港誉智慧城市服务(00265) - 2024 - 中期业绩

Interim Results Summary Performance Overview The Group's revenue slightly decreased, but profit attributable to equity holders significantly increased, mainly due to reduced impairment provisions for receivables and effective cost control measures, while basic and diluted earnings per share decreased, and no interim dividend was recommended Key Financial Data for the Period | Indicator | Current Period (H1 2024) | Corresponding Period (H1 2023) | Change | | :--- | :--- | :--- | :--- | | Revenue | 167.7 Million HKD | 169.7 Million HKD | Decreased by approx. 1.2% | | Profit attributable to equity holders | 24.0 Million HKD | 18.2 Million HKD | Increased by approx. 31.9% | | Basic and diluted EPS | 0.08 HK cents | 0.10 HK cents | Decreased | - Profit growth was primarily driven by a net reduction of approximately HKD 6.0 million in impairment provisions for trade receivables and contract assets, along with effective cost control measures leading to reduced selling, general, and administrative expenses. No gain on disposal was recorded during the period[1] - The Board did not recommend the payment of any interim dividend for the period[2] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the Group reported revenue of HKD 167.7 million, gross profit of HKD 47.2 million, and profit for the period of HKD 23.8 million, with HKD 24.0 million attributable to equity holders Condensed Consolidated Statement of Profit or Loss (Thousand HKD) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 167,741 | 169,698 | | Cost of sales and services | (120,555) | (122,459) | | Gross profit | 47,186 | 47,239 | | Other income | 3,563 | 2,398 | | Selling, general and administrative expenses | (22,835) | (34,262) | | Profit before tax | 21,442 | 18,495 | | Profit for the period | 23,832 | 20,636 | | Profit attributable to equity holders | 24,017 | 18,159 | | Basic and diluted EPS | 0.08 HK cents | 0.10 HK cents | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group's profit for the period was HKD 23.8 million, but due to exchange differences on translation of foreign operations and share of other comprehensive income of an associate, total comprehensive income for the period was HKD 9.6 million, with a comprehensive loss of HKD 10.3 million attributable to equity holders Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Thousand HKD) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit for the period | 23,832 | 20,636 | | Exchange differences on translation of foreign operations | (13,583) | (22,852) | | Exchange differences on translation of share of other comprehensive income of an associate | (647) | (1,192) | | Total comprehensive income (loss) for the period | 9,602 | (3,408) | | Attributable to equity holders | (10,256) | (5,207) | Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were HKD 789.6 million, total liabilities were HKD 182.4 million, and net assets were HKD 607.2 million, with non-current assets primarily comprising property, plant and equipment and investment properties, and current assets mainly cash and cash equivalents Consolidated Statement of Financial Position (Thousand HKD) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 126,911 | 136,179 | | Investment properties | 67,355 | 74,783 | | Investment in an associate | 24,356 | 25,055 | | Current assets | | | | Trade receivables | 92,745 | 90,362 | | Contract assets | 59,825 | 41,826 | | Cash and cash equivalents | 230,108 | 201,373 | | Current liabilities | | | | Contract liabilities | 22,866 | 26,820 | | Trade payables | 32,211 | 30,071 | | Non-current liabilities | | | | Lease liabilities | 36,310 | 41,284 | | Total equity | 607,211 | 622,136 | Notes to the Unaudited Condensed Consolidated Financial Statements Accounting Standards This section outlines the amendments to Hong Kong Accounting Standards and Hong Kong Financial Reporting Standards referenced in the preparation of the interim financial statements, covering liability classification, supplier finance arrangements, and lease liabilities in sale and leaseback transactions - The report mentions HKAS 1 (Amendments) regarding classification of liabilities, HK(IFRIC)-Int 5 (Amendments) regarding classification by the borrower of a term loan that contains a clause that gives the lender a right to demand immediate repayment, and HKFRS 7 (Amendments) regarding supplier finance arrangements[7] 1. General Information The Company is an exempted company incorporated in the Cayman Islands with shares listed on the Stock Exchange, primarily engaged in property management, environmental sanitation, integrated development, and diversified tourism products and services - The Company is an exempted company incorporated in the Cayman Islands with its shares listed on The Stock Exchange of Hong Kong Limited[8] - The Group is principally engaged in