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兴业物联(09916) - 2024 - 中期财报
XINGYE WULIANXINGYE WULIAN(HK:09916)2024-09-13 10:08

Corporate Information The company's board comprises executive, non-executive, and independent non-executive directors, supported by audit, remuneration, and nomination committees to ensure sound corporate governance Board of Directors and Committees The board includes one executive, three non-executive, and three independent non-executive directors, with specific chairs for audit, remuneration, and nomination committees - Board members include 1 executive director (Qiu Ming), 3 non-executive directors (Zhang Huiqi, Wang Jinhu, Liu Zhenqiang), and 3 independent non-executive directors (Xu Chun, Feng Zhidong, Zhou Sheng)3 - The Audit Committee is chaired by Feng Zhidong, the Remuneration Committee by Zhou Sheng, and the Nomination Committee by Qiu Ming3 Key Corporate Details The company has appointed authorized representatives and a company secretary, with audit services provided by Zhong Shen Zhong Huan (Hong Kong) CPA Limited, and China Construction Bank as its principal banker - Authorized representatives and company secretaries are Zhang Shize and Qiu Ming3 - The auditor is Zhong Shen Zhong Huan (Hong Kong) CPA Limited3 - The principal banker is China Construction Bank (Hanghai East Road Branch)4 - The company's stock code is 99165 Management Discussion and Analysis The company, a prominent property management service provider in Henan, significantly expanded its managed area and ventured into property development by acquiring Zheng Zhi Yue for the Zhengshang Center project Business Overview Established in 1999, the company is a leading property management service provider in Henan, expanding its managed GFA to 25.5 million sqm and entering property development with the Zhengshang Center project - Established in 1999, the company is a well-known property management service provider in Henan Province, focusing on property management and value-added services including security, cleaning, landscaping, parking management, maintenance, and customer service6 - The gross floor area (GFA) of properties under management significantly expanded from approximately 8.5 million sqm as of December 31, 2023, to approximately 25.5 million sqm as of June 30, 20246 - As of June 30, 2024, the total GFA of contracted property portfolio was approximately 37.0 million sqm7 - During the period, the company signed 28 new property management service contracts with a total contract value of approximately RMB 18.7 million7 - In 2023, the company acquired Henan Zheng Zhi Yue Real Estate Co., Ltd. to develop property development business, currently holding the Zhengshang Center project in Zhengzhou, expected to be completed by the end of 202589 Financial Review Total revenue increased by 4.7% to RMB 167.2 million in H1, driven by property management services, while gross profit margin slightly declined, but profit attributable to equity holders grew by 15.9% Revenue Overview (RMB thousand) | Indicator | H1 2024 | H1 2023 | YoY Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 167,201 | 159,733 | +7,468 | +4.7% | | Property Management and Value-Added Services | 148,201 | 136,197 | +12,004 | +8.8% | | Property Engineering Services | 2,668 | 6,987 | -4,319 | -61.8% | | Others | 16,332 | 16,549 | -217 | -1.3% | - Revenue growth in property management and value-added services was primarily due to the continuous expansion of the property portfolio under management1417 - The decrease in property engineering services revenue was mainly affected by the overall downturn in China's real estate market, leading to a reduction in new project numbers and scale1518 Profit Metrics (RMB thousand) | Indicator | H1 2024 | H1 2023 | YoY Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Cost of Services | 117,213 | 109,224 | +7,989 | +7.3% | | Gross Profit | 49,988 | 50,509 | -521 | -1.0% | | Gross Profit Margin | 29.9% | 31.6% | -1.7% | - | | Profit Attributable to Equity Holders of the Company | 24,084 | 20,766 | +3,318 | +15.9% | - The slight decrease in gross profit margin was mainly due to lower contract prices for projects undertaken during the period compared to the same period last year20 - Administrative expenses decreased by 10.3% to RMB 15.7 million, primarily due to reduced professional fees21 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 202421 Financial Position As of June 30, 2024, total trade receivables significantly decreased due to active collection efforts, while the current ratio remained healthy with no interest-bearing borrowings, and capital structure is equity-dominated Key Balance Sheet Items (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net Property, Plant and Equipment | 188,113 | 188,536 | -423 | -0.2% | | Properties Under Development | 130,803 | 130,738 | +65 | +0.05% | | Gross Trade Receivables | 69,800 | 102,200 | -32,400 | -31.7% | | Net Trade