金朝阳集团(00878) - 2024 - 中期业绩

Financial Highlights Revenue significantly increased, while net fair value loss on investment properties expanded, leading to a substantial rise in loss attributable to owners, alongside a decrease in total assets and net assets | Indicator | Six Months Ended June 30, 2024 (HKD million) | Six Months Ended June 30, 2023 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,030.1 | 212.3 | 385.2% Increase | | Net fair value loss on investment properties | (1,324) | (482.9) | 174.2% Loss Widening | | Loss attributable to owners of the Company | (974.8) | (347.7) | 180.3% Loss Widening | | Basic loss per share (in HKD) | HKD (3.44) | HKD (1.23) | 179.7% Loss Widening | | Indicator | As of June 30, 2024 (HKD million) | As of December 31, 2023 (HKD million) | Change | | :--- | :--- | :--- | :--- | | Total assets | 19,488 | 21,000 | 7.2% Decrease | | Net assets | 17,213 | 18,460 | 6.8% Decrease | | Total borrowings | 1,394 | 1,517 | 8.0% Decrease | | Gearing ratio | 8% | 8% | Unchanged | | Net asset value per share (in HKD) | HKD 60.8 | HKD 65.2 | 6.8% Decrease | Condensed Consolidated Interim Financial Statements This section presents the group's financial performance and position, highlighting significant changes in revenue, losses, assets, and liabilities Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, group revenue significantly increased, primarily from goods and services, but expanded net fair value loss on investment properties led to a substantial rise in loss for the period | Indicator | Six Months Ended June 30, 2024 (HKD thousand) | Six Months Ended June 30, 2023 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,030,115 | 212,303 | 385.2% Increase | | - Revenue from goods and services | 856,374 | 29,637 | 2789.4% Increase | | - Rental income | 173,741 | 182,666 | 4.9% Decrease | | Cost of sales | (575,483) | (26,926) | 2037.3% Increase | | Gross profit | 454,632 | 185,377 | 145.2% Increase | | Net fair value loss on investment properties | (1,324,070) | (482,903) | 174.2% Loss Widening | | Loss for the period | (974,549) | (347,741) | 180.3% Loss Widening | | Loss attributable to owners of the Company | (974,829) | (347,746) | 180.3% Loss Widening | | Basic loss per share | HKD (3.44) | HKD (1.23) | 179.7% Loss Widening | - Other comprehensive income recorded a net gain of HKD 10,958 million in the first half of 2024, compared to a net expense of HKD 20,081 million in the prior period, primarily due to significant exchange gains on the translation of overseas operations[2] Consolidated Statement of Financial Position As of June 30, 2024, total assets decreased by 7.2% due to declines in investment properties and properties held for sale, while current borrowings substantially increased despite a slight reduction in total liabilities | Indicator | As of June 30, 2024 (HKD thousand) | As of December 31, 2023 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Investment properties | 16,819,125 | 18,171,015 | 7.4% Decrease | | Properties held for sale | 969,659 | 1,381,903 | 29.9% Decrease | | Short-term bank deposits | 193,731 | 635,200 | 69.5% Decrease | | Cash and cash equivalents | 880,144 | 503,106 | 75.0% Increase | | Total assets | 19,487,610 | 21,000,233 | 7.2% Decrease | | Liabilities | | | | | Borrowings (current) | 1,394,138 | 585,072 | 138.3% Increase | | Borrowings (non-current) | — | 931,727 | 100% Decrease | | Total liabilities | 2,274,648 | 2,540,371 | 10.5% Decrease | | Equity | | | | | Total equity | 17,212,962 | 18,459,862 | 6.8% Decrease | - Net current assets significantly decreased from HKD 1,209,668 thousand at year-end 2023 to HKD 160,748 thousand as of June 30, 2024, reflecting a tightening of liquidity[5] Notes to the Condensed Consolidated Interim Financial Statements This section details the accounting policies, segment information, and specific financial items that underpin the condensed consolidated interim financial statements Basis of Preparation and Principal Accounting Policies The condensed consolidated interim financial statements are prepared under HKAS 34 and HKEX Listing Rules, primarily using historical cost, with new HKFRS amendments having no material impact - The financial statements are presented in HKD and prepared in accordance with HKAS 34 "Interim Financial Reporting"[8] - The statements primarily adopt the historical cost convention, except for a few items like investment properties, and new HKFRS amendments applied this period had no material impact[9][10] Segment Information The group's primary operating segments include property development, property leasing, and building management, with property development revenue significantly increasing to become the main income source, while property leasing revenue slightly declined - The group identifies three main operating segments: property development, property leasing, and building management and other services[11] | Segment Revenue (HKD thousand) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Property