五矿地产(00230) - 2025 - 中期业绩

Company Information and Announcement Company Basic Information Minmetals Land Limited (Stock Code: 230) is a Bermuda-incorporated company, with June Glory International Limited as its direct holding company and China Minmetals Corporation Limited as its ultimate holding company - Minmetals Land Limited (Stock Code: 230) is a company incorporated in Bermuda[2] - Its direct holding company is June Glory International Limited, and its ultimate holding company is China Minmetals Corporation Limited[6] Announcement Statement This announcement discloses the unaudited interim results of Minmetals Land Limited and its subsidiaries for the six months ended June 30, 2025, including comparative figures for the same period in 2024 - This announcement discloses the unaudited interim results of the Company and its subsidiaries for the six months ended June 30, 2025, and provides comparative figures for the same period in 2024[2] Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the company's revenue significantly decreased by 60.7% to HKD 1.976 billion, and gross profit decreased by 40.3% to HKD 224 million, with loss for the period narrowing by 44.8% to HKD 580 million and basic loss per share at 17.49 HK cents Interim Condensed Consolidated Statement of Profit or Loss Key Data | Indicator | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,976,005 | 5,023,251 | -60.7% | | Cost of sales | (1,752,319) | (4,648,058) | -62.4% | | Gross profit | 223,686 | 375,193 | -40.3% | | Other income | 55,062 | 30,310 | 81.7% | | Fair value changes of investment properties | (97,700) | (87,504) | 11.7% | | Selling and marketing expenses | (129,459) | (253,848) | -49.0% | | Administrative and other expenses | (230,800) | (279,434) | -17.4% | | Impairment provision for inventories | (30,947) | (278,557) | -88.9% | | Net impairment loss under expected credit loss model | (79,513) | (249,464) | -68.1% | | Finance income | 88,956 | 114,151 | -22.1% | | Finance costs | (291,093) | (297,354) | -2.1% | | Share of results of associates | (28,566) | (157,715) | -81.9% | | Share of results of joint ventures | 10,288 | 71,371 | -85.6% | | Loss before tax | (510,086) | (1,012,851) | -49.6% | | Income tax expense | (69,601) | (37,099) | 87.6% | | Loss for the period | (579,687) | (1,049,950) | -44.8% | | Loss attributable to equity holders of the Company | (585,290) | (1,044,489) | -44.0% | | Basic and diluted loss per share (HK cents) | (17.49) | (31.21) | -44.0% | Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company's loss for the period was HKD 580 million, but other comprehensive income turned positive at HKD 294 million due to exchange differences and fair value gains on financial assets, significantly narrowing the total comprehensive expense to HKD 286 million Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Loss for the period | (579,687) | (1,049,950) | | Other comprehensive income/(expense) | 293,769 | (120,481) | | Total comprehensive expense for the period | (285,918) | (1,170,431) | | Total comprehensive expense attributable to equity holders of the Company | (409,364) | (1,076,689) | | Total comprehensive income attributable to non-controlling interests | 123,446 | (93,742) | | Exchange differences | 204,474 | (80,852) | | Fair value (loss)/gain on cash flow hedges | (11,053) | 2,439 | | Fair value gain/(loss) on financial assets measured at fair value through other comprehensive income | 49,548 | (27,489) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets were HKD 39.372 billion, a 4.0% decrease from the end of 2024, with total liabilities at HKD 30.402 billion and total equity at HKD 8.969 billion; net current assets increased to HKD 10.533 billion, but current borrowings remain high Interim Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 5,711,904 | 5,400,538 | 5.8% | | Total current assets | 33,659,959 | 35,630,382 | -5.5% | | Total assets | 39,371,863 | 41,030,920 | -4.0% | | Total equity | 8,969,425 | 9,256,969 | -3.1% | | Total non-current liabilities | 7,275,601 | 5,751,906 | 26.5% | | Total current liabilities | 23,126,837 | 26,022,045 | -11.2% | | Total liabilities | 30,402,438 | 31,773,951 | -4.3% | | Net current assets | 10,533,122 | 9,608,337 | 9.6% | | Inventories | 23,646,262 | 24,699,194 | -4.3% | | Cash and cash equivalents | 1,983,197 | 2,821,859 | -29.7% | | Current borrowings | 14,614,344 | 16,294,582 | -10.3% | Notes to the Interim Condensed Consolidated