Impairment Loss and Credit Risk - For the fiscal year ending December 31, 2023, the company's net impairment loss on financial assets was approximately RMB 101.1 million, an increase of about 987.1% compared to RMB 9.3 million for the fiscal year ending December 31, 2022[5]. - The increase in impairment loss provisions was primarily due to significant increases in impairment losses on trade receivables, amounts due from subsidiaries, and amounts due from related parties, amounting to RMB 24.2 million, RMB 56.5 million, and RMB 19.9 million respectively[5]. - The assessment of expected credit loss provisions was conducted using the simplified approach under Hong Kong Financial Reporting Standard 9, considering factors such as delays in collecting trade receivables and increased credit risk due to financial difficulties faced by property developers[5]. - As of December 31, 2023, the expected credit loss provision for trade receivables was calculated based on historical default rates and forward-looking adjustments, with a total expected loss provision amounting to RMB 142.6 million[9]. - The expected credit loss for amounts due from related parties was assessed with a total expected loss provision of RMB 65.2 million, with varying loss rates based on collateral status[11]. - The company assumes that trade receivables related to real estate agency services over two years and property management services over three years are considered 100% provisioned[11]. - As of December 31, 2023, the expected loss rate for trade receivables increased significantly compared to December 31, 2022, with overdue amounts over one year rising sharply[12]. - The expected loss rate for trade receivables is 12% for amounts overdue within one year, 26% for one to two years, 56% for two to three years, and 100% for amounts overdue over three years[16]. - The expected loss rate for receivables from related parties is 21% for unsecured amounts and 25% for related companies[18]. - The group has taken measures to recover outstanding receivables, including regular communication and legal actions, with a civil lawsuit filed for approximately RMB 14.2 million against Guangzhou Fangyuan[20]. Acquisition of Yikang - The company is currently in the process of acquiring Yikang, with updates on the acquisition status provided in the supplementary announcement[2]. - The acquisition of Guangdong Yikang Property Services Co., Ltd. involves a cash payment structure, with the third and fourth installment payments contingent on achieving profit targets for the years ending December 31, 2021, 2022, and 2023[21]. - Yikang recorded a net profit of approximately RMB 5.3 million for the year ending December 31, 2023, which is below the guaranteed profit of RMB 6,153,800[25]. - The performance commitment percentage is below 100%, meaning the company will not pay any previous installment deductions as part of the fifth installment payment[28]. - The seller has committed to ensuring that the total revenue of Yikang will not be less than approximately RMB 76 million for the fiscal years ending December 31, 2021, December 31, 2022, and December 31, 2023[29]. - The board confirms that Yikang's total revenue during the specified period has exceeded RMB 76 million, thus exempting the seller from any penalty obligations to the buyer[29]. Business Focus and Market Conditions - The company continues to focus on property management and real estate agency services as its core business areas, with ongoing assessments of market conditions and credit risks impacting its financial performance[3]. - The management has indicated that there will be no significant changes in political, legal, financial, technical, market, and economic conditions that could materially affect the company's operations[11].
方圆生活服务(09978) - 2024 - 年度业绩