中国新城市(01321) - 2019 - 中期财报

Corporate Information The report provides fundamental corporate details including core management, board members, registered office, principal place of business, and primary banking relationships[6][11] Chairperson's Statement Results Review In the first half of 2019, the Group achieved significant performance improvement with revenue up 28%, gross profit surging 299%, and comprehensive income attributable to equity holders turning profitable, leading the Board to recommend no interim dividend 2019 H1 Key Financial Indicators | Indicator | 2019 H1 | 2018 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. 663 million RMB | Approx. 518 million RMB | +28% | | Gross Profit | Approx. 290 million RMB | Approx. 73 million RMB | +299% | | Gross Margin | 44% | 14% | +30 percentage points | | Comprehensive Income Attributable to Equity Holders | Approx. 21 million RMB | Approx. -99 million RMB | Turned profitable | - During the review period, contracted sales area was approximately 24,061 square meters, with contracted sales revenue of approximately 479 million RMB[17] - To meet the Group's future business development needs, the Board does not recommend declaring an interim dividend for 2019[17] Market and Business Review Under the policy of "housing is for living, not for speculation," the Group adheres to prudent investment and stable operations, with property sales and leasing maintaining stability, hotel operations growing, and strategic expansion into parent-child education and healthcare - Property Sales: IOC Jia Run Gong Guan, Xixi New City, and Xixi Manhattan projects were progressively delivered, becoming the primary drivers of property sales revenue growth[26][29][30] - Property Leasing: Revenue remained stable compared to the same period last year, primarily from Hangzhou Xiaoshan Henglong Plaza (occupancy rate over 97%) and Yuyao Zhong An Times Square[32] - Hotel Operations: Revenue increased by nearly 26% year-on-year, with occupancy rate rising from 48% in the same period last year to 55%. Hangzhou Somerset Serviced Residence, a collaboration with CapitaLand Singapore, opened in April 2019[36][37] - Emerging Industries: The Group further acquired 31.56% equity in the UK parent-child education brand Maggie & Rose, with plans to open approximately 18 clubs in Greater China over the next five years. Concurrently, in healthcare, Hangzhou Qiushi Eye Hospital opened in March 2019[42][48] Prospects and Outlook and Development Strategies Looking ahead, the Group will continue to focus on urbanization development in the Yangtze River Delta region, leveraging key projects like IOC to drive sales growth and expand into diversified emerging industries including cultural education and healthcare - The Group's strategic core is to focus on urbanization development in the Yangtze River Delta region and establish a prominent brand there[55] - The key development project IOC (International Office Center), adjacent to Hangzhou Olympic Sports Center and the 2022 Asian Games venues, is expected to continue driving significant sales revenue growth for the Group. Construction on IOC Plot A2 commenced in late 2018, with foundation piling successfully completed[60][61] - The Group will expand into four new emerging industry sectors: cultural education, healthcare, film and television entertainment, and cultural tourism and leisure, building upon its existing commercial foundation[56] Management Discussion and Analysis Financial Analysis In the first half of 2019, the Group's consolidated revenue increased by 28% to RMB 663 million, driven by high-unit-price property sales, while gross profit surged 299% to RMB 290 million, and loss attributable to equity holders significantly narrowed to RMB 20.81 million, achieving a turnaround with exchange gains 2019 H1 Revenue Composition | Revenue Source | Amount (RMB) | Year-on-Year Change | | :--- | :--- | :--- | | Property Sales | 474 million RMB | +30% | | Property Leasing and Management | 83 million RMB | +0.5% | | Hotel Operations | 60 million RMB | +26% | | Total Revenue | 663 million RMB | +28% | - Gross profit significantly increased by 299% year-on-year to 290 million RMB, with gross margin improving from 14.1% to 43.8%, primarily due to increased revenue recognition from high-margin core commercial property projects[70] - Finance costs increased by 71% year-on-year to 62.87 million RMB, mainly because interest on loans related to completed properties held for sale was no longer capitalized[82] - Loss attributable to equity holders narrowed from 54.09 million RMB in the same period last year to 20.81 million RMB, a 62% decrease. Including exchange gains, comprehensive income attributable to equity holders was 20.80 million RMB, compared to a loss of 98.64 million RMB in the same period last year[83] Investment Properties and Land Reserve As of June 30, 2019, the Group's total land reserve was approximately 3.06 million square meters, with an investment property portfolio covering commercial complexes totaling 0.298 million square meters, and the IOC project serving as a core asset for development and/or sale - As of June 30, 2019, the Group's total land reserve had a gross floor area of approximately 3.06 million square meters[98] Summary of Principal Properties Held for Development and/or Sale | Project | Location | Land Reserve Gross Floor Area (Square Meters) | | :--- | :--- | :--- | | International Office Center (Plot A) | Hangzhou, Zhejiang Province | 706,586 | | International Office Center (Plots B & C) | Hangzhou, Zhejiang Province | 1,098,065 | | Xuzhou MixC | Xuzhou, Jiangsu Province | 562,371 | | Zhong An Times Square (Phase I & II) | Yuyao, Zhejiang Province | 267,535 | Material Acquisitions and Disposal During the reporting period, the Group acquired approximately 31.56% of Maggie and Rose Limited for GBP 8.84 million, with no other material acquisitions or disposals of subsidiaries and associates - The Group acquired approximately 31.56% of the issued share capital of Maggie and Rose Limited for a consideration of 8.84 million GBP (approximately 90.8 million HKD), with this investment to be recognized in the second half of 2019[106][107] Human Resources and Remuneration Policy As of June 30, 2019, the Group employed 1,588 staff, with staff costs decreasing by 3% to RMB 73.45 million due to focused sales strategy, and remuneration policies are based on market levels, industry standards, and individual performance Human Resources Data | Indicator | June 30, 2019 | June 30, 2018 | | :--- | :--- | :--- | | Total Employees | 1,588 persons | 1,373 persons | | Staff Costs (H1) | Approx. 73.45 million RMB | Approx. 75.35 million RMB | Capital Structure and Liabilities As of June 30, 2019, the Group's capital structure remained robust despite increased leverage, with the gearing ratio rising to 46%, cash and cash equivalents decreasing to RMB 294 million, total borrowings at RMB 3.13 billion, and contingent liabilities primarily from mortgage loan guarantees Key Capital Structure Indicators | Indicator | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash and Cash Equivalents and Restricted Cash | 294 million RMB | 625 million RMB | | Current Ratio | 1.11 | 0.94 | | Gearing Ratio (Net Debt/Total Equity) | 46% | 40% | | Total Borrowings | 3.135 billion RMB | 2.968 billion RMB | - As of the period end, the Group's capital commitments were approximately 394 million RMB, primarily for construction costs[118] - Contingent liabilities were approximately 237 million RMB, mainly for guarantees provided for mortgage loans granted to property buyers[119] Asset Pledges (for Secured Borrowings) | Asset Category | Pledged Carrying Value (June 30, 2019) | | :--- | :--- | | Investment Properties | 1.289 billion RMB | | Completed Properties Held for Sale | 1.565 billion RMB | | Property and Equipment | 584 million RMB | | Properties Under Development | 415 million RMB | | Total | 3.864 billion RMB | Risk Management The Group maintains a conservative risk management strategy, not employing foreign exchange hedging tools as most transactions are in RMB, and currently not using interest rate swaps to hedge floating-rate borrowings - Foreign Exchange Risk: Business is primarily in China, with most transactions conducted in RMB, and no foreign exchange hedging instruments are used[127] - Interest Rate Risk: Risk primarily arises from floating-rate borrowings, with no interest rate swaps currently used for hedging[128] Events After the Period Under Review Subsequent to the reporting period, a lawsuit was filed by the seller seeking to cancel the transaction for the acquisition of 22.65% equity in Zhejiang Xinnongdu Industrial Co., Ltd. (XND), for which shares were issued in January 2019. As of the report date, the lawsuit has not been adjudicated, and the outcome remains uncertain - Regarding the acquisition of 22.65% equity in Zhejiang Xinnongdu, the seller has filed a lawsuit seeking cancellation. As of the report date, the outcome of the lawsuit remains uncertain[132][133] Financial Information Report on Review of Unaudited Interim Condensed Consolidated Financial Information Ernst & Young reviewed the interim financial information for the six months ended June 30, 2019, in accordance with HKSAE 2410, concluding that nothing suggested the information was not prepared in all material respects according to IAS 34 - Auditor Ernst & Young reviewed, rather than fully audited, this interim financial information[143] - The review concluded that nothing came to the auditor's attention that caused them to believe the interim financial information was not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting'[144] Interim Condensed Consolidated Financial Statements The financial statements show strong growth in the Group's revenue and gross profit in the first half of 2019, but net profit attributable to owners of the parent remained a loss, while total assets and liabilities saw slight increases, and operating cash flow was a net outflow primarily supported by financing activities Interim Condensed Consolidated Statement of Profit or Loss In the first half of 2019, the Group's revenue was RMB 663 million, up 28%, and gross profit was RMB 290 million, up 299%, but due to increased income tax expense, net loss attributable to owners of the parent was RMB 20.81 million, a significant narrowing from the prior year 2019 H1 Summary of Statement of Profit or Loss | Item (RMB '000) | 2019 H1 | 2018 H1 | | :--- | :--- | :--- | | Revenue | 663,222 | 516,864 | | Gross Profit | 290,322 | 72,804 | | Profit/(Loss) Before Tax | 143,454 | (44,494) | | Income Tax Expense | (135,283) | (26,241) | | Profit/(Loss) for the Period | 8,171 | (70,735) | | Loss Attributable to Owners of the Parent | (20,812) | (54,090) | | Basic Loss Per Share | (1.04 cents) | (2.9 cents) | Interim Condensed Consolidated Statement of Comprehensive Income Building on the profit for the period of RMB 8.17 million, and including exchange differences, the