Financial Information General Information The Group's principal activities are property development, property management, professional construction, and property investment, primarily operating in the PRC, with the company incorporated in Bermuda and listed on the Hong Kong Stock Exchange - The Group's principal activities include property development, property management, professional construction, and property investment, with its primary market in the PRC[6] - The Company is incorporated in Bermuda and listed on The Stock Exchange of Hong Kong Limited[6] Basis of Preparation The condensed consolidated financial information is prepared in accordance with HKAS 34 and the Listing Rules, presented in HKD '000; despite a net loss and non-compliance with certain bank loan covenants, the directors believe the Group can continue as a going concern based on cash flow forecasts, financial position, holding company support, and unutilized credit facilities - The condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the Listing Rules of the Hong Kong Stock Exchange[8] - For the six months ended June 30, 2025, the Group recorded a net loss of approximately HKD 580 million, with net current assets of HKD 10.533 billion, current portion of interest-bearing bank and other borrowings of HKD 14.614 billion, and cash and cash equivalents of HKD 1.983 billion[9] - The Group is applying to banks for waivers of non-compliance with certain financial covenants of bank borrowings, but the directors are satisfied that the Group is able to meet its financial obligations in the next twelve months, thus preparing the financial information on a going concern basis[9] Accounting Policies The condensed consolidated financial statements are primarily prepared on a historical cost basis, with certain properties and financial instruments measured at revalued amounts or fair value; newly applied revised HKFRS accounting standards in this period had no significant impact on financial position or performance - The condensed consolidated financial statements are prepared on the historical cost basis, with certain properties and financial instruments measured at revalued amounts or fair value[10] - The revised Hong Kong Financial Reporting Standards accounting standards issued by the Hong Kong Institute of Certified Public Accountants were first applied in this interim period but had no significant impact on the financial position or performance[11] Revenue and Segment Information The Group's revenue primarily derives from contracts with customers and rental income from investment properties, totaling HKD 1.976 billion for the six months ended June 30, 2025, with property development contributing HKD 1.743 billion (88.2%) and property management HKD 210 million (10.6%); operating segments were reorganized to separately present property management services Revenue Analysis | Revenue Source | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Revenue from contracts with customers | 1,954,153 | 4,997,329 | | Rental income from investment properties | 21,852 | 25,922 | | Total Revenue | 1,976,005 | 5,023,251 | Revenue from Contracts with Customers Breakdown (June 30, 2025) | Segment | Property Development (HKD '000) | Property Management (HKD '000) | Professional Construction (HKD '000) | Total (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Sale of properties | 1,719,035 | — | — | 1,719,035 | | Professional construction services | — | — | 545 | 545 | | Management services | 24,218 | 210,355 | — | 234,573 | | Total | 1,743,253 | 210,355 | 545 | 1,954,153 | | Geographical Market | | | | | | Mainland China | 1,592,273 | 205,533 | — | 1,797,806 | | Hong Kong | 150,980 | 4,822 | 545 | 156,347 | - The executive directors reorganized the operating segments, with "Property Management Services," previously integrated into "Property Development," now considered a separate segment[15] Segment Revenue and Results (June 30, 2025) | Segment | 2025 Revenue (HKD '000) | 2024 Revenue (HKD '000) | 2025 Results (HKD '000) | 2024 Results (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 1,743,253 | 4,808,026 | (102,162) | (574,418) | | Property Management | 210,355 | 189,046 | 30,206 | 23,410 | | Professional Construction | 545 | 257 | 1,691 | (12,718) | | Property Investment | 21,852 | 25,922 | (86,209) | (53,212) | | Total Sales to External Customers | 1,976,005 | 5,023,251 | (156,474) | (616,938) | Other Income For the six months ended June 