of-use assets | 2,002 | 4,292 | | Cost of inventories sold and properties held for sale | 310,753 | 318,606 | [Dividends](index=12&type=section&id=Dividends) The Board of Directors does not recommend any interim dividend for the six months ended June 30, 2025 and 2024, while the 2024 final dividend of HK cents 2 per ordinary share, totaling HK$21,663 thousand, was paid, exceeding the HK cents 1 per share paid in 2023 - No interim dividend is recommended for the six months ended June 30, 2025 and 2024[27](index=27&type=chunk) Dividends Declared (Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 2024 final dividend (2 HK cents per share) | 21,663 | N/A | | 2023 final dividend (1 HK cent per share) | N/A | 10,860 | [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share was HK cents 1.11, a 44.22% decrease from HK cents 1.99 in the prior year, with no diluted earnings per share presented due to the absence of potential dilutive ordinary shares Earnings Per Share Calculation (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (HK$ Thousand) | 11,979 | 21,659 | | Weighted average number of ordinary shares | 1,083,981,672 | 1,086,005,457 | | Basic earnings per share (HK cents) | 1.11 | 1.99 | - Diluted earnings per share is not presented as there are no potential dilutive ordinary shares[30](index=30&type=chunk) [Trade and Other Receivables, Deposits and Prepayments](index=13&type=section&id=Trade%20and%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) As of June 30, 2025, total trade receivables decreased to HK$120,890 thousand from HK$143,791 thousand on December 31, 2024, primarily comprising receivables from hospital operations and elderly care related services, with the 0-30 day ageing category being the largest but showing a year-on-year reduction Trade and Other Receivables, Deposits and Prepayments (As at June 30) | Item | 2025 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables from hospital operations and elderly care related services | 128,655 | 150,141 | | Receivables from financial services | 876 | 876 | | Less: Provision for credit losses | (8,641) | (7,226) | | Net trade receivables | 120,890 | 143,791 | | Net deposits, prepayments and other receivables | 22,309 | 28,792 | Ageing Analysis of Trade Receivables (As at June 30) | Ageing | 2025 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | | :--- | :--- | :--- | | 0 – 30 days | 77,546 | 109,664 | | 31 – 60 days | 12,733 | 10,110 | | 61 – 90 days | 7,894 | 5,243 | | 91 – 365 days | 22,881 | 16,055 | | Over 365 days | 7,601 | 9,069 | | Total | 128,655 | 150,141 | [Trade and Other Payables, Deposits, Accruals and Other Payables](index=14&type=section&id=Trade%20and%20Other%20Payables%2C%20Deposits%2C%20Accruals%20and%20Other%20Payables) As of June 30, 2025, trade payables decreased to HK$108,171 thousand from HK$133,439 thousand on December 31, 2024, while current deposits, advances received, and accruals significantly declined, and non-current other payables included a new HK$37,239 thousand for construction payables Trade and Other Payables, Deposits, Accruals and Other Payables (As at June 30) | Item | 2025 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 108,171 | 133,439 | | Current deposits, advances received and accruals | 321,374 | 450,111 | | Non-current other payables (construction payables) | 37,239 | – | Ageing Analysis of Trade Payables (As at June 30) | Ageing | 2025 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | | :--- | :--- | :--- | | 0 – 30 days | 42,847 | 59,973 | | 31 – 60 days | 30,184 | 38,855 | | 61 – 90 days | 11,066 | 8,154 | | 91 – 365 days | 15,592 | 13,767 | | Over one year but not over two years | 5,638 | 9,405 | | Over two years but not over five years | 2,844 | 3,285 | | Total | 108,171 | 133,439 | [Litigation](index=15&type=section&id=Litigation) Tongren Medical, an indirect wholly-owned subsidiary, received a claim of approximately RMB143 million on July 30, 2024, which was dismissed by the court on December 26, 2024, but the claimant filed an appeal on January 9, 2025; as of June 30, 2025, the Company believes the lawsuit has no legal basis and no material impact on the Group's operations and financial position - Tongren Medical, an indirect wholly-owned subsidiary, received a claim of approximately **RMB143 million** from Jiaozuo City Investment Group Co Ltd on July 30, 2024[37](index=37&type=chunk) - The court dismissed the claim on December 26, 2024, but the claimant filed an appeal on January 9, 2025[37](index=37&type=chunk) - As of June 30, 2025, the Company believes the lawsuit has no legal basis and no material impact on the Group's operations and financial position[37](index=37&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's financial performance, business review by segment, financial resources, capital structure, and future outlook [Financial Performance Overview](index=16&type=section&id=Financial%20Performance%20Overview) For the six months ended June 30, 2025, the Group's total revenue decreased by 4.67% to HK$783,132 thousand, and profit attributable to owners of the Company significantly decreased by 44.69% to HK$11,979 thousand, with basic earnings per share at HK cents 1.11 and net asset value per share at HK$1.68 Financial Performance Overview (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total revenue | 783,132 | 821,529 | -4.67% | | Profit attributable to owners of the Company | 11,979 | 21,659 | -44.69% | | Basic earnings per share (HK cents) | 1.11 | 1.99 | -44.19% | - Profit decline primarily due to reduced revenue in the healthcare segment and increased non-cash fair value losses on investment properties, partially offset by lower employee benefit expenses, net exchange gains, and reduced income tax expense[39](index=39&type=chunk) - As of June 30, 2025, net asset value per share was **HK$1.68** (December 31, 2024: HK$1.67)[40](index=40&type=chunk) [Business Review](index=16&type=section&id=Business%20Review) The Group's principal businesses encompass healthcare, elderly care, property investment and development, securities trading and investment, financial services, and strategic investments; in the first half of 2025, the domestic healthcare and elderly care industries faced a complex and challenging operating environment, including policy adjustments, intensified market competition, and low consumer confidence - Principal businesses include investment, management and operation of healthcare and hospital businesses, elderly care businesses, trading of medical equipment and related supplies, property investment and development, securities trading and investment, provision of financial services, and strategic investments[41](index=41&type=chunk) - Domestic healthcare and elderly care institutions face a complex operating environment, affected by industry policy adjustments, intensified market competition, low consumer confidence, and other factors[41](index=41&type=chunk) [Overall Business Environment](index=16&type=section&id=Overall%20Business%20Environment) In the first half of 2025, the domestic healthcare and elderly care industries faced multiple challenges, including policy adjustments, intensified market competition, low consumer confidence, technological changes, and economic uncertainty, leading to a general "chill" in the industry - The industry faces multiple challenges including policy adjustments, intensified market competition, low consumer confidence, technological changes, and economic uncertainty[41](index=41&type=chunk) [Healthcare Segment](index=17&type=section&id=Healthcare%20Segment) Healthcare segment revenue decreased to HK$756,739 thousand, and profit fell to HK$57,559 thousand, with EBITDA at HK$102,248 thousand; Nanjing Hospital and Kunming Hospital made progress in operations, research, specialty development, and marketing, but overall business volume declined Healthcare Segment Financial Performance (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 756,739 | 800,390 | | Profit | 57,559 | 82,250 | | EBITDA | 102,248 | 137,731 | - Nanjing Hospital's outpatient visits, inpatient admissions, and physical examination counts all decreased year-on-year[54](index=54&type=chunk) - Kunming Hospital's outpatient visits, inpatient admissions, and physical examination counts all slightly increased year-on-year[54](index=54&type=chunk) [Nanjing Hospital](index=17&type=section&id=Nanjing%20Hospital) Nanjing Hospital, a Grade III Class B general hospital, operates 43 clinical medical technology departments; during the review period, the hospital improved operational efficiency through cost control, human resource optimization, budget management, increased equipment self-repair rate, and marketing strategy adjustments, while scientific research progressed with an international cooperation project completed and multiple projects approved, specialty development advanced, and medical alliance collaborations were actively expanded - Nanjing Hospital operates **43** clinical medical technology departments, including national and provincial key specialties[43](index=43&type=chunk) - Operational management implemented cost control measures, optimized human resources, strengthened budget management, achieved a **96%** equipment self-repair rate, and optimized marketing costs[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - In scientific research, completed the "Nanjing Science and Technology Bureau International/Hong Kong, Macao and Taiwan Science and Technology Cooperation Project" and secured **16** approved projects[47](index=47&type=chunk) - Specialty development achieved acceptance for the Jiangsu Provincial Imaging Cloud Platform construction and promoted "medical rehabilitation-education integration" for disabled children[47](index=47&type=chunk) - Marketing promoted medical alliance co-construction and conducted corporate health popularization activities[48](index=48&type=chunk)[49](index=49&type=chunk) [Kunming Hospital](index=19&type=section&id=Kunming%20Hospital) Kunming Hospital, a Grade III Class A general hospital, operates 44 clinical medical technology departments; during the review period, scientific research reached a new high with 19 city-level continuing medical education projects approved, the Medical Laboratory Department passed ISO 15189 accreditation, and the International Medical Department made progress in foreign-related business, while marketing involved comprehensive promotion during medical festivals and "Health Carnival" interactive events, and the structural work for Kunming Hospital Phase II has been topped out with interior decoration underway - Kunming Hospital operates **44** clinical medical technology departments[50](index=50&type=chunk) - In scientific research, successfully applied for **19** city-level continuing medical education projects, a five-year high[51](index=51&type=chunk) - In specialty and department development, the Medical Laboratory Department passed ISO **15189** accreditation, and the International Medical Department made progress in foreign-related business[52](index=52&type=chunk)[53](index=53&type=chunk) - Marketing involved comprehensive promotion around medical festivals and creating "Health Carnival" themed interactive events[53](index=53&type=chunk) - Kunming Hospital Phase II (including comprehensive inpatient building, oncology and nuclear medicine building, and rehabilitation medicine building) has achieved overall structural topping out, with interior decoration underway[54](index=54&type=chunk) [Elderly Care Segment](index=20&type=section&id=Elderly%20Care%20Segment) Elderly care segment revenue increased to HK$24,254 thousand, but recorded a loss of HK$32,066 thousand, mainly due to increased non-cash fair value losses on investment properties; Tiandi Health City sold 857 independent living units with over 390 residents, and 107 serviced apartments were leased, while elderly care homes continued to improve operational efficiency, and Deyu Hospital saw growth in outpatient visits and inpatient admissions Elderly Care Segment Financial Performance (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 24,254 | 18,942 | | Loss | (32,066) | (25,735) | | Non-cash fair value loss on investment properties | (12,608) | (2,667) | | Provision for properties under development for sale | (4,834) | (6,147) | - Tiandi Health City sold **857** independent living units, with over **390** residents moved in[57](index=57&type=chunk) - Serviced apartments leased: **107** (December 31, 2024: 94)[57](index=57&type=chunk) - Deyu Hospital's outpatient visits and inpatient admissions both increased[59](index=59&type=chunk) [Property Development Segment](index=22&type=section&id=Property%20Development%20Segment) For the six months ended June 30, 2025, the property development business recorded zero revenue and a loss of HK$499 thousand, a narrower loss compared to HK$4,210 thousand in the same period of 2024, with the provision for properties under development for sale being zero Property Development Segment Financial Performance (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | – | – | | Loss | (499) | (4,210) | | Provision for properties under development for sale | – | (1,979) | - As of June 30, 2025, properties under development for sale amounted to **HK$34,230 thousand**[61](index=61&type=chunk) [Property Investment Segment](index=22&type=section&id=Property%20Investment%20Segment) For the six months ended June 30, 2025, the property investment segment generated rental income of HK$2,139 thousand but recorded a loss of HK$12,212 thousand, with the loss widening year-on-year, primarily due to increased non-cash fair value losses on investment properties Property Investment Segment Financial Performance (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Rental income | 2,139 | 2,197 | | Loss | (12,212) | (6,096) | | Non-cash fair value loss on investment properties | (13,136) | (9,130) | - As of June 30, 2025, the carrying value of the investment property portfolio was **HK$184,104 thousand**[62](index=62&type=chunk) [Securities Trading and Investment Segment](index=22&type=section&id=Securities%20Trading%20and%20Investment%20Segment) During the review period, the securities trading and investment business recorded zero revenue but a gain of HK$53 thousand, an improvement from the HK$363 thousand loss in the same period of 2024, mainly due to fair value gains on investments held for trading; the investment portfolio is primarily distributed in Hong Kong, Australia, and the Philippines, with a focus on property and construction industries Securities Trading and Investment Segment Financial Performance (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | – | – | | Gain/(Loss) | 53 | (363) | | Fair value gains/(losses) on investments held for trading | 77 | (326) | Geographical Distribution of Investments Held for Trading Portfolio (As at June 30) | Geographical Location | 2025 Carrying Value (HK$ Thousand) | Percentage of Total Assets (%) | | :--- | :--- | :--- | | Hong Kong | 3,718 | 0.11% | | Australia | 947 | 0.03% | | Philippines | 363 | 0.01% | | Total | 5,028 | N/A | Principal Business of Investments Held for Trading Portfolio (As at June 30) | Principal Business | 2025 Carrying Value (HK$ Thousand) | Percentage of Total Assets (%) | | :--- | :--- | :--- | | Entertainment & Media | 423 | 0.01% | | Financial Services & Investment | 79 | 0.00% | | Industrial Materials | 257 | 0.01% | | Property & Construction | 4,269 | 0.12% | | Total | 5,028 | N/A | [Financial Services Segment](index=24&type=section&id=Financial%20Services%20Segment) During the review period, the money lending business generated no interest income and recorded a loss of HK$2 thousand, a significant reduction from the HK$18 thousand loss in the same period of 2024; as of June 30, 2025, the carrying value of loans receivable was zero, with a full impairment provision made, and the Group manages its money lending