Receivables | 67,674 | 99,675 | -32,001 | -32.1% | | Trade Payables | 34,952 | 54,959 | -20,007 | -36.4% | | Other Payables and Accruals | 72,949 | 96,079 | -23,130 | -24.1% | | Contract Liabilities | 78,840 | 85,423 | -6,583 | -7.7% | | Cash and Cash Equivalents | 217,372 | 210,684 | +6,688 | +3.2% | | Current Assets | 481,903 | 507,118 | -25,215 | -5.0% | | Current Ratio | 2.6 times | 2.1 times | +0.5 times | - | - The decrease in gross trade receivables and net trade receivables (after deducting loss allowance) was mainly due to the company's proactive implementation of trade receivables recovery and management measures, leading to increased repayments22 - Gross trade receivables from related parties decreased by 51.8% to RMB 35.7 million, reflecting the company's efforts in recovering related party balances23 - Trade payables decreased by 36.4%, primarily due to timely settlement during the period2427 - The company has no outstanding borrowings or unutilized bank facilities, with a zero debt-to-asset ratio, maintaining a sound financial position30 Contingent Liabilities As of June 30, 2024, the Group had no significant contingent liabilities - As of June 30, 2024, the Group had no significant contingent liabilities3135 Capital Commitments As of June 30, 2024, the Group had capital expenditure commitments of RMB 280.2 million, primarily related to properties under development - As of June 30, 2024, the Group had capital expenditure commitments of RMB 280.2 million related to properties under development3235 Foreign Exchange Risks Operating primarily in China with most transactions settled in RMB, the Group faces insignificant foreign exchange risk and currently does not hedge, except for minor HKD-denominated bank balances - The Group primarily operates in China, with most transactions settled in RMB, thus not facing significant foreign exchange risk3336 - Except for certain HKD-denominated bank balances held by the Company, the Group has not entered into contracts to hedge its foreign exchange risk3336 Employment and Remuneration Policy As of June 30, 2024, the company had 726 employees, with remuneration based on qualifications, position, seniority, and performance, participating in various social security schemes, and total employee-related costs were RMB 40.2 million - As of June 30, 2024, the Group had 726 employees37 - Employee remuneration is determined based on qualifications, position, seniority, and performance, with participation in pension, medical, maternity, work injury, and unemployment benefit schemes37 - Total employee-related costs (including directors' emoluments) for the period were approximately RMB 40.2 million37 Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures During the period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures37 Significant Investments As of June 30, 2024, the Group had no significant investments accounting for more than 5% of its total assets - As of June 30, 2024, the Group had no significant investments accounting for more than 5% of its total assets37 Future Plans for Material Investments or Capital Assets As of June 30, 2024, the company had no specific plans for material investments or capital assets, and any future plans will be announced in due course - As of June 30, 2024, there were no specific plans for material investments or capital assets3840 - Should the Group engage in any material investment or capital asset plans, the Company will make timely announcements and comply with relevant Listing Rules3840 Future Outlook The company aims to enhance its position in property management through diversification, M&A, service empowerment, digitalization, and community value-added services, striving to become an "all-scenario service expert" and deliver high-quality development to shareholders - The company will continue to enhance its position in the property management service sector, with strategies including undertaking more property management projects, deepening non-residential business, selectively seeking M&A opportunities, enhancing professional coverage, expanding service empowerment, continuously upgrading smart and digital capabilities, and focusing on developing community value-added services39 - The company is committed to high-quality development, achieving customer-centric service transformation, and striving for stability and predictability in service quality39 - The company will launch three major service systems: "Standard+, Community Operations+, Smart Technology+", to create a high-quality, standardized, and warm property service experience, building a leading brand in high-quality property management39 - The company aims to become an "all-scenario service expert," building a "grand property" management system that integrates urban public spaces and resources, rewarding shareholders with excellent performance41 Other Information This section details directors' and substantial