万科海外(01036) - 2020 - 中期财报

Company Information This section provides fundamental company details, including board composition, key committees, and essential contact information - The company's board of directors includes executive directors such as Chairman Zhang Xu and CEO Que Dongwu, as well as non-executive and independent non-executive directors[5] - KPMG is the company's auditor, with Reed Smith Richards Butler and Maples and Calder (Hong Kong) LLP serving as legal advisors[5] - The company's principal place of business is located at 55/F, Bank of China Tower, 1 Garden Road, Central, Hong Kong[5] Management Discussion and Analysis This chapter reviews the company's business performance, financial position, and future outlook for the six months ended June 30, 2020, noting significant revenue growth and stable financial health Business Review The Group's revenue significantly increased by 356% to HKD 233.2 million, driven by property rentals, investment tool interest, and asset management services, with related profit growing 222% Property Investment Property investments, including Regent Centre and Ryder Court, maintained high occupancy and increased rental income, with segment profit growing despite fair value losses from exchange adjustments Property Investment Key Metrics | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Revenue | HKD 233.2 million | HKD 51.1 million | 356% increase | 7 | | Related Profit (excluding fair value changes and share of associates' results) | HKD 99.0 million | HKD 30.7 million | 222% increase | 8 | | Fair Value Loss on Investment Properties | HKD 27.7 million | HKD 32.6 million (gain) | Turned from gain to loss | 8 | | Regent Centre Occupancy Rate | 97% | 98% | 1% decrease | 9 | | Regent Centre Average Rent | HKD 10.0 per sq ft | HKD 9.9 per sq ft | Slight increase | 9 | | Regent Centre Rental Income | HKD 51.4 million | HKD 51.1 million | Slight increase | 9 | | Ryder Court Rental Income | HKD 24.8 million | N/A | New contribution | 10 | | Property Investment Segment Profit (before fair value changes) | HKD 63.8 million | HKD 40.0 million | 60% increase | 10 | - The fair value of Ryder Court investment decreased from HKD 1,149.5 million as of December 31, 2019, to HKD 1,045.7 million as of June 30, 2020[8] Property Development Property development projects, including TW6, Mission Street, Park Row, and Chun Yeung Street, show varied progress with most TW6 units sold, Mission Street under renovation, and Park Row generating interest income - Over 99% of units in the TW6 project (The Pavilia Farm) have been sold, generating approximately HKD 10.1 billion in total proceeds, with most units delivered to buyers[12] Property Development Key Metrics | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Share of TW6 Associate's Results | Loss of HKD 1.1 million | Profit of HKD 14.5 million | Turned from profit to loss | 13 | | Share of Mission Street Group Loss | HKD 15.4 million | N/A | New loss incurred | 14 | | Investment Tool Income (Park Row) | HKD 42.6 million | N/A | New contribution | 14 | | Property Development Segment Profit | HKD 28.8 million | HKD 18.0 million | 60% increase | 16 | - The Mission Street property is expected to generate revenue starting in 2021, and the Chun Yeung Street property is anticipated to be completed in 2022[14][16] Asset Management The Group commenced asset management services for Vanke Hong Kong and its subsidiaries in late 2019, generating significant revenue and profit with a 1.25% annual service fee Asset Management Key Metrics | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Asset Management Service Revenue | HKD 114.4 million | N/A | New contribution | 17 | | Asset Management Service Segment Profit | HKD 38.5 million | N/A | New contribution | 18 | - Service fees are calculated at 1.25% per annum of the total invested capital by Vanke Hong Kong contracting parties in relevant projects[17] Head Office and Corporate Expenses Head office and corporate expenses significantly decreased, mainly due to the absence of prior period's acquisition-related legal and professional fees Head Office and Corporate Expenses | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Head Office and Corporate Expenses | HKD 7.3 million | HKD 17.9 million | 59.2% decrease | 19 | Finance Income Finance income decreased due to lower bank interest rates, reduced average bank balances, and a smaller average shareholder loan receivable from Goldrich Holdings Limited Finance Income | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Total Finance Income | HKD 5.5 million | HKD 14.7 million | 62.6% decrease | 20 | | Interest Income from Bank Deposits and Balances | HKD 2.7 