30, 2025, other income significantly increased by 81.7% year-on-year to HKD 55.062 million, primarily driven by a notable rise in project management income, liquidated damages, and other miscellaneous income Other Income Components | Income Item | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Government grants | 8,719 | 9,278 | | Dividend income | 334 | 592 | | Management fee income from fellow subsidiaries | 1,228 | 1,246 | | Project management income | 12,913 | 1,290 | | Liquidated damages income | 8,456 | 7,209 | | Others | 23,412 | 10,695 | | Total | 55,062 | 30,310 | Income Tax Expense For the six months ended June 30, 2025, income tax expense significantly increased by 87.6% year-on-year to HKD 69.601 million, mainly due to higher PRC corporate income tax and land appreciation tax - Hong Kong profits tax rate is 16.5% (with the first HKD 2 million of assessable profits taxed at 8.25%)[19] - Land appreciation tax is levied at progressive rates from 30% to 60%[20] Income Tax Expense Components | Tax Type | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | PRC corporate income tax | 32,712 | 16,240 | | PRC land appreciation tax | 22,395 | (9,758) | | Hong Kong profits tax | 952 | 1,361 | | Total Current Tax | 56,059 | 7,843 | | Deferred tax | 13,542 | 29,256 | | Total | 69,601 | 37,099 | Loss Before Tax For the six months ended June 30, 2025, loss before tax narrowed by 49.6% year-on-year to HKD 510 million, primarily driven by significant decreases in cost of properties sold, selling and marketing expenses, administrative and other expenses, impairment provision for inventories, and net impairment loss under expected credit loss model Loss Before Tax Key Components | Item | June 30, 2025 (HKD '000) | June 30, 2024 (HKD '000) | | :--- | :--- | :--- | | Cost of properties sold | 1,563,704 | 4,473,986 | | Cost of management services | 185,689 | 172,568 | | Employee benefits expense | 123,337 | 141,761 | | Net exchange loss | 57,311 | 78,428 | - Cost of properties sold includes capitalized interest expenses of HKD 125 million (2024: HKD 557 million)[25] - Of the employee benefits expense, HKD 18.155 million (2024: HKD 24.846 million) was capitalized into properties under development[25] Dividends The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[23] Earnings Per Share Basic earnings per share are calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the period; diluted earnings per share are the same as basic earnings per share due to the absence of dilutive potential ordinary shares - Basic earnings per share are calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the period[24] - As there were no dilutive potential ordinary shares for the periods ended June 30, 2025 and 2024, diluted earnings per share are the same as basic earnings per share[26] Inventories As of June 30, 2025, the company's total inventories amounted to HKD 23.646 billion, a 4.3% decrease from the end of 2024, with properties under development slightly increasing and properties held for sale decreasing; some inventories are pledged as collateral for bank borrowings Inventories Components | Inventory Type | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Properties under development – located in Mainland China | 10,765,173 | 10,079,451 | | Properties held for sale – located in Mainland China | 8,596,188 | 10,188,165 | | Properties held for sale – located in Hong Kong | 4,284,901 | 4,431,578 | | Total | 23,646,262 | 24,699,194 | - As of June 30, 2025, inventories with a carrying amount of HKD 3.682 billion (December 31, 2024: HKD 4.265 billion) were pledged as collateral for bank borrowings[27] Prepayments, Trade and Other Receivables As of June 30, 2025, total trade receivables amounted to HKD 229 million, a slight increase from the end of 2024, with the largest portion due within 90 days; an impairment provision of HKD 51.829 million has been made Trade Receivables Ageing Analysis | Ageing | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 90 days | 23,854 | 79,844 | | 91 to 180 days | 57,466 | 13,986 | | 181 days to one year | 47,217 | 23,025 | | One to two years | 25,350 | 39,745 | | Over two years | 75,418 | 55,033 | | Total | 229,305 | 211,633 | | Less: Impairment provision | (51,829) | (54,409) | | Net Amount | 177,476 | 157,224 | Contract Assets As of June 30, 2025, net contract assets amounted to HKD 53.108 million, a decrease from the end of 2024, primarily comprising construction services