中国新城市(01321) - 2024 - 中期业绩

Financial Summary The company achieved substantial growth in revenue, gross profit, and net profit for the period, reversing previous losses, with a slight decrease in total assets but an increase in net assets Financial Highlights | Metric | Six Months Ended June 30, 2024 (RMB thousands) | Six Months Ended June 30, 2023 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,921,774 | 818,559 | 256.9% | | Gross Profit | 1,579,596 | 229,021 | 589.7% | | Profit/(Loss) for the Period | 347,502 | (71,996) | 582.7% | | Profit/(Loss) Attributable to Owners of the Parent | 377,789 | (66,669) | 666.7% | | Earnings/(Loss) Per Share Attributable to Owners of the Parent - Basic and Diluted | RMB 18.79 cents | RMB (3.32) cents | - | | Metric | As at June 30, 2024 (RMB thousands) | As at December 31, 2023 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 13,421,184 | 13,533,007 | -0.8% | | Net Assets | 5,204,361 | 4,840,839 | 7.5% | | Net Asset Value Per Share | RMB 2.59 yuan | RMB 2.41 yuan | 7.5% | Interim Condensed Consolidated Financial Statements This section presents the interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the company's revenue significantly increased by 256.9% to RMB 2.922 billion, gross profit grew by 589.7% to RMB 1.580 billion, and it achieved a profit of RMB 348 million, reversing the loss from the prior year period Interim Condensed Consolidated Statement of Profit or Loss | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 2,921,774 | 818,559 | | Cost of Sales | (1,342,178) | (589,538) | | Gross Profit | 1,579,596 | 229,021 | | Other Income and Gains | 25,876 | 5,782 | | Selling and Distribution Expenses | (66,588) | (77,630) | | Administrative Expenses | (67,991) | (92,725) | | Other Expenses | (5,833) | (4,038) | | Finance Costs | (47,317) | (47,185) | | Share of Profits and Losses of a Joint Venture | (4,485) | (427) | | Fair Value Change of Investment Properties | (535,900) | (29,911) | | Profit/(Loss) Before Tax | 877,358 | (17,113) | | Income Tax Expense | (529,856) | (54,883) | | Profit/(Loss) for the Period | 347,502 | (71,996) | | Profit/(Loss) Attributable to Owners of the Parent | 377,789 | (66,669) | | Profit/(Loss) Attributable to Non-controlling Interests | (30,287) | (5,327) | | Basic and Diluted Earnings/(Loss) Per Share Attributable to Owners of the Parent | RMB 18.79 cents | RMB (3.32) cents | Interim Condensed Consolidated Statement of Comprehensive Income The company's total comprehensive income for the period was RMB 363 million, a significant improvement from the RMB 20.31 million loss in the prior year, primarily due to a substantial increase in profit for the period, despite some impact from exchange differences and fair value changes in equity investments Interim Condensed Consolidated Statement of Comprehensive Income | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 347,502 | (71,996) | | Exchange Differences Arising from Translation of Financial Statements of Overseas Subsidiaries | 10,812 | 45,784 | | Exchange Differences Arising from Translation of Overseas Operations | 5,690 | – | | Equity Investments Designated at Fair Value Through Other Comprehensive Income: Fair Value Change | (1,982) | 7,871 | | Income Tax Effect | 496 | (1,968) | | Other Comprehensive Income/(Loss) for the Period, Net of Tax | 15,016 | 51,687 | | Total Comprehensive Income/(Loss) for the Period | 362,518 | (20,309) | | Attributable to Owners of the Parent | 392,805 | (14,982) | | Attributable to Non-controlling Interests | (30,287) | (5,327) | Interim Condensed Consolidated Statement of Financial Position As at June 30, 2024, the company's total assets slightly decreased by 0.8% to RMB 13.421 billion, while net assets increased by 7.5% to RMB 5.204 billion, with net current assets turning positive from a negative value at the end of last year, indicating improved liquidity Interim Condensed Consolidated Statement of Financial Position | Metric | As at June 30, 2024 (RMB thousands) | As at December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | ASSETS | | | | Total Non-current Assets | 8,402,320 | 9,047,360 | | Total Current Assets | 5,018,864 | 4,485,647 | | Total Assets | 13,421,184 | 13,533,007 | | LIABILITIES | | | | Total Current Liabilities | 4,864,982 | 5,332,192 | | Total Non-current Liabilities | 3,351,841 | 3,359,976 | | EQUITY | | | | Equity Attributable to Owners of the Parent | 5,139,691 | 4,746,886 | | Non-controlling Interests | 64,670 | 93,953 | | Total Equity | 5,204,361 | 4,840,839 | | Net Current Assets | 153,882 | (846,545) | Notes to the Interim Condensed Consolidated Financial Information This section provides detailed notes to the interim condensed consolidated