shareholders' interests, capital raising activities, corporate governance, and other relevant disclosures Directors' and Chief Executive's Interests and Short Positions in Securities As of June 30, 2024, non-executive director Ms. Zhang Huiqi indirectly held 56.59% of the company's shares through a family trust and had 100% equity in related companies Directors' Long Positions in Shares | Director Name | Capacity | Number of Shares Held | Approximate Percentage of Issued Share Capital (%) | | :--- | :--- | :--- | :--- | | Ms. Zhang Huiqi | Interest in controlled corporation (Note) | 226,350,000 | 56.59 | - Ms. Zhang Huiqi indirectly controls 226,350,000 shares held by Foison Amber Development Limited through Blossom Trust4445 - Ms. Zhang Huiqi holds 100% equity interest in related corporations including Glory Reach, Fast Achieve, and Foison Amber Development4647 Substantial Shareholders As of June 30, 2024, Vistra Trust (BVI) Limited and its controlled entities (Glory Reach, Fast Achieve, Foison Amber Development) were the largest shareholders, holding 56.59% of shares, while Eco-Victory Limited held 18.41% Substantial Shareholders' Long Positions in Company Shares | Shareholder Name | Nature of Interest | Number of Shares Held | Approximate Percentage of the Company's Issued Share Capital (%) | | :--- | :--- | :--- | :--- | | Vistra Trust (BVI) Limited | Trustee of a trust (Note) | 226,350,000 | 56.59 | | Glory Reach | Interest in controlled corporation (Note) | 226,350,000 | 56.59 | | Fast Achieve | Interest in controlled corporation (Note) | 226,350,000 | 56.59 | | Foison Amber Development | Beneficial owner (Note) | 226,350,000 | 56.59 | | Eco-Victory Limited | Beneficial owner | 73,650,000 | 18.41 | - Vistra Trust (BVI) Limited, as trustee of Blossom Trust, indirectly holds 56.59% of the company's shares through its wholly-owned subsidiaries Glory Reach, Fast Achieve, and Foison Amber Development52 Capital Raising Activities and the Use of Proceeds from Global Offering The company raised approximately RMB 149.6 million net from its 2020 IPO, with RMB 75.0 million utilized by June 30, 2024, mainly for business expansion and property management service enhancement, and remaining funds expected to be used by end of 2025 - The company was listed on March 9, 2020, with net proceeds from the global offering of approximately RMB 149.6 million5556 Use of Proceeds from Global Offering (RMB million) | Intended Use | Net Proceeds Planned for Intended Use | Utilized as of Dec 31, 2023 | Utilized During the Period | Unutilized as of Jun 30, 2024 | Expected Timeframe for Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Selective acquisitions to expand business | 60.0 | 60.0 | – | – | On or before Dec 31, 2025 | | Enhancement of property engineering services | 30.2 | 21.2 | 5.3 | 3.7 | On or before Dec 31, 2025 | | Enhancement of property management services | 44.5 | 26.7 | 6.9 | 10.9 | On or before Dec 31, 2025 | | General working capital | 14.9 | 14.9 | – | – | Not applicable | | Total | 149.6 | 122.8 | 12.2 | 14.6 | - | - As of June 30, 2024, the Group had utilized approximately RMB 75.0 million of the raised funds (RMB 62.8 million as of December 31, 2023, with RMB 12.2 million utilized during the period)56 Purchase, Sale or Redemption of Our Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period57 Corporate Governance Code The company adopted and complied with the Corporate Governance Code during the period, with the exception of the combined roles of Chairman and CEO, which the Board deems appropriate for power balance - The company has adopted corporate governance practices based on the principles and code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules57 - The company has complied with the relevant code provisions of the Corporate Governance Code during the period, except for the deviation from code provision C.2.1 (roles of Chairman and Chief Executive should be separate)57 - The Board believes that Mr. Qiu Ming serving as both Chairman and Chief Executive is in the best interest of the company, and the current Board composition and structure are sufficient to ensure a balance of power and authority57 Model Code for Securities Transactions by Directors and Relevant Employees The company adopted the Model Code from Appendix C3 of the Listing Rules and confirmed all directors and relevant employees complied with it during the period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors have confirmed compliance with the required standards5859 - The company has adopted a code of conduct for securities transactions by relevant employees who may possess inside information, and all relevant employees have fully complied5859 Audit Committee The Audit Committee, composed of three independent non-executive directors, reviews financial reporting, risk management, and internal control systems, and has reviewed the unaudited interim condensed consolidated financial results for the period - The Audit Committee comprises three independent non-executive directors: Feng Zhidong (Chairman), Zhou Sheng, and Xu Chun58 - The Audit Committee is primarily responsible for assisting the Board in reviewing and monitoring financial reporting processes, risk management, and internal control systems, and overseeing the audit process58 - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management and has reviewed the unaudited interim condensed consolidated financial results for the period58 Changes Since 31 December 2023 Except as disclosed in this interim report, there have been no other significant changes to the Group's financial position or information disclosed in the management discussion and analysis section of the 2023 annual report - Except as disclosed in this interim report, there have been no other significant changes to the Group's financial position or information disclosed in the management discussion and analysis section of the company's 2023 annual report6064 Changes in Information of Directors No other director information is required to be disclosed under Rule 13.51B(1) of the Listing Rules - No other director information is required to be disclosed under Rule 13.51B(1) of the Listing Rules6165 Events After the Reporting Period There have been no significant events after the reporting period and up to the date of this interim report - There have been no significant events after the reporting period and up to the date of this interim report6266 Acknowledgement The company extends its sincere gratitude to management, all employees, and shareholders - The company expresses its sincere gratitude to management and all employees for their tireless dedication and service to the Group, and to shareholders for their continuous strong support6367 Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the company's revenue increased by 4.7% to RMB 167.2 million, with profit for the period growing by 15.6% to RMB 24.0 million Profit or Loss For H1 2024, revenue grew 4.7% to RMB 167.2 million, while profit for the period increased 15.6% to RMB 24.0 million Profit or Loss Key Data (RMB thousand) | Indicator | H1 2024 | H1 2023 | YoY Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 167,201 | 159,733 | +7,468 | +4.7% | | Cost of Services | (117,213) | (109,224) | (7,989) | +7.3% | | Gross Profit | 49,988 | 50,509 | (521) | -1.0% | | Profit Before Tax | 33,512 | 31,153 | +2,359 | +7.6% | | Income Tax Expense | (9,495) | (10,380) | +885 | -8.5% | | Profit for the Period | 24,017 | 20,773 | +3,244 | +15.6% | Other Comprehensive Income Other comprehensive income for the period was RMB 750 thousand, primarily from exchange differences on translating overseas operations, resulting in total comprehensive income of RMB 24.8 million Other Comprehensive Income (RMB thousand) | Indicator | H1 2024 | H1 2023 | YoY Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Exchange differences on translating overseas operations | 750 | 2,870 | (2,120) | -73.9% | | Total other comprehensive profit for the period | 750 | 2,870 | (2,120) | -73.9% | | Total comprehensive income for the period | 24,767 | 23,643 | +1,124 | +4.8% | Attributable to Equity Holders and Non-controlling Interests Profit attributable to equity holders of the company for the period was RMB 24.1 million, while loss attributable to non-controlling interests was RMB 67 thousand Profit and Comprehensive Income Attributable (RMB thousand) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit for the period attributable to equity holders of the Company | 24,084 | 20,766 | | Profit for the period attributable to non-controlling interests | (67) | 7 | | Total comprehensive income for the period attributable to equity holders of the Company | 24,834 | 23,636 | | Total comprehensive income for the period attributable to non-controlling interests | (67) | 7 | Earnings Per Share Basic and diluted earnings per share for the period were RMB 6.02 cents, an increase from RMB 5.19 cents in the prior year Earnings Per Share (RMB cents) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Basic and diluted earnings per share | 6.02 | 5.19 | Interim Condensed Consolidated Statement of Financial Position This statement presents the Group's financial position, including non-current assets, current assets, current liabilities, and equity, as of June 30, 2024 Non-Current Assets As of June 30, 2024, total non-current assets were RMB 191.1 million, a slight decrease from year-end 2023, primarily comprising property, plant, and equipment Non-Current Assets (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 188,113 | 188,536 | (423) | -0.2% | | Right-of-use assets | 1,967 | 2,139 | (172) | -8.0% | | Deferred tax assets | 1,034 | 1,261 | (227) | -18.0% | | Total Non-Current Assets | 191,114 | 191,936 | (822) | -0.4% | Current Assets As of June 30, 2024, total current assets were RMB 481.9 million, a 5.0% decrease from year-end 2023, with a