and retention receivables, with impairment provisions already made Contract Assets Components | Item | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Construction services | 112,054 | 120,734 | | Retention receivables | 31,006 | 48,949 | | Total | 143,060 | 169,683 | | Impairment | (89,952) | (101,286) | | Net Amount | 53,108 | 68,397 | Borrowings As of June 30, 2025, total borrowings amounted to HKD 21.309 billion, a slight decrease from the end of 2024, with non-current borrowings increasing and current borrowings decreasing; the company failed to comply with certain financial covenants of financing agreements, leading to the reclassification of some non-current borrowings as current liabilities Borrowings Components | Borrowing Type | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Non-current Borrowings | | | | Bank borrowings, secured | 1,198,593 | 926,986 | | Bank borrowings, unsecured | 953,078 | 380,665 | | Guaranteed bonds, unsecured | 2,352,660 | 2,325,828 | | Bonds, unsecured | 442,242 | — | | Loans from holding company | 1,273,497 | 1,254,218 | | Loans from non-controlling shareholders of subsidiaries | 474,741 | 500,890 | | Total Non-current Borrowings | 6,694,811 | 5,388,587 | | Current Borrowings | | | | Bank borrowings, secured | 278,679 | 870,140 | | Bank borrowings, unsecured | 12,371,506 | 11,920,603 | | Guaranteed bonds, unsecured | 51,419 | 51,341 | | Bonds, unsecured | 924,777 | 3,300,346 | | Loans from holding company | 872,813 | — | | Loans from non-controlling shareholders of subsidiaries | 115,150 | 152,152 | | Total Current Borrowings | 14,614,344 | 16,294,582 | | Total Borrowings | 21,309,155 | 21,683,169 | - The Group issued 2021 guaranteed bonds (USD 300 million, 4.95% annual interest, due 2026), 2025 bonds (RMB 404 million, 4.3% annual interest, due 2027), and 2022 bonds (RMB 800 million, 4.6% annual interest, due 2025)[30] - The Group failed to comply with financial covenants of certain financing agreements, involving HKD 9.929 billion in bank borrowings, leading to cross-default on HKD 2.365 billion of other bank borrowings; HKD 8.318 billion of the non-current portion was reclassified as current liabilities[31] Trade and Other Payables As of June 30, 2025, total trade and other payables amounted to HKD 1.699 billion, a decrease from the end of 2024, with the largest portion due within 90 days Trade and Other Payables Ageing Analysis | Ageing | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 90 days | 798,870 | 887,832 | | 91 to 180 days | 299,462 | 87,377 | | 181 days to one year | 118,392 | 349,378 | | One to two years | 133,349 | 169,758 | | Over two years | 348,511 | 360,039 | | Total | 1,698,584 | 1,854,384 | Management Discussion and Analysis Operating Review In the first half of 2025, despite a persistent downturn in the real estate market, the Group's loss narrowed by 44.8% year-on-year, actively addressing market challenges with progress in property development, professional construction, property investment, and property management, while continuously optimizing its land bank structure Overview In the first half of 2025, the real estate market remained in a deep adjustment phase with sluggish sales, yet the Group's loss for the period decreased by 44.8% to HKD 580 million, and loss attributable to equity holders was HKD 585 million - In the first half of 2025, the real estate market remained in a deep adjustment phase, with property development investment continuing to decline and sales remaining sluggish[34] Core Loss Data | Indicator | June 30, 2025 (HKD) | June 30, 2024 (HKD) | | :--- | :--- | :--- | | Loss for the period | 580 million | 1.05 billion | | Loss attributable to equity holders | 585 million | 1.044 billion | | Core loss attributable to equity holders of the Company | 292 million | 159 million | Market Review In the first half of 2025, national commercial property sales decreased by 5.5% year-on-year to RMB 4,424.1 billion, with sales area down 3.5% to 458.51 million square meters; real estate development investment fell 11.2% to RMB 4,665.8 billion, and construction area declined by 9.1% H1 2025 National Real Estate Market Data | Indicator | Jan-Jun 2025 | YoY Change (%) | | :--- | :--- | :--- | | Commercial property sales (RMB) | 4,424.1 billion | -5.5% | | Commercial property sales area (sq.m.) | 458.51 million | -3.5% | | Real estate development investment (RMB) | 4,665.8 billion | -11.2% | | Housing construction area (sq.m.) | 