financial information, covering company details, accounting policies, segment information, and specific financial line items Company Information China New City Commercial Development Limited, an investment holding company incorporated in the Cayman Islands, primarily engages in commercial property development, leasing, and hotel operations, and is a member of ZhongAn Group Limited, with All Good Management Limited as its ultimate holding company - The Company was incorporated in the Cayman Islands as an exempted company with limited liability on July 2, 2013[6] - The Group is principally engaged in commercial property development, property leasing, and hotel operations[6] - The ultimate holding company of the Company is All Good Management Limited[6] Basis of Preparation and Accounting Policies The interim condensed consolidated financial information is prepared in accordance with IAS 34 and should be read in conjunction with the 2023 annual consolidated financial statements, with no significant financial impact from new or revised IFRSs adopted for the period Basis of Preparation - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting issued by the International Accounting Standards Board[7] - The financial statements are presented in RMB and adjusted to the nearest thousand[7] Changes in Accounting Policies and Disclosures - The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group’s annual financial information for the year ended December 31, 2023, except for the adoption of new and revised International Financial Reporting Standards for the current period[8] - The new and revised standards have no significant financial impact on these financial statements[8] Operating Segment Information The Group operates four reportable segments: commercial property development, property leasing, hotel operations, and other services; in the first half of 2024, commercial property development contributed the most to revenue and results, while property leasing and hotel operations segments reported losses, with revenue primarily from Mainland China - The Group has four reportable operating segments: commercial property development, property leasing, hotel operations, and "others" (including project management and other businesses)[9] Segment Revenue and Results for H1 2024 | Segment | Sales to External Customers (RMB thousands) | Segment Results (RMB thousands) | | :--- | :--- | :--- | | Commercial Property Development | 2,723,530 | 1,403,421 | | Property Leasing | 48,646 | (426,319) | | Hotel Operations | 112,651 | (30,498) | | Other Services | 36,947 | (26,026) | | Total | 2,921,774 | 920,578 | Geographical Revenue for H1 2024 | Region | Revenue (RMB thousands) | | :--- | :--- | | Mainland China | 2,921,774 | | Others | – | | Total | 2,921,774 | - No sales to a single customer or group of customers under common control accounted for 10% or more of the Group's revenue for the six months ended June 30, 2024 and 2023[17] Revenue, Other Income and Gains Total revenue for the period reached RMB 2.922 billion, primarily driven by property sales, with significant contributions from International Office Center (IOC) A2 and Mingcai City; other income and gains surged by 347.5% year-on-year, mainly due to gains from disposal of right-of-use assets, exchange gains, compensation for lease termination, and disposal of subsidiaries Revenue Sources Analysis | Revenue Type | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Revenue from Contracts with Customers | 2,873,128 | 757,977 | | Gross Rental Income from Operating Leases of Investment Properties | 48,646 | 60,582 | | Total | 2,921,774 | 818,559 | Revenue from Contracts with Customers by Type of Goods or Services (2024) | Type of Goods or Services | Commercial Property Development (RMB thousands) | Hotel Operations (RMB thousands) | Other Services (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Property Sales | 2,723,530 | – | – | 2,723,530 | | Hotel Operations Revenue | – | 112,651 | – | 112,651 | | Other Services | – | – | 36,947 | 36,947 | | Total | 2,723,530 | 112,651 | 36,947 | 2,873,128 | Other Income and Gains | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Subsidy Income | 80 | 477 | | Interest Income | 4,097 | 3,411 | | Other Income | 4,137 | 1,658 | | Gain on Disposal of Property and Equipment Items | 576 | – | | Compensation for Lease Termination | 2,876 | – | | Gain on Disposal of Subsidiaries | 2,863 | – | | Gain on Disposal of Right-of-Use Asset Items | 5,918 | – | | Exchange Gain | 5,329 | 236 | | Total | 25,876 | 5,782 | Profit/(Loss) Before Tax Profit before tax for the period was RMB 877 million, a significant improvement from the loss in the prior year, with major costs including