property management and leasing services for residential and commercial properties, environmental sanitation, integrated development, and diversified tourism products and services[8] - The Group's immediate and ultimate holding company is Orient Victory Real Estate Group Holdings Limited, wholly owned by Mr. Shi Baodong[8] 2. Basis of Preparation The interim financial statements are prepared in accordance with Appendix D2 of the Listing Rules and HKAS 34, using a historical cost basis except for investment properties measured at fair value, with no significant impact from new/revised HKFRSs - The interim financial statements have been prepared in accordance with the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[9] - The adoption of new/revised HKFRSs has no significant impact on the Group’s results and financial position for the current or prior periods[10] 3. Revenue and Segment Reporting The Group's total revenue of HKD 167.7 million is primarily derived from property management, environmental sanitation, and tourism-related income, with property management showing significant growth and environmental sanitation revenue decreasing due to contract expiry Revenue Breakdown The Group's total revenue for the period was HKD 167.7 million, comprising HKD 85.3 million from property management services, HKD 65.2 million from environmental sanitation services, and HKD 13.3 million from rental income Revenue by Category (Thousand HKD) | Revenue Category | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Property management services | 85,260 | 72,007 | | Environmental sanitation services | 65,249 | 80,068 | | Tourism-related income | 3,928 | 4,775 | | Rental income | 13,304 | 12,848 | | Total Revenue | 167,741 | 169,698 | Segment Reporting (by Business Segment) The Group operates four reportable segments: property management, environmental sanitation, integrated development, and diversified tourism products and services, with property management revenue growing significantly, environmental sanitation revenue declining, and integrated development recording a loss Segment Results, Assets and Liabilities Property management segment revenue grew by 16.1% to HKD 98.6 million, but segment results decreased; environmental sanitation segment revenue decreased by 18.5% to HKD 65.2 million, but segment results significantly increased; integrated development segment saw declines in both revenue and results Segment Revenue and Results (Thousand HKD) | Segment | H1 2024 Revenue | H1 2023 Revenue | Revenue Change | H1 2024 Segment Results | H1 2023 Segment Results | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Management | 98,564 | 84,855 | +16.1% | 8,287 | 14,507 | | Environmental Sanitation | 65,249 | 80,068 | -18.5% | 15,925 | 7,588 | | Integrated Development | 3,928 | 4,775 | -17.7% | (905) | (6,016) | | Diversified Tourism Products and Services | – | – | N/A | (155) | 9,081 | Segment Assets and Liabilities (Thousand HKD) | Segment | June 30, 2024 Segment Assets | December 31, 2023 Segment Assets | June 30, 2024 Segment Liabilities | December 31, 2023 Segment Liabilities | | :--- | :--- | :--- | :--- | :--- | | Property Management | 165,905 | 158,415 | 120,609 | 114,406 | | Environmental Sanitation | 145,385 | 149,598 | 35,035 | 47,033 | | Integrated Development | 215,429 | 228,532 | 24,664 | 27,210 | | Diversified Tourism Products and Services | 1,218 | 4,005 | 564 | 936 | | Total Assets | 789,592 | 814,736 | Total Liabilities | 182,381 | 192,600 | - Segment results are assessed based on reportable segment profit (loss), which is adjusted profit (loss) before tax, excluding finance costs and head office and corporate income and expenses[13] Geographical Information All of the Group's external customer revenue is derived from Mainland China, where its non-current assets are also primarily located Geographical Distribution (Thousand HKD) | Region | H1 2024 External Customer Revenue | H1 2023 External Customer Revenue | June 30, 2024 Non-current Assets | December 31, 2023 Non-current Assets | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | – | – | 1,252 | 1,460 | | Mainland China | 167,741 | 169,698 | 241,221 | 261,001 | | Total | 167,741 | 169,698 | 242,473 | 262,461 | - The geographical distribution of customers is based on the location where goods and services are sold or provided, while the geographical distribution of specified assets is based on the physical location of the assets or the location of operations[16] Information on Major Customers During the period, two major customers contributed 10% or more to total revenue, with Customer B's contribution significantly increasing Major Customer Revenue (Thousand HKD) | Customer | H1 2024 Revenue | H1 2023 Revenue | | :--- | :--- | :--- | | Customer A | 19,369 | 22,562 | | Customer B | 29,196 | – | - Customer A refers to