633.32 million | -9.1% | Business Development The Group's property development, professional construction, property investment, and property management businesses showed varied performance amidst market challenges, with property development contract sales and GFA decreasing, professional construction securing new projects, property investment experiencing lower occupancy, and property management achieving stable expansion Property Development In the first half of 2025, the Company, together with its subsidiaries, joint ventures, and associates, recorded a 28.4% year-on-year decrease in contract sales to RMB 2.29 billion, and a 16.9% decrease in total contract sales GFA to 138 thousand square meters Contract Sales and Gross Floor Area | Indicator | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Contract sales (RMB billion) | 2.29 | 3.20 | -28.4% | | Contract sales GFA ('000 sq.m.) | 138 | 166 | -16.9% | - Contract sales primarily originated from property development projects in first-tier and core second-tier cities[37] Contract Sales Composition (H1 2025) | Location | Contract Amount (RMB million) | Contract GFA (sq.m.) | | :--- | :--- | :--- | | Bohai Rim Region | 633 | 44,000 | | Yangtze River Delta Region | 277 | 12,000 | | Central China Region | 585 | 45,000 | | Chengdu-Chongqing Region | 275 | 22,000 | | Pearl River Delta Region (including Hong Kong) | 524 | 15,000 | | Total | 2,294 | 138,000 | Professional Construction The Group operates professional construction business, primarily curtain wall projects, in the Hong Kong market; despite a sluggish market, it successfully secured one curtain wall project and one steel structure project during the period, while continuously optimizing its operational structure and strengthening risk management - The Group operates professional construction business in the Hong Kong market, primarily focusing on the design, manufacturing, and installation of curtain wall systems[40] - During the period, it successfully secured one curtain wall project and one steel structure project, and continued to optimize its operational structure and strengthen risk management[40][41] Property Investment The Group's property investment business primarily comprises two commercial buildings in Hong Kong; as of June 30, 2025, occupancy rates for both LKF29 and China Minmetals Tower decreased compared to the prior year, mainly due to tenant departures and a subdued market sentiment - The Group's property investment business primarily includes China Minmetals Tower and LKF29 in Central, Hong Kong[42] Property Occupancy Rates | Property | June 30, 2025 Occupancy Rate | June 30, 2024 Occupancy Rate | Change | | :--- | :--- | :--- | :--- | | LKF29 | 75.63% | 80.64% | -5.01% | | China Minmetals Tower | 80.27% | 86.89% | -6.62% | - The decrease in occupancy rates was mainly due to more tenants whose contracts expired and moved out during the period compared to the same period last year, with the Hong Kong office and retail leasing market expected to continue facing challenges in the second half of the year[42] Property Management The Group's property management services cover over 70 projects in nearly 20 cities across Mainland China and Hong Kong, committed to providing high-quality living experiences; despite a challenging operating environment, it achieved stable expansion of its operating scale during the period - The Group's property management services cover over 70 projects in nearly 20 cities across Mainland China and Hong Kong[43] - The Group actively improved its 37ºC Living Community service system and achieved stable expansion of its operating scale[43][44] Land Bank As of June 30, 2025, the Group's total land bank was 5.295 million square meters, with first-tier, second-tier, and third-tier cities accounting for 30.5%, 34.3%, and 35.2% respectively; the Bohai Rim region holds the largest land bank - As of June 30, 2025, the Group's total developable land bank was 5,295,000 square meters[45] Land Bank Composition | City Tier | Land Bank ('000 sq.m.) | Proportion (%) | | :--- | :--- | :--- | | First-tier cities | 1,614 | 30.5% | | Second-tier cities | 1,814 | 34.3% | | Third-tier cities | 1,867 | 35.2% | | Total | 5,295 | 100.0% | | Location | | | | Bohai Rim Region | 2,016 | 38.1% | | Yangtze River Delta Region | 195 | 3.7% | | Central China Region | 947 | 17.9% | | Chengdu-Chongqing Region | 1,054 | 19.9% | | Pearl River Delta Region (including Hong Kong) | 1,083 | 20.4% | | Total | 5,295 | 100.0% | Entrusted Asset Management During the period, the Group recorded RMB 1.13 million in management service income under entrusted management service agreements, managing China Minmetals' unlisted property development business assets - During the period, the Group recorded RMB 1.13 million in management service income under entrusted management service agreements[46] - The entrusted assets include property development projects located in Beijing, Tianjin, Shenyang, Liaoning, Jiangsu, Hunan, and Guangdong, among other places[46] Outlook Looking ahead to the second half of the year, the national real estate market continues to face adjustment pressure, with financing contraction and liquidity risks coexisting; the Group will persistently enhance sales and collection capabilities, reduce costs and increase efficiency, prevent and resolve debt risks, and strengthen sustainable development capabilities - Looking ahead to the second half of the year, the national real estate market continues to face adjustment pressure, with property developers' financing showing a contraction trend, and some developers still facing liquidity crises and default risks[47] - The Group will make unremitting efforts to continuously enhance sales and collection capabilities, effectively reduce costs and increase efficiency, prevent and resolve debt risks, and strengthen sustainable development capabilities[47] Financial Review In the first half of 2025, the Group's consolidated revenue decreased by 60.7% year-on-year to HKD 1.976 billion, mainly due to a decline in property development business settlement scale; the overall gross profit margin increased to 11.3%, and loss for the period narrowed, primarily benefiting from cost control, reduced impairment provisions, and lower losses from associates Revenue The Group's consolidated revenue for the first half of 2025 was HKD 1.976 billion, a 60.7% year-on-year decrease; property development revenue decreased by 63.7%, but its gross profit margin increased by 3.4 percentage points to 10.3%; professional construction revenue grew by 111.5%, property investment revenue decreased by 15.7%, and property management revenue increased by 11.3%; the overall gross profit margin rose from 7.5% to 11.3% Consolidated Revenue Components | Business | 2025 (HKD million) | Proportion (%) | 2024 (HKD million) | Proportion (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Development | 1,743.25 | 88.2% | 4,808.03 | 95.7% | –63.7% | | Professional Construction | 0.55 | 0.1% | 0.26 | 0.0% | 111.5% | | Property Investment | 21.85 | 1.1% | 25.92 | 0.5% | –15.7% | | Property Management | 210.36 | 10.6% | 189.04 | 3.8% | 11.3% | | Total | 1,976.01 | 100.0% | 5,023.25 | 100% | –60.7% | - The gross profit margin for property development business increased by 3.4 percentage points to 10.3% compared to the same period last year, mainly due to changes in product mix[50] - The gross profit margin for property investment business decreased by 8.7 percentage points to 62.8%, mainly due to reduced rental income and fixed costs[50] - The Group's overall gross profit margin increased from 7.5% in the same period last year to 11.3%[51] Other Income The Group's other income increased by 83.3% year-on-year to HKD 55 million, primarily due to increased forfeited deposits from customers breaching property development sales agreements, penalties from suppliers, and project management income - The Group's other income increased by 83.3% year-on-year to HKD 55 million (June 30, 2024: HKD 30 million)[52] - This was mainly due to increased forfeited deposits from customers breaching property development sales agreements, penalties from suppliers for engineering projects, and project management income[52] Fair Value Changes of Investment Properties The Group's non-cash fair value loss on investment properties increased by 11.4% year-on-year to HKD 98 million during the period, mainly due to pressure on rental levels in the Hong Kong market, but with no material impact on cash flow - The Group's non-cash fair value loss on investment properties increased by 11.4% year-on-year to HKD 98 million (June 30, 2024: HKD 88 million)[53] - This was mainly due to the market not fully recovering, with market rental levels for renewed and newly leased properties still under pressure, leading to fair value losses on investment properties in Hong Kong[53] Selling and Marketing Expenses The Group's