cost of properties sold, depreciation of property and equipment, and staff costs, while fair value changes in investment properties resulted in a substantial loss Components of Profit/(Loss) Before Tax | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Cost of Properties Sold | 1,217,435 | 429,479 | | Depreciation of Property and Equipment | 62,147 | 47,104 | | Depreciation of Right-of-Use Assets | 6,182 | 15,866 | | Staff Costs | 49,995 | 71,910 | | Fair Value Change of Investment Properties | 535,900 | 29,911 | | Impairment of Investment in a Joint Venture | 5,626 | – | | Exchange Gain | (5,329) | 236 | | Gain on Disposal of Right-of-Use Asset Items | (5,918) | – | | Gain on Disposal of Subsidiaries | (2,863) | – | | Compensation for Lease Termination | (2,876) | – | | (Gain)/Loss on Disposal of Property and Equipment Items | (576) | 197 | Income Tax Expense Total income tax expense for the period was RMB 530 million, a substantial increase from the prior year, primarily due to significant growth in PRC income tax and land appreciation tax, reflecting the company's improved profitability - PRC income tax has been provided at the applicable income tax rate of 25% on the assessable profits of the Group’s subsidiaries in Mainland China[22] - PRC Land Appreciation Tax is levied at progressive rates ranging from 30% to 60% on the appreciation of land value[22] Components of Income Tax Expense | Item | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | PRC Income Tax for the Period | 295,642 | 607 | | PRC Land Appreciation Tax for the Period | 428,946 | 62,134 | | Deferred Tax | (194,732) | (7,858) | | Total Tax Expense for the Period | 529,856 | 54,883 | Earnings/(Loss) Per Share Attributable to Owners of the Parent Basic earnings per share attributable to owners of the parent for the period was RMB 18.79 cents, a significant improvement from the RMB 3.32 cents loss per share in the prior year, primarily due to the turnaround to profit for the period Earnings/(Loss) Per Share Calculation | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Owners of the Parent | 377,789 | (66,669) | | Weighted Average Number of Ordinary Shares in Issue for the Period (shares) | 2,010,768,000 | 2,010,768,000 | | Basic Earnings/(Loss) Per Share | RMB 18.79 cents | RMB (3.32) cents | - The Group had no potentially dilutive ordinary shares in issue for the period ended June 30, 2024[24] Dividends The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024, consistent with the prior year period - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024[25] Trade and Other Receivables and Payables As at June 30, 2024, trade receivables totaled RMB 81.425 million and trade payables amounted to RMB 2.085 billion, with the majority of trade payables due within six months Aging Analysis of Trade Receivables | Aging | As at June 30, 2024 (RMB thousands) | As at December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 77,681 | 67,535 | | Over 6 months but within 1 year | 3,744 | 2,478 | | Total | 81,425 | 70,013 | Aging Analysis of Trade Payables | Aging | As at June 30, 2024 (RMB thousands) | As at December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 1,931,508 | 482,634 | | Over 6 months but within 1 year | 68,027 | 75,001 | | Over 1 year | 85,495 | 17,383 | | Total | 2,085,030 | 575,018 | Commitments As at June 30, 2024, the Group's contracted but unprovided commitments for property development expenditures were RMB 290 million, a significant decrease from the end of last year; additionally, the company has a payment commitment of approximately RMB 110 million arising from a settlement agreement for the acquisition of Xin Nong Du equity Property Development Expenditure Commitments | Item | As at June 30, 2024 (RMB thousands) | As at December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Properties Under Development | 290,457 | 1,497,185 | - The Company entered into a settlement deed with the vendor to pay RMB 210,000,000 to the vendor for the acquisition of a 22.65% equity interest in Zhejiang Xin Nong Du Holdings Group Co, Ltd by June 30, 2025[28] - As at June 30, 2024, the Company had paid RMB 100,000,000 for the aforementioned settlement deed and had a payment commitment of approximately RMB 110,000,000[28] Contingent Liabilities As at June 30, 2024, the Group's contingent liabilities primarily consisted of bank guarantees for mortgage loans granted to property purchasers, amounting to approximately RMB 374 million; the directors believe that the net realizable value of the related properties is sufficient to cover potential defaults, thus no provision has been made - The Group provides guarantees for mortgage loans granted by certain banks to purchasers