revenue from associated companies controlled by Mr. Shi and Orient Victory Real Estate Development Group Co., Ltd. (95% owned by Mr. Shi) under the property management segment[18] 4. Finance Costs Total finance costs for the period amounted to HKD 848 thousand, a decrease from HKD 1,439 thousand in the prior period, primarily due to reduced interest on lease liabilities and other loans Finance Costs (Thousand HKD) | Finance Cost Category | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Interest on lease liabilities | 848 | 1,312 | | Interest on other loans | – | 127 | | Total | 848 | 1,439 | 5. Profit Before Tax Profit before tax was HKD 21.4 million, influenced by factors such as staff costs, depreciation and amortization, direct operating expenses for investment properties, impairment provisions for trade receivables, and net exchange gains Items Affecting Profit Before Tax (Thousand HKD) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Staff costs | 48,406 | 50,209 | | Depreciation of property, plant and equipment | 9,402 | 11,848 | | Depreciation of right-of-use assets | 961 | 970 | | Impairment provision for trade receivables | 4,568 | 9,581 | | Impairment provision (reversal) for contract assets | (1,032) | – | | Net exchange gain | (1,868) | (539) | 6. Income Tax Income tax for the period was negative HKD 2.39 million, primarily due to the reversal of deferred tax losses and temporary differences, with China corporate income tax accrued at 5% or 25% and no provision for Hong Kong profits tax Income Tax (Thousand HKD) | Tax Category | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Current tax – Corporate income tax | 2,206 | 1,419 | | Deferred tax – Reversal of tax losses and temporary differences | (4,596) | (3,560) | | Total Income Tax | (2,390) | (2,141) | - China corporate income tax is accrued at a rate of 5% (for small and micro enterprises) or 25% (for others)[20] - No provision for Hong Kong profits tax was made as the Group recorded tax losses in both periods[20] 7. Earnings Per Share Basic and diluted earnings per share for the period were 0.08 HK cents, a decrease from 0.10 HK cents in the prior period, with certain perpetual convertible securities and share awards not assumed converted due to their anti-dilutive effect Basis for Earnings Per Share Calculation (Thousand HKD) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit attributable to equity holders | 24,017 | 18,159 | | Distributions paid to holders of perpetual convertible securities | (11,613) | – | | Accrued distributions to holders of perpetual convertible securities | (2,100) | (5,054) | | Profit for basic EPS calculation | 10,304 | 13,105 | Weighted Average Number of Ordinary Shares (Thousand Shares) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Weighted average number of ordinary shares for basic EPS calculation | 12,922,075 | 12,922,075 | - Diluted earnings per share for the current and corresponding periods did not assume the conversion of certain perpetual convertible securities and the issuance of certain shares under the share award scheme, as their hypothetical conversion and issuance would have an anti-dilutive effect on the presented basic earnings per share amounts[23] 8. Property, Plant and Equipment As of June 30, 2024, the carrying amount of machinery and equipment was HKD 3.872 million, primarily comprising assets held under leases Carrying Amount of Machinery and Equipment (Thousand HKD) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Carrying amount of machinery and equipment (held under leases) | 3,872 | 4,236 | 9. Trade Receivables As of June 30, 2024, net trade receivables were HKD 92.7 million, a slight increase from the end of 2023, with impairment provisions of HKD 14.4 million; property management customers typically pay upon immediate invoicing, while other segments have credit terms of 1 to 90 days Trade Receivables Breakdown (Thousand HKD) | Source of Trade Receivables | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Third parties | 57,328 | 55,450 | | Related companies | 49,855 | 45,087 | | Total | 107,183 | 100,537 | | Impairment provision | (14,438) | (10,175) | | Net Amount | 92,745 | 90,362 | Trade Receivables Ageing Analysis (Thousand HKD) | Ageing | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 90 days | 28,111 | 38,492 | | 91 to 180 days | 34,880 | 23,077 | | 181 to 365 days | 24,369 | 23,237 | | Over 365 days | 5,385 | 5,556 | | Total | 92,745 | 90,362 | 10. Trade Payables As of June 30, 2024, total trade payables were HKD 32.2 million, a slight increase from the end of 2023, primarily from third parties, with all trade payables expected to be settled within one year Trade Payables Breakdown (Thousand HKD) | Source of Trade Payables | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Third parties | 29,352 | 29,892 | | Related parties | 2,859 | 179 | | Total | 32,211 | 30,071 | Trade Payables Ageing Analysis (Thousand HKD) | Ageing | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 90 days | 14,554 | 13,495 | | 91 to 180 days | 2,491 | 2,515 | | 181 to 365 days | 4,276 | 3,173 | | Over 365 days | 10,890 | 10,888 | | Total | 32,211 | 30,071 | 11. Share Capital As of June 30, 2024, the Company's authorized share capital was HKD 100 million, with issued and fully paid share capital of HKD 64.61 million, and the number of shares remained unchanged Share Capital Structure (Thousand Shares/Thousand HKD) | Share Capital Category | June 30, 2024 (Thousand Shares) | June 30, 2024 (Thousand HKD) | December 31, 2023 (Thousand Shares) | December 31, 2023 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Authorized share capital (ordinary shares of HKD 0.005 par value each) | 20,000,000 | 100,000 | 20,000,000 | 100,000 | | Issued and fully paid share capital (ordinary shares of HKD 0.005 par value each) | 12,922,075 | 64,610 | 12,922,075 | 64,610 | 12. Interim Dividend The Board did not recommend the payment of any interim dividend for the period - The Board did not recommend the payment of any interim dividend for the period (corresponding period: nil)[29] Management Discussion and Analysis Industry Overview and Business Review The Group adheres to its core values of "people-oriented, sincere service" and a "prudent and sustainable" strategy, with main businesses including property management, environmental sanitation, integrated development, and diversified tourism products and services - The Group adheres to its corporate core values of "people-oriented, sincere service" and places great emphasis on a "prudent and sustainable" strategy to maintain sustainable profitability through cautious investment and development strategies[30] - The Group is principally engaged in property management and leasing services for residential and commercial properties, environmental sanitation, integrated development, and diversified tourism products and services[30] Property Management Business Driven by national policies, the property management industry continues to grow; Gangyu Property Group achieved a 16.1% revenue increase to HKD 98.6 million by enhancing service quality, strengthening staff training, and securing five new projects, despite a reduction in total contracted gross floor area due to six contract expirations - National policies continue to promote the healthy development of the property management industry, emphasizing improved service quality and diversity[31] - Gangyu Property Group obtained ISO 9001, ISO 14001, and ISO 45001 certifications and received multiple industry awards[32] - Revenue from property management business for the period was approximately HKD 98.6 million, an increase of approximately 16.1%[33] - Gangyu Property Group successfully secured five new projects, but the expiration of six service contracts led to a reduction of 4.4 million square meters in total contracted gross floor area, with the total contracted gross floor area under management being approximately 7.4 million square meters as of June 30, 2024[33] Environmental Sanitation Business The Chinese government's supportive policies and rising industry standards have led the Group to upgrade services with advanced technology and win new projects; despite revenue decline to HKD 65.2 million due to contract expiry and client deductions, cost control measures significantly improved gross margin, and government policies are expected to alleviate delayed payment challenges - The Chinese government has implemented various policies to support the environmental sanitation industry, including promoting investment and construction of urban and rural environmental protection infrastructure, strengthening government procurement service reforms in key areas such as urban and rural community public services and public health services, and accelerating the improvement of waste collection and treatment systems to promote the construction of smart waste classification facilities[34] - The Company invested in purchasing environmental vehicles in the second half of 2023 to meet stricter industry standards and higher environmental regulations[34] - Revenue from environmental sanitation services for the period was approximately HKD 65.2 million, a decrease from HKD 80.1 million in the corresponding period, primarily due to the expiry of one service project and client service fee deductions[35] - The Group significantly improved the gross margin of its environmental sanitation services business for the period by optimizing personnel, outsourcing some work to subcontractors, and implementing cost-saving measures to reduce fuel consumption and operating costs[35] - The Hebei Provincial Government held an urban management conference, requiring all local