million | HKD 11.1 million | 75.7% decrease | 20 | | Interest Income from Shareholder Loan Receivable from Goldrich Holdings Limited | HKD 2.8 million | HKD 3.6 million | 22.2% decrease | 20 | Events After Reporting Period No significant events impacting the Group's operations, results, or financial position have occurred since the reporting date - No events significantly affecting the Group's operations, results, or financial position occurred after the reporting period[21] Financial Review The Group maintained a robust financial position with increased shareholders' equity, reduced borrowings, lower gearing ratios, ample liquidity, and managed exchange rate risks, with capital commitments for property development Liquidity, Financial Resources, Gearing Ratio and Capital Structure Shareholders' equity increased, total interest-bearing borrowings decreased, and gearing ratios improved, reflecting reduced financial leverage and ample liquidity Liquidity and Capital Structure Key Metrics | Metric | As of June 30, 2020 | As of December 31, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Company Shareholders | HKD 3,785.9 million | HKD 3,764.3 million | 0.58% increase | 23 | | Interest-Bearing Bank and Other Borrowings | HKD 1,186.6 million | HKD 1,258.0 million | 5.68% decrease | 23 | | Debt-to-Equity Ratio | 31.3% | 33.4% | 2.1 percentage points decrease | 24 | | Net Debt-to-Total Equity Ratio | 17.4% | 21.4% | 4.0 percentage points decrease | 24 | | Bank Balances and Cash | HKD 526.8 million | HKD 450.9 million | 16.8% increase | 25 | - Total outstanding bank loans amounted to HKD 1,116.257 million, with HKD 702.212 million due after one year but within two years, and HKD 404.372 million due after two years but within five years[24] Exchange Rate Fluctuation Risk The Group manages exchange rate risk through foreign exchange monitoring and natural hedging, including funding Ryder Court's equity investment with GBP-denominated bank loans - The Group operates in Hong Kong, the US, and the UK, with assets and liabilities denominated in HKD, USD, and GBP[27] - Natural hedging is employed to mitigate GBP foreign exchange risk by funding the Ryder Court equity investment with GBP-denominated bank loans[27] Capital Commitments The Group's capital commitments, primarily for the Chun Yeung Street property development, increased from the previous period Capital Commitments | Metric | As of June 30, 2020 | As of December 31, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Chun Yeung Street Property Capital Expenditure Commitments | HKD 46.1 million | HKD 24.7 million | 86.6% increase | 28 | Contingent Liabilities and Financial Guarantees As of the reporting period end, the Group had no outstanding contingent liabilities or financial guarantees - The Group had no outstanding contingent liabilities or financial guarantees as of June 30, 2020[29] Pledge of Assets Certain investment properties are pledged as security for bank financing, and the carrying value of these pledged assets has decreased Pledged Assets | Metric | As of June 30, 2020 | As of December 31, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Carrying Value of Pledged Investment Properties | HKD 1,045.7 million | HKD 1,149.5 million | 9.03% decrease | 30 | Significant Investments, Acquisitions and Disposals in Subsidiaries and Associates No significant investments, acquisitions, or disposals occurred during the period beyond those disclosed, and no major investment plans were authorized - No other significant investments, acquisitions, or disposals occurred during the period[31] - The Board has not authorized any plans for significant investments or additions to capital assets[31] Employees and Remuneration Policy Employee headcount and staff costs increased significantly due to a large influx of employees in 2019, with remuneration based on market terms, responsibilities, and performance Employees and Staff Costs | Metric | As of June 30, 2020 | As of December 31, 2019 | Change | Source Chunk | | :--- | :--- | :--- | :--- | :--- | | Number of Employees | 93 employees | 91 employees | 2 employees increase | 32 | | Staff Costs (including directors' emoluments) | HKD 62.1 million | HKD 4.3 million | 1344% increase | 32 | | Total Fees Payable to Vanke Hong Kong | HKD 5.3 million | HKD 1.0 million | 430% increase | 32 | - The significant increase in staff costs was primarily due to 28 and 54 employees transferring to the Group on June 30, 2019, and November 1, 2019, respectively[32] Dividends The Board does not recommend an interim dividend for the current period - The directors do not recommend the payment of an interim dividend for the current period[33] Outlook