of the Group’s properties[29] - The Group’s guarantees commence from the date of grant of the relevant mortgage loans and cease upon the purchasers entering into mortgage agreements[29] Bank Guarantee Amount | Item | As at June 30, 2024 (RMB thousands) | As at December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Mortgage Loans Granted to Property Purchasers of the Group | 374,392 | 363,960 | Management Discussion and Analysis Management discusses the group's business review, strategic outlook, project progress, sales performance, operational segments, and financial position for the period Overview China New City Group is a large enterprise integrating commercial development and operations, hotel management, film and television, education, and cultural tourism, possessing leading commercial real estate comprehensive operational capabilities in the Yangtze River Delta region and having received multiple industry awards - The Group is a large enterprise integrating commercial development and operations, hotel management, film and television, education, and cultural tourism[31] - The Group has developed into an excellent integrated commercial property operator in the Yangtze River Delta region[31] - It has been successively rated as one of the "Top 10 Commercial Property Operators in China" and "Top 100 Commercial Property Enterprises in China"[31] Business Review The Group focuses on four core business segments: industrial property development, commercial operations, hotel management, and industrial investment, while diversifying into emerging industries to create strong synergies; for the period, consolidated revenue reached RMB 2.922 billion, a 256.9% year-on-year increase, with gross profit of RMB 1.58 billion, a 589.7% year-on-year increase, and a gross profit margin of 54.1% - The Group focuses on industrial property development, commercial operations, hotel management, and industrial investment as its four core business segments, while also diversifying into other emerging industries such as industrial services, rural cultural tourism, smart agricultural wholesale, film and television education, and digital health[32] Key Financial Performance for the Period | Metric | Amount (RMB) | Year-on-year growth (%) | | :--- | :--- | :--- | | Consolidated Revenue | 2.922 billion yuan | 256.9% | | Gross Profit | 1.58 billion yuan | 589.7% | | Gross Profit Margin | 54.1% | Increased by 26.1% | | Total Equity (June 30, 2024) | 5.177 billion yuan | - | | Cash Book Value (June 30, 2024) | 224 million yuan | - | Policies and Outlook China's real estate policy bottom has been established, with the central government committed to supporting reasonable financing needs of property developers, anticipating a more relaxed financing environment for private and mixed-ownership developers; the Group will maintain prudent operations, financial stability, enhance business innovation, advance urban renewal projects, and explore new development models in the existing market - China's 2024 government report clearly defined three major policy guidelines for real estate: resolving risks, maintaining bottom lines, and stabilizing the market, signaling that the policy bottom has been established[33] - The central government reiterated its commitment to meeting the reasonable financing needs of property developers, indicating a more relaxed financing environment for private and mixed-ownership property developers[33] - The Group will continue to adhere to a prudent operating philosophy, maintain financial stability, effectively integrate group resources, and intensify business innovation efforts[33] - The Group will steadfastly advance urban renewal projects and actively explore new development models in the existing market segment[33] Progress of Major Projects During the period, sales for Mingcai City and International Office Center (IOC) A2 in Hangzhou met expectations, both completed in 2023; Longying Huijinzuo (Binhe Yin) is expected to be completed in 2024 with good pre-sale performance - The Mingcai City project was completed in 2023, with sales meeting expectations for the current period[34] - The International Office Center (IOC) A2 plot was completed in 2023, with sales meeting expectations for the current period[35] - The Longying Huijinzuo (Binhe Yin) project is expected to be completed in 2024, with pre-sales meeting expectations for the current period[36] Sales Review Recognized property sales for the period amounted to approximately RMB 2.724 billion, a significant year-on-year increase, primarily contributed by International Office Center (IOC) A2 and Mingcai City; contracted sales area and revenue decreased year-on-year but maintained a certain scale Recognized Sales Amount and Area | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Recognized Sales Amount | Approximately RMB 2,723,530,000 | Approximately RMB 565,273,000 | | Recognized Gross Floor Area Sold | Approximately 73,493 square meters | Approximately 36,584 square meters | Recognized Sales Projects for H1 2024 | Project | Region | Recognized Amount (RMB millions) | Recognized Sales Area (square meters) | | :--- | :--- | :--- | :--- | | International Office Center (IOC) A2 | Hangzhou | 2,505.7 | 56,862 | | Mingcai City | Hangzhou | 148.7 | 10,289 | | Yinlong Bay | Hangzhou | 33.5 | 2,947 | | Cixi New City | Ningbo | 21.4 | 3,228 | | Xixi Manhattan | Hangzhou | 10.3 | 166 | | No. 8 Commercial Plot | Hangzhou | 3.2 | – | | Yuyao ZhongAn Times Square Phase II | Yuyao | 0.8 | – | | Total | | 2,723.5 | 73,493 | Contracted Sales for H1 2024 | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Contracted Sales Area | Approximately 29,997 square meters | Approximately 55,687 square meters | | Contracted Sales Revenue | Approximately RMB 663,350,000 | Approximately RMB 813,700,000 | Hotel Management Hotel management revenue for the period was approximately RMB 113 million, a year-on-year decrease of approximately 9.46%, primarily due to a weakening market leading to a decline in average hotel occupancy from 67% to 62% - The Group manages four self-owned hotels[40] Hotel Management Revenue and Occupancy Rate | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | Approximately RMB 112,651,000 | Approximately RMB 124,419,000 | | Occupancy Rate | Approximately 62% | Approximately 67% | Commercial Operations Total commercial operations revenue for the period was approximately RMB 48.646 million, a year-on-year decrease of approximately 19.7%, mainly due to a decline in the average rent per square meter for leased properties, despite an increase in average occupancy rate from 78% to 84% - Commercial operations revenue primarily derives from rental income from Hang Lung Plaza, International Office Center (IOC), Yiwu ZhongAn Plaza, and Yuyao ZhongAn Plaza[41] Commercial Operations Revenue and Occupancy Rate | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Total Revenue | Approximately RMB 48,646,000 | Approximately RMB 60,582,000 | | Average Occupancy Rate | Approximately 84% | Approximately 78% | - The decrease in related revenue was primarily due to a decline in the average rent per square meter of leased properties compared to the same period in 2023[41] Land Bank As at June 30, 2024, the Group's total gross floor area of land bank held for development and/or sale was approximately 3.7626 million square meters, a slight decrease from the end of 2023 Total Gross Floor Area of Land Bank | Date | Total Gross Floor Area (square meters) | | :--- | :--- | | June 30, 2024 | 3,762,642 | | December 31, 2023 | 3,836,135 | Financial Performance Analysis During the period, the company's revenue, gross profit, and net profit all achieved substantial growth, primarily driven by contributions from high-margin property sales; selling and administrative expenses were effectively controlled, but other expenses increased due to impairment losses from a joint venture Revenue - The Group's consolidated revenue for the period was approximately RMB 2,921,774,000, an increase of approximately RMB 2,103,215,000 or 256.9% compared to the same period in 2023[43] - This was primarily due to an increase of approximately RMB 2,158,257,000 in property sales business compared to the same period in 2023, with the International Office Center (IOC) A2 and Mingcai City projects contributing approximately RMB 2,505,700,000 and RMB 148,700,000 in property sales, respectively[43] Gross Profit - The Group's consolidated gross profit was approximately RMB 1,579,596,000, an increase of approximately RMB 1,350,575,000 or 589.7% compared to the same period in 2023[44] - The consolidated gross profit margin was approximately 54.1%, an increase of approximately 26.1% compared to the same period in 2023[44] - The increase in consolidated gross profit was primarily due to the higher gross profit margin from property sales during the period, which significantly boosted the Group's revenue[44] Other Income and Gains - Other income and gains amounted to approximately RMB 25,876,000, an increase of approximately RMB 20,094,000 or 347.5% compared to the same period in 2023[45] - The increase was mainly due to gains from disposal of right-of-use asset items, exchange gains, compensation for lease termination, and gains from disposal of subsidiaries during the period[45] Selling and Distribution Expenses - Selling and distribution expenses were approximately RMB 66,588,000, a decrease of approximately