significant reduction in trade receivables and a slight increase in cash and cash equivalents Current Assets (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Properties Under Development | 130,803 | 130,738 | +65 | +0.05% | | Trade Receivables | 67,674 | 99,675 | (32,001) | -32.1% | | Contract Assets | 38,847 | 39,202 | (355) | -0.9% | | Prepayments, Other Receivables and Other Assets | 24,985 | 25,232 | (247) | -1.0% | | Cash and Cash Equivalents | 217,372 | 210,684 | +6,688 | +3.2% | | Total Current Assets | 481,903 | 507,118 | (25,215) | -5.0% | Current Liabilities As of June 30, 2024, total current liabilities were RMB 188.0 million, a significant 21.2% decrease from year-end 2023, mainly due to reductions in trade payables and other payables Current Liabilities (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Trade Payables | 34,952 | 54,959 | (20,007) | -36.4% | | Other Payables and Accruals | 72,949 | 96,079 | (23,130) | -24.1% | | Contract Liabilities | 78,840 | 85,423 | (6,583) | -7.7% | | Lease Liabilities | 462 | 1,107 | (645) | -58.3% | | Total Current Liabilities | 188,044 | 238,779 | (50,735) | -21.2% | Net Current Assets and Total Assets Less Current Liabilities As of June 30, 2024, net current assets increased to RMB 293.9 million, and total assets less current liabilities increased to RMB 485.0 million, indicating improved liquidity Liquidity Indicators (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | Change | Change Rate | | :--- | :--- | :--- | :--- | | Net Current Assets | 293,859 | 268,339 | +25,520 | +9.5% | | Total Assets Less Current Liabilities | 484,973 | 460,275 | +24,698 | +5.4% | Non-Current Liabilities As of June 30, 2024, total non-current liabilities were RMB 5.2 million, largely consistent with year-end 2023 Non-Current Liabilities (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Provisions | 2,652 | 2,717 | (65) | -2.4% | | Lease Liabilities | 1,934 | 1,938 | (4) | -0.2% | | Deferred tax liabilities | 590 | 590 | 0 | 0.0% | | Total Non-Current Liabilities | 5,176 | 5,245 | (69) | -1.3% | Net Assets and Total Equity As of June 30, 2024, net assets and total equity both increased to RMB 479.8 million, reflecting strengthened financial position Net Assets and Total Equity (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | Change | Change Rate | | :--- | :--- | :--- | :--- | | Net Assets | 479,797 | 455,030 | +24,767 | +5.4% | | Total Equity | 479,797 | 455,030 | +24,767 | +5.4% | | Equity attributable to equity holders of the Company | 479,833 | 454,999 | +24,834 | +5.5% | | Non-controlling interests | (36) | 31 | (67) | -216.1% | Interim Condensed Consolidated Statement of Changes in Equity This statement outlines the changes in the Group's equity for the periods presented, reflecting profit, other comprehensive income, and transfers Equity Changes for H1 2024 As of June 30, 2024, total equity increased to RMB 479.8 million, primarily driven by profit for the period of RMB 24.0 million and an increase in exchange reserves of RMB 750 thousand H1 2024 Equity Changes Overview (RMB thousand) | Indicator | Share Capital | Share Premium | Merger Reserve | Statutory Surplus Reserve | Exchange Reserve | Other Reserve | Retained Profits | Total (Parent Company) | Non-controlling Interests | Total Equity | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jan 1, 2024 | 3,572 | 246,327 | (15,894) | 28,810 | 3,713 | 1,890 | 186,581 | 454,999 | 31 | 455,030 | | Profit for the period | - | - | - | - | - | - | 24,084 | 24,084 | (67) | 24,017 | | Exchange differences | - | - | - | - | 750 | - | - | 750 | - | 750 | | Total comprehensive income for the period | - | - | - | - | 750 | - | 24,084 | 24,834 | (67) | 24,767 | | Transfer from retained profits | - | - | - | 2,747 | - | - | (2,747) | 0 | 0 | 0 | | Jun 30, 2024 | 3,572 | 246,327 | (15,894) | 31,557 | 4,463 | 1,890 | 207,918 | 479,833 | (36) | 479,797 | Equity Changes for H1 2023 As of June 30, 2023, total equity was RMB 437.1 million, with profit for the period of RMB 20.8 million and an increase in exchange reserves of RMB 2.9 million H1 2023 Equity Changes Overview (RMB thousand) | Indicator | Share Capital | Share Premium | Merger Reserve | Statutory Surplus Reserve | Exchange Reserve | Other Reserve | Retained Profits | Total (Parent Company) | Non-controlling Interests | Total Equity | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jan 1, 2023 | 3,572 | 246,327 | (15,894) | 23,899 | 2,361 | 1,890 | 151,319 | 413,474 | 23 | 413,497 | | Profit for the period | - | - | - | - | - | - | 20,766 | 20,766 | 7 | 20,773 | | Exchange differences | - | - | - | - | 2,870 | - | - | 2,870 | - | 2,870 | | Total comprehensive income for the period | - | - | - | - | 2,870 | - | 20,766 | 23,636 | 7 | 23,643 | | Transfer from retained profits | - | - | - | 3,021 | - | - | (3,021) | 0 | 0 | 0 | | Jun 30, 2023 | 3,572 | 246,327 | (15,894) | 26,920 | 5,231 | 1,890 | 169,064 | 437,110 | 30 | 