Despite global uncertainties from COVID-19, trade friction, and Brexit, the Group remains financially robust, seeking new investment opportunities and expecting stable returns from its property and asset management businesses - 2020 is anticipated to be full of uncertainties, influenced by the COVID-19 pandemic, the US presidential election, US-China trade agreements, and Brexit[35] - The Group maintains a sound financial position, is prepared for economic pressures, and will explore investment opportunities in other global real estate markets[35] - Occupancy rates and average rents for Regent Centre in Hong Kong and Ryder Court in London are expected to remain stable in the second half of 2020, with investment tools and asset management businesses generating stable revenue and profit[35] Review Report on Interim Financial Information KPMG reviewed the interim financial information under HKSA 2410, concluding no material non-compliance with IAS 34 and HKAS 34 - KPMG has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[37][39] - The review concluded that no matters were found to suggest the interim financial information was not prepared in all material respects in accordance with IAS 34 and HKAS 34[40] Consolidated Statement of Profit or Loss For the six months ended June 30, 2020, revenue grew significantly to HKD 233 million, but profit decreased to HKD 54.84 million due to fair value losses and increased finance costs Consolidated Statement of Profit or Loss Key Data | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Revenue | 233,191 | 51,136 | | Gross Profit | 146,242 | 40,622 | | Fair Value (Loss)/Gain on Investment Properties | (27,686) | 32,564 | | Operating Profit | 109,833 | 54,705 | | Finance Income | 5,522 | 14,666 | | Finance Costs | (21,587) | – | | Share of Results of Associates | (16,488) | 14,451 | | Profit Before Taxation | 77,280 | 83,822 | | Income Tax | (22,440) | (6,060) | | Profit for the Period | 54,840 | 77,762 | | Earnings Per Share – Basic and Diluted | 0.14 | 0.20 | - Revenue increased by 356%, primarily due to contributions from new businesses, but fair value of investment properties shifted from a gain to a loss, and new finance costs were incurred[42] Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2020, total comprehensive income was HKD 56.652 million, a decrease from the prior year, including exchange differences from overseas subsidiary translations Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Profit for the Period | 54,840 | 77,762 | | Exchange Differences on Translation of Financial Statements of Overseas Subsidiaries | 1,812 | – | | Total Comprehensive Income for the Period | 56,652 | 77,762 | | Total Comprehensive Income Attributable to Company Shareholders | 56,662 | 77,762 | - New exchange differences of HKD 1.812 million arose from the translation of financial statements of overseas subsidiaries in the current period[45] Consolidated Statement of Financial Position As of June 30, 2020, total assets less current liabilities increased to HKD 4.996 billion, driven by reduced current liabilities from loan repayment and increased cash, despite decreases in investment properties and associate interests Consolidated Statement of Financial Position Key Data | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Investment Properties | 3,050,170 | 3,153,973 | | Interests in Associates | 424,413 | 453,786 | | Bank Balances and Cash | 526,769 | 450,893 | | Net Current Assets | 857,149 | 366,238 | | Total Assets Less Current Liabilities | 4,996,783 | 4,628,474 | | Loan From an Intermediate Holding Company (Current Liabilities) | – | (424,600) | | Bank Loans (Non-Current Liabilities) | (1,106,584) | (761,580) | | Net Assets | 3,786,128 | 3,764,534 | | Total Equity Attributable to Company Shareholders | 3,785,871 | 3,764,267 | - The loan from an intermediate holding company was fully repaid during the period, leading to a significant reduction in current liabilities[47][91] - Non-current bank loans significantly increased, reflecting an adjustment in the financing structure[47] Consolidated Statement of Changes in Equity For the six months ended June 30, 2020, total equity attributable to shareholders increased to HKD 3.785 billion, driven by profit and overseas exchange differences, partially offset by dividends Consolidated Statement of Changes in Equity Key Data | Metric | As of June 30, 2020 (HKD thousand) | As of June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Total Equity Attributable to Company Shareholders at Beginning of Period | 3,764,267 | 3,666,767 | | Profit for the Period | 54,850 | 77,762 | | Exchange Differences on Translation of Overseas Operations | 1,812 | – | | Total Comprehensive Income | 56,662 | 77,762 | | Approved Final Dividend for Previous Year | (35,058) | (35,058) | | Total Equity Attributable to Company Shareholders at End of Period | 3,785,871 | 3,709,471 | - Exchange reserve shifted from a negative to a positive value, reflecting a positive exchange difference from the translation of overseas operations[52] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2020, net cash from operating activities significantly increased, investment activities generated net inflow, and financing activities resulted in net outflow, with cash and cash equivalents rising to HKD 526 million Condensed Consolidated Statement of Cash Flows Key Data | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 115,618 | 30,427 | | Net Cash From/(Used In) Investing Activities | 25,853 | (851,908) | | Net Cash (Used In)/From Financing Activities | (62,269) | 330,929 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 79,202 | (490,552) | | Cash and Cash Equivalents at End of Period | 526,769 | 934,533 | - Net cash from operating activities significantly increased, primarily due to higher cash generated from operations and tax refunds[55] - Investing activities shifted from a net outflow in the prior period to a net inflow, mainly due to repayments from associates and bank interest income[55] - Financing activities shifted from a net inflow in the prior period to a net outflow, primarily due to the repayment of loans from an intermediate holding company and bank loans[55] Notes to the Unaudited Interim Financial Information This chapter details the interim financial information's basis of preparation, accounting policies, revenue, segment data, taxation, earnings per share, dividends, investment properties, and related party transactions General Information Vanke Overseas Investment Holding Company Limited, a Cayman Islands-registered company listed on HKEX, primarily engages in asset management, property development, and investment, with Vanke Co., Ltd. as its ultimate holding company - The Company is a limited liability company incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange[57] - The Group is primarily engaged in asset management, property development, and property investment businesses[57] - Vanke Co., Ltd. is considered the ultimate holding company of the Company[57] Basis of Preparation and Principal Accounting Policies Interim financial information is prepared under IAS 34 and HKAS 34, with the Group's first IFRS compliance statement effective January 1, 2019, requiring no adjustments for transition - The interim financial information is prepared in accordance with International Accounting Standard 34 and Hong Kong Accounting Standard 34[58] - The Group explicitly stated its compliance with International Financial Reporting Standards for the first time, with a transition date of January 1, 2019[58] - Management believes no adjustments are required to the financial position, performance, or cash flows on the date of transition to IFRS or for the comparative periods[60] Revenue and Segment Information The Group's revenue sources include property management, asset management, investment property rentals, and investment tool interest, with asset management being a new revenue stream this period Revenue Composition | Revenue Source | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Property Management Fee Income | 8,369 | 7,789 | | Asset Management Fee Income | 114,379 | – | | Rental Income from Investment Properties | 67,867 | 43,347 | | Interest Income from Investment Tools | 42,576 | – | | Total Revenue | 233,191 | 51,136 | - The Group is segmented into property investment, property development, and asset management[64] Segment Results | Segment | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Property Investment Segment Results | 36,132 | 72,609 | | Property Development Segment Results | 28,829 | 18,001 | | Asset Management Segment Results | 38,510 | – | | Total Segment Results | 103,471 | 90,610 | Other Income Other income, mainly from early lease termination compensation and miscellaneous sources, decreased compared to the prior year Other Income Composition | Income Source | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Compensation Received from Tenants for Early Lease Termination | 62 | 300 | | Others | 54 | 55 | | Total | 116 | 355 | Profit Before Taxation Profit before taxation was impacted by reduced finance income, increased finance costs, and associate losses, with new interest expenses from various loans and lease liabilities Finance Income and Costs | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Finance Income | (5,522) | (14,666) | | Interest