RMB 11,042,000 or 14.2% compared to the same period in 2023[46] - This was attributable to the Group's effective implementation of cost management strategies and the resulting improvement in cost control efficiency[46] Administrative Expenses - Administrative expenses were approximately RMB 67,991,000, a decrease of approximately RMB 24,734,000 or 26.7% compared to the same period in 2023[47] - This was attributable to the Group's effective implementation of cost management strategies and the resulting improvement in cost control efficiency[47] Other Expenses - Other expenses were approximately RMB 5,833,000, an increase of approximately RMB 1,795,000 or 44.5% compared to the same period in 2023[48] - This was primarily due to an impairment loss of approximately RMB 5,626,000 from one of the Group's joint ventures[48] Finance Costs - The Group's finance costs were approximately RMB 47,317,000, a slight increase of approximately RMB 132,000 or 0.3% compared to the same period in 2023[49] Profit for the Period - The Group's profit attributable to owners was approximately RMB 347,502,000[50] - This profit for the period was primarily due to the recognition of revenue from commercial property projects in 2024, with related property sales generating a profit before tax of approximately RMB 1,430,238,000[50] Capital Expenditure - The Group incurred capital expenditure on property and equipment of approximately RMB 24,835,000 (six months ended June 30, 2023: RMB 21,871,000)[51] Significant Investments During the period, the Group did not hold any significant investments - During the period, the Group did not hold any significant investments[52] Capital Structure As at June 30, 2024, the Group's total cash and cash equivalents amounted to approximately RMB 224 million, with the current ratio improving to 1.03; the gearing ratio was 52%, an increase from the end of last year Key Capital Structure Metrics | Metric | As at June 30, 2024 | As at December 31, 2023 | | :--- | :--- | :--- | | Total Cash and Cash Equivalents and Restricted Cash | Approximately RMB 223,899,000 | Approximately RMB 384,164,000 | | Current Ratio | 1.03 | 0.84 | | Bank and Other Borrowings Repayable Within One Year | Approximately RMB 575,860,000 | Approximately RMB 584,860,000 | | Bank and Other Borrowings Repayable After One Year | Approximately RMB 2,706,610,000 | Approximately RMB 2,534,180,000 | | Gearing Ratio | 52% | 46% | Pledge of Assets As at June 30, 2024, approximately RMB 3.282 billion of the Group's bank and other borrowings were secured by pledges of property and equipment, investment properties, properties under development, and completed properties held for sale - As at June 30, 2024, the Group’s bank and other borrowings of approximately RMB 3,282,470,000 (as at December 31, 2023: approximately RMB 3,119,040,000) were secured by pledges over the following assets of the Group[54] Pledged Asset Categories | Asset Category | As at June 30, 2024 (RMB thousands) | As at December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Property and Equipment | 1,057,315 | 1,081,614 | | Investment Properties | 2,586,539 | 2,993,909 | | Properties Under Development | – | 1,551,833 | | Completed Properties Held for Sale | 2,012,074 | – | | Total | 5,655,928 | 5,627,356 | Treasury Policy The Group primarily operates in China, with revenue, costs, and borrowings denominated in RMB, resulting in minimal exchange rate fluctuation risk; the company adopts a prudent treasury policy, with cash mainly held as short-term RMB deposits, and no hedging activities were undertaken during the period - The Group is exposed to minimal exchange rate fluctuation risk as it primarily operates in China, with revenue, operating costs, and borrowings mainly denominated in RMB[55] - The Group adopts a prudent treasury policy in cash and financial management, with cash typically held as short-term deposits, mostly denominated in RMB[55] - The Group did not use any financial instruments for hedging purposes during the period[55] Guarantees and Contingent Liabilities As at June 30, 2024, the Group's contingent liabilities amounted to approximately RMB 374 million, primarily consisting of bank guarantees for mortgage loans granted to property purchasers Contingent Liabilities Amount | Date | Amount (RMB thousands) | | :--- | :--- | | June 30, 2024 | 374,392 | | December 31, 2023 | 363,960 | - Contingent liabilities primarily consist of guarantees provided by the Group for mortgage loans granted by certain banks to purchasers of the Group’s properties[56] Capital Commitments As at June 30, 2024, the Group's capital commitments for property development expenditures were approximately RMB 290 million, a