437,140 | Interim Condensed Consolidated Statement of Cash Flows This statement presents the Group's cash flows from operating, investing, and financing activities for the periods presented Operating Activities Net cash flow from operating activities for the period was RMB 7.0 million, a decrease from RMB 9.2 million in the prior year, mainly due to changes in working capital Operating Activities Cash Flow (RMB thousand) | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Profit Before Tax | 33,512 | 31,153 | +2,359 | | Operating cash flow before working capital changes | 34,735 | 34,236 | +499 | | Change in trade receivables | +24,217 | (19,419) | +43,636 | | Change in trade payables | (20,007) | (7,820) | (12,187) | | Cash generated from operations | 17,419 | 18,353 | (934) | | Income tax paid | (10,388) | (9,196) | (1,192) | | Net cash flow from operating activities | 7,031 | 9,157 | (2,126) | Investing Activities Net cash flow used in investing activities for the period was RMB 383 thousand, primarily for purchasing property, plant, and equipment, contrasting with a net inflow in the prior year Investing Activities Cash Flow (RMB thousand) | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Purchase of property, plant and equipment items | (613) | (1,827) | +1,214 | | Interest income received | 230 | 3,561 | (3,331) | | Net cash flow (used in) generated from investing activities | (383) | 1,734 | (2,117) | Net Increase in Cash and Cash Equivalents The net increase in cash and cash equivalents for the period was RMB 6.6 million, with an ending balance of RMB 217.4 million Cash and Cash Equivalents Movement (RMB thousand) | Indicator | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Net increase in cash and cash equivalents | 6,648 | 10,891 | (4,243) | | Cash and cash equivalents at beginning of period | 210,684 | 467,723 | (257,039) | | Effect of exchange rate changes | 40 | 108 | (68) | | Cash and cash equivalents at end of period | 217,372 | 478,722 | (261,350) | Notes to Interim Condensed Consolidated Financial Information This section provides detailed notes to the interim condensed consolidated financial information, covering corporate details, accounting policies, segment information, and specific financial statement items Corporate Information (Notes) The company, incorporated in the Cayman Islands in 2019 and listed on the HKEX in 2020, primarily engages in property management, engineering, and development services - The company was incorporated in the Cayman Islands on August 12, 2019, and listed on the Main Board of the Stock Exchange on March 9, 202078 - The Group is principally engaged in property management and value-added services, property engineering services, and property development78 - The company's ultimate controlling company is Vistra Trust (BVI) Limited, as trustee of Blossom Trust, with Ms. Zhang Huiqi as the protector and discretionary beneficiary of the trust78 Basis of Preparation The interim condensed consolidated financial information is prepared in accordance with IAS 34, approved for issue by the Board on August 29, 2024, and presented in RMB - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"7980 - The financial information was approved for issue by the Board of Directors on August 29, 2024, and is presented in RMB8688 Changes in Accounting Policies and Disclosures Several new and revised IFRS standards, including amendments to IAS 1, IFRS 16, IAS 7, and IFRS 7, were adopted for the first time during the period but had no significant impact on the Group's interim condensed consolidated financial information - Several new and revised International Financial Reporting Standards were adopted for the first time during the period, including amendments to IAS 1 (Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants), IFRS 16 (Lease Liability in a Sale and Leaseback), and IAS 7 and IFRS 7 (Supplier Finance Arrangements)878990919293 - All adopted amendments had no significant impact on the Group's interim condensed consolidated financial information90919293 Operating Segment Information The Group operates four reportable segments: property management and value-added services, property engineering services, property development, and others, with property management being the primary revenue source, but property engineering services recorded a loss - The Group is divided into four reportable operating segments: property management and value-added services, property engineering services, property development, and others94 Segment Revenue (RMB thousand) | Segment | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Property Management and Value-Added Services | 148,201 | 136,197 | | Property Engineering Services | 2,668 | 6,987 | | Property Development | – | – | | Others | 16,332 | 16,549 | | Total | 167,201 | 159,733 | Segment Results (RMB thousand) | Segment | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Property Management and