selling and marketing expenses decreased by 49.2% year-on-year to HKD 129 million, primarily due to lower property development business settlement revenue, resulting in reduced sales commissions and related expenses - The Group's selling and marketing expenses decreased by 49.2% year-on-year to HKD 129 million (June 30, 2024: HKD 254 million)[54] - This was mainly due to lower property development business settlement revenue compared to the same period last year, resulting in reduced sales commissions and related selling and marketing expenses recognized in profit or loss[54] Administrative and Other Expenses The Group's administrative and other expenses decreased by 17.2% year-on-year to HKD 231 million, primarily benefiting from strict cost control principles and improved operational efficiency, leading to reduced total remuneration and benefits for directors and employees, and professional fees - The Group's administrative and other expenses decreased by 17.2% year-on-year to HKD 231 million (June 30, 2024: HKD 279 million)[55] - This was mainly due to the Group adhering to strict cost control principles and continuously improving operational efficiency, resulting in reduced total remuneration and benefits for directors and employees, and professional fees compared to the same period last year[55] Impairment Provision for Inventories During the period, the Group recorded a one-off non-cash impairment provision for inventories of HKD 31 million, a significant 88.9% year-on-year decrease, primarily benefiting from market stabilization under real estate policy adjustments, which mitigated the extent of price declines for some projects - During the period, the Group recorded a one-off non-cash impairment provision for inventories of HKD 31 million (June 30, 2024: HKD 279 million), a significant year-on-year decrease[56] - The main reason is that under continuous real estate policy adjustments, local governments further relaxed administrative controls to stabilize real estate market development[56] Net Impairment Loss Under Expected Credit Loss Model The Group made an impairment provision of HKD 80 million for receivables related to certain joint ventures and associates, a 67.9% year-on-year decrease, mainly because joint ventures and associates did not undertake significant inventory impairments as in the prior year - The Group made an impairment provision of HKD 80 million for receivables related to certain joint ventures and associates, a 67.9% decrease compared to HKD 249 million in the same period last year[57] - The main reason is that during the period, joint ventures and associates did not undertake significant inventory impairments as in the same period last year, thereby reducing the expected loss on receivables for the period[57] Finance Costs The Group's finance costs recognized in profit or loss decreased by 2.0% year-on-year to HKD 291 million, primarily benefiting from active capital management, debt portfolio restructuring leading to lower loan interest rates, and a concurrent decrease in the one-month Hong Kong Interbank Offered Rate - The Group's finance costs recognized in profit or loss decreased by 2.0% year-on-year to HKD 291 million (June 30, 2024: HKD 297 million)[58] - This was mainly achieved through active capital management and restructuring of the debt portfolio, leading to lower loan interest rates, coupled with a concurrent decrease in the one-month Hong Kong Interbank Offered Rate[58] Share of Results of Associates The Group's share of loss from associates decreased by 81.6% year-on-year to HKD 29 million, primarily because associates made significant inventory impairment provisions in the prior year, while market performance did not further deteriorate in the current period, leading to reduced impairment provisions - The Group's share of loss from associates decreased by 81.6% year-on-year to HKD 29 million (June 30, 2024: HKD 158 million)[59] - This was mainly due to associates making significant inventory impairment provisions in the same period last year, while in the current period, with no further deterioration in real estate market performance, associates did not make substantial inventory impairment provisions[59] Share of Results of Joint Ventures The Group's share of profit from joint ventures decreased by 85.9% year-on-year to HKD 10 million, primarily due to concentrated deliveries by joint ventures in the prior year leading to higher profits, while the scale