municipal, county, and district governments to prioritize and ensure timely payment for key environmental sanitation services, including waste collection, transfer, treatment, and sewage treatment, which is expected to accelerate the collection of long-overdue payments[36] Integrated Development Business Integrated development business includes tourism scenic area operation, management, promotion, event planning, and consulting services; tourism-related income declined due to adverse weather, increased competition, and lack of unique products, while demand for promotion, event planning, and consulting services significantly dropped, with no revenue recognized in the period Tourism-related Income Tumen Tourism's tourism-related income was approximately HKD 3.9 million, a decrease from the prior year, mainly affected by adverse weather, high shopping mall vacancy rates, and increased competition from nearby self-operated villagers Tourism-related Income (Thousand HKD) | Revenue Category | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Tourism-related income | 3,928 | 4,775 | - The decrease in Tumen Tourism's revenue was due to adverse weather conditions, high shopping mall vacancy rates, increased competition from nearby self-operated villagers, and a lack of unique and competitive products from certain merchants[38] - Tumen Tourism has implemented an event planning strategy involving active participation of all staff in scenic area performances, which attracts customer traffic while reducing operating costs by eliminating the need to hire external performers[38] Promotion, Event Planning and Consulting Services Demand for promotion, event planning, and consulting services significantly decreased during the period, with no revenue recognized, primarily due to changes in the sales and marketing strategies of a major client - The Group did not recognize any revenue from providing promotion, event planning, and consulting services during the period, mainly due to changes in the sales and marketing strategies of Orient Victory Real Estate Development Group Co., Ltd. and its subsidiaries (the Group's major clients for promotion, event planning, and consulting services) since 2023[40] Diversified Tourism Products and Services Business The Group recorded no revenue in the diversified tourism products and services segment during the current and corresponding periods, primarily due to focusing on other businesses, and will re-evaluate the business environment to make appropriate arrangements - The Group recorded no revenue in this segment during the current and corresponding periods, mainly due to the Group's focus on other businesses (such as property management and environmental sanitation)[41] - Based on the recent resumption of outbound tourism, the Group will re-evaluate the surrounding business environment and make appropriate arrangements for this business segment to achieve the overall best interests of the Company and its shareholders[41] Future Outlook The Group plans to expand its business through organic growth, new project bids, strategic acquisitions, and partnerships, prioritizing projects with minimal capital requirements to mitigate liquidity risks, and actively seeking acquisition opportunities in property management, tourism, and environmental services - The Group plans to expand its business through organic growth, securing new projects through bidding, strategic acquisitions, and partnerships[43] - This expansion strategy aligns with the Group's asset-light investment model, prioritizing projects with minimal capital and working capital requirements, which minimizes liquidity risk and provides greater flexibility in investment management[43] - The Group is actively seeking acquisition opportunities, particularly in the property management, tourism, and environmental services segments, and exploring potential collaboration opportunities with target clients[43] Financial Analysis During the period, the Group's total revenue slightly decreased, but gross margin improved; property management revenue increased but gross profit decreased, while environmental sanitation revenue decreased but gross profit significantly increased; profit for the period rose due to reduced impairment provisions and cost control Operating Performance (by Nature of Revenue) The Group's total revenue for the period was approximately HKD 167.7 million, a year-on-year decrease of 1.2%, with property management revenue increasing, environmental sanitation revenue decreasing, and integrated development revenue declining Analysis by Nature of Revenue (Thousand HKD) | Revenue Nature | H1 2024 | Share (%) | H1 2023 | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Property management and leasing related services | 98,564 | 58.8 | 84,855 | 50.0 | | Environmental sanitation services | 65,249 | 38.9 | 80,068 | 47.2 | | Tourism-related income | 3,928 | 2.3 | 4,775 | 2.8 | | Total | 167,741 | 100.0 | 169,698 | 100.0 | - The Group recorded revenue of approximately HKD 167.7 million for the period, a decrease of approximately 1.2% compared to the corresponding period last year[44] - Property management business revenue increased, mainly due to increased revenue from planning, promotion, and operation management businesses since November 2023, and the full recognition of revenue from five new public facility construction projects undertaken by the Group in the second half of 2023[44] - Environmental sanitation business revenue decreased, primarily due to the expiry of one service project and client service fee deductions as the Group failed to meet the client's strict service satisfaction standards[44] Gross Profit and Gross Margin The Group's gross profit for the period was approximately HKD 47.2 million, with gross margin increasing from 27.8% to 28.1%; property management gross profit and margin decreased, environmental sanitation gross profit and margin significantly increased, and integrated development gross profit decreased but margin slightly increased Total Gross Profit and Gross Margin (Thousand HKD) | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Gross Profit | 47,200 | 47,200 | Stable | | Total Gross Margin | 28.1% | 27.8% | +0.3 percentage points | Segment Gross Profit and Gross Margin (Thousand HKD) | Segment | H1 2024 Gross Profit | H1 2023 Gross Profit | Gross Profit Change | H1 2024 Gross Margin (%) | H1 2023 Gross Margin (%) | Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Property Management | 25,600 | 28,900 | -3.3 Million HKD | 26.0 | 34.1 | -8.1 percentage points | | Environmental Sanitation | 18,100 | 14,100 | +4.0 Million HKD | 27.7 | 17.6 | +10.1 percentage points | | Integrated Development | 3,500 | 4,200 | -0.7 Million HKD | 89.7 | 88.9 | +0.8 percentage points | - The decrease in gross profit and gross margin for the property management business was due to competitive bidding prices for new projects, primarily in public facility projects, and an increase in direct labor costs of approximately HKD 2.8 million[46] - The increase in gross profit and gross margin for the environmental sanitation business was mainly due to a reduction in staff costs of approximately HKD 3.5 million[46] Profit for the Period Profit for the period was approximately HKD 23.8 million, an increase from the prior period, primarily driven by a net reduction of approximately HKD 6.0 million in impairment provisions for trade receivables and contract assets, and effective cost control measures reducing selling, general, and administrative expenses Profit for the Period (Thousand HKD) | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Profit for the period | 23,800 | 20,600 | +3.2 Million HKD | - The increase in profit for the period was due to (i) a net reduction of approximately HKD 6.0 million in impairment provisions for trade receivables and contract assets; and (ii) effective cost control measures leading to reduced selling, general, and administrative expenses[47] - Unlike 2023, the Group did not record any gain on disposal during the period[47] Asset Structure The Group's assets primarily include property, plant and equipment, investment properties, investments in associates, inventories, trade receivables, contract assets, and cash equivalents; property, plant and equipment mainly relate to tourism and environmental sanitation businesses, while trade receivables and contract assets increased, and cash and cash equivalents slightly decreased - Property, plant and equipment and right-of-use assets totaled approximately HKD 150.6 million, mainly referring to properties and other equipment of tourism scenic areas and cultural attractions owned by Tumen Tourism, and vehicles and other equipment for the Group's environmental sanitation business[48] - Investment properties of approximately HKD 67.4 million represent the fair value of right-of-use assets for non-residential properties in Shijiazhuang City and Xingtai City, Hebei Province, China, leased by the Group from property owners to earn rental income[48] - Investment in an associate of approximately HKD 24.4 million refers to the Group's 40% equity interest in Zhangjiakou Dakun Zhifang Real Estate Development Co., Ltd., whose development project was suspended due to economic uncertainties brought by the COVID-19 pandemic[49][50] - Trade receivables of approximately HKD 92.7 million slightly increased, mainly due to delayed payments from specific clients in the environmental sanitation and property management segments facing cash flow difficulties[50] - Contract assets of approximately HKD 59.8 million represent trade receivables yet to be invoiced, particularly from the environmental sanitation business, as these clients