development | 846,029 | 19,023 | 4347.4% Increase | | Property leasing | 173,825 | 182,690 | 4.8% Decrease | | Building management and other services | 10,893 | 11,950 | 8.8% Decrease | | Total Segment | 1,030,747 | 213,663 | 382.4% Increase | | Segment Assets (HKD thousand) | As of June 30, 2024 | As of December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Property development | 1,465,747 | 1,702,323 | 13.9% Decrease | | Property leasing | 17,053,096 | 18,372,825 | 7.2% Decrease | | Building management and other services | 33,329 | 32,676 | 2.0% Increase | | Total Segment | 18,552,172 | 20,107,824 | 7.6% Decrease | - Property development segment profit significantly increased from HKD 457 thousand in the prior period to HKD 282,977 thousand in the first half of 2024[12] Other Income For the six months ended June 30, 2024, total other income decreased, primarily due to reduced interest income from financial assets at fair value through profit or loss and other bank interest income | Income Source (HKD thousand) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Interest income from financial assets at fair value through profit or loss and other bank interest income | 26,811 | 31,240 | 14.2% Decrease | | Interest income from loans receivable | 3,600 | 159 | 2164.8% Increase | | Miscellaneous income | 4,142 | 7,278 | 43.1% Decrease | | Total | 34,553 | 38,886 | 11.1% Decrease | Finance Costs For the six months ended June 30, 2024, total finance costs increased by approximately 7.1%, primarily driven by higher interest expense on borrowings | Cost Type (HKD thousand) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Interest expense on borrowings | 37,839 | 35,133 | 7.7% Increase | | Interest expense on lease liabilities | 737 | 901 | 18.2% Decrease | | Total | 38,576 | 36,034 | 7.1% Increase | Loss Before Income Tax Expense For the six months ended June 30, 2024, loss before income tax expense significantly widened, primarily due to a substantial increase in the cost of completed properties held for sale | Expense Item (HKD thousand) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Cost of completed properties held for sale recognised as an expense | 553,874 | 11,295 | 4803.0% Increase | | Depreciation of right-of-use assets and other property, plant and equipment | 1,342 | 4,257 | 68.5% Decrease | | Employee benefit expense | 73,911 | 67,051 | 10.2% Increase | Income Tax Expense For the six months ended June 30, 2024, total income tax expense significantly increased by 212.9%, primarily due to higher Hong Kong profits tax | Tax Type (HKD thousand) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 53,861 | 13,612 | 295.7% Increase | | PRC enterprise income tax | 205 | 382 | 46.3% Decrease | | PRC land appreciation tax | 394 | 1,231 | 68.0% Decrease | | Deferred tax expense | 3,352 | 3,252 | 3.1% Increase | | Total | 57,812 | 18,477 | 212.9% Increase | - Hong Kong profits tax is provided at a rate of 16.5%, while Mainland China enterprise income tax is payable at 25%[20][21] Loss Per Share For the six months ended June 30, 2024, basic loss per share attributable to owners of the Company widened by 179.7%, with no diluted loss per share presented due to the absence of potential ordinary shares | Indicator | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Loss attributable to owners of the Company (HKD thousand) | (974,829) | (347,746) | 180.3% Loss Widening | | Number of ordinary shares for calculating basic loss per share | 283,308,635 | 283,308,635 | Unchanged | | Basic loss per share | HKD (3.44) | HKD (1.23) | 179.7% Loss Widening | - There were no potential ordinary shares issued during the period, thus diluted loss per share is the same as basic loss per share[22] Trade and Other Receivables / Loans Receivable As of June 30, 2024, total trade receivables increased, while non-current loans receivable significantly rose, and net current loans receivable also increased | Ageing of Trade Receivables (HKD thousand) | As of June 30, 2024 | As of December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | 0 to 30 days | 15,223 | 12,040 | 26.4% Increase | | 31 to 90 days | 14,025 | 9,114 | 53.9% Increase | | 91 to 180 days | 5,252 | 4,338 | 21.1% Increase | | Over 180 days | 9,249 | 6,900 | 34.0% Increase | | Total trade receivables, net | 43,749 | 32,392 | 35.1% Increase | | Loans Receivable (HKD thousand) | As of June 30, 2024 | As of December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Total current loans receivable, net | 12,565 | 3,609 | 248.2% Increase | | Non-current loans receivable | 229,918 | 4,349 | 5186.7% Increase | Trade and Other Payables As of June 30, 2024, total trade payables slightly decreased, and other payables also declined | Ageing of Trade Payables (HKD thousand) | As of June 30, 2024 | As of December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | 0 to 30 days | 7,564 | 10,801 | 29.9% Decrease | | 31 to 90 days | 1,639 | 1,188 | 37.9% Increase | | Over 90 days | 15,204 | 12,768 | 19.1% Increase | | Total trade payables | 24,407 | 24,757 | 1.4% Decrease | | Other Payables (HKD thousand) | As of June 30, 2024 | As of December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Other payables | 470,377 | 520,226 | 9.6% Decrease | | Total | 494,784 | 544,983 | 9.2% Decrease | Management Discussion and Analysis This section provides an overview of the group's operational performance, segment-specific developments, and strategic initiatives amidst global economic uncertainties and local market conditions Overview In the first half of 2024, global economic uncertainties persisted, and while Hong Kong's economy grew moderately, consumer markets faced pressure, prompting strategic initiatives to adapt to market changes and replenish land bank - Global economy faces geopolitical tensions, high inflation, and monetary tightening, while Hong Kong's economy shows moderate growth but consumer confidence is under pressure[25] - The group's total revenue improved due to iCITY sales recognition, but rental income from key investment properties declined[25] - The group is actively responding to market changes by optimizing tenant mix, enhancing property quality, and implementing the "Soundwill Club" membership program to improve operational efficiency[25] Property Leasing Property leasing business generated approximately 17% of total revenue, with overall rental income declining despite tourism recovery, influenced by changing consumer patterns and competition, prompting the group to optimize tenant mix - Property leasing business revenue was HKD 173,741 thousand, accounting for 17% of the group's total revenue[27] - The recovery of inbound tourism boosted footfall and merchant sales, but rental income declined due to changing consumer patterns and market competition[27] - The group's key investment properties are in prime locations, attracting target consumer groups through a quality tenant mix and the "Soundwill Club" membership program[27] Supreme Mini Storage Management Limited Supreme Mini Storage achieved high occupancy rates, plans expansion with new branches and door-to-door services, and is enhancing security with a new central control center - Supreme Mini Storage achieved an overall occupancy rate of 80%, with some branches nearing 90%[28] - Plans include opening more branches and launching a door-to-door mini-box service[28][29] - A security control center will be established, equipped with advanced security systems to enhance mini-storage safety[29] Property Development Property development contributed about 82% of total revenue, with iCITY Phase 1 completed and handed over, Phase 2 in preparation, and Mainland Greater Bay Area projects completed with stable sales, as the group explores diversified development - Property development business revenue was HKD 846,029 thousand, accounting for 82% of the group's total revenue[30] - iCITY Phase 1 has been completed and handed over, with Phase 2 currently in preparation[30] - Mainland Greater Bay Area projects "The Paragon" and "King's Bay • Coastline" have been completed and handed over, with stable sales, and the group is exploring diversified development opportunities[30] Building Management and Other Services Building management and other services generated about 1% of total revenue, with Soundwill Property Management Limited providing quality services, achieving ISO certifications, and actively implementing advanced technology and environmental measures for sustainable development - Building management and other services business revenue was HKD 10,345 thousand, accounting for 1% of the group's total revenue[31] Soundwill Property Management Limited Soundwill Property Management achieved multiple ISO certifications, implemented energy-saving and waste management initiatives, and established a high-tech central management center with IoT systems for enhanced security - Soundwill Property Management Limited obtained ISO9001, ISO14001, and ISO45001 quality management certifications[32] - An environmental management and energy-saving team was established to implement carbon reduction measures and a waste management model[32] - A high-tech central management center was set up, equipped with an Internet of Things (IoT) management system to enhance anti-theft and detection capabilities[32] Shareholder and Investor Communication / Investor Relations The group is committed to enhancing corporate transparency and fostering trusted partnerships through comprehensive investor engagement, with the Board emphasizing good corporate governance as crucial for success - The group is committed to effective investor communication through electronic channels, briefings, and press releases to enhance corporate transparency and build trusted partnerships[33] - The Board emphasizes that good corporate governance is essential for the group's success and sustainable development[33] Corporate Citizenship The group integrates sustainable