significant decrease from the end of last year; additionally, a payment commitment of approximately RMB 110 million arose from a settlement deed Capital Commitments for Property Development Expenditures | Date | Amount (RMB thousands) | | :--- | :--- | | June 30, 2024 | 290,457 | | December 31, 2023 | 1,497,185 | - The Group has a payment commitment of approximately RMB 110,000,000 arising from a settlement deed, of which RMB 100,000,000 was paid before June 30, 2024[57] Human Resources and Remuneration Policy As at June 30, 2024, the Group employed 1,287 people; the remuneration policy considers market conditions, industry status, inflation, corporate performance, and employee performance, and provides continuous education and training programs Number of Employees | Date | Number of Employees (people) | | :--- | :--- | | June 30, 2024 | 1,287 | | December 31, 2023 | 1,256 | - Employee remuneration policy is determined by referencing local market salary conditions, combined with overall industry salary status, inflation levels, corporate operating efficiency, and employee performance[58] - The Group provides continuous education and training programs to enhance employees' skills and knowledge[58] Strategies Management has formulated strategies to address challenges, including developing effective marketing strategies, enhancing product and service quality, strengthening cost and risk management, advancing urban renewal projects, identifying profitable acquisition opportunities, and focusing on investor relations management to maximize shareholder value - Develop effective marketing strategies and plans and enhance product and service quality to strengthen the brand[59] - Intensify efforts in formulating new policies, guidelines, systems, and procedures to effectively facilitate cost management, risk management, internal control, and sustainable environmental management[59] - Committed to identifying profitable acquisition projects with future development potential to improve asset returns[59] - Focus on investor relations management by communicating business philosophy, current operations, and future development strategies to stakeholders through press conferences, roadshows, media tours, and one-on-one meetings[59] Relationships with Employees, Customers and Suppliers The Group considers talent crucial for success and has adopted a share option scheme to incentivize employees; it communicates with customers through professional sales teams to grasp market trends and collaborates with suppliers to ensure environmental and safety standards for sustainable business development - The Group believes that talent is a key factor for success and competitive advantage in the market and has adopted a share option scheme to incentivize and reward eligible participants[60] - Professional sales teams maintain continuous communication with customers and potential customers to identify and meet their needs[60] - Grasping market trends is crucial for the Group to timely adjust its operating strategies to adapt to market demands[60] Events After Reporting Period This section outlines significant events occurring after the reporting period, including an off-market share repurchase related to a settlement agreement Off-market Share Repurchase The Company and Hangzhou Oriental Culture Park Tourism Group Co, Ltd reached a settlement regarding the acquisition of a 22.65% equity interest in Zhejiang Xin Nong Du Holdings Group Co, Ltd; the consideration shares will be returned to the Company by their holders for cancellation, and an off-market share repurchase will be conducted in accordance with the Hong Kong Share Buy-backs Code - ZhongAn Shenglong, the Company, and Hangzhou Oriental entered into a settlement deed after mediation by the Zhejiang Provincial Higher People's Court to finally and fully resolve all disputes between the parties regarding ZhongAn Shenglong's acquisition of a 22.65% equity interest in Zhejiang Xin Nong Du Holdings Group Co, Ltd for a consideration of RMB 352,994,400[61] - Pursuant to the settlement deed, the consideration shares will be returned by their holders to the Company for cancellation[61] - To cancel the consideration shares, an off-market share repurchase of the consideration shares will be conducted in accordance with the Hong Kong Share Buy-backs Code, which is the necessary procedure to effect the cancellation of the consideration shares[62] - As at the date of this announcement, no conditions for the share repurchase have been fulfilled[62] Other Information This section provides additional information on environmental policies, interim dividends, audit committee review, securities transactions, corporate governance, and report publication