Expense on Bank Loans | 9,774 | – | | Interest Expense on Loan From an Intermediate Holding Company | 7,902 | – | | Interest Expense on Lease Liabilities | 3,212 | – | | Total Finance Costs | 21,587 | – | Other Major Expenses | Metric | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Depreciation | 4,864 | 48 | | Contributions to Defined Contribution Plans | 1,210 | 53 | | Salaries, Wages and Other Benefits | 60,903 | 4,258 | | Net Exchange Loss | 198 | 1,651 | Income Tax Income tax expense significantly increased due to higher Hong Kong profits tax, overseas tax provisions, and deferred tax recognition Income Tax Composition | Tax Category | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Current Tax – Hong Kong Profits Tax | 12,837 | 4,791 | | Current Tax – Overseas | 8,391 | – | | Deferred Tax | 1,212 | 1,269 | | Total | 22,440 | 6,060 | - Hong Kong profits tax is provided at a rate of 16.5%, while overseas tax is calculated at the rates applicable in the respective jurisdictions[76][77] Earnings Per Share Basic and diluted earnings per share for the period were HKD 0.14, a decrease from the prior year due to lower profit, with no difference between basic and diluted EPS Earnings Per Share | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | HKD 0.14 | HKD 0.20 | | Profit Attributable to Company Shareholders | HKD 54.85 million | HKD 77.762 million | | Number of Shares in Issue | 389,527,932 shares | 389,527,932 shares | - The Company had no potential dilutive shares in issue during the period[78] Dividends The Board does not recommend an interim dividend for the current period; the previous year's final dividend was HKD 0.09 per share - The directors do not recommend the payment of an interim dividend for the current period[79] Dividends Paid | Dividend Type | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Approved Final Dividend for Previous Year (HKD 0.09 per share) | 35,058 | 35,058 | Investment Properties Investment properties were revalued at period-end, resulting in a fair value loss mainly from exchange adjustments, with valuations performed by independent surveyors Investment Property Movements | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Beginning of Period | 3,153,973 | 1,968,000 | | Fair Value (Loss)/Gain | (27,686) | 943 | | Exchange Adjustment | (76,117) | 48,795 | | End of Period | 3,050,170 | 3,153,973 | - The fair value loss on investment properties was primarily due to exchange adjustments[81] - Valuations were conducted by independent professional valuers, JLL Corporate Appraisal and Advisory Limited and Knight Frank LLP[81] Interests in Associates and Amounts Due From/To Associates Total interests in associates and amounts due from associates decreased, with Goldrich Holdings Limited's receivables bearing preferential interest and Ultimate Vantage Limited's payables being unsecured and interest-free Interests in Associates and Amounts Due From/To Associates | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Share of Net Assets | 250,177 | 252,056 | | Amounts Due From an Associate (Non-Current Portion) | 174,236 | 201,730 | | Total | 424,413 | 453,786 | | Amounts Due From an Associate (Current Portion) | 4,042 | 5,699 | | Amounts Due To Ultimate Vantage Limited | 148,185 | 148,185 | - Amounts due from Goldrich Holdings Limited bear interest at the Hong Kong dollar prime rate less 2.1% per annum[84] Trade and Other Receivables and Other Non-Current Assets Total trade and other receivables slightly decreased, with trade receivables mostly within 30 days, and amounts due from intermediate holding companies and fellow subsidiaries being unsecured, interest-free, and repayable on demand Trade and Other Receivables | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Trade Receivables | 1,934 | 1,075 | | Unamortized Rental Receivables | 50,908 | 58,723 | | Other Receivables | 15,668 | 9,111 | | Amounts Due From an Intermediate Holding Company | 30,332 | 41,857 | | Amounts Due From Fellow Subsidiaries | 18,477 | 11,196 | | Total | 128,297 | 132,551 | | Current | 85,886 | 82,827 | | Non-Current (Unamortized Rental Receivables) | 42,411 | 49,724 | - Trade receivables are due within 15 to 90 days from the date of revenue recognition[86] - Amounts due from an intermediate holding company and fellow subsidiaries are unsecured, interest-free, and repayable on demand, primarily arising from asset management services[88] Other Payables and Accruals Total other payables and accruals increased, driven by a significant rise in amounts due to an intermediate holding company, with most payables expected within one year Other Payables and Accruals | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Other