Group's total comprehensive income for the period was RMB 49.78 million, with total comprehensive income attributable to owners of the parent turning positive at RMB 20.80 million 2019 H1 Summary of Statement of Comprehensive Income | Item (RMB '000) | 2019 H1 | 2018 H1 | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 8,171 | (70,735) | | Other Comprehensive Income (Exchange Differences) | 41,611 | (44,551) | | Total Comprehensive Income/(Loss) for the Period | 49,782 | (115,286) | | Comprehensive Income Attributable to Owners of the Parent | 20,799 | (98,641) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2019, the Group's total assets were RMB 13.56 billion, total liabilities RMB 7.45 billion, and net assets RMB 6.11 billion, with non-current assets and completed properties held for sale being major components, and interest-bearing borrowings totaling RMB 3.13 billion Summary of Statement of Financial Position (as of June 30, 2019) | Item (RMB '000) | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Assets | 13,562,141 | 13,231,588 | | Non-current Assets | 9,456,961 | 9,153,872 | | Current Assets | 4,105,180 | 4,077,716 | | Total Liabilities | 7,450,462 | 7,333,545 | | Non-current Liabilities | 3,749,354 | 2,998,001 | | Current Liabilities | 3,701,108 | 4,335,544 | | Net Assets | 6,111,679 | 5,898,043 | | Total Equity | 6,111,679 | 5,898,043 | Interim Condensed Consolidated Statement of Changes in Equity As of June 30, 2019, the Group's total equity increased from RMB 5.90 billion at the beginning of the year to RMB 6.11 billion, primarily driven by comprehensive income for the period and proceeds from new share issuance - Total equity increased from 5.898 billion RMB at the beginning of the period to 6.111 billion RMB at the end of the period[225][268] - Key drivers for the equity increase include total comprehensive income of 49.78 million RMB for the period and proceeds from new share issuance of 163.85 million RMB[239][245][250] Interim Condensed Consolidated Statement of Cash Flows In the first half of 2019, the Group experienced a net cash outflow of RMB 278 million from operating activities and RMB 68 million from investing activities, relying on financing activities for cash inflow, resulting in cash and cash equivalents decreasing to RMB 237 million 2019 H1 Summary of Statement of Cash Flows | Item (RMB '000) | 2019 H1 | 2018 H1 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (277,752) | (288,137) | | Net Cash (Used in)/Generated from Investing Activities | (67,731) | 443,864 | | Net Cash Generated from Financing Activities | 32,976 | 63,709 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (312,507) | 219,436 | | Cash and Cash Equivalents at End of Period | 236,773 | 544,808 | Notes to Interim Condensed Consolidated Financial Information The notes detail the basis of financial statement preparation, accounting policy changes (IFRS 16 impact), segment operations, asset/liability breakdowns, related party transactions, commitments, contingent liabilities, and fair value of financial instruments - Accounting Policy Changes: The Group adopted IFRS 16 'Leases' effective January 1, 2019, leading to the recognition of 280 million RMB in right-of-use assets and 273 million RMB in lease liabilities[344][362] Segment Revenue and Results (2019 H1) | Segment (RMB '000) | External Revenue | Segment Results | | :--- | :--- | :--- | | Commercial Property Development | 474,375 | 278,350 | | Property Leasing | 77,797 | 528 | | Hotel Operations | 60,116 | (33,200) | | Others | 50,934 | (54,112) | | Total | 663,222 | 191,566 | - Related Party Transactions: As of period end, receivables from related companies were approximately 131 million RMB, and payables to related companies were approximately 972 million RMB. Additionally, Chairman Shi Kancheng provided guarantees for the Group's borrowings of 470 million RMB[504][509][515] - Contingent Liabilities: As of period end, the total mortgage guarantees provided by the Group for property buyers amounted to approximately 237 million RMB[525] Other Information Directors' and Substantial Shareholders' Interests This section discloses the shareholdings of directors and substantial shareholders in the company and its associated corporations, with Chairman Shi Kancheng being the controlling shareholder holding approximately 64.64% of shares, alongside other key shareholders - Chairman Shi Kancheng, through corporations controlled by his wholly-owned Whole Good Management Limited, collectively holds 1.301 billion shares, representing 64.64% of the issued share capital[611][613] - Substantial shareholder Ideal World Investments Limited holds 1.27 billion shares, representing 63.08% of the share capital[621] Corporate Governance The Group complied with the Corporate Governance Code, adopted a standard for directors' securities transactions, and the Audit Committee reviewed the interim financial information, with no interim dividend recommended and no listed securities purchased, sold, or redeemed during the period - The Board does not recommend declaring an interim dividend for the six months ended June 30, 2019[631] - The company complied with the code provisions of the Corporate Governance Code and adopted a standard code for directors' securities transactions[632][633] - The Audit Committee reviewed the unaudited interim condensed consolidated financial information for the period[640] - During the review period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[643]