business through stringent credit assessment and risk management policies Financial Services Segment Financial Performance (Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest income | – | – | | Loss | (2) | (18) | | Carrying value of loans receivable (after impairment provision) | – | – | - The Group prudently made a full impairment loss provision for the loan in **2021**[69](index=69&type=chunk) [Business Model and Customer Information](index=25&type=section&id=Business%20Model%20and%20Customer%20Information) The financial services segment provides secured and unsecured term loans to diversify revenue streams and business risks, aiming for stable returns for the Group, with funding primarily from internal resources and borrowings, and customers referred through company or business networks without specific industry or revenue targets - Provides secured and unsecured term loans to diversify revenue streams and business risks[70](index=70&type=chunk) - Funding sources primarily include internal resources and borrowings[70](index=70&type=chunk) - Customers are referred through company or business networks, with no specific industry or annual revenue targets for corporate clients[70](index=70&type=chunk) [Risk Management Policies](index=25&type=section&id=Risk%20Management%20Policies) The Group adopts comprehensive credit assessment and approval procedures, evaluating loan transactions on a case-by-case basis; the finance and accounting department conducts background checks, reviews financial conditions, inquires about loan purposes and repayment sources, and assesses credit risk and collateral value, with loan transactions approved by the Board or Executive Committee and repayment progress regularly monitored - Adopts comprehensive credit assessment and approval procedures, evaluating loan transactions on a case-by-case basis[71](index=71&type=chunk) - Finance and accounting department conducts background checks, reviews financial conditions, inquires about loan purposes and repayment sources, and assesses credit risk and collateral value[71](index=71&type=chunk) - Loan transactions are approved by the Board or Executive Committee, with repayment progress regularly monitored[71](index=71&type=chunk) [Loan Impairment Policies](index=25&type=section&id=Loan%20Impairment%20Policies) The Group adopts the Expected Credit Loss (ECL) policy under HKFRS 9, regularly reviewing the recoverability of loans and making adequate provisions; ECL assessment is based on historical credit loss experience, adjusted for specific borrower factors and forward-looking information, to identify significant increases in credit risk - Adopts the Expected Credit Loss (ECL) policy under HKFRS **9**[72](index=72&type=chunk) - ECL assessment is based on historical credit loss experience, adjusted for specific borrower factors and forward-looking information (including economic conditions)[72](index=72&type=chunk) - Regularly monitors and revises criteria for identifying significant increases in credit risk as appropriate[72](index=72&type=chunk) [Financial Resources and Capital Structure](index=26&type=section&id=Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, the Group's non-current assets were HK$2,196,056 thousand, primarily funded by shareholders' equity; total borrowings increased to HK$866,809 thousand, with a gearing ratio of 2.3%, and the company completed a share premium account reduction in 2024 and a rights issue in 2023 Non-current Assets Composition (As at June 30) | Item | 2025 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | | :--- | :--- | :--- | | Investment properties | 503,116 | 525,392 | | Property, plant and equipment | 1,591,237 | 1,541,635 | | Right-of-use assets | 84,853 | 86,605 | | Financial assets at fair value through profit or loss | 2,151 | 2,151 | | Prepayments for acquisition of property, plant and equipment | 14,699 | 23,887 | | Total non-current assets | 2,196,056 | 2,179,670 | Total Borrowings Composition and Repayment Terms (As at June 30) | Item | 2025 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | | :--- | :--- | :--- | | Secured bank borrowings | 72,053 | 35,123 | | Unsecured bank borrowings | 387,063 | 395,050 | | Unsecured term loans | 407,693 | 403,210 | | Total borrowings | 866,809 | 833,383 | | Repayable within one year | 418,329 | 390,817 | | Repayable after one year but within two years | 444,050 | 442,566 | | Repayable after two years but within five years | 4,430 | – | - Gearing ratio (net borrowings divided by total equity) was **2.3%** (December 31, 2024: no gearing ratio)[75](index=75&type=chunk) - In May 2024, the share premium account was reduced by **HK$2,600,000 thousand** to offset accumulated losses, with the remaining **HK$327,046 thousand** transferred to the contributed surplus account[75](index=75&type=chunk) - In June 2023, a rights issue was completed, raising approximately **HK$318.6 million** (before expenses)[76](index=76&type=chunk) Net Proceeds from Rights Issue Utilisation (As at June 30, 2025) | Intended Use | Net Proceeds Planned (HK$ Thousand) | Utilised (HK$ Thousand) | Unutilised Balance (HK$ Thousand) | Expected Utilisation Timeline | | :--- | :--- | :--- | :--- | :--- | | Investment opportunities | 200,000 | – | 200,000 | End of 2027 | | General working capital | 47,792 | – | 47,792 | End of 2026 | | Share repurchases | 61,500 | – | 61,500 | End of 2026 | | Total | 309,292 | – | 309,292 | N/A | - The Group's primary functional currencies are HKD, RMB, AUD, and USD, and it will closely monitor foreign exchange risks and consider hedging[78](index=78&type=chunk) [Pledge of Group Assets](index=27&type=section&id=Pledge%20of%20Group%20Assets) As of June 30, 2025, certain Group assets were pledged to banks and securities brokers to secure credit facilities, including investments held for trading, buildings, right-of-use assets, investment properties, pledged bank deposits, and medical equipment Pledged Group Assets (As at June 30) | Asset Category | 2025 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | | :--- | :--- | :--- | | Investments held for trading | 5,028 | 4,951 | | Buildings (included in property, plant and equipment) | 557,034 | – | | Right-of-use assets | 15,082 | – | | Investment properties | 13,297 | 13,043 | | Pledged bank deposits | 8,791 | – | | Medical equipment (included in property, plant and equipment) | 14,181 | 14,883 | [Capital Commitments](index=28&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments for the acquisition of property, plant and equipment amounted to HK$95,834 thousand, a decrease from HK$133,747 thousand on December 31, 2024 Capital Commitments (As at June 30) | Item | 2025 (HK$ Thousand) | 2024 December 31 (HK$ Thousand) | | :--- | :--- | :--- | | Capital commitments for acquisition of property, plant and equipment | 95,834 | 133,747 | [Contingent Liabilities](index=28&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no other significant contingent liabilities apart from the litigation disclosed in this announcement - No other significant contingent liabilities apart from the disclosed litigation[81](index=81&type=chunk) [Significant Acquisitions and Disposals and Future Plans](index=28&type=section&id=Significant%20Acquisitions%20and%20Disposals%20and%20Future%20Plans) For the six months ended June 30, 2025, the Group did not undertake any other significant investments, acquisitions, or disposals of subsidiaries, associates, and joint ventures, nor did it have any significant investment or capital asset plans - No significant investments, acquisitions, or disposals of subsidiaries, associates, and joint ventures during the review period[82](index=82&type=chunk) - As of June 30, 2025, there were no significant investment or capital asset plans[82](index=82&type=chunk) [Employees](index=28&type=section&id=Employees) As of June 30, 2025, the Group's total number of employees increased to 2,694 from 2,626 on December 31, 2024, and the company regularly reviews its remuneration policy to ensure alignment with market conditions and individual performance Number of Employees | Date | Number of Employees | | :--- | :--- | | June 30, 2025 | 2,694 | | December 31, 2024 | 2,626 | - Remuneration policy is aligned with market conditions and individual performance, and is regularly reviewed[83](index=83&type=chunk) [Outlook](index=28&type=section&id=Outlook) The Group will continue to focus on strengthening healthcare content, activating operational capabilities, and solidifying cost reduction and efficiency improvement; the elderly care segment will build smart elderly care communities and enhance rehabilitation departments, while facing a continuously challenging business environment, the Group will maintain a cautious approach, closely review, and adjust its business and investment strategies - The Group will continue to focus on strengthening healthcare content, activating operational capabilities, and solidifying cost reduction and efficiency improvement[84](index=84&type=chunk) - Facing global trade tensions, geopolitical conflicts, low consumer confidence, and economic slowdown, the Group will maintain a cautious approach and adjust its business and investment strategies[87](index=87&type=chunk) [Healthcare Segment Outlook](index=28&type=section&id=Healthcare%20Segment%20Outlook) The healthcare segment will focus on business development to reverse the decline and achieve performance growth; Nanjing Hospital will stabilize advantageous disciplines and strengthen external cooperation, while Kunming Hospital will solidify core services and expand external business, aiming to become a medical destination for ASEAN, with both hospitals committed to utilizing innovative technologies and prioritizing cost control - Nanjing Hospital will stabilize advantageous disciplines such as ophthalmology, ENT, and stomatology, strengthen operational capabilities, increase high-value-added projects, and enhance external cooperation with public and grassroots institutions[84](index=84&type=chunk)[85](index=85&type=chunk) - Kunming Hospital will solidify advantageous specialties like cardiology, cardiothoracic surgery, and gynecology, support new business development, integrate into the Belt and Road Initiative, expand external business, and aim to become a medical destination for ASEAN countries[84](index=84&type=chunk)[85](index=85&type=chunk) - Both hospitals are committed to utilizing innovative technologies to enhance diagnosis and treatment, improve patient care, and continuously optimize human resource structure and resource utilization to strengthen cost control[85](index=85&type=chunk) [Elderly Care Segment Outlook](index=29&type=section&id=Elderly%20Care%20Segment%20Outlook) The elderly care segment plans to build smart elderly care communities, enhance member services, implement precise dietary management, and launch community home-based elderly care services; property management will strengthen safety, and nursing homes will bolster rehabilitation departments, refine rehabilitation services, complete new bed construction, and continue developing three distinctive features: rehabilitation, nursing, and dementia care - In community operations, plans include building smart elderly care communities, increasing member services, implementing precise dietary management, expanding club categories, and launching community home-based elderly care services[86](index=86&type=chunk) - In property management services, focus will be on strengthening safety management, advancing fire facility renovations, and gradually taking over hospital property management operations[86](index=86&type=chunk) - In nursing home operations, efforts will be made to strengthen rehabilitation departments, complete the construction of new beds on the first floor, and continuously promote the three distinctive features: rehabilitation, nursing, and dementia care[86](index=86&type=chunk) [Other Business Outlook](index=30&type=section&id=Other%20Business%20Outlook) Amidst global trade tensions, geopolitical conflicts, low consumer confidence, and economic slowdown, the Group will maintain a cautious approach, closely review and adjust its business and investment strategies and overall investment portfolio to adapt to challenges and create higher value and returns for shareholders - The business environment remains challenging, and the Group will maintain a cautious approach[87](index=87&type=chunk) - Will closely review and adjust business and investment strategies and the overall investment portfolio to adapt to challenges and create higher value and returns for shareholders[87](index=87&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section covers corporate governance, audit committee review, share repurchases, and changes in the nomination committee role [Corporate Governance Code](index=30&type=section&id=Corporate%20Governance%20Code) For the six months ended June 30, 2025, the Company has applied and consistently complied with the Corporate Governance Code in Appendix C1 of the Listing Rules - The Company has applied and consistently complied with the Corporate Governance Code in Appendix C1 of the Listing Rules[88](index=88&type=chunk) [Review by Audit Committee](index=30&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee, in conjunction with management, reviewed the Group's accounting principles and practices, discussed internal controls and financial reporting matters, including a general review of the interim report, relying on the external auditor's findings and management's report without conducting a detailed independent audit review - The Audit Committee reviewed accounting principles, internal controls, and financial reporting matters, including a general review of the interim report[89](index=89&type=chunk) - The review relied on the findings of the external auditor (BDO Limited) and management's report[89](index=89&type=chunk) - The Audit Committee did not conduct a detailed independent audit review[89](index=89&type=chunk) [Purchase, Sale or Redemption of Shares](index=31&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) During the six months ended June 30, 2025, the Company repurchased a total of 1,965,000 shares on the Stock Exchange for a total consideration of HK$1,532,600, and all repurchased shares have been cancelled Share Repurchase Details (Six Months Ended June 30) | Month | Number of Shares | Highest Purchase Price (HK$) | Lowest Purchase Price (HK$) | Total Consideration (Excluding Expenses) (HK$) | | :--- | :--- | :--- | :--- | :--- | | March | 180,000 | 0.76 | 0.74 | 136,600 | | April | 1,485,000 | 0.78 | 0.77 | 1,158,250 | | May | 40,000 | 0.75 | 0.75 | 30,000 | | June | 260,000 | 0.81 | 0.78 | 207,750 | | Total | 1,965,000 | N/A | N/A | 1,532,600 | - All repurchased shares have been cancelled[90](index=90&type=chunk) [Re-designation of Nomination Committee Role](index=31&type=section&id=Re-designation%20of%20Nomination%20Committee%20Role) Dr Wong Wing Kuen will succeed Mr Kong Muk Yin as the Chairman of the Nomination Committee effective August 1, 2025, with Mr Kong Muk Yin remaining a member of the committee after the re-designation - Dr Wong Wing Kuen will succeed Mr Kong Muk Yin as the Chairman of the Nomination Committee effective **August 1, 2025**[92](index=92&type=chunk) - Mr Kong Muk Yin will remain a member of the Nomination Committee after the re-designation[92](index=92&type=chunk)

(Incorporated in the Cayman Islands with limited liability) ( 於開曼群島註冊成立的有限公司 ) Stock code : 3616 股份代號 : 3616 ANNUAL REPORT 年度報告 2024 Ever Reach Group (Holdings) Company Limited 恒 達 集 團（控 股）有 限 公 司 ANNUAL REPORT 2024 年 度 報 告 CONTENTS 目錄 Corporate Information 公司資料 As of the date of this Report DIRECTORS Executive Directors Mr. LI Xiaobing (Chairman) Mr. WANG Zhenfeng (Chief Executive Officer) Ms. QI Chunfeng Mr. WANG Quan Independent Non-Executive Directors | Corporate Information | 2 | | --- | --- | | 公司資料 | ...