Payables | 2,984 | 21,310 | | Rental and Other Deposits Received | 25,093 | 24,810 | | Accruals | 38,680 | 29,385 | | Amounts Due To an Associate | 148,185 | 148,185 | | Amounts Due To an Intermediate Holding Company | 41,856 | 10,054 | | Amounts Due To a Fellow Subsidiary | – | 309 | | Total | 256,798 | 234,053 | - Amounts due to an intermediate holding company and fellow subsidiaries are unsecured, interest-free, and repayable on demand[90] Loan From an Intermediate Holding Company The unsecured loan from an intermediate holding company was fully repaid during the period, bearing interest at LIBOR plus 2.1% or the lender's average capital cost - The loan from an intermediate holding company was fully repaid during the period[91] - The loan was unsecured, bearing interest at LIBOR plus 2.1% per annum or the lender's latest average cost of capital, whichever is higher[91] Bank Loans Total bank loans significantly increased due to new Hong Kong loan facilities, with both Hong Kong and UK facilities bearing floating rates, secured by assets, and all financing covenants complied with Total Bank Loans and Maturity Profile | Metric | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Total Bank Loans | 1,116,257 | 771,937 | | Repayable Within One Year or On Demand | 9,673 | 10,357 | | Repayable After One Year But Within Two Years | 702,212 | 10,357 | | Repayable After Two Years But Within Five Years | 404,372 | 751,223 | - A new Hong Kong loan facility of HKD 1 billion was obtained, with HKD 406.27 million utilized[93][94] - Hong Kong loan facilities bear interest at LIBOR plus 2.1% per annum, while UK loan facilities bear interest at LIBOR plus 1.95% per annum[94][95] - UK loan facilities are secured by UK investment properties, and Hong Kong loan facilities are secured by equity interests in Hong Kong subsidiaries and rental-related receivables[94][95] - The Group did not breach any covenants related to drawing down financing as of June 30, 2020[97] Commitments The Group's capital commitments, mainly for the contracted Chun Yeung Street property development, increased from the previous period Capital Commitments | Commitment Type | As of June 30, 2020 (HKD thousand) | As of December 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Contracted | 46,110 | 23,767 | | Authorized But Not Contracted | – | 905 | | Total | 46,110 | 24,672 | Significant Related Party Transactions The Group conducted significant related party transactions, including management and administrative fees paid, asset management fees received, and key management personnel remuneration Significant Related Party Transactions | Transaction Type | Six Months Ended June 30, 2020 (HKD thousand) | Six Months Ended June 30, 2019 (HKD thousand) | | :--- | :--- | :--- | | Management and Administrative Fees Payable to an Intermediate Holding Company | 5,270 | 1,037 | | Asset Management Fee Income Received/Receivable From an Intermediate Holding Company | 63,303 | – | | Asset Management Fee Income Received/Receivable From Fellow Subsidiaries | 51,076 | – | | Key Management Personnel Remuneration | 870 | 950 | - Management and administrative fees and asset management fee income are charged based on mutually agreed terms[100][101] - For the six months ended June 30, 2019, the Group acquired certain subsidiaries through an intermediate holding company and fellow subsidiaries for a total consideration of HKD 1,086.537 million[102] Other Information This chapter covers corporate governance, directors' securities transactions, share dealings, director updates, and major shareholder interests, confirming compliance and disclosing credit facilities with specific covenants Review of Interim Financial Information The Group's interim financial information was reviewed by independent auditor KPMG and the Audit Committee, with no disagreements - The interim financial information is unaudited but has been reviewed by KPMG[104] - The Audit Committee has reviewed the interim financial information and has no disagreements[104] Compliance with Corporate Governance Code The Company consistently complied with the Corporate Governance Code in Appendix 14 of the Listing Rules throughout the reporting period - The Company has consistently complied with the Corporate Governance Code in Appendix 14 of the Listing Rules throughout the period[105] Compliance with Model Code for Securities Transactions by Directors The Company adopted the Model Code for directors' securities transactions, and all directors confirmed compliance during the period - The Company has adopted the Model Code in Appendix 10 of the Listing Rules as the code of conduct for directors' securities