Financial Performance - The Group's revenue for the six months ended June 30, 2021, was approximately RMB 31.1 million, a decrease of approximately 67.3% compared to RMB 95.1 million for the same period last year [11]. - Gross profit for the Group was approximately RMB 26.1 million, representing a decrease of approximately 35.2% year-on-year [11]. - Loss attributable to the owners of the Company was approximately RMB 286.5 million, an increase of approximately 3 times compared to RMB 71.6 million for the same period last year [14]. - Basic loss per share was approximately RMB 0.153, compared to RMB 0.035 for the six months ended June 30, 2020 [15]. - The Group recorded revenue from property sales of approximately RMB 2.4 million, representing a decrease of approximately 97.1% compared to the same period last year [24]. - Property sales decreased to approximately RMB 2.4 million, down RMB 61.3 million or 96.2% from RMB 63.7 million in the same period last year, primarily due to a 90.5% drop in GFA delivered [61]. - Rental income amounted to approximately RMB 28.7 million, a decrease of RMB 2.7 million or 8.6% from RMB 31.4 million for the same period last year, mainly due to rent-free policies for tenants [63]. - Operating loss was approximately RMB 295.6 million, an increase of RMB 216.6 million or 274.2% compared to a loss of RMB 79.0 million last year [77]. - Other expenses rose to approximately RMB 292.0 million, an increase of RMB 239.3 million or 4.54 times from RMB 52.7 million last year, primarily due to property impairments and penalties [72]. Assets and Liabilities - As of June 30, 2021, total assets amounted to approximately RMB 6,541.6 million, while total liabilities were approximately RMB 5,973.2 million [16]. - Total equity as of June 30, 2021, was approximately RMB 568.5 million, down from approximately RMB 864.1 million as of December 31, 2020 [16]. - The total assets of the Group as of June 30, 2021, were approximately RMB 6,541.6 million, an increase of approximately RMB 119.4 million compared to RMB 6,422.2 million as of December 31, 2020 [99]. - Total liabilities as of June 30, 2021, were approximately RMB 5,973.2 million, representing an increase of approximately RMB 415.0 million compared to RMB 5,558.2 million as of December 31, 2020 [106]. - The current ratio of the Group as of June 30, 2021, was 0.59, a slight decrease from 0.61 as of December 31, 2020 [108]. - The gearing ratio increased to 78.5% as of June 30, 2021, compared to 71.1% as of December 31, 2020 [109]. - The Group's net current liabilities increased to approximately RMB 2,235.9 million as of June 30, 2021, up by approximately RMB 294.8 million from RMB 1,941.1 million as of December 31, 2020 [107]. - Total current liabilities were approximately RMB 5,391.4 million, accounting for approximately 90.3% of total liabilities as of June 30, 2021 [106]. Market Conditions and Economic Outlook - The ongoing COVID-19 pandemic continues to create economic uncertainties, although China is experiencing a steady economic recovery [17]. - The Chinese government is focusing on supply-side structural reforms and demand-side management as part of its new development pattern [17]. - The establishment of a long-term real estate financial management mechanism is being accelerated to prevent excessive financialization and systemic financial risks [17]. - The overall real estate development investment growth rate is expected to slow down in the second half of 2021 due to ongoing market adjustments [42]. - The Group expects to improve investment sentiment in the second half of 2021 due to better pandemic control and higher vaccination rates [38]. Strategic Initiatives - The Group plans to implement a new marketing strategy in September to accelerate the sales of remaining commercial properties and improve cash recovery [41]. - The Group adopted a rapid sales and fund recovery strategy, resulting in significant discounts on selling prices to clear inventory [46]. - The second phase of residential property sales under the Shandong project is under preparation, aiming to enhance cash inflows [38]. - The Group aims to accelerate the pre-sale and sale of properties, such as the Shandong and Chongqing projects, to generate adequate net cash inflows [196]. Employee and Corporate Governance - The Group's workforce decreased to 88 employees as of June 30, 2021, from 108 employees a year earlier, primarily due to a cost efficiency campaign [138]. - The Group has adopted a share option scheme and a share award scheme to enhance employee remuneration linked to performance [138]. - The Company has adopted a Share Option Scheme effective from June 8, 2015, which will last for 10 years [171]. Liquidity and Financial Management - The Group's ability to continue as a going concern is under careful assessment due to liquidity challenges [194]. - The management is implementing measures to improve liquidity, including negotiating with lenders to avoid immediate repayment demands and extending repayment schedules [196]. - The management has taken steps to mitigate liquidity pressure and improve cash flow conditions [194]. - The Group is exploring various financing options to support working capital and commitments in the foreseeable future [196]. - The management is negotiating with financial institutions for potential waivers of penalties after repayment of overdue amounts [198].
新明中国(02699) - 2021 - 中期财报