[Corporate Information](index=3&type=section&id=Corporate%20Information) [Board of Directors and Committee Composition](index=3&type=section&id=Directors%20and%20Committees) As of the report date, the company's Board of Directors comprises four executive directors and three independent non-executive directors, with established Audit, Remuneration, Nomination, and Legal Compliance Committees. - The Board of Directors includes executive directors Li Xiaobing (Chairman), Wang Zhenfeng (CEO), Qi Chunfeng, and Wang Quan, as well as independent non-executive directors Fang Zheng, Li Guolin, and Wei Jian[4](index=4&type=chunk)[5](index=5&type=chunk) - The Audit Committee Chairman is Li Guolin, the Remuneration Committee Chairman is Fang Zheng, and the Nomination Committee Chairman is Li Xiaobing (to be succeeded by Li Guolin on June 30, 2025)[4](index=4&type=chunk)[5](index=5&type=chunk) [Company Details](index=4&type=section&id=Company%20Details) The company has appointed authorized representatives, a company secretary, and an auditor, disclosing its registered office, principal place of business in Hong Kong, and China headquarters, along with key information such as principal legal advisors and bankers. - Authorized representatives are Wang Quan and Liang Jinhui, the company secretary is Liang Jinhui, and the auditor is Evergreen (Hong Kong) CPA Limited[7](index=7&type=chunk)[8](index=8&type=chunk) - The company is registered in the Cayman Islands, with its principal place of business in Hong Kong at Leighton Centre, Causeway Bay, and its China headquarters in Xuchang City, Henan Province[7](index=7&type=chunk)[8](index=8&type=chunk) - Principal bankers include Bank of China (Hong Kong), China Construction Bank, China Minsheng Bank, and Industrial and Commercial Bank of China[9](index=9&type=chunk)[10](index=10&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Review](index=6&type=section&id=Industry%20Review) In the first half of 2024, China's real estate market experienced a significant downturn, with substantial declines in investment, completed area, and sales value, despite government policies aimed at stabilization and destocking. Key Indicators of China's Real Estate Market, H1 2024, Year-on-Year Change | Indicator | YoY Change (%) | | :--- | :--- | | Real Estate Development Investment | -10.1 | | Completed Housing Area | -21.8 | | Completed Residential Area | -21.7 | | New Commercial Housing Sales Area | -19.0 | | Residential Sales Area | -21.9 | | New Commercial Housing Sales Value | -25.0 | | Residential Sales Value | -26.9 | - Henan Province's real estate market also faced pressure, with development investment decreasing by **9.1% year-on-year** and new commercial housing sales value declining by **22.6%**[14](index=14&type=chunk)[15](index=15&type=chunk) - Government policy directions include "coordinated research on policies to digest existing housing stock and optimize incremental housing supply" and the central bank's "package" of new policies, aimed at stabilizing the market and destocking[16](index=16&type=chunk)[17](index=17&type=chunk) [Business Overview](index=8&type=section&id=Business%20Overview) In the first half of 2024, the Group focused on "ensuring project delivery" and "destocking" amidst market pressures, successfully delivering 259,000 square meters of gross floor area and earning recognition for high-quality development. - The Group successfully delivered approximately **259,000 square meters** of gross floor area in the first half, including projects in Xuchang urban area, Changge region, and Linying region of Luohe City[19](index=19&type=chunk)[22](index=22&type=chunk) - The Group aims to achieve its "destocking" goal by accelerating the supply of unsold housing and enhancing housing quality[19](index=19&type=chunk)[22](index=22&type=chunk) - The Group was recognized by China Index Academy as one of the "**2024 Henan Province High-Quality Real Estate Development Excellent Enterprises**"[21](index=21&type=chunk)[23](index=23&type=chunk) [Land Reserves](index=9&type=section&id=Land%20reserves) As of June 30, 2024, the Group's land reserves had a gross floor area of approximately 3.2 million square meters. - As of June 30, 2024, the Group's land reserves had a gross floor area of approximately **3.2 million square meters**[24](index=24&type=chunk)[25](index=25&type=chunk) [Contracted Sales](index=9&type=section&id=Contracted%20sales) For the six months ended June 30, 2024, the Group's total contracted sales decreased by 46.8% to RMB 839.4 million, primarily due to a significant drop in residential unit sales and declining average selling prices in Henan Province. Contracted Sales and Average Selling Price (For the six months ended June 30) | Indicator | 2024 (RMB Million/sqm/unit) | 2023 (RMB Million/sqm/unit) | Change (%) | | :--- | :--- | :--- | :--- | | **Contracted Sales** | | | | | Residential Units | 673.4 | 1,313.2 | -48.7 | | Commercial Units | 138.4 | 214.4 | -35.4 | | Parking Spaces | 21.1 | 40.9 | -48.4 | | Others | 6.5 | 9.9 | -34.3 | | **Total** | **839.4** | **1,578.4** | **-46.8** | | **Contracted Saleable GFA/Number of Units** | | | | | Saleable GFA (sqm) | 144,293 | 257,655 | -44.0 | | Parking Spaces (units) | 553 | 852 | -35.1 | | **Contracted Average Selling Price** | | | | | Saleable GFA (RMB/sqm) | 5,671 | 5,968 | -5.0 | | Parking Spaces (RMB/unit) | 38,114 | 47,442 | -19.7 | - The contracted average selling price per square meter for saleable gross floor area decreased by **5.0%** to approximately **RMB 5,671**, primarily due to property market price declines in Henan Province[27](index=27&type=chunk)[29](index=29&type=chunk) [Financial Review](index=10&type=section&id=Financial%20Review) In the first half of 2024, the Group's revenue slightly decreased, but gross profit and net profit significantly declined, turning from profit to loss, with narrowing gross profit margins and increased gearing. [Results](index=10&type=section&id=Results) Key Financial Results (For the six months ended June 30) | Indicator | 2024 (RMB Million) | 2023 (RMB Million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,467.6 | 1,488.2 | -1.4 | | Gross Profit | 139.1 | 259.2 | -46.3 | | Gross Profit Margin | 9.5% | 17.4% | -7.9 percentage points | | Net Profit/(Loss) for the Period | (36.1) | 69.2 | -105.3 million (from profit to loss) | [Revenue](index=10&type=section&id=Revenue) Revenue Composition (For the six months ended June 30) | Revenue Source | 2024 (RMB Thousand) | 2024 (%) | 2023 (RMB Thousand) | 2023 (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Sales | 1,457,879 | 99.4 | 1,481,189 | 99.5 | -1.6 | | Rental Income | 4,769 | 0.3 | 5,597 | 0.4 | -14.8 | | Service Income | 4,951 | 0.3 | 1,365 | 0.1 | +262.7 | | **Total** | **1,467,599** | **100.0** | **1,488,151** | **100.0** | **-1.4** | Property Sales Revenue Details (For the six months ended June 30) | Property Type | 2024 Revenue (RMB Thousand) | 2024 GFA Recognized (sqm) | 2024 Average Selling Price per sqm (RMB) | 2023 Revenue (RMB Thousand) | 2023 GFA Recognized (sqm) | 2023 Average Selling Price per sqm (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Residential | 1,269,581 | 244,648 | 5,189 | 1,282,830 | 223,965 | 5,728 | | Commercial | 144,798 | 18,749 | 7,723 | 159,592 | 21,956 | 7,269 | | Storerooms | 5,521 | 2,972 | 1,858 | 7,731 | 3,401 | 2,273 | | **Subtotal** | **1,419,900** | **266,369** | **5,331** | **1,450,153** | **249,322** | **5,816** | | Parking Spaces | 37,979 | 592 (number of units) | 64,154 (per unit) | 31,036 | 601 (number of units) | 51,641 (per unit) | [Gross Profit and Gross Profit Margin](index=12&type=section&id=Gross%20profit%20and%20gross%20profit%20margin) Gross Profit and Gross Profit Margin by Category (For the six months ended June 30) | Category | 2024 Revenue (RMB Thousand) | 2024 Cost of Sales (RMB Thousand) | 2024 Gross Profit/(Loss) (RMB Thousand) | 2024 Gross Profit Margin (%) | 2023 Revenue (RMB Thousand) | 2023 Cost of Sales (RMB Thousand) | 2023 Gross Profit/(Loss) (RMB Thousand) | 2023 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Property Sales** | | | | | | | | | | — Residential | 1,269,581 | 1,162,061 | 107,520 | 8.5 | 1,282,830 | 1,046,361 | 236,469 | 18.4 | | — Commercial | 144,798 | 133,953 | 10,845 | 7.5 | 159,592 | 133,917 | 25,675 | 16.1 | | — Parking Spaces and Storerooms | 43,500 | 28,801 | 14,699 | 33.8 | 38,767 | 45,691 | (6,924) | (17.9) | | **Subtotal** | **1,457,879** | **1,324,815** | **133,064** | **9.1** | **1,481,189** | **1,225,969** | **255,220** | **17.2** | | Rental Income | 4,769 | 34 | 4,735 | 99.3 | 5,597 | — | 5,597 | 100.0 | | Service Income | 4,951 | 3,699 | 1,252 | 25.3 | 1,365 | 2,955 | (1,590) | (116.5) | | **Total** | **1,467,599** | **1,328,548** | **139,051** | **9.5** | **1,488,151** | **1,228,924** | **259,227** | **17.4** | - Gross profit margins for residential and commercial property sales decreased from **18.4% and 16.1% to 8.5% and 7.5%**, respectively, primarily due to lower average selling prices for residential properties and increased costs for commercial properties[47](index=47&type=chunk)[51](index=51&type=chunk) - Loss for the period was approximately **RMB 36.1 million**, a decrease of approximately **RMB 105.3 million** compared to a profit of RMB 69.2 million in the same period last year, mainly due to a decline in gross profit margin and increased impairment provisions for properties held for sale or under development[48](index=48&type=chunk)[51](index=51&type=chunk) [Fair Value Losses on Investment Properties](index=13&type=section&id=Fair%20value%20losses%20on%20investment%20properties) Investment properties were valued by independent valuers as of June 30, 2024. - Investment properties were valued by independent valuers as of **June 30, 2024**[49](index=49&type=chunk)[52](index=52&type=chunk) [Selling and Marketing Expenses](index=13&type=section&id=Selling%20and%20marketing%20expenses) Selling and marketing expenses decreased by 17.8% to RMB 58.1 million, primarily due to reduced advertising and sales agent commissions. - Selling and marketing expenses were approximately **RMB 58.1 million**, a year-on-year decrease of approximately **17.8%**, primarily due to reduced advertising and promotional costs and sales agent commissions[50](index=50&type=chunk)[53](index=53&type=chunk) [Administrative Expenses](index=14&type=section&id=Administrative%20expenses) Administrative expenses slightly increased by 0.7% to RMB 56.6 million. - Administrative expenses were approximately **RMB 56.6 million**, a slight year-on-year increase of approximately **0.7%**[55](index=55&type=chunk)[59](index=59&type=chunk) [Other Losses — Net](index=14&type=section&id=Other%20losses%20%E2%80%94%20net) Other losses, net, amounted to approximately RMB 0.5 million. - Other losses, net, were approximately **RMB 0.5 million**[56](index=56&type=chunk)[60](index=60&type=chunk) [Finance (Costs)/Income — Net](index=14&type=section&id=Finance%20(costs)%2Fincome%20%E2%80%94%20net) Net finance costs primarily include interest expenses on borrowings and lease liabilities, offset by capitalized interest expenses and minor bank deposit interest income. - Finance (costs)/income, net, primarily includes interest income from bank deposits, interest expenses on borrowings, and interest and finance charges payable on lease liabilities, net of capitalized interest expenses[57](index=57&type=chunk)[61](index=61&type=chunk) [Income Tax Expenses](index=14&type=section&id=Income%20tax%20expenses) Income tax expenses decreased by 21.5% to RMB 49.2 million, mainly due to lower gross profit. - Income tax expenses were approximately **RMB 49.2 million**, a year-on-year decrease of approximately **21.5%**, primarily due to lower gross profit[58](index=58&type=chunk)[62](index=62&type=chunk) [Liquidity, Financial Resources and Capital Resources](index=15&type=section&id=Liquidity%2C%20financial%20resources%20and%20capital%20resources) Liquidity Position (As of June 30) | Indicator | 2024 (RMB Million) | December 31, 2023 (RMB Million) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 238.5 | 274.8 | | Restricted Bank Deposits | 161.2 | 165.6 | | Total Borrowings | 1,092.0 | 948.6 | | Borrowings in Current Liabilities | 748.5 | 678.6 | | Fixed-Rate Borrowings Ratio | 63.3% | 68.9% | Borrowing Repayment Schedule (As of June 30) | Repayment Period | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Within 1 year | 748,506 | 678,592 | | 1 to 2 years | 227,500 | 230,000 | | 2 to 5 years | 115,957 | 40,037 | | **Total** | **1,092,000** | **948,629** | [Current, Total and Net Assets](index=16&type=section&id=Current%2C%20total%20and%20net%20assets) Asset and Liability Position (As of June 30) | Indicator | 2024 (RMB Million) | December 31, 2023 (RMB Million) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-Current Assets | 385.5 | 381.6 | | Total Current Assets | 7,948.2 | 8,703.6 | | **Total Assets** | **8,333.6** | **9,085.2** | | **Capital and Reserves** | | | | Equity Attributable to Owners of the Company | 1,761.7 | 1,812.4 | | Non-Controlling Interests | 60.3 | 45.7 | | **Total Equity** | **1,821.9** | **1,858.0** | | **Liabilities** | | | | Total Non-Current Liabilities | 378.4 | 296.1 | | Total Current Liabilities | 6,133.3 | 6,931.1 | | **Total Liabilities** | **6,511.7** | **7,227.2** | | Net Current Assets | 1,814.8 | 1,772.5 | | Total Assets Less Current Liabilities | 2,200.3 | 2,154.1 | [Charge on Assets](index=16&type=section&id=Charge%20on%20assets) Part of the Group's borrowings are secured by properties, plant and equipment, investment properties, shares of subsidiaries, and properties held for sale or under development. - Part of the Group's borrowings are secured by properties, plant and equipment, investment properties, shares of subsidiaries, and properties held for sale or under development[72](index=72&type=chunk)[74](index=74&type=chunk) [Contingent Liabilities](index=17&type=section&id=Contingent%20liabilities) The Group provides guarantees for homebuyers' bank financing and an associate's shareholder loan, with directors assessing the likelihood of default and funding risk as minimal or low. - The Group provides guarantees for homebuyers' bank financing, with directors considering the likelihood of default to be minimal and the financial guarantees not material[75](index=75&type=chunk)[76](index=76&type=chunk) - A Group subsidiary has funding repayment obligations for an associate's shareholder loan, amounting to approximately **RMB 229,495,000** as of June 30, 2024[75](index=75&type=chunk)[76](index=76&type=chunk) - Properties held for sale or under development pledged for certain third-party borrowings amounted to **RMB 119.3 million**[78](index=78&type=chunk)[79](index=79&type=chunk) [Key Financial Ratios](index=18&type=section&id=Key%20financial%20ratios) Key Financial Ratios (As of June 30) | Indicator | 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 1.3 | 1.3 | | Gearing Ratio | 59.9 | 51.1 | | Debt-to-Equity Ratio | 46.8 | 36.3 | [KEY RISK FACTORS](index=19&type=section&id=KEY%20RISK%20FACTORS) The Group's business is highly dependent on the Henan Province real estate market, facing intense competition, susceptibility to force majeure events, and interest rate fluctuation risks. - All projects are located in Henan Province, China, with business highly dependent on local property market performance, influenced by economic, financial, supply-demand, government policies, and interest rates[83](index=83&type=chunk)[86](index=86&type=chunk) - The real estate market is highly competitive, with the Group competing against large national, regional, and local developers in land acquisition, location, product quality, and pricing[84](index=84&type=chunk)[86](index=86&type=chunk) - Business is affected by operating regions and the overall social conditions in China, with force majeure events (e.g., epidemics) potentially causing damage[85](index=85&type=chunk)[87](index=87&type=chunk) - The Group primarily faces interest rate fluctuation risks from borrowings but does not hedge cash flow or fair value interest rate risks[89](index=89&type=chunk)[93](index=93&type=chunk) [GEARING RATIO](index=20&type=section&id=GEARING%20RATIO) As of June 30, 2024, the Group's gearing ratio increased by 8.8 percentage points to 59.9%, primarily due to new borrowings obtained during the period. - As of June 30, 2024, the gearing ratio was **59.9%**, an increase of **8.8 percentage points** from **51.1%** on December 31, 2023[91](index=91&type=chunk)[94](index=94&type=chunk) - The increase in gearing ratio was primarily due to **new borrowings obtained** during the period[91](index=91&type=chunk)[94](index=94&type=chunk) [INTERIM DIVIDEND](index=20&type=section&id=INTERIM%20DIVIDEND) The Board does not recommend paying an interim dividend for the six months ended June 30, 2024, considering the Group's operating results, financial position, and