Environmental Policies and Performance The Group is committed to environmental protection, ensuring compliance with government environmental standards, closely monitoring construction processes at all project stages, collaborating with suppliers and contractors to prevent pollution and reduce waste, and encouraging employees to enhance environmental awareness - The Group is committed to protecting the environment in the areas where it operates and ensuring consistent compliance with environmental standards set by the government[62] - Construction processes are closely monitored at different stages of projects to ensure compliance with environmental and safety laws and regulations[62] - By collaborating with suppliers and contractors, the Group ensures they are aware of the importance of environmental protection, preventing pollution and reducing waste[62] Interim Dividend The Board of Directors does not recommend the payment of any interim dividend for the period ended June 30, 2024, consistent with the prior year period - During the period, the Board of Directors does not recommend the payment of any interim dividend[63] Audit Committee The Company's Audit Committee has reviewed the Group's unaudited interim consolidated results for the period and discussed accounting principles, internal controls, and financial reporting matters with management; external auditor Ernst & Young has reviewed the interim financial information - The Company’s Audit Committee (comprising all independent non-executive Directors) has reviewed the Group’s unaudited interim consolidated results for the period[63] - External auditor Ernst & Young has reviewed the Group’s unaudited interim consolidated results for the period in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[63] Purchase, Sale or Redemption of the Company's Listed Securities During the period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities on the Stock Exchange - During the period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company’s listed securities on the Stock Exchange[64] Standard Code for Securities Transactions by Directors The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than those in Appendix C3 of the Listing Rules; all directors have confirmed compliance with this code during the period and up to the announcement date - The Company has adopted a code of conduct for directors’ securities transactions, the terms of which are no less exacting than those set out in Appendix C3 to the Listing Rules[64] - All Directors have confirmed that they have complied with the required standards set out in the Standard Code during the period and up to the date of this announcement[64] Compliance with Corporate Governance Code The Board has adopted the applicable principles and code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules and confirms that the Company has complied with the code during the period and up to the announcement date - The Board has adopted the applicable principles and code provisions set out in the Corporate Governance Code in Appendix C1 to the Listing Rules[64] - The Board is confident that the Company has complied with the code provisions set out in the Corporate Governance Code during the period and up to the date of this announcement[64] Publication of Interim Results Announcement and Interim Report on the Company's and HKEX Websites This announcement has been published on the Company's and HKEX websites; the interim report for the period, containing relevant information required by the Listing Rules, will be published on these websites and dispatched to shareholders in due course - This announcement is published on the Company’s website (www.chinanewcity.com.cn) and the Stock Exchange’s website (www.hkexnews.hk)[65](index=65&type=chunk) - The Company’s interim report for the period, containing relevant information required by the Listing Rules, will be published on the aforementioned websites and dispatched to the Company’s shareholders in due course[65] By Order of the Board This announcement was issued by Mr. Shi Zhong An, Chairman of the Board, on August 23, 2024; the Board members include Executive Directors Mr. Shi Nan Lu and Mr. Jin Jian Rong, Non-executive Director Mr. Shi Zhong An, and Independent Non-executive Directors Mr. Xu Cheng Fa, Mr. Lin You Yao, and Mr. Yuan Yuan - This announcement is issued by Mr. Shi Zhong An, Chairman of the Board, in the People’s Republic of China, on August 23, 2024[66] - The Board of Directors of the Company comprises Executive Directors Mr. Shi Nan Lu and Mr. Jin Jian Rong; Non-executive Director Mr. Shi Zhong An; and Independent Non-executive Directors Mr. Xu Cheng Fa, Mr. Lin You Yao, and Mr. Yuan Yuan[66]