Value-Added Services | 35,954 | 39,523 | | Property Engineering Services | (2,335) | (942) | | Property Development | (117) | – | | Others | 2,064 | (2,804) | | Total Segment Results | 35,566 | 35,777 | - The property engineering services segment recorded a loss of RMB 2.3 million in H1 2024, an increase from the loss in the prior year96 - No geographical analysis of operations is presented as the Group operates solely in Mainland China99100 Revenue (Notes) Total revenue for the period was RMB 167.2 million, primarily from property management and value-added services, with property management services recognized over time and other services at a point in time Revenue by Service Type (RMB thousand) | Service Type | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Property Management and Value-Added Services | 148,201 | 136,197 | | Property Engineering Services | 2,668 | 6,987 | | Club House Services | 6,881 | 7,761 | | Charging Pile Services | 6,281 | 3,538 | | Agency Services | 870 | 3,119 | | Others | 2,300 | 2,131 | | Total | 167,201 | 159,733 | Revenue by Timing of Recognition (RMB thousand) | Timing of Revenue Recognition | H1 2024 | H1 2023 | | :--- | :--- | :--- | | At a point in time (Value-added services, Club house services, Charging pile services, Agency services, Others) | 19,062 | 17,446 | | Over time (Property management, Property engineering services) | 148,138 | 142,287 | | Total | 167,201 | 159,733 | - Property management and value-added services are primarily provided to properties under management developed by related parties (Yongzuan Group, Zhengshang Industrial Group, Zhengshang Development Group)103104 Other Income, Other Gains and Losses, Net (Notes) Net other income, other gains and losses for the period was a loss of RMB 400 thousand, primarily due to exchange losses, with both government grants and interest income decreasing Other Income, Other Gains and Losses, Net (RMB thousand) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Government grants | 18 | 84 | | Interest income | 230 | 1,599 | | Exchange differences | (645) | (2,585) | | Other (losses) gains | (3) | 381 | | Total | (400) | (521) | - Decreased government grants and reduced exchange losses collectively led to a decrease in net other income, other gains and losses20 Profit Before Tax (Notes) Profit before tax for the period was RMB 33.5 million, with increased staff costs, decreased R&D expenses, and a reversal of impairment losses on financial and contract assets Profit Before Tax Adjustment Items (RMB thousand) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Staff costs (including directors' emoluments) | 40,154 | 34,005 | | Cost of services provided | 117,213 | 109,224 | | Depreciation of property, plant and equipment | 1,036 | 614 | | Research and development expenses | 884 | 2,306 | | Impairment losses (reversal of impairment losses) on financial and contract assets | (405) | 650 | - Staff costs increased primarily due to business expansion20 - Research and development expenses decreased from RMB 2.3 million to RMB 884 thousand107 Income Tax Expense (Notes) The Group operates mainly in Mainland China, subject to a 25% corporate income tax rate, with some subsidiaries enjoying preferential rates of 5% or 15%; income tax expense for the period was RMB 9.5 million - The Group is subject to income tax on profits generated or earned in the jurisdictions where its Mainland China operations are located, on an entity basis109111 - Some subsidiaries (e.g., Zhengshang Haoshenghuo) enjoy a preferential corporate tax rate of 5%, Henan Wuxiang Intelligent Technology Co., Ltd. enjoys a 15% preferential tax rate for high-tech enterprises, while other Chinese operating subsidiaries are subject to a 25% corporate income tax rate110111 Income Tax Expense (RMB thousand) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Current tax (PRC corporate income tax) | 9,266 | 10,097 | | Deferred tax (origination and reversal of temporary differences) | 229 | 283 | | Total | 9,495 | 10,380 | Dividends (Notes) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (H1 2023: nil)114115 Earnings Per Share Attributable to Equity Holders of the Company (Notes) Basic and diluted earnings per share for the period were RMB 6.02 cents, calculated based on profit attributable to equity holders of RMB 24.1 million and 400,000,000 weighted average ordinary shares Earnings Per Share Calculation Basis (RMB thousand) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit for the period attributable to equity holders of the Company used in calculating basic earnings per share | 24,084 | 20,766 | | Weighted average number of ordinary shares in issue during the period | 400,000,000 | 400,000,000 | - The Group had no potential dilutive ordinary shares in issue during H1 2024 and H1 2023116 Trade Receivables (Notes) As of June 30, 2024, net trade receivables were RMB 67.7 million, a significant 32.1% decrease from year-end 