capital requirements. - The Board does not recommend paying an interim dividend for the six months ended **June 30, 2024**[92](index=92&type=chunk)[95](index=95&type=chunk) [TREASURY POLICIES AND CAPITAL STRUCTURE](index=21&type=section&id=TREASURY%20POLICIES%20AND%20CAPITAL%20STRUCTURE) The Group's capital management aims to ensure continued operation, generate shareholder returns, and maintain an optimal capital structure to minimize funding costs, monitored by the gearing ratio. - The Group's capital management objectives are to ensure **continued operation**, generate **returns for shareholders**, and maintain an **optimal capital structure** to minimize funding costs[96](index=96&type=chunk)[100](index=100&type=chunk) - The Group adjusts its capital structure by modifying dividends, issuing new shares, or selling assets, and monitors capital using the **gearing ratio**[96](index=96&type=chunk)[101](index=101&type=chunk) [HUMAN RESOURCES AND EMPLOYEES' REMUNERATION](index=21&type=section&id=HUMAN%20RESOURCES%20AND%20EMPLOYEES'%20REMUNERATION) As of June 30, 2024, the Group had 548 employees, providing competitive remuneration, benefits, and training, and utilizing a share option scheme to attract and retain talent. - As of June 30, 2024, the Group had **548 employees**, a decrease from **658** on June 30, 2023[98](index=98&type=chunk)[102](index=102&type=chunk) - The Group provides medical insurance, social insurance contribution schemes or other pension schemes, and other in-kind benefits[98](index=98&type=chunk)[102](index=102&type=chunk) - The Group offers a range of employee training programs and adopted a **share option scheme** in **November 2018** as an incentive to attract and retain talent[99](index=99&type=chunk)[102](index=102&type=chunk) [FORWARD LOOKING](index=22&type=section&id=FORWARD%20LOOKING) For the second half of 2024, new home sales decline is expected to narrow, but real estate investment may remain weak, requiring time for market confidence to recover, with policies focusing on stimulating demand and optimizing restrictions. - The year-on-year decline in national new home sales is expected to **gradually narrow** in the second half, but real estate investment may remain weak, and market confidence recovery will still take time[104](index=104&type=chunk)[106](index=106&type=chunk) - Key policy directions include **lowering mortgage rates**, **transaction taxes and fees**, **optimizing purchase restrictions**, and stimulating demand for upgraded housing[104](index=104&type=chunk)[106](index=106&type=chunk) - In the second half, the Group will **strengthen internal control management**, maintain **product quality**, deepen core operational strategies, and enhance carbon neutrality requirements[105](index=105&type=chunk)[107](index=107&type=chunk) - The Group will closely monitor fund allocation, ensure efficient use of funds and stable cash flow through precise data analysis and forward-looking planning, and intensify innovation and application of marketing strategies[105](index=105&type=chunk)[107](index=107&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) [EVENTS AFTER THE REPORTING PERIOD](index=23&type=section&id=EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) Except as disclosed in this interim report, the Group has not undertaken any significant events after June 30, 2024. - The Group has not undertaken any **significant events** after **June 30, 2024**[108](index=108&type=chunk)[112](index=112&type=chunk) [DIRECTORS' SERVICE CONTRACTS](index=23&type=section&id=DIRECTORS'%20SERVICE%20CONTRACTS) Both executive and independent non-executive directors have signed three-year service agreements or appointment letters with the company, terminable according to agreement terms. - Service agreements or appointment letters for executive and independent non-executive directors are for a term of **three years**, terminable according to agreement terms[109](index=109&type=chunk)[113](index=113&type=chunk) [CORPORATE GOVERNANCE](index=23&type=section&id=CORPORATE%20GOVERNANCE) The company is committed to high standards of corporate governance and has complied with all applicable code provisions in Appendix C1 of the Listing Rules for the six months ended June 30, 2024, except for code provision B.2.2 (rotation of directors). - The company has complied with all applicable code provisions in Appendix C1 of the Listing Rules, except for code provision **B.2.2 (rotation of directors)**[110](index=110&type=chunk)[114](index=114&type=chunk) - Ms. Qi Chunfeng was due to retire at the 2024 Annual General Meeting and is required to retire by rotation at the next Annual General Meeting[111](index=111&type=chunk)[114](index=114&type=chunk) [COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS](index=24&type=section&id=COMPLIANCE%20WITH%20THE%20MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS) The company has adopted the Model Code as the code of conduct for directors' securities transactions, and all directors have confirmed compliance with it. - All directors have confirmed compliance with the **Model Code for Securities Transactions** adopted by the company[116](index=116&type=chunk)[120](index=120&type=chunk) [PURCHASE, SALE OR REDEMPTION OF SECURITIES](index=24&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20SECURITIES) For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities. - For the six months ended **June 30, 2024**, neither the company nor any of its subsidiaries purchased, sold, or redeemed any **listed securities**[117](index=117&type=chunk)[121](index=121&type=chunk) [DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES](index=24&type=section&id=DIRECTORS'%20RIGHTS%20TO%20ACQUIRE%20SHARES%20OR%20DEBENTURES) For the six months ended June 30, 2024, no rights to subscribe for shares or debentures of the company were granted to or exercised by any director, their spouse, or children under 18. - For the six months ended **June 30, 2024**, no rights to subscribe for company shares or debentures were granted to or exercised by any director, their spouse, or children under 18[118](index=118&type=chunk)[122](index=122&type=chunk) [SHARE OPTIONS](index=24&type=section&id=SHARE%20OPTIONS) The company adopted a ten-year share option scheme on October 22, 2018, to incentivize eligible participants, with a maximum of 120,000,000 shares available for issue, and no options granted, exercised, cancelled, or lapsed during the period ended June 30, 2024. - The company adopted a **share option scheme** on **October 22, 2018**, valid for **ten years**, to provide incentives to eligible participants[119](index=119&type=chunk)[123](index=123&type=chunk) - The maximum total number of shares available for issue under the share option scheme shall not exceed **10%** of the issued shares upon completion of the initial public offering (i.e., **120,000,000 shares**)[124](index=124&type=chunk)[127](index=127&type=chunk) - As of **June 30, 2024**, no share options were granted, exercised, cancelled, or lapsed during the period[130](index=130&type=chunk)[132](index=132&type=chunk) [DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY](index=26&type=section&id=DIRECTORS'%20AND%20CHIEF%20EXECUTIVES'%20INTERESTS%20IN%20THE%20SHARES%2C%20UNDERLYING%20SHARES%20AND%20DEBENTURES%20OF%20THE%20COMPANY) As of June 30, 2024, Executive Director Mr. Li Xiaobing was deemed to have a 75.00% equity interest in the company through a discretionary trust and controlled corporations, with no other directors holding disclosable interests. Directors' Interests in the Company's Shares (As of June 30) | Name of Director | Capacity/Nature of Interest | Number and Class of Securities | Approximate Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | Mr. Li Xiaobing | Trustee of a discretionary trust | 855,000,000 Ordinary Shares (L) | 71.25 | | Mr. Li Xiaobing | Interest in controlled corporation | 45,000,000 Ordinary Shares (L) | 3.75 | | **Total** | | **900,000,000 Ordinary Shares (L)** | **75.00** | - Mr. Li Xiaobing is deemed to have an interest in the company's shares through his capacity as the sole trustee of a family trust and a wholly-owned company[139](index=139&type=chunk) [SUBSTANTIAL SHAREHOLDERS' INTERESTS IN SHARES AND UNDERLYING SHARES OF THE COMPANY](index=28&type=section&id=SUBSTANTIAL%20SHAREHOLDERS'%20INTERESTS%20IN%20SHARES%20AND%20UNDERLYING%20SHARES%20OF%20THE%20COMPANY) As of June 30, 2024, substantial shareholders Heng Sheng Enterprise Limited, Heng Nuo Private Trust Limited, and Ms. Lin Wei (spouse of Mr. Li Xiaobing) were disclosed to have interests in the company's shares, with Ms. Lin Wei deemed to hold 75.00% due to spousal interest. Substantial Shareholders' Interests in the Company's Shares (As of June 30) | Name of Shareholder | Capacity/Nature of Interest | Number and Class of Securities | Approximate Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | Heng Sheng Enterprise Limited | Beneficial owner | 855,000,000 Ordinary Shares (L) | 71.25 | | Heng Nuo Private Trust Limited | Interest in controlled corporation | 855,000,000 Ordinary Shares (L) | 71.25 | | Ms. Lin Wei | Interest of spouse | 900,000,000 Ordinary Shares (L) | 75.00 | - Heng Nuo Private Trust Limited, as the trustee of a family trust established by Mr. Li Xiaobing, is therefore deemed to have an interest in the shares of Heng Sheng Enterprise Limited[148](index=148&type=chunk) - Ms. Lin Wei, as the spouse of Mr. Li Xiaobing, is deemed to have an interest in all shares held by Mr. Li Xiaobing due to spousal interest[148](index=148&type=chunk) [EMPLOYEE AND REMUNERATION POLICIES](index=29&type=section&id=EMPLOYEE%20AND%20REMUNERATION%20POLICIES) The Group provides employees with remuneration and benefits in line with industry practice, awarding discretionary bonuses based on performance, and granting share options to eligible employees. - The Group provides employees with remuneration and benefits in line with industry practice, and discretionary bonuses are awarded based on Group and individual performance[145](index=145&type=chunk)[147](index=147&type=chunk) - Eligible employees may be granted share options in accordance with the terms of the company's share option scheme[145](index=145&type=chunk)[147](index=147&type=chunk) [RETIREMENT SCHEMES](index=30&type=section&id=RETIREMENT%20SCHEMES) The Group participates in defined contribution retirement schemes for its employees in China and provides a Mandatory Provident Fund Scheme for its Hong Kong employees, with contributions from both employer and employee. - The Group participates in defined contribution retirement schemes organized by Chinese municipal and provincial government authorities for its employees in China[150](index=150&type=chunk)[151](index=151&type=chunk) - The Group operates a Mandatory Provident Fund Scheme for its Hong Kong employees, with both employer and employee contributing **5%** of the employee's relevant income, subject to a monthly cap of **HK$30,000**[152](index=152&type=chunk)[155](index=155&type=chunk) [REVIEW BY AUDIT COMMITTEE](index=30&type=section&id=REVIEW%20BY%20AUDIT%20COMMITTEE) The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024, have been reviewed by the Board's Audit Committee, which comprises three independent non-executive directors. - The unaudited condensed consolidated interim financial statements for the six months ended **June 30, 2024**, have been reviewed by the Board's Audit Committee[153](index=153&type=chunk)[156](index=156&type=chunk) [AUDIT OR REVIEW OF THE FINANCIAL RESULTS](index=30&type=section&id=AUDIT%20OR%20REVIEW%20OF%20THE%20FINANCIAL%20RESULTS) The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024, have not been audited or reviewed by the company's auditor. - The unaudited condensed consolidated interim financial statements for the six months ended **June 30, 2024**, have not been audited or reviewed by the company's auditor[154](index=154&type=chunk)[157](index=157&type=chunk) [Unaudited Condensed Consolidated Statement of Profit or Loss](index=31&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) [Profit or Loss Summary](index=31&type=section&id=Profit%20or%20Loss%20Summary) For the six months ended June 30, 2024, the Group recorded revenue of RMB 1,467,599 thousand and gross profit of RMB 139,051 thousand, but ultimately incurred a loss for the period of RMB 36,099 thousand, with loss attributable to owners of the company at RMB 50,718 thousand. Unaudited Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 1,467,599 | 1,488,151 | | Cost of sales | (1,328,548) | (1,228,924) | | Gross profit | 139,051 | 259,227 | | Fair value losses on investment properties | (9,648) | (1,480) | | Selling and marketing expenses | (58,135) | (70,706) | | Administrative expenses | (56,643) | (56,193) | | Operating profit | 13,216 | 131,773 | | Finance (costs)/income, net | (43) | 101 | | Profit before income tax | 13,119 | 131,874 | | Income tax expenses | (49,218) | (62,698) | | **(Loss)/Profit for the period** | **(36,099)** | **69,176** | | (Loss)/Profit for the period attributable to owners of the Company | (50,718) | 60,763 | | Non-controlling interests | 14,619 | 8,413 | | Basic and diluted (loss)/earnings per share (RMB cents) | (4.23) | 5.06 | [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=33&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) [Comprehensive Income Summary](index=33&type=section&id=Comprehensive%20Income%20Summary) For the six months ended June 30, 2024, the Group recorded total comprehensive expense for the period of RMB (36,099) thousand, with RMB (50,718) thousand attributable to owners of the company. Unaudited Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | (Loss)/Profit for the period and total comprehensive (expense)/income | (36,099) | 69,176 | | Total comprehensive (expense)/income attributable to owners of the Company | (50,718) | 60,763 | | Non-controlling interests | 14,619 | 8,413 | [Unaudited Condensed Consolidated Statement of Financial Position](index=34&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Financial Position Summary](index=34&type=section&id=Financial%20Position%20Summary) As of June 30, 2024, the Group's total assets were RMB 8,333,641 thousand, total liabilities were RMB 6,511,699 thousand, and total equity was RMB 1,821,942 thousand, with increased net current assets and non-current liabilities. Unaudited Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | **Assets** | | | | Total non-current assets | 385,456 | 381,579 | | Total current assets | 7,948,185 | 8,703,626 | | **Total assets** | **8,333,641** | **9,085,205** | | **Capital and reserves** | | | | Equity attributable to owners of the Company | 1,761,659 | 1,812,377 | | Non-controlling interests | 60,283 | 45,664 | | **Total equity** | **1,821,942** | **1,858,041** | | **Liabilities** | | | | Total non-current liabilities | 378,352 | 296,072 | | Total current liabilities | 6,133,347 | 6,931,092 | | **Total liabilities** | **6,511,699** | **7,227,164** | | Net current assets | 1,814,838 | 1,772,534 | | Total assets less current liabilities | 2,200,294 | 2,154,113 | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=36&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) [Equity Changes Summary](index=36&type=section&id=Equity%20Changes%20Summary) For the six months ended June 30, 2024, the Group's total equity decreased from RMB 1,858,041 thousand to RMB 1,821,942 thousand, primarily due to a loss of RMB 36,099 thousand recorded during the period. Unaudited Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | Share Capital (RMB Thousand) | Share Premium (RMB Thousand) | Retained Profits (RMB Thousand) | Other Reserves (RMB Thousand) | Subtotal (RMB Thousand) | Non-controlling Interests (RMB Thousand) | Total Equity (RMB Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | At January 1, 2024 | 10,645 | 299,188 | 1,296,860 | 205,684 | 1,812,377 | 45,664 | 1,858,041 | | (Loss)/Profit for the period and total comprehensive (expense)/income | — | — | (50,718) | — | (50,718) | 14,619 | (36,099) | | At June 30, 2024 | 10,645 | 299,188 | 1,246,142 | 205,684 | 1,761,659 | 60,283 | 1,821,942 | [Unaudited Condensed Consolidated Statement of Cash Flows](index=37&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [Cash Flows Summary](index=37&type=section&id=Cash%20Flows%20Summary) For the six months ended June 30, 2024, the Group used net cash of RMB (99,864) thousand in operating activities and RMB (9,834) thousand in investing activities, while generating RMB 73,357 thousand from financing activities, resulting in a decrease in cash and cash equivalents. Unaudited Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (99,864) | (134,267) | | Net cash used in investing activities | (9,834) | (179,297) | | Net cash generated from financing activities | 73,357 | 253,235 | | Net decrease in cash and cash equivalents | (36,341) | (60,329) | | Cash and