transactions[106] - All directors confirmed compliance with the required standards set out in the Model Code throughout the period[106] Purchase, Sale or Redemption of Shares Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's shares during the reporting period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares[107] Update on Directors' Information Pursuant to Rule 13.51B(1) of the Listing Rules This section updates director information since the 2019 annual report, including Ms. Que Dongwu's appointment to Vanke's supervisory board and Mr. Chen Weixi's new independent non-executive directorship - Ms. Que Dongwu was appointed as an employee representative supervisor of the 10th session of the supervisory board of Vanke Co., Ltd[108] - Mr. Chen Weixi was appointed as an independent non-executive director of China Shandong Hi-Speed Financial Group Limited[108] Directors' Interests in Shares or Debentures As of June 30, 2020, certain directors held interests in Vanke A/H shares and shares of Vanke US Management LLC and Lithium Topco Limited Directors' Interests in Associated Corporations | Director Name | Associated Corporation Name | Share Class | Total Interests | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Zhang Xu | Vanke | A Shares | 904,039 | 0.0093% | | Que Dongwu | Vanke | A Shares | 60,700 | 0.0006% | | Chen Zhiyu | Vanke | H Shares | 500,203 | 0.0264% | | Li Kaiyan | Vanke US Management LLC | Ordinary Shares | 20% | 20% | | Lin Lily | Vanke Overseas UK Management Limited | Ordinary Shares | 490 | 9.8% | | Lin Lily | Lithium Topco Limited | Ordinary Shares | 521 | 0.0521% | | Lin Lily | Lithium Topco Limited | Preference Shares | 95 | 0.0551% | - Mr. Li Kaiyan indirectly holds interests in Vanke US Management LLC through his controlled corporation, Minerva US LLC[113] - Ms. Lin Lily indirectly holds share interests in Lithium Topco Limited through her controlled corporation, Valliance Capital Europe LP[114] Directors' Rights to Acquire Shares or Debentures Zhang Xu, Que Dongwu, Li Kaiyan, and Ms. Lin Lily are beneficiaries of Vanke's Business Partner Scheme, and the Company had no share option schemes or other arrangements for directors to acquire shares or debentures - Zhang Xu, Que Dongwu, Li Kaiyan, and Ms. Lin Lily are beneficiaries of Vanke's Business Partner Scheme[115] - Vanke's Business Partner Scheme involves depositing a portion of bonuses into a collective account for investment management[115] - The Company did not establish any share option schemes during the period[116] Major Shareholders' Interests and Short Positions Discloseable Under the SFO As of June 30, 2020, Vanke and CITIC Securities Company Limited were major shareholders, holding 75.0% and 7.72% of share interests, respectively Major Shareholders' Interests | Major Shareholder Name | Capacity | Total Number of Shares in Which Shareholder is Interested | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Vanke | Held by controlled corporation | 292,145,949 | 75.0% | | CITIC Securities Company Limited | Held by controlled corporation | 30,080,000 | 7.72% | - Vanke holds shares in the Company through its indirect wholly-owned subsidiary, Wkland Investments Company Limited[118] - CITIC Securities Company Limited holds shares in the Company through its direct wholly-owned subsidiary, CSI Capital Management Limited[119] Credit Facilities Subject to Specific Performance Covenant of Controlling Shareholder Chericourt Company Limited secured a HKD 1 billion loan facility with a specific covenant: Vanke's beneficial ownership of Future Best Developments Limited's issued share capital must remain at least 30% to avoid default - Chericourt Company Limited entered into a HKD 1 billion term loan facility agreement with a bank[121] - The loan facility includes a specific covenant: if Vanke ceases to be the beneficial owner of at least 30% of the entire issued share capital of Future Best Developments Limited, it will constitute an event of default[121] - Should an event of default occur, the loan facility, together with accrued interest and all other accrued amounts, will become immediately due and repayable[121] Publication of Interim Report Printed and electronic versions of this interim report are available on the Company's and HKEX websites, with shareholders able to change communication preferences free of charge - Printed copies of this interim report in both English and Chinese are available and published on the Company's website (www.vankeoverseas.com) and the HKEX website (**www.hkexnews.hk**)[123](index=123&type=chunk) - Shareholders can change their preferred method of receiving company communications free of charge[123]