development into its corporate strategy, with a dedicated team analyzing and improving ESG performance and setting carbon reduction targets, actively engaging in community affairs and earning accolades - The group integrates sustainable development into its corporate blueprint, with a professional team analyzing and improving environmental, social, and governance (ESG) performance, and setting carbon reduction targets[34] - The "Soundwill Volunteer Team" actively participates in community services, including distributing supplies, sponsoring activities, and providing free mini-storage space[34] - The group received the "Caring Company" award for the thirteenth consecutive year from the Hong Kong Council of Social Service and the "Happy Company" award from the Hong Kong Productivity Council[34] Outlook For the second half, the global economic outlook remains uncertain, while Hong Kong's economy is expected to maintain steady growth, and the group will adopt prudent strategies to enhance operational efficiency and leverage its strong financial position - The global economic outlook for the second half remains uncertain, with the market generally adopting a wait-and-see attitude and conservative investment approach[35] - Hong Kong's economy is expected to continue its steady development, driven by national pro-Hong Kong measures (such as optimizing individual travel and increasing tax allowances) and the event economy[35] - The group will continue to adopt prudent, innovative, and flexible management strategies to enhance the operational efficiency of its business portfolio, and leverage its strong financial position to seize investment opportunities, consolidating market share and competitiveness[36] Financial Review and Other Important Matters This section covers the group's financial performance, liquidity, significant investments, and other material events, including post-reporting period developments and employee policies Interim Dividend The Board does not recommend paying an interim dividend for the six months ended June 30, 2024, consistent with the prior period - The Board does not recommend paying an interim dividend for the first half of 2024 (consistent with no dividend in the prior period)[37] Financial Review For the six months ended June 30, 2024, group revenue significantly increased due to higher property development income, yet loss attributable to owners of the Company increased due to expanded investment property valuation losses | Indicator | Six Months Ended June 30, 2024 (HKD thousand) | Six Months Ended June 30, 2023 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,030,115 | 212,303 | 385.2% Increase | | Loss attributable to owners of the Company | (974,829) | (347,746) | 180.3% Loss Widening | | Valuation loss on investment properties | (1,324,070) | (482,903) | 174.2% Loss Widening | | Total interest expense | 38,576 | 36,034 | 7.1% Increase | | Basic loss per share | HKD 3.44 | HKD 1.23 | 179.7% Loss Widening | - The increase in revenue was primarily due to higher income from property development projects[38] Financial Resources and Liquidity As of June 30, 2024, cash and bank balances slightly decreased, total borrowings were HKD 1,394,138 thousand, and the gearing ratio remained stable at 8%, with primary foreign exchange risk from HKD to RMB fluctuations | Indicator | As of June 30, 2024 (HKD thousand) | As of December 31, 2023 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Cash and bank balances | 1,073,875 | 1,138,306 | 5.7% Decrease | | Total borrowings | 1,394,138 | 1,516,799 | 8.1% Decrease | | Gearing ratio | 8% | 8% | Unchanged | | Net assets | 17,212,962 | 18,459,862 | 6.8% Decrease | - The group's foreign exchange risk primarily arises from fluctuations in the HKD to RMB exchange rate, but no hedging measures have been adopted[40] Material Investments Held For the financial period ended June 30, 2024, the group held no other material investments apart from the property projects disclosed in the management discussion and analysis - During the reporting period, the group had no other material investments[41] Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures The group applied for a sale order for the Haven Mansion property, which the Lands Tribunal ordered to be sold by auction, with no other material acquisitions or disposals during the period - The group applied for a sale order for the Haven Mansion property, which the Lands Tribunal ordered to be sold by auction with a reserve price of HKD 2,425,000,000[42] - The first auction received no bids, and the group has applied for an extension of the auction period and appealed the ruling[42][43] Events After the Reporting Period The Lands Tribunal has directed a second auction for the Haven Mansion property, with details pending, and the Company has no intention to bid, while the Court of Appeal has dismissed the group's appeal - The Lands Tribunal has directed a second auction for the Haven Mansion property, with details