cash equivalents at end of period | 238,467 | 160,730 | [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=39&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) [GENERAL INFORMATION](index=39&type=section&id=GENERAL%20INFORMATION) Hengda Group (Holdings) Company Limited, incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engages in property development in China, with its interim financial information unaudited. - The company was incorporated in the **Cayman Islands** on **July 22, 2016**, and listed on the **Hong Kong Stock Exchange** on **November 12, 2018**[172](index=172&type=chunk)[175](index=175&type=chunk) - The company and its subsidiaries are primarily engaged in **property development** in **China**[173](index=173&type=chunk)[175](index=175&type=chunk) - The Group's condensed consolidated interim financial information has **not been audited or reviewed** by the company's auditor[174](index=174&type=chunk)[175](index=175&type=chunk) [BASIS OF PREPARATION](index=40&type=section&id=BASIS%20OF%20PREPARATION) This interim financial information is prepared under HKAS 34, consistent with 2023 annual policies, with the Board confident in the Group's going concern despite a period loss and significant liabilities, through proactive management and financial support. - This interim financial information has been prepared in accordance with **Hong Kong Accounting Standard 34** and is consistent with the accounting policies adopted in the **2023 annual consolidated financial statements**[176](index=176&type=chunk)[181](index=181&type=chunk) - The Group incurred a loss of approximately **RMB 36,099,000** for the six months ended June 30, 2024, and faces a low cash balance, significant short-term liabilities, and potential cash outflows from financial guarantees[182](index=182&type=chunk)[184](index=184&type=chunk) - The Board believes the Group will have sufficient working capital to continue as a going concern through proactive sales adjustments, communication with major contractors and suppliers, securing bank financing, and obtaining financial support from related parties[183](index=183&type=chunk)[190](index=190&type=chunk) [Going Concern Consideration](index=41&type=section&id=Going%20Concern%20consideration) Despite a loss of RMB 36,099,000 and significant current liabilities and potential cash outflows from financial guarantees, the Board plans proactive measures to ensure the Group's continued operation. - The Group recorded a loss of **RMB 36,099,000** in the first half of 2024, with total current liabilities of approximately **RMB 6,133,347,000**, of which approximately **RMB 748,506,000** represents bank and other long-term borrowings due within the next twelve months[182](index=182&type=chunk)[184](index=184&type=chunk) - The Group faces potential cash outflows of approximately **RMB 6,741,908,000** arising from financial guarantees provided to third parties and related parties[182](index=182&type=chunk)[184](index=184&type=chunk) - The Board has reviewed cash flow forecasts and plans to ensure **going concern** through measures such as sales adjustments, negotiating payments with major contractors and suppliers, securing project development loans, and obtaining financial support from related parties[183](index=183&type=chunk)[190](index=190&type=chunk) [ADOPTION OF AMENDMENTS TO HKFRS ACCOUNTING STANDARDS](index=43&type=section&id=ADOPTION%20OF%20AMENDMENTS%20TO%20HKFRS%20ACCOUNTING%20STANDARDS) During this interim period, the Group first applied several amendments to HKFRS Accounting Standards, which had no material impact on its consolidated financial position or performance, nor did they alter borrowing classifications. - The Group first applied amendments to **HKAS 1 "Classification of Liabilities as Current or Non-current"** and **"Non-current Liabilities with Covenants"**[191](index=191&type=chunk)[195](index=195&type=chunk) - These amendments had **no material impact** on the Group's consolidated financial position and performance, and did not result in changes to the classification of borrowings[191](index=191&type=chunk)[195](index=195&type=chunk) [SEGMENT INFORMATION](index=45&type=section&id=SEGMENT%20INFORMATION) The Group primarily engages in property development in China, with its chief operating decision-maker reviewing the business as a single segment, thus no segment information is presented, and all revenue and non-current assets originate from China. - The Group is primarily engaged in **property development in China**, and its chief operating decision-maker reviews the business as a single segment, thus no segment information is presented[196](index=196&type=chunk)[197](index=197&type=chunk) - For the six months ended June 30, 2024 and 2023, all of the Group's revenue originated from **China**, and all non-current assets are located in **China**[198](index=198&type=chunk)[199](index=199&type=chunk) [REVENUE](index=46&type=section&id=REVENUE) The Group's revenue primarily derives from property sales, rental income, and service income, with property sales accounting for 99.4% of total revenue and service income significantly increasing by 262.7% year-on-year, all generated from China. Revenue Source Analysis (For the six months ended June 30) | Revenue Source | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | Property Sales | 1,457,879 | 1,481,189 | | Service Income | 4,951 | 1,365 | | Rental Income | 4,769 | 5,597 | | **Total** | **1,467,599** | **1,488,151** | - Service income increased by **262.7% year-on-year**, while rental income decreased by **14.8% year-on-year**[201](index=201&type=chunk) - All revenue is generated from **China** and primarily recognized at a point in time[204](index=204&type=chunk)[205](index=205&type=chunk) [OTHER LOSSES, NET](index=48&type=section&id=OTHER%20LOSSES%2C%20NET) For the six months ended June 30, 2024, the Group's other losses, net, amounted to RMB 539 thousand, primarily comprising penalties, fines, compensation, and donations. Other Losses, Net Details (For the six months ended June 30) | Item | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | Penalties, fines and compensation | (537) | (179) | | Donations | (186) | (100) | | Loss on disposal of property, plant and equipment | (3) | (29) | | Others | 187 | 12 | | **Total** | **(539)** | **(296)** | [FINANCE INCOME/(COSTS)](index=49&type=section&id=FINANCE%20INCOME%2F(COSTS)) For the six months ended June 30, 2024, the Group's net finance costs were RMB 43 thousand, primarily comprising interest expenses on bank and other borrowings and lease liabilities interest, net of capitalized interest expenses. Finance Income/(Costs) Details (For the six months ended June 30) | Item | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | Interest income from bank deposits | 427 | 591 | | Interest on bank and other borrowings | (27,911) | (32,556) | | Interest on lease liabilities | (470) | (490) | | Less: Amount capitalised | 27,911 | 32,556 | | **Finance (costs)/income, net** | **(43)** | **101** | [PROFIT BEFORE INCOME TAX](index=50&type=section&id=PROFIT%20BEFORE%20INCOME%20TAX) For the six months ended June 30, 2024, the Group's profit before income tax was RMB 13,119 thousand, with key expenses including staff costs, depreciation, amortization, property costs, and a significant increase in provisions for properties held for sale or under development. Deductions from Profit Before Income Tax (For the six months ended June 30) | Item | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | Staff costs | 36,037 | 47,268 | | Depreciation expenses of property, plant and equipment | 3,692 | 4,031 | | Depreciation expenses of right-of-use assets | 2,295 | 2,070 | | Amortisation expenses of intangible assets | 364 | 363 | | Property costs recognised as expenses | 1,265,154 | 1,201,654 | | Provision for properties held for sale or under development | 57,671 | 12,583 | - Provision for properties held for sale or under development significantly increased from **RMB 12,583 thousand** in 2023 to **RMB 57,671 thousand** in 2024[212](index=212&type=chunk) [INCOME TAX EXPENSES](index=51&type=section&id=INCOME%20TAX%20EXPENSES) For the six months ended June 30, 2024, the Group's income tax expenses were RMB 49,218 thousand, primarily comprising PRC corporate income tax and land appreciation tax, with varying tax rates and exemptions for different entities. Income Tax Expenses Details (For the six months ended June 30) | Item | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | Current income tax — PRC Land Appreciation Tax | 915 | 23,858 | | Current income tax — PRC Corporate Income Tax | 31,460 | 50,703 | | Deferred income tax | 16,843 | (11,863) | | **Total** | **49,218** | **62,698** | - PRC corporate income tax rate is **25%**, with a **10% withholding tax** on dividends distributed to offshore holding companies (**5% for Hong Kong companies**)[215](index=215&type=chunk)[217](index=217&type=chunk) - PRC Land Appreciation Tax is levied at progressive rates from **30% to 60%**, while Hong Kong and overseas companies are exempt from profits tax[218](index=218&type=chunk)[223](index=223&type=chunk) [PRC Corporate Income Tax](index=51&type=section&id=PRC%20corporate%20income%20tax) - The PRC corporate income tax rate is **25%**[215](index=215&type=chunk) - Dividends distributed by PRC entities to offshore holding companies are subject to a **10% withholding tax**, with a **5% rate** applicable to Hong Kong holding companies[216](index=216&type=chunk)[217](index=217&type=chunk) [Land Appreciation Tax](index=52&type=section&id=LAT) - PRC Land Appreciation Tax is levied at progressive rates ranging from **30% to 60%**[218](index=218&type=chunk)[221](index=221&type=chunk) [Hong Kong Profits Tax](index=52&type=section&id=Hong%20Kong%20Profits%20Tax) - Hong Kong subsidiaries had **no taxable profits**, thus no provision for Hong Kong profits tax was made[219](index=219&type=chunk)[222](index=222&type=chunk) [Overseas Corporate Income Tax](index=52&type=section&id=Overseas%20corporate%20income%20tax) - Companies registered in the **Cayman Islands** and **British Virgin Islands** are not subject to any taxation[220](index=220&type=chunk)[223](index=223&type=chunk) [(LOSS)/EARNINGS PER SHARE](index=53&type=section&id=(LOSS)%2FEARNINGS%20PER%20SHARE) For the six months ended June 30, 2024, the Group reported a basic and diluted loss per share of RMB 4.23 cents, a decline from earnings per share of RMB 5.06 cents in the prior year, with no dilutive shares. (Loss)/Earnings Per Share (For the six months ended June 30) | Indicator | 2024 (RMB Thousand/cents) | 2023 (RMB Thousand/cents) | | :--- | :--- | :--- | | (Loss)/Profit for the period attributable to owners of the Company | (50,718) | 60,763 | | Weighted average number of ordinary shares in issue (thousands) | 1,200,000 | 1,200,000 | | Basic and diluted (loss)/earnings per share (RMB cents) | (4.23) | 5.06 | - As there were no dilutive shares in issue during the period, diluted (loss)/earnings per share is the same as basic (loss)/earnings per share[226](index=226&type=chunk)[227](index=227&type=chunk) [DIVIDENDS](index=54&type=section&id=DIVIDENDS) For the six months ended June 30, 2024, no dividends were paid or proposed, nor have any dividends been proposed since the end of the reporting period. - For the six months ended **June 30, 2024**, no dividends were paid or proposed[228](index=228&type=chunk)[232](index=232&type=chunk) [PROPERTY, PLANT AND EQUIPMENT](index=54&type=section&id=PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) For the six months ended June 30, 2024, the Group acquired RMB 275 thousand in property, plant and equipment, disposed of RMB 3 thousand, and pledged certain buildings as collateral for bank borrowings. - Acquisitions of property, plant and equipment during the period amounted to approximately **RMB 275 thousand** (2023: RMB 2,828 thousand)[229](index=229&type=chunk)[233](index=233&type=chunk) - Disposals of property, plant and equipment with a carrying amount of approximately **RMB 3 thousand** were made during the period, with a loss of approximately **RMB 3 thousand** recognized[230](index=230&type=chunk)[233](index=233&type=chunk) - Certain buildings have been pledged as collateral for the Group's bank borrowings[231](index=231&type=chunk)[233](index=233&type=chunk) [INVESTMENT PROPERTIES](index=55&type=section&id=INVESTMENT%20PROPERTIES) As of June 30, 2024, the Group's investment properties had a carrying amount of RMB 135,440 thousand, including transfers from properties held for sale and a fair value loss, with some properties pledged as collateral for bank borrowings. Movement in Investment Properties (For the six months ended June 30) | Item | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | | At January 1 | 119,600 | 122,520 | | Transfer from properties held or under development for sale | 25,488 | — | | Fair value losses | (9,648) | (1,480) | | **At June 30** | **135,440** | **121,040** | - Certain investment properties have been pledged as collateral for the Group's bank borrowings[235](index=235&type=chunk)[236](index=236&type=chunk) [PROPERTIES HELD OR UNDER DEVELOPMENT FOR SALE](index=56&type=section&id=PROPERTIES%20HELD%20OR%20UNDER%20DEVELOPMENT%20FOR%20SALE) As of June 30, 2024, the Group's net properties held or under development for sale amounted to RMB 6,956,459 thousand, with significant provisions made and certain properties pledged as collateral for borrowings. Balances of Properties Held or Under Development for Sale (As of June 30) | Item | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | 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 carrying amount** | **6,956,459** | **7,521,685** | - Certain properties held or under development for sale have been pledged as collateral for the Group's bank and other long-term borrowings, and some are pledged for third-party and related-party borrowings[239](index=239&type=chunk)[241](index=241&type=chunk) [OTHER RECEIVABLES AND PREPAYMENTS](index=57&type=section&id=OTHER%20RECEIVABLES%20AND%20PREPAYMENTS) As of June 30, 2024, the Group's total other receivables and prepayments decreased to RMB 378,791 thousand, primarily comprising prepayments for construction costs, tender deposits, amounts due from government, and temporary funding from third parties. Other Receivables and Prepayments Details (As of June 30) | Item | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Prepayments for construction costs | 20,269 | 120,245 | | Prepaid taxes and surcharges | 15,477 | 13,609 | | Recoverable VAT | 16,453 | 6,557 | | Tender and other deposits | 112,044 | 111,188 | | Amount due from a related party | 41,506 | 40,503 | | Amounts due from government in relation to costs of demolition and resettlement activities | 84,845 | 102,864 | | Temporary funding due from third parties | 63,506 | 55,730 | | Amount due from a contractor and a supplier | 13,750 | 114,610 | | Less: Impairment provision | (55,955) | (54,279) | | **Total** | **378,791** | **582,461** | [SHARE CAPITAL AND SHARE PREMIUM](index=58&type=section&id=SHARE%20CAPITAL%20AND%20SHARE%20PREMIUM) As of June 30, 2024, the company's authorized share capital was 2,400,000,000 ordinary shares of HK$0.01 each, with 1,200,000,000 shares issued and fully paid, totaling RMB 10,645 thousand in share capital and RMB 299,188 thousand in share premium. Share Capital and Share Premium (As of June 30) | Item | Number | Amount (HKD/RMB Thousand) | | :--- | :--- | :--- | | Authorised share capital (ordinary shares of HK$0.01 each) | 2,400,000,000 | 24,000,000 (HKD) | | Issued and fully paid ordinary shares (of HK$0.01 each) | 1,200,000,000 | 10,645 (RMB Thousand) (Share capital) | | | | 299,188 (RMB Thousand) (Share premium) | [BANK BORROWINGS](index=59&type=section&id=BANK%20BORROWINGS) As of June 30, 2024, the Group's total bank borrowings amounted to RMB 670,910 thousand, with RMB 364,990 thousand being current, and secured by various assets and guaranteed by related parties. Bank Borrowings Details (As of June 30) | Item | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Long-term borrowings — secured bank borrowings | 622,910 | 367,400 | | Less: Current portion | (316,990) | (134,900) | | **Total non-current portion** | **305,920** | **232,500** | | Current borrowings — secured bank borrowings | 48,000 | 48,000 | | Add: Current portion of long-term secured bank borrowings | 316,990 | 134,900 | | **Total current portion** | **364,990** | **182,900** | | **Total** | **670,910** | **415,400** | - Part of the bank borrowings are secured by **properties held for sale or under development**, **investment properties**, and **property, plant and equipment**[248](index=248&type=chunk)[251](index=251&type=chunk) - Part of the bank borrowings are secured by **equity interests in subsidiaries**, **third-party properties**, and **related-party properties**, and guaranteed by **related