2023, primarily due to increased repayments from related parties Trade Receivables (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net trade receivables from third parties | 33,121 | 27,362 | +5,759 | +21.0% | | Net trade receivables from related parties | 34,553 | 72,313 | (37,760) | -52.2% | | Total Net Trade Receivables | 67,674 | 99,675 | (32,001) | -32.1% | Ageing Analysis of Trade Receivables (RMB thousand) | Ageing | Jun 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Within 1 year | 39,053 | 52,585 | | 1 to 2 years | 22,160 | 42,863 | | 2 to 3 years | 6,134 | 4,040 | | 3 to 4 years | 327 | 187 | | Total | 67,674 | 99,675 | - Gross trade receivables from related parties decreased by approximately 51.8%, mainly due to the Group's efforts in recovering trade receivables and implementing management measures23123 Trade Payables (Notes) As of June 30, 2024, trade payables were RMB 35.0 million, a 36.4% decrease from year-end 2023 due to timely settlement; these are non-interest bearing and typically settled within three months Ageing Analysis of Trade Payables (RMB thousand) | Ageing | Jun 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Within 1 year | 28,832 | 51,856 | | Over 1 year | 6,120 | 3,103 | | Total | 34,952 | 54,959 | - The decrease in trade payables was due to timely settlement of trade payables during the period27 - Trade payables are non-interest bearing and generally settled within three months, with their carrying amounts approximating fair values121 Share Capital (Notes) As of June 30, 2024, the company's authorized share capital was 10,000,000 thousand shares, with 400,000,000 fully paid-up shares issued, each with a par value of HKD 0.01, totaling RMB 3,572 thousand Share Capital Structure (RMB thousand) | Indicator | Jun 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Authorized share capital (10,000,000 thousand shares, HKD 0.01 each) | 89,858 | 89,858 | | Issued and fully paid share capital (400,000,000 shares, HKD 0.01 each) | 3,572 | 3,572 | - All shares issued during the period rank pari passu in all respects with the existing issued shares123 Contingent Liabilities (Notes) The Group had no significant contingent liabilities at the end of the reporting period - The Group had no significant contingent liabilities at the end of the reporting period124 Commitments (Notes) As of June 30, 2024, the Group had capital expenditure commitments of RMB 280.2 million contracted but not yet provided for property development expenses Capital Expenditure Commitments (RMB thousand) | Item | Jun 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Contracted but not yet provided for property development expenses | 280,171 | 311,454 | Related Party Transactions During the period, the company's sales of services to related parties totaled RMB 7.8 million, primarily for property management and engineering services, with various outstanding balances and active management of receivables Sales of Services to Related Parties (RMB thousand) | Service Type | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Provision of property management and value-added services to related parties | 5,094 | 12,880 | | Provision of property engineering services to related parties | 2,668 | 5,700 | | Total | 7,762 | 18,580 | - Sales of services to related parties are conducted under agreements mutually agreed upon by the parties127 - Related parties include Yongzuan Global Group, Zhengshang Industrial Group, and Zhengshang Development Group, all associated with non-executive director Ms. Zhang Huiqi127 - As of June 30, 2024, receivables from related parties included in contract assets amounted to RMB 39,178 thousand128 - As of June 30, 2024, payables to related parties included in contract liabilities, other payables and accruals, and lease liabilities amounted to RMB 2,869 thousand, RMB 6,224 thousand, and RMB 2,396 thousand, respectively128 Key Management Personnel Remuneration (RMB thousand) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Short-term employee benefits | 1,037 | 886 | | Post-employment benefits | 80 | 66 | | Total | 1,117 | 952 | Fair Value and Fair Value Hierarchy of Financial Instruments Management assesses that the fair values of financial instruments like cash and cash equivalents, trade receivables, and trade payables approximate their carrying amounts due to their short-term maturity, with the finance department overseeing fair value measurement policies - Management has assessed that the fair values of financial instruments such as cash and cash equivalents, trade receivables, and trade payables approximate their carrying amounts, primarily due to the short-term maturity of these instruments130132 - The Group's finance department, led by the finance manager, is responsible for determining policies and procedures for fair value measurement of financial instruments, reporting directly to the Chief Financial Officer and the Audit Committee130132