are government departments with strict procedures for verifying the Group's completed works[51] - Time deposits with original maturity over three months and cash and cash equivalents totaled approximately HKD 258.9 million, with the slight decrease mainly due to (i) payments of approximately HKD 3.9 million for vehicle and equipment purchases during the period; and (ii) distributions of approximately HKD 24.2 million paid to holders of perpetual convertible securities during the period[52] Liability Structure The Group's liabilities primarily include trade payables, contract liabilities, other payables, and lease liabilities; total trade payables and contract liabilities slightly decreased, mainly due to the scaled-down environmental sanitation and integrated development segments, while other payables and lease liabilities also slightly declined - Trade payables and contract liabilities totaled approximately HKD 55.1 million, with the decrease mainly attributable to the scaled-down environmental sanitation segment and promotion, event planning, and consulting services under the integrated development segment during the period[53] - Other payables of approximately HKD 64.8 million mainly include prepayments and deposits for property management and environmental sanitation businesses, accrued salaries and retirement contributions, and consideration payable for the acquisition of Tumen Tourism[54] - Lease liabilities of approximately HKD 43.4 million primarily include lease liabilities for right-of-use assets of non-residential properties leased by the Group from property owners to earn rental income, and finance lease obligations for machinery and equipment in the environmental sanitation segment[54] Liquidity and Financial Resources The Group maintains a prudent financial policy, funding operations and investments with internal resources; the current ratio is approximately 3.8, and the gearing ratio is not applicable due to the absence of bank and other borrowings - The Group maintains a prudent financial policy, strictly controlling its cash and risk management, and funded its operations and investments with internal resources during the period[55] Liquidity Indicators | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 3.8 | 3.8 | | Gearing Ratio | Not Applicable | Not Applicable | Foreign Exchange Risk Most of the Group's transactions are denominated and settled in RMB, and exchange rate fluctuations impact net assets; no derivative financial instruments were used to hedge foreign exchange risk during the period - Most of the Group's subsidiaries operate in China, with the majority of transactions denominated and settled in Renminbi[56] - Exchange rate fluctuations will affect the Group's net assets due to currency translation required in preparing the Group's consolidated accounts. During the period, the Group did not use derivative financial instruments to hedge its foreign exchange risk[56] Capital Commitments As of June 30, 2024, the Group's capital commitments related to equity securities investments amounted to approximately HKD 16.0 million Capital Commitments (Thousand HKD) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Capital commitments for equity securities investments | 16,000 | 16,500 | Significant Acquisitions, Investments and Disposals The Group had no significant investments, acquisitions, or disposals of subsidiaries and associates during the period - The Group had no significant investments, significant acquisitions, or disposals of subsidiaries and associates during the period[57] Pledge of Assets As of June 30, 2024, and December 31, 2023, the Group had no assets pledged - As of June 30, 2024, and December 31, 2023, the Group had no assets pledged[58] Significant Contingent Liabilities As of June 30, 2024, and December 31, 2023, the Group had no significant contingent liabilities - As of June 30, 2024, and December 31, 2023, the Group had no significant contingent liabilities[59] Number of Employees and Remuneration As of June 30, 2024, the Group had approximately 2,100 employees, with staff costs of about HKD 48.4 million, providing benefits such as medical insurance, MPF schemes, and China retirement plans Number of Employees and Remuneration | Indicator | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Total number of employees | 2,100 | 2,200 | | Staff costs (including directors' emoluments) | 48.4 Million HKD | 50.2 Million HKD | - In addition to salaries, the Group also provides other employee benefits to all employees, such as employee medical insurance and Mandatory Provident Fund schemes[60] Interim Dividend (Management Discussion and Analysis) The Board did not recommend the payment of any interim dividend for the period - The Board did not recommend the payment of any interim dividend for the period (corresponding period: nil)[61] Other