parties**[249](index=249&type=chunk)[250](index=250&type=chunk) Bank Borrowings Repayment Schedule (As of June 30) | Repayment Period | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Within one year | 364,990 | 182,900 | | After one year but within two years | 202,500 | 205,000 | | After two years but within five years | 103,420 | 27,500 | | **Total** | **670,910** | **415,400** | [OTHER LONG-TERM BORROWINGS](index=61&type=section&id=OTHER%20LONG-TERM%20BORROWINGS) As of June 30, 2024, the Group's total other long-term borrowings amounted to RMB 421,053 thousand, with RMB 383,516 thousand being current, primarily from non-financial institutions and non-controlling shareholders, secured by various assets and guaranteed by related parties. Other Long-Term Borrowings Details (As of June 30) | Item | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Non-financial institutions, secured | 22,537 | 22,537 | | Non-financial institutions, unsecured | 266,260 | 294,260 | | Financial institutions, secured | — | 90,000 | | Loans from non-controlling shareholders, unsecured | 132,256 | 126,432 | | **Total** | **421,053** | **533,229** | | Less: Current portion | (383,516) | (495,692) | | **Amounts presented under non-current liabilities** | **37,537** | **37,537** | - The Group's other long-term borrowings are secured by **properties held for sale or under development** and **equity interests in subsidiaries**, and guaranteed by **related parties**[257](index=257&type=chunk)[259](index=259&type=chunk) - Borrowings from non-controlling shareholders are **unsecured and interest-bearing**, planned for repayment before **December 2024**[258](index=258&type=chunk)[260](index=260&type=chunk) Other Long-Term Borrowings Repayment Schedule (As of June 30) | Repayment Period | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Within one year | 383,516 | 441,692 | | After one year but within two years | 25,000 | 61,000 | | After two years but within five years | 12,537 | 30,537 | | **Total** | **421,053** | **533,229** | [TRADE AND OTHER PAYABLES](index=64&type=section&id=TRADE%20AND%20OTHER%20PAYABLES) As of June 30, 2024, the Group's total trade and other payables decreased to RMB 1,693,145 thousand, with trade payables accounting for RMB 1,320,784 thousand, primarily including amounts due to related parties. Trade and Other Payables Details (As of June 30) | Item | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Trade payables | 1,320,784 | 1,490,485 | | Deposits received from customers | 54,041 | 81,591 | | VAT and other taxes payable | 136,182 | 205,803 | | Amounts due to non-controlling shareholders | 41,733 | 83,533 | | Temporary funding payable | 25,389 | 18,939 | | Interest payable | 50,360 | 57,172 | | Salaries payable | 18,056 | 21,325 | | Amounts due to related parties | 17,382 | 15,304 | | Other amounts due to related parties | 2,303 | 958 | | Others | 26,915 | 32,375 | | **Total** | **1,693,145** | **2,007,485** | Ageing Analysis of Trade Payables (As of June 30) | Ageing | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Within 1 year | 924,984 | 1,037,502 | | 1 to 2 years | 191,287 | 222,064 | | 2 to 3 years | 102,832 | 131,792 | | Over 3 years | 101,681 | 99,127 | | **Total** | **1,320,784** | **1,490,485** | - Trade payables include trade payables to related parties of approximately **RMB 5,330 thousand**[270](index=270&type=chunk) [CONTRACT LIABILITIES](index=66&type=section&id=CONTRACT%20LIABILITIES) Contract liabilities primarily represent amounts received in advance from customers for property sales, classified as current liabilities, and recognized as revenue upon property control transfer. - Contract liabilities primarily represent amounts received in advance from customers for property sales, which will be recognized as revenue upon transfer of property control[272](index=272&type=chunk) - Contract liabilities are classified as **current liabilities** and are expected to be recognized as revenue within the normal operating cycle[273](index=273&type=chunk) [COMMITMENTS](index=66&type=section&id=COMMITMENTS) As of June 30, 2024, the Group's capital expenditure committed but not yet incurred amounted to RMB 948,170 thousand, primarily for properties under development for sale. Capital Expenditure Committed But Not Yet Incurred (As of June 30) | Item | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Properties under development for sale | 948,170 | 1,334,357 | | Land use rights | — | 40,810 | | **Total** | **948,170** | **1,375,167** | [FINANCIAL GUARANTEES AND CONTINGENT LIABILITIES](index=67&type=section&id=FINANCIAL%20GUARANTEES%20AND%20CONTINGENT%20LIABILITIES) As of June 30, 2024, the Group provided significant financial guarantees for homebuyers' mortgage financing and an associate's shareholder loan, along with pledges for third-party borrowings, with directors assessing low default and funding risks. Financial Guarantees and Contingent Liabilities (As of June 30) | Item | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | | Guarantees given for homebuyers' mortgage financing | 6,512,413 | 6,958,416 | | Guarantees given for an associate's shareholder loan | 229,495 | 229,495 | | Pledges provided for certain third-party borrowings | 119,300 | 120,900 | | **Total** | **6,861,208** | **7,308,811** | - The Group provides guarantees for homebuyers' mortgage financing, with directors considering the likelihood of homebuyers defaulting on payments to be minimal[279](index=279&type=chunk)[280](index=280&type=chunk) - A Group subsidiary is obligated to fund the repayment of an associate's shareholder loan, with directors considering the risk of providing such funding to be low[282](index=282&type=chunk)[283](index=283&type=chunk) [RELATED-PARTY TRANSACTIONS](index=69&type=section&id=RELATED-PARTY%20TRANSACTIONS) The Group engaged in various related-party transactions, including temporary funding, civil engineering, and property management services, with related parties also providing guarantees for the Group's borrowings, resulting in outstanding balances as of June 30, 2024. - Related parties include company directors, their family members, controlling shareholders, non-controlling shareholders of subsidiaries, and companies controlled by Mr. Li[284](index=284&type=chunk)[287](index=287&type=chunk) Summary of Related-Party Transactions (For the six months ended June 30) | Transaction Type | Related Party | 2024 (RMB Thousand) | 2023 (RMB Thousand) | | :--- | :--- | :--- | :--- | | Provision of temporary funding | Xuchang Hengzhu | 1,003 | 3,782 | | Repayment of temporary funding | Xuchang Hengzhu | — | 3,360 | | Receipt of temporary funding | Heng Sheng | 2,078 | 2,556 | | Repayment of temporary funding | Heng Sheng | — | 283 | | Services provided | Luohe Huatai Construction | 9,268 | — | | Services provided | Hengda Property Management | 5,590 | 12,289 | | Related party guarantees | Mr. Li and Ms. Lin Wei | 488,630 | 414,420 | Related-Party Balances (As of June 30) | Balance Type | Related Party | 2024 (RMB Thousand) | December 31, 2023 (RMB Thousand) | | :--- | :--- | :--- | :--- | | Amounts due from related parties | Xuchang Hengzhu | 41,506 | 40,503 | | Other amounts due to related parties | Hengda Property Management | 1,799 | 958 | | Trade payables to related parties | Luohe Huatai Construction | 3,913 | 220 | | Amounts due to related parties | Heng Sheng | 11,224 | 9,146 | [Name and relationship with related parties](index=69&type=section&id=Name%20and%20relationship%20with%20related%20parties) - Related parties include company director Li Xiaobing and his family members, controlling shareholder Heng Sheng, property management companies controlled by Mr. Li, and associate Xuchang Hengzhu, among others[286](index=286&type=chunk)[287](index=287&type=chunk) [Transactions with related parties](index=71&type=section&id=Transactions%20with%20related%20parties) - The Group provided temporary funding of **RMB 1,003 thousand** to associate Xuchang Hengzhu and received temporary funding of **RMB 2,078 thousand** from holding company Heng Sheng[288](index=288&type=chunk)[290](index=290&type=chunk) - Related parties Luohe Huatai Construction provided civil engineering and construction services, and Hengda Property Management provided property management services[291](index=291&type=chunk)[292](index=292&type=chunk) - Mr. Li and Ms. Lin Wei provided guarantees for the Group's bank and other long-term borrowings, totaling **RMB 488,630 thousand**[293](index=293&type=chunk)[297](index=297&type=chunk) [Related-party balances](index=75&type=section&id=Related-party%20balances) - Amounts due from associate Xuchang Hengzhu were **RMB 41,506 thousand**[299](index=299&type=chunk)[300](index=300&type=chunk) - Among trade payables to related parties, **RMB 3,913 thousand** was due to Luohe Huatai Construction and **RMB 1,417 thousand** to Xuchang Erjian[304](index=304&type=chunk) - Amounts due to controlling shareholder Heng Sheng were **RMB 11,224 thousand**, and amounts due to Mr. Li were **RMB 1,814 thousand**[305](index=305&type=chunk)[306](index=306&type=chunk) [Glossary](index=77&type=section&id=Glossary) [Definitions](index=77&type=section&id=Definitions) This section provides definitions for key terms used in the report, including Board, Directors, the Group, HK$, IPO, Listing Rules, Model Code, PRC, RMB, SFO, Stock Exchange, and the Company. - The glossary provides definitions for key terms used in the report, such as "**the Group**" referring to Hengda Holdings and its subsidiaries, and "**PRC**" referring to the People's Republic of China (excluding Taiwan, Hong Kong, and Macau SAR)[307](index=307&type=chunk)

Ever Reach Group (Holdings) Company Limited 恒 (Incorporated in the Cayman Islands with limited liability) ( 於開曼群島註冊成立的有限公司 ) Stock code : 3616 股份代號 : 3616 ANNUAL REPORT 2023 年度報告 團（控 股）有 限 達 集 公 司 ANNUAL REPORT 2023 年 度 報 告 CONTENTS 目錄 | Corporate Information | 2 | | --- | --- | | 公司資料 | | | Chairman's Statement | 5 | | 主席報告 | | | Management Discussion and Analysis | 10 | | 管理層討論與分析 | | | Biographical Details of Directors and Senior | 29 | | Management | | | 董事及高級管理人員之履歷 | | | Directors' Report | 36 | | 董事會 ...

[Company Information](index=2&type=section&id=Company%20Information) This section provides fundamental details about the company's registration and general corporate structure [Company Overview](index=5&type=section&id=Company%20Overview) This section details the company's business operations, corporate structure, and production capacity [Business Overview](index=5&type=section&id=Company%20Overview-Business%20Overview) China Tianrui Cement is one of 12 nationally supported large cement groups, holding market leadership in Henan and Liaoning provinces, leveraging advanced technology, strategic regional layout, and abundant limestone resources for sustainable development - The company is one of 12 nationally supported large cement groups, holding market leadership in Henan and Liaoning provinces[5](index=5&type=chunk) - As of December 31, 2024, all clinker production lines utilize advanced NSP technology with waste heat recovery for cost savings and pollution reduction, with intelligent upgrades achieving partial 'unmanned' operations[5](index=5&type=chunk) - The company is one of the first three Chinese cement companies accepted into the World Business Council for Sustainable Development's Cement Sustainability Initiative (CSI), demonstrating its commitment to environmental protection and sustainable development[8](index=8&type=chunk) [Corporate Structure](index=6&type=section&id=Company%20Overview-Corporate%20Structure) As of December 31, 2024, the company is indirectly held by controlling shareholders Mr. Li Liufa and Ms. Li Fengluan through Tianrui Group, comprising numerous wholly-owned and non-wholly-owned subsidiaries and associates, forming a comprehensive group structure covering cement production, sales, supply chain, and financial services - Controlling shareholders are Mr. Li Liufa and his spouse Ms. Li Fengluan, who indirectly control the company through Tianrui Group Co., Ltd[10](index=10&type=chunk)[11](index=11&type=chunk) - The company owns 36 wholly-owned Chinese subsidiaries, 11 non-wholly-owned Chinese subsidiaries, and 5 associates, indicating a diverse business entity portfolio[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) [Production Facility Distribution and Capacity](index=9&type=section&id=Company%20Overview-Production%20Facility%20Distribution%20and%20Capacity) The Group's production facilities are strategically located in Henan, Liaoning, Tianjin, and Anhui provinces, near limestone resources, end markets, and transportation hubs, maintaining stable annual capacities of approximately **28.4 million tonnes** for clinker, **56.4 million tonnes** for cement, and **30.2 million tonnes** for aggregates as of December 31, 2024 Capacity as of December 31, 2024 | Product Type | Total Annual Capacity (million tonnes) | 2023 Same Period (million tonnes) | Change | | :--- | :--- | :--- | :--- | | Clinker | 28.4 | 28.4 | No Change | | Cement | 56.4 | 56.4 | No Change | | Aggregates | 30.2 | 30.2 | No Change | - The Group's production facilities are primarily distributed across two major regions: Central China (Henan, Anhui) and Northeast China (Liaoning, Tianjin)[13](index=13&type=chunk)[14](index=14&type=chunk) [Financial Highlights](index=10&type=section&id=Financial%20Highlights) This section presents a concise overview of the company's key financial performance and position [Key Financial Data](index=10&type=section&id=Financial%20Highlights-Key%20Financial%20Data) In 2024, the company turned profitable with a net profit attributable to owners of **RMB 279 million**, compared to a loss of **RMB 634 million** in the prior year, despite revenue decreasing from **RMB 7.89 billion** to **RMB 6.12 billion**, primarily due to cost control and other factors, while total assets and liabilities both decreased Annual Financial Summary (As of December 31) | Metric (RMB thousands) | 2024 | 2023 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Revenue** | 6,117,025 | 7,888,810 | -22.5% | | **Gross Profit** | 1,346,599 | 1,629,323 | -17.4% | | **Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)** | 2,258,004 | 1,476,495 | +52.9% | | **Profit/(Loss) Attributable to Owners of the Company** | 279,412 | (633,875) | Turned Profitable | | **Basic Earnings Per Share (RMB)** | 0.10 | (0.22) | Turned Profitable | | **Total Assets** | 37,215,106 | 40,573,494 | -8.3% | | **Total Liabilities** | 21,239,599 | 24,787,427 | -14.3% | | **Total Equity** | 15,975,507 | 15,786,067 | +1.2% | [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's operational performance, financial results, and future outlook [Business Review and Operating Environment](index=11&type=section&id=Management%20Discussion%20and%20Analysis-Business%20Review%20and%20Operating%20Environment) In 2024, the cement industry faced declining demand and intensified competition due to real estate adjustments and slowing infrastructure projects, leading to a **22.5%** decrease in the Group's total revenue, though full-year profitability was restored by stabilizing cement prices in the second half and effective cost control 2024 Key Product Sales Volume and Price Changes | Product | Sales Volume (million tonnes) | Year-on-Year Change | Average Price (RMB/tonne) | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | Cement | 18.6 | -26.2% | 234.9 | -2.8% | | Limestone Aggregates | 37.1 | -14.8% | 33.1 | -4.0% | - Despite declines in both sales volume and price, profit attributable to owners of the company was approximately **RMB 279 million**, turning profitable from a **RMB 634 million** loss in 2023[19](index=19&type=chunk) - Macroeconomically, real estate development investment decreased by **10.6%** year-on-year in 2024, a significant negative factor for cement demand, while national cement output declined by **9.5%** year-on-year, intensifying industry competition[22](index=22&type=chunk)[24](index=24&type=chunk) [Coal Trading Business](index=13&type=section&id=Management%20Discussion%20and%20Analysis-Coal%20Trading%20Business) The Group suspended its coal trading business in October 2024 due to unfavorable market conditions, resulting in approximately **RMB 14.78 billion** in prepayments to suppliers as of year-end, with plans to recover or utilize about **RMB 12.27 billion** by the end of 2025 through various methods - The Group suspended its planned coal trading business in October 2024 due to coal market prices not rising as expected and the risk of losses[29](index=29&type=chunk) - As of December 31, 2024, prepayments to coal suppliers amounted to approximately **RMB 14.78 billion**[29](index=29&type=chunk) Major Prepayment Recovery Plan (Expected by End of 2025) | Method | Amount (RMB millions) | | :--- | :--- | | Purchase coal for self-use | 3,031.7 | | Purchase other raw materials for self-use | 1,275.7 | | Sell coal to related parties | 2,214.8 | | Supplier cash repayment | 5,751.7 | | **Total** | **12,273.9** | [Financial Review](index=15&type=section&id=Management%20Discussion%20and%20Analysis-Financial%20Review) In 2024, the Group's revenue decreased by **22.5%** to **RMB 6.12 billion** due to lower cement and aggregate sales, but a **23.8%** reduction in cost of sales and a **375.7%** surge in other income, primarily from deposit interest and demurrage fees, were key drivers for turning profitable - Revenue decreased by **22.5%** year-on-year to **RMB 6.117 billion**, primarily due to simultaneous reductions in cement sales volume and price[32](index=32&type=chunk) - Cost of sales decreased by **23.8%** year-on-year, mainly due to lower coal and raw material procurement prices, leading to an increase in gross profit margin from **20.7%** to **22.0%**[35](index=35&type=chunk)[36](index=36&type=chunk) - Other income significantly increased by **375.7%** year-on-year to **RMB 1.887 billion**, primarily due to increased interest income from deposits with Tianrui Group and demurrage fees for raw coal supply, serving as a key driver for turning profitable[38](index=38&type=chunk) - Distribution, administrative, and finance expenses all recorded double-digit decreases of **38.3%**, **16.1%**, and **19.9%** respectively, reflecting the company's effective cost control[39](index=39&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk) [Financial and Liquidity Position](index=17&type=section&id=Management%20Discussion%20and%20Analysis-Financial%20and%20Liquidity%20Position) As of year-end 2024, the Group's total borrowings significantly decreased by **25.7%** to **RMB 13.80 billion**, improving the debt structure with asset-liability ratio falling from **61.1%** to **57.1%** and net gearing ratio from **79.3%** to **67.2%**, despite a **22.1%** reduction in cash and cash equivalents Key Financial Ratios Change | Ratio | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Asset-Liability Ratio | 57.1% | 61.1% | -4.0 percentage points | | Net Gearing Ratio | 67.2% | 79.3% | -12.2 percentage points | | Current Ratio | 1.4 | 1.5 | -5.8% | | Quick Ratio | 1.3 | 1.4 | -5.5% | - Total borrowings decreased by **25.7%** year-on-year, from **RMB 18.58 billion** to **RMB 13.80 billion**[50](index=50&type=chunk) - Capital expenditure was approximately **RMB 375 million**, a significant decrease from **RMB 639 million** in the prior year[55](index=55&type=chunk) [Auditor's Qualified Opinion and Response](index=19&type=section&id=Management%20Discussion%20and%20Analysis-Auditor%27s%20Qualified%20Opinion%20and%20Response) The auditor issued a qualified opinion due to insufficient evidence regarding the recoverability of approximately **RMB 14.78 billion** in coal trade prepayments, which management believes are recoverable based on long-term supplier relationships and a formulated recovery plan, expecting the issue to be resolved by year-end 2025 - The auditor issued a qualified opinion due to insufficient audit evidence regarding the recoverability of approximately **RMB 14.78 billion** in coal trade prepayments and related interest receivables[60](index=60&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - Management believes no impairment is needed for prepayments given long-term supplier relationships and the established recovery plan, expecting the qualified opinion matter to be resolved upon execution of the recovery plan by year-end 2025[61](index=61&type=chunk)[62](index=62&type=chunk) [Outlook and Strategies](index=20&type=section&id=Management%20Discussion%20and%20Analysis-Outlook%20and%20Strategies) For 2025, despite an anticipated **5%** decline in cement demand, government fiscal policies and key provincial projects are expected to provide support, while industry supply-side reforms and staggered production should improve supply-demand dynamics, with the Group focusing on cost reduction, high-value products, and smart factory development - Cement demand is projected to decline in 2025, but the decrease is expected to narrow to around **5%**, with increased government fiscal spending and key project investments providing demand support[72](index=72&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk) - Industry supply-side reforms, including standardized capacity management and normalized staggered production, are expected to alleviate supply-demand imbalances, with cement prices projected to fluctuate upwards in 2025 and industry profitability anticipated to rebound[77](index=77&type=chunk) - The Group's key priorities for 2025 include: implementing staggered production, refining cost management, expanding high-profit businesses like aggregates and solid waste disposal, advancing smart factory construction, and strengthening customer relationships[77](index=77&type=chunk) [Biographies of Directors and Senior Management](index=23&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management) This section provides biographical information for the company's directors and senior management team [Directors' Report](index=29&type=section&id=Directors%27%20Report) This section outlines the Group's principal activities, financial performance, and corporate governance matters as reported by the Board of Directors [Principal Activities and Performance](index=29&type=section&id=Directors%27%20Report-Principal%20Activities%20and%20Performance) The Group's principal activities involve limestone quarrying, clinker and cement production and distribution, with detailed performance presented in the consolidated financial statements, and the Board of Directors has not recommended a final dividend for the year ended December 31, 2024 - The Group's principal activities are limestone quarrying, and the production, sale, and distribution of clinker and cement[100](index=100&type=chunk) - The Board of Directors has not recommended the declaration of a final dividend for the year ended December 31, 2024[103](index=103&type=chunk) [Directors' and Major Shareholders' Interests](index=30&type=section&id=Directors%27%20Report-Directors%27%20and%20Major%20Shareholders%27%20Interests) As of December 31, 2024, controlling shareholders Mr. Li Liufa and Ms. Li Fengluan collectively held approximately **53.21%** of the company's shares through controlled corporations, with the report detailing their holdings and confirming compliance with non-competition undertakings Major Shareholders' Shareholding (As of December 31, 2024) | Shareholder Name | Capacity/Nature of Interest | Total Shares | Approximate Percentage of Shareholding (%) | | :--- | :--- | :--- | :--- | | Yu Kuo | Beneficial Owner/Long Position | 1,563,333,822 | 53.21 | | Mr. Li Liufa | Interest of Corporation Controlled by Director/Long Position | 1,563,333,822 | 53.21 | | Ms. Li Fengluan | Interest of Corporation Controlled by Director/Long Position | 1,563,333,822 | 53.21 | | The Export-Import Bank of China | Person with Security Interest over Shares/Long Position | 315,000,000 | 10.72 | | China Huarong Asset Management Co., Ltd. | Interest of Controlled Corporation/Long Position | 470,000,000 | 16.00 | - The independent non-executive directors have reviewed and confirmed the controlling shareholders' compliance with the amended non-competition undertaking deed[128](index=128&type=chunk) [Connected Transactions and Continuing Connected Transactions](index=38&type=section&id=Directors%27%20Report-Connected%20Transactions%20and%20Continuing%20Connected%20Transactions) During the reporting period, the Group engaged in several continuing connected transactions, including purchases from and sales to associates, mutual guarantees with controlling shareholder Tianrui Group, and financial services with Tianrui Finance, all subject to annual caps and auditor review, with the auditor noting that Tianrui Group's guarantee exceeded its annual cap - Key continuing connected transactions include clinker procurement from Ruiping Shilong, mutual guarantees with Tianrui Group, and deposits and financial services with Tianrui Finance[145](index=145&type=chunk)[152](index=152&type=chunk)[155](index=155&type=chunk)[161](index=161&type=chunk) - As of December 31, 2024, the maximum daily balance of guarantees provided by Tianrui Group to the company was **RMB 7.9 billion**, exceeding the **RMB 7 billion** annual cap, which the company deemed beneficial and thus sought exemption from related disclosure requirements[159](index=159&type=chunk) - The auditor issued a qualified opinion letter regarding continuing connected transactions, noting no other material issues except for Tianrui Group's guarantee exceeding the relevant annual cap[172](index=172&type=chunk)[174](index=174&type=chunk) [Advances to Entities](index=45&type=section&id=Directors%27%20Report-Advances%20to%20Entities) As of December 31, 2024, the Group had approximately **RMB 14.78 billion** in prepayments to coal suppliers for a now-suspended coal trading business, directly linked to the management discussion and analysis and the auditor's qualified opinion - As of December 31, 2024, the Group had approximately **RMB 14.78 billion** in prepayments to suppliers for coal procurement for trading purposes[177](index=177&type=chunk) [Corporate Governance Report](index=48&type=section&id=Corporate%20Governance%20Report) This section details the company's adherence to corporate governance principles, including practices, deviations, and internal control measures [Corporate Governance Practices and Deviations](index=48&type=section&id=Corporate%20Governance%20Report-Corporate%20Governance%20Practices%20and%20Deviations) The company largely complied with the Corporate Governance Code but deviated on the separation of Chairman and CEO roles, insufficient independent non-executive directors post-reporting period, and inadequate investor communication channels - The company deviated from Code Provision C.2.1, which requires separation of Chairman and Chief Executive roles, as a new CEO has not yet been appointed, with daily operations managed by the Executive Committee[192](index=192&type=chunk) - Subsequent to the reporting period, due to director resignations, the company failed to meet Listing Rules requirements regarding the minimum number of independent non-executive directors, their proportion on the Board, and the composition of the Audit and Remuneration Committees[193](index=193&type=chunk) [Risk Management and Internal Control](index=53&type=section&id=Corporate%20Governance%20Report-Risk%20Management%20and%20Internal%20Control) The Board is responsible for risk management and internal control, identifying significant issues including improper cash transfers from a subsidiary to the controlling shareholder and failure to timely disclose large prepayments to coal suppliers, for which various remedial measures have been implemented - Internal control deficiencies were identified: cash from subsidiary Henan Shengye was improperly transferred to controlling shareholder Tianrui Group's account, with the balance cleared by year-end, and the company has pledged to prevent similar transactions and implemented remedial measures[212](index=212&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - The company failed to comply with Listing Rules 13.13 and 13.15 by not timely disclosing significant advances to coal suppliers, and will implement remedial measures such as training, monitoring, and approval processes to prevent recurrence[216](index=216&type=chunk)[217](index=217&type=chunk) [Board Committees](index=56&type=section&id=Corporate%20Governance%20Report-Board%20Committees) The Board operates with Audit, Nomination, and Remuneration Committees, with the Audit Committee, comprising three independent non-executive directors, reviewing financial statements and internal controls, while the Nomination and Remuneration Committees oversee director selection and compensation policies respectively - The Audit Committee comprises three independent non-executive directors, chaired by Mr. Mak Tin Sang, and held seven meetings during the year[219](index=219&type=chunk) - The Nomination Committee has formulated a director nomination policy, with selection criteria including skills, experience, integrity, and contribution to board diversity[220](index=220&type=chunk)[221](index=221&type=chunk) [Material Uncertainty Related to Going Concern](index=61&type=section&id=Corporate%20Governance%20Report-Material%20Uncertainty%20Related%20to%20Going%20Concern) As of year-end 2024, the Group had approximately **RMB 704 million** in overdue borrowings and other financial liabilities, leading to the reclassification of **RMB 878 million** in non-current borrowings to current liabilities, indicating a material uncertainty regarding its going concern ability, despite management's implemented measures and positive cash flow forecasts - As of year-end, the Group had approximately **RMB 704 million** in overdue borrowings and other financial liabilities, constituting a material uncertainty related to going concern[234](index=234&type=chunk) - Management has implemented various measures to address liquidity pressure, including successfully extending some borrowing terms, completing new share placements, and controlling costs and capital expenditures, deeming the preparation of financial statements on a going concern basis appropriate[234](index=234&type=chunk)[235](index=235&type=chunk) [Independent Auditor's Report](index=65&type=section&id=Independent%20Auditor%27s%20Report) This section presents the auditor's opinion on the consolidated financial statements, including any qualifications, material uncertainties, and key audit matters [Qualified Opinion and Basis for Opinion](index=65&type=section&id=Independent%20Auditor%27s%20Report-Qualified%20Opinion%20and%20Basis%20for%20Opinion) The auditor, Zhonghui Anda CPA Limited, issued a qualified opinion on the consolidated financial statements due to insufficient audit evidence regarding the recoverability of significant prepayments (approximately **RMB 14.23 billion** in 2024) and related interest receivables (approximately **RMB 680 million** in 2024) to coal suppliers for a suspended trading business - The auditor issued a qualified opinion on the financial statements[246](index=246&type=chunk) - The basis for the qualified opinion is the inability to obtain sufficient audit evidence regarding the recoverability of prepayments to coal suppliers (approximately **RMB 14.23 billion** in 2024, **RMB 11.20 billion** in 2023) and related interest receivables (approximately **RMB 680 million** in 2024)[247](index=247&type=chunk)[248](index=248&type=chunk) [Material Uncertainty Related to Going Concern](index=66&type=section&id=Independent%20Auditor%27s%20Report-Material%20Uncertainty%20Related%20to%20Going%20Concern) The auditor's report highlights a material uncertainty related to going concern, noting that the Group had approximately **RMB 704 million** in overdue borrowings and other financial liabilities as of year-end, which may cast significant doubt on its ability to continue as a going concern, though this does not modify the audit opinion - The auditor's report includes a 'Material Uncertainty Related to Going Concern' paragraph, indicating that the Group has overdue borrowings that may cast significant doubt on its ability to continue as a going concern[250](index=250&type=chunk) [Key Audit Matters](index=67&type=section&id=Independent%20Auditor%27s%20Report-Key%20Audit%20Matters) Beyond the qualified opinion and going concern uncertainty, the auditor identified the impairment assessment of property, plant and equipment, right-of-use assets, mining rights, and goodwill as a key audit matter due to their material carrying amounts and the significant management judgments and estimates involved, leading to approximately **RMB 537 million** in impairment losses recognized during the year - A key audit matter is the impairment assessment of property, plant and equipment, right-of-use assets, mining rights, and goodwill, due to their material carrying amounts and the significant management judgments involved in their evaluation[252](index=252&type=chunk) - For the year ended December 31, 2024, the Group recognized total impairment losses on related assets of approximately **RMB 537 million**[252](index=252&type=chunk) [Consolidated Financial Statements](index=69&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's complete set of consolidated financial statements, including the income statement, balance sheet, statement of changes in equity, and cash flow statement [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=70&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended December 31, 2024, the Group reported revenue of **RMB 6.117 billion**, a **22.5%** year-on-year decrease, but achieved a profit for the year of **RMB 214 million** (compared to a **RMB 624 million** loss in the prior year) and a profit