pending, and the Company has no intention to bid[44] - The Court of Appeal has dismissed the group's appeal against the ruling[44] Employees and Remuneration Policy As of June 30, 2024, the group's total employee count slightly increased, with remuneration based on performance, experience, and market practice, and total employee salaries and wages for the first half increased by 10.2% | Region | As of June 30, 2024 (Average Number of Employees) | As of June 30, 2023 (Average Number of Employees) | Change | | :--- | :--- | :--- | :--- | | Hong Kong | 301 | 299 | 0.7% Increase | | Mainland China | 42 | 33 | 27.3% Increase | | Total | 343 | 332 | 3.3% Increase | | Indicator | Six Months Ended June 30, 2024 (HKD thousand) | Six Months Ended June 30, 2023 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Total employee salaries and wages | 73,911 | 67,051 | 10.2% Increase | - Remuneration packages include salaries, medical insurance, Mandatory Provident Fund (MPF), and discretionary year-end bonuses[45] Pledge of Assets As of June 30, 2024, the group pledged investment properties, properties held for sale, and property, plant and equipment with a total carrying value of approximately HKD 10,234,707 thousand to secure bank financing | Type of Pledged Assets | As of June 30, 2024 (HKD thousand) | As of December 31, 2023 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Certain investment properties, properties held for sale and property, plant and equipment | 10,234,707 | 11,058,645 | 7.5% Decrease | Contingent Liabilities As of June 30, 2024, the group provided guarantees of approximately HKD 13,307 thousand to banks for mortgage loans obtained by Mainland China property buyers, a significant reduction from year-end 2023 | Type of Contingent Liability | As of June 30, 2024 (HKD thousand) | As of December 31, 2023 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Guarantees for mortgage loans of property buyers in Mainland China | 13,307 | 40,220 | 66.9% Decrease | - Guarantees will be released upon delivery of the properties and completion of mortgage registration or repayment of the loans[47] Purchase, Sale or Redemption 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 of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[48] Corporate Governance This section outlines the group's adherence to corporate governance principles, including the roles of the Audit Committee, compliance with codes, and the composition of the Board of Directors Audit Committee The Audit Committee, comprising three independent non-executive directors, reviewed the group's accounting principles, internal control systems, risk management, and financial reporting matters, expressing no disagreement with the interim financial statements - The Audit Committee, composed of three independent non-executive directors, reviewed the group's accounting principles, internal control, risk management, internal audit, and financial reporting matters[49] - After reviewing the interim financial statements for the period, no disagreements were noted[49] Compliance with Corporate Governance Code Except for the unsegregated roles of Chairman and Chief Executive Officer, the Company complied with the applicable code provisions of the HKEX Corporate Governance Code, and the Board believes the current management structure effectively supports the group's operations - Except for the unsegregated roles of Chairman and Chief Executive Officer, the Company complied with the applicable code provisions of the HKEX Corporate Governance Code during the reporting period[50] - Mr. Chan King Tak serves as Chairman, responsible for overall development strategy, with daily operations delegated to other executive directors and management personnel[51] - The Board believes the existing management structure effectively supports the group's operations and business development[51] Compliance with Model Code The Company adopted the Model Code for Securities Transactions by Directors, confirming all directors complied, and also adopted written guidelines for relevant employees' securities transactions no less exacting than the Model Code - The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions and confirmed all directors complied during the reporting period[52] - The Company also adopted written guidelines for relevant employees' securities transactions that are no less exacting than the Model Code[52] Acknowledgement and Board of Directors Mr. Chan King Tak, Chairman of the Board, expressed gratitude to the directors and staff for their contributions, and as of the announcement date, the Board comprises four executive directors and three independent non-executive directors - Mr. Chan King Tak, Chairman of the Board, expressed gratitude to the directors and staff for their contributions and outstanding performance during the period[52] - As of the announcement date, the Board of Directors includes four executive directors and three independent non-executive directors[53]