Information Events After Reporting Period The Company completed its name change in the Cayman Islands and Hong Kong on July 10 and August 1, 2024, respectively, from "Orient Victory Smart Urban Services Holding Limited" to "Gangyu Smart Urban Services Holding Limited" - The Company issued its Certificate of Change of Name in the Cayman Islands on July 10, 2024, and the Registrar of Companies in Hong Kong issued the Certificate of Registration of Alteration of Name of Registered Non-Hong Kong Company on August 1, 2024, confirming the change of the Company's English name from 'Orient Victory Smart Urban Services Holding Limited' to 'Gangyu Smart Urban Services Holding Limited' and its Chinese name from '東勝智慧城市服務控股有限公司' to '港譽智慧城市服務控股有限公司', both effective from July 10, 2024[62] Corporate Governance The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the period, except for a deviation from code provision C.2.1 (separation of roles of Chairman and Chief Executive), but the Board believes power is balanced and management is sound - The Company has complied with all applicable code provisions set out in the Corporate Governance Code in Appendix C1 of the Listing Rules during the period, save for a deviation from code provision C.2.1 of the Corporate Governance Code[63] - Although the responsibilities of the Company's former Chairman and former Chief Executive Officer were vested in Mr. Shi Baodong, all major decisions were made after consulting the Board. The Board believes that the power is adequately balanced, and the existing corporate arrangements maintain the Company's sound management status[63] Model Code for Securities Transactions by Directors The Company adopted the Model Code in Appendix C3 of the Listing Rules for directors' securities transactions, and all directors confirmed compliance during the period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' dealings in the Company's securities[64] - Specific enquiries have been made to all Directors, who have confirmed their compliance with the required standards set out in the Model Code throughout the period. The Company has not identified any non-compliance with the Model Code by its employees[64][65] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of its shares listed on the Stock Exchange during the period - During the period, the Company did not redeem any of its shares listed on the Stock Exchange, and neither the Company nor any of its subsidiaries purchased or sold any such shares[66] Constitutional Documents The Company adopted new amended and restated Articles of Association by special resolution at the AGM on June 28, 2024, to comply with the latest regulatory requirements - The new amended and restated Memorandum and Articles of Association were adopted by special resolution at the Company's Annual General Meeting held on June 28, 2024[67] - The amendments aim to align the Memorandum and Articles of Association with the latest regulatory requirements concerning the expansion of the paperless listing mechanism and mandatory electronic dissemination of corporate communications by listed issuers[67] Audit Committee and Review of Interim Results The Audit Committee, comprising three independent non-executive directors, reviews and oversees financial reporting and internal controls; the interim results for the period were reviewed by the Committee, which found applicable accounting standards adopted and sufficient disclosures made - The Audit Committee currently comprises three independent non-executive Directors and is primarily responsible for reviewing and overseeing the Group's financial reporting process and internal controls[68] - The Group's interim results for the period are unaudited but have been reviewed by the Audit Committee. The Audit Committee is of the opinion that applicable accounting standards have been adopted and the applicable requirements of the Listing Rules have been complied with, and that adequate disclosures have been made in the preparation of the relevant results[68] Publication of Interim Results and Interim Report This interim results announcement is published on the Company's and Stock Exchange's websites, and the interim report will be dispatched to shareholders and published on the websites in due course - This interim results announcement is published on the Company's website (www.gycsfw.com.cn) and the Stock Exchange's website (www.hkexnews.hk)[69](index=69&type=chunk) - The Company's interim report for the period, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[69] Acknowledgement The Board extends its sincere gratitude to shareholders, business partners, and employees - The Board extends its sincere gratitude to shareholders and business partners for their continuous support, and to employees for their dedicated service, contributions, and efforts during the period[70]