attributable to owners of **RMB 279 million**, driven by a significant increase in other income and reduced expenses Consolidated Income Statement Summary | Item (RMB thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 6,117,025 | 7,888,810 | | Gross Profit | 1,346,599 | 1,629,323 | | Other Income | 1,886,596 | 396,574 | | Profit/(Loss) Before Tax | 478,701 | (629,819) | | **Profit/(Loss) for the Year** | **214,215** | **(623,524)** | | **Profit/(Loss) Attributable to Owners of the Company** | **279,412** | **(633,875)** | [Consolidated Statement of Financial Position](index=71&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2024, the Group's total assets decreased to **RMB 37.215 billion** from **RMB 40.573 billion** in the prior year, with total liabilities reducing to **RMB 21.240 billion** and total equity slightly increasing to **RMB 15.976 billion**, notably with trade and other receivables of **RMB 20.764 billion** constituting **55.8%** of total assets Consolidated Statement of Financial Position Summary | Item (RMB thousands) | As of December 31, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **37,215,106** | **40,573,494** | | Current Assets | 25,884,057 | 27,326,926 | | Non-current Assets | 11,331,049 | 13,246,568 | | **Total Liabilities** | **21,239,599** | **24,787,427** | | Current Liabilities | 18,925,006 | 18,814,217 | | Non-current Liabilities | 2,314,593 | 5,973,210 | | **Total Equity** | **15,975,507** | **15,786,067** | [Consolidated Statement of Changes in Equity](index=73&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the year ended December 31, 2024, equity attributable to owners of the company increased from **RMB 15.466 billion** at the beginning of the year to **RMB 15.737 billion** at year-end, primarily due to the **RMB 279 million** profit for the year, partially offset by adjustments for financial guarantees provided to related parties - Equity attributable to owners of the company increased from **RMB 15.466 billion** to **RMB 15.737 billion**, primarily benefiting from the annual profit[266](index=266&type=chunk) [Consolidated Statement of Cash Flows](index=74&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2024, the Group generated **RMB 1.551 billion** in net cash from operating activities, a significant improvement from a net outflow in the prior year, while net cash from investing activities was **RMB 3.086 billion**, and net cash used in financing activities was **RMB 4.896 billion**, resulting in a **RMB 260 million** decrease in cash and cash equivalents to **RMB 915 million** at year-end Consolidated Statement of Cash Flows Summary | Item (RMB thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash From/(Used in) Operating Activities | 1,550,539 | (4,221,392) | | Net Cash From Investing Activities | 3,085,741 | 1,921,547 | | Net Cash (Used in)/From Financing Activities | (4,896,029) | 2,486,889 | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | **(259,749)** | **187,044** | | Cash and Cash Equivalents at Year-End | 915,092 | 1,174,841 | [Notes to the Consolidated Financial Statements](index=76&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the accounting policies, significant judgments, estimates, and specific line items within the consolidated financial statements [Significant Accounting Policies, Judgments and Estimates](index=76&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements-Significant%20Accounting%20Policies%2C%20Judgments%20and%20Estimates) This section details the basis of preparation, new and revised IFRS applications, and significant accounting policies covering business combinations, goodwill, revenue recognition, leases, financial instruments, taxes, and asset impairment, along with management's critical judgments and estimation uncertainties, particularly regarding going concern and asset impairment assessments - Note 3.1 details material uncertainties related to going concern, indicating overdue borrowings, but directors believe sufficient measures have been taken, allowing for financial statement preparation on a going concern basis[275](index=275&type=chunk)[277](index=277&type=chunk) - Note 4 discloses key assumptions used by management in asset impairment assessments, including cement price growth rates, sales volume growth rates, gross profit margins, and discount rates, which significantly impact impairment results[365](index=365&type=chunk)[366](index=366&type=chunk)[368](index=368&type=chunk) [Segment Information and Key Income Statement Items](index=107&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements-Segment%20Information%20and%20Key%20Income%20Statement%20Items) The Group operates in 'Central China' and 'Northeast China' segments, with Central China's sales revenue declining by **26.6%** in 2024 while Northeast China remained relatively stable, both segments reporting losses, and the notes detailing revenue composition, other income, and key profit or loss items 2024 Segment Performance | Segment | Revenue (RMB thousands) | Segment Loss (RMB thousands) | | :--- | :--- | :--- | | Central China | 4,734,904 | (180,091) | | Northeast China | 1,382,121 | (532,970) | - Note 7 indicates that 'Supplier interest income' (**RMB 685 million**) and 'Tianrui Group interest income' (**RMB 665 million**) within other income were significant components of the year's profit, both related to associated parties or disputed prepayments[377](index=377&type=chunk) [Key Asset and Liability Items](index=119&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements-Key%20Asset%20and%20Liability%20Items) This section details key balance sheet items, including property, plant and equipment with a net book value of **RMB 7.89 billion** and **RMB 463 million** in impairment recognized, goodwill impairment of **RMB 74.34 million**, and trade and other receivables totaling **RMB 20.76 billion**, with prepayments to suppliers of **RMB 15.13 billion** being the largest single asset item and a core focus of the auditor's qualified opinion - Note 17 discloses that property, plant and equipment, right-of-use assets, and mining rights collectively recognized impairment losses of **RMB 463 million** during the year[394](index=394&type=chunk)[397](index=397&type=chunk) - Note 26 details the composition of trade and other receivables, with prepayments to suppliers amounting to **RMB 15.13 billion**, primarily for the suspended coal trading business, forming the core of the auditor's qualified opinion[421](index=421&type=chunk)[423](index=423&type=chunk)[424](index=424&type=chunk) - Note 36 indicates total borrowings of **RMB 11.72 billion**, with **85%** (**RMB 10.04 billion**) being current liabilities due within one year, and some principal repayments being overdue, exacerbating liquidity risk[441](index=441&type=chunk)[442](index=442&type=chunk) [Related Party Disclosures and Financial Instruments](index=145&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements-Related%20Party%20Disclosures%20and%20Financial%20Instruments) The Group engages in significant related party transactions, including borrowings and deposits with associates, and procurement and sales with the controlling shareholder and fellow subsidiaries, with Note 47 specifically detailing cash movements between Henan Shengye and Tianrui Group, while Note 49 analyzes market, credit, and liquidity risks, providing fair value measurements for financial instruments - Note 47 discloses multiple significant transactions with controlling shareholders, associates, and fellow subsidiaries, specifically detailing cash movements between Henan Shengye and Tianrui Group and the recognition of related interest[467](index=467&type=chunk)[468](index=468&type=chunk) - Note 49.2 liquidity risk analysis indicates the Group's total undiscounted cash flows for financial liabilities are approximately **RMB 19.99 billion**, with the vast majority due within one year, posing significant liquidity pressure[493](index=493&type=chunk)[496](index=496&type=chunk) [Events After Reporting Period](index=168&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements-Events%20After%20Reporting%20Period) Subsequent to the reporting period, in January 2025, the Group completed a placement of **145 million** shares at **HKD 0.33** per share, raising net proceeds of approximately **RMB 44.26 million** for working capital supplementation - In January 2025, the Group completed a placement of **145 million** shares, raising net proceeds of approximately **RMB 44.26 million**[515](index=515&type=chunk) [Financial Summary](index=169&type=section&id=Financial%20Summary) This section provides a high-level overview of the Group's financial performance and position over the past five years [Five-Year Financial Data](index=169&type=section&id=Financial%20Summary-Five-Year%20Financial%20Data) The financial summary presents the Group's key performance and financial position over the past five years, showing a three-year consecutive decline in revenue since its 2021 peak, with profitability rebounding in 2024 from a 2023 low, though still significantly below 2020-2022 levels, and total assets decreasing in 2024 after peaking in 2023 Five-Year Consolidated Performance Summary (For the year ended December 31) | Item (RMB thousands) | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 6,117,025 | 7,888,810 | 11,055,439 | 12,716,775 | 12,170,754 | | Profit/(Loss) Before Tax | 478,701 | (629,819) | 687,886 | 1,453,103 | 2,368,102 | | Profit/(Loss) Attributable to Owners of the Company | 279,412 | (633,875) | 448,690 | 1,200,590 | 1,860,580 | Five-Year Consolidated Financial Position Summary (As of December 31) | Item (RMB thousands) | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 37,215,106 | 40,573,494 | 32,343,592 | 32,658,235 | 32,439,501 | | Total Liabilities | 21,239,599 | 24,787,427 | 15,753,498 | 16,589,957 | 17,616,603 | | Total Equity | 15,975,507 | 15,786,067 | 16,590,094 | 16,068,278 | 14,822,898 |

[Announcement Overview and Legal Disclaimer](index=1&type=section&id=Announcement%20Overview%20and%20Legal%20Disclaimer) This section provides legal disclaimers from HKEX and SEHK, clarifying the announcement's purpose as a supplement to the 2024 annual report [Legal Disclaimer and Purpose of Announcement](index=1&type=section&id=Legal%20Disclaimer%20and%20Purpose%20of%20Announcement) This section presents disclaimers from HKEX and SEHK, clarifying this announcement supplements WT Group's 2024 annual report with share option scheme details - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited accept no responsibility for the contents of this announcement[1](index=1&type=chunk) - This announcement serves as a supplement to the annual report of WT Group Holdings Limited (Stock Code: 8422) for the year ended June 30, 2024 (the '2024 Annual Report')[2](index=2&type=chunk)[3](index=3&type=chunk) - The announcement aims to provide supplementary details regarding the share option scheme[3](index=3&type=chunk) [Supplementary Details of Share Option Scheme](index=1&type=section&id=Supplementary%20Details%20of%20Share%20Option%20Scheme) This section provides additional details on the company's share option scheme, including the total number of shares available for issue and their proportion of issued capital [Number of Shares Available for Issue](index=1&type=section&id=Number%20of%20Shares%20Available%20for%20Issue) This section details the total shares available for issue under WT Group's share option scheme, including its proportion of issued share capital - This announcement provides supplementary disclosure for the 'Share Option Scheme' section in the 2024 Annual Report[3](index=3&type=chunk) Share Option Scheme Details | Metric | Value | | :--- | :--- | | Total Shares Available for Issue | **12,000,000 shares** | | Percentage of Issued Share Capital | Approximately **10.0%** | | As of Date | 2024 Annual Report Date | [General Matters and Corporate Governance](index=1&type=section&id=General%20Matters%20and%20Corporate%20Governance) This section covers the effectiveness of supplementary information, board composition, compliance statements, and publication details [Effectiveness of Supplementary Information](index=1&type=section&id=Effectiveness%20of%20Supplementary%20Information) This supplementary information does not affect the accuracy or validity of other information in the 2024 Annual Report, which remains unchanged - The aforementioned supplementary information does not affect other information contained in the 2024 Annual Report, and the content of the 2024 Annual Report remains accurate and unchanged[5](index=5&type=chunk) [Board Composition and Compliance Statement](index=1&type=section&id=Board%20Composition%20and%20Compliance%20Statement) This section details WT Group's board composition, confirms GEM Listing Rules compliance, outlines directors' responsibility for accuracy, and specifies publication details - The announcement publication date is August 1, 2025[6](index=6&type=chunk) - The Board members include Executive Director Ms. Wong Mei Chun; Independent Non-executive Directors Ms. Chan Sin Wah, Ms. Lee Chong Yuk, and Mr. Yu Tat Chi[7](index=7&type=chunk) - This announcement is published in compliance with the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited, aiming to provide information about the Company[7](index=7&type=chunk) - The Directors collectively and individually accept full responsibility for the information contained in this announcement, confirming its accuracy, completeness, and absence of misleading or fraudulent content[7](index=7&type=chunk) - This announcement will be published on the GEM website (www.hkgem.com) and the Company's website (www.hklistco.com/8422) for at least seven days from the date of publication[7](index=7&type=chunk) - In case of any discrepancy between the English and Chinese versions, the English version shall prevail[7](index=7&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何部份內容而產生或因倚賴該等內 容而引致之任何損失承擔任何責任。 XINYI GLASS HOLDINGS LIMITED 信義玻璃控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：00868） 截至二零二五年六月三十日止六個月之 中期業績公告 | 財務摘要 | | | | | --- | --- | --- | --- | | | 截至六月三十日止六個月 | | | | | 二零二五年 | 二零二四年 | 變動 | | | 人民幣百萬元 | 人民幣百萬元 | | | | | （經重列） | | | 收益 | 9,821.3 | 10,881.7 | -9.7% | | 本公司股本權益 | | | | | 持有人應佔溢利 | 1,012.8 | 2,509.3 | -59.6% | | 每股盈利－基本 | 人民幣23.25分 | 人民幣59.41分 | -60.9% | | 每股中期股息 | 12.5港仙 | 31.0港仙 | -59.7% | – 3 – ...

[Clarification Announcement on Annual Results](index=1&type=section&id=Clarification%20Announcement%20on%20Annual%20Results) This announcement clarifies specific matters regarding NIU Holdings Limited's annual results announcement for the year ended March 31, 2025, originally published on July 31, 2025 [Announcement Background and Purpose](index=1&type=section&id=1.%20Announcement%20Background%20and%20Purpose) This announcement clarifies specific matters in NIU Holdings Limited's annual results for the year ended March 31, 2025, with all other original information remaining unchanged - This announcement aims to clarify the company's annual results announcement published on July 31, 2025[2](index=2&type=chunk) - All other information in the original annual results announcement remains unchanged, except for the matters disclosed in this clarification[5](index=5&type=chunk) [Key Clarifications](index=1&type=section&id=2.%20Key%20Clarifications) The announcement clarifies three key items: the company's discontinuation of its Chinese name, the effective date for the stock ticker change, and the start time of stock trading suspension [Corporate Name and Stock Ticker Change](index=1&type=section&id=2.1%20Corporate%20Name%20and%20Stock%20Ticker%20Change) The company will no longer use '飲食天王（環球）控股有限公司' as its Chinese dual foreign name, and the new stock ticker will be effective from 9:00 AM on August 18, 2025 - The company will no longer use its Chinese dual foreign name, and the former Chinese name '飲食天王（環球）控股有限公司' will be deleted[3](index=3&type=chunk) - The stock ticker for trading shares on the Stock Exchange will be effective from 9:00 AM on August 18, 2025[3](index=3&type=chunk) [Trading Suspension](index=2&type=section&id=2.2%20Trading%20Suspension) The company's shares have been suspended from trading on the Stock Exchange since 9:00 AM on Wednesday, July 2, 2025 - The company's shares have been suspended from trading on the Stock Exchange since 9:00 AM on Wednesday, July 2, 2025[4](index=4&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就 因 本 公 告 全 部 或 任 何 部 份 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 Kafelaku Coffee Holding Limited 猫屎咖啡控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1869） 有關截至二零二四年十二月三十一日止年度 年度業績公告之 補充公告 茲提述本公司日期為二零二五年三月三十一日有關截至二零二四年十二月 三 十 一 日 止 年 度 的 年 度 業 績 公 告（「該公告」）。除 另 有 指 明 外，本 公 告 所 用 詞 彙 與 該 公 告 所 界 定 者 具 有 相 同 涵 義。本 公 司 謹 就 該 公 告 內 的 行 動 計 劃 及 措 施 提 供 補 充 資 料 如 下： 董事會就無法發表意見之基礎的行動計劃及措施 就 獨 立 核 數 師 報 告「無 法 發 表 意 見 之 基 礎」一 節 所 述 事 項，本 ...