of real estate projects recognized in the current period decreased - The Group's share of profit from joint ventures decreased by 85.9% year-on-year to HKD 10 million (June 30, 2024: HKD 71 million)[60] - This was mainly due to concentrated deliveries by joint ventures in the same period last year, while the scale of real estate projects recognized by joint ventures decreased during the period[60] Loss for the Period Considering all factors, the Group recorded a net loss of HKD 580 million for the period, with loss attributable to equity holders of the Company at HKD 585 million, and basic loss per share at 17.49 HK cents Loss for the Period Data | Indicator | June 30, 2025 (HKD) | June 30, 2024 (HKD) | | :--- | :--- | :--- | | Net loss | 580 million | 1.05 billion | | Loss attributable to equity holders of the Company | 585 million | 1.044 billion | | Basic loss per share (HK cents) | 17.49 | 31.21 | Financial Position As of June 30, 2025, the Group's total assets decreased by 4.0% to HKD 39.372 billion, and net assets decreased by 3.1% to HKD 8.969 billion; the asset-liability ratio was 77.2%, and the net gearing ratio increased by 12.1 percentage points to 215.4% Financial Position Key Indicators | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total assets | HKD 39.372 billion | HKD 41.031 billion | -4.0% | | Net assets | HKD 8.969 billion | HKD 9.257 billion | -3.1% | | Asset-liability ratio | 77.2% | 77.4% | -0.2 percentage points | | Asset-liability ratio excluding contract liabilities and deferred income | 72.9% | 76.4% | -3.5 percentage points | | Net gearing ratio | 215.4% | 203.3% | +12.1 percentage points | - The decrease in net assets was mainly due to the loss attributable to equity holders of the Company of HKD 585 million during the period; however, the increase in RMB exchange rate and financial assets measured at fair value through other comprehensive income increased the Group's net assets by HKD 254 million during the period[62] Liquidity and Financial Resources The Group's working capital primarily comes from operating cash flow and borrowings; during the period, it successfully signed a RMB 1 billion dim sum bond and renewed a RMB 490 million revolving loan, actively adjusting its borrowing structure; as of June 30, 2025, total borrowings were HKD 21.309 billion, cash and bank deposits were HKD 1.983 billion, and unutilized bank financing facilities amounted to HKD 3.615 billion - The Group signed a RMB 1 billion dim sum bond and successfully renewed a RMB 490 million revolving loan during the period[64] - The Group actively adjusted its borrowing structure, increasing the proportion of RMB loans and reducing the scale of offshore loans, while actively reducing the overall loan scale[64] Borrowings Maturity Profile | Maturity Period | June 30, 2025 (HKD million) | Proportion (%) | December 31, 2024 (HKD million) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Within one year | 14,614 | 68.6% | 16,295 | 75.2% | | Second year | 4,815 | 22.6% | 4,315 | 19.9% | | Third to fifth year | 1,488 | 7.0% | 743 | 3.4% | | Over five years | 392 | 1.8% | 330 | 1.5% | | Total | 21,309 | 100.0% | 21,683 | 100.0% | Borrowings Currency Composition | Currency | June 30, 2025 (HKD million) | Proportion (%) | December 31, 2024 (HKD million) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | RMB | 10,105 | 47.4% | 10,521 | 48.5% | | HKD | 8,800 | 41.3% | 8,785 | 40.5% | | USD | 2,404 | 11.3% | 2,377 | 11.0% | | Total | 21,309 | 100.0% | 21,683 | 100.0% | - As of June 30, 2025, the Group had cash and bank deposits of HKD 1.983 billion (December 31, 2024: HKD 2.822 billion), of which 71.0% was in RMB, 23.2% in HKD, and 5.8% in USD[66] - The Group's unutilized bank financing facilities amounted to HKD 3.615 billion as of June 30, 2025 (December 31, 2024: HKD 4.089 billion)[66] Exchange Rate and Interest Rate Fluctuation Risks The Group faces exchange rate and interest rate fluctuation risks; to mitigate these, the company adjusts its foreign currency borrowing proportion, uses exchange rate hedging instruments, and enters into interest rate swap agreements to manage floating-rate borrowings Exchange Rate Risk The Group's primary operations are in Mainland China, with revenue mainly in RMB and external financing primarily in HKD, exposing it to exchange rate fluctuation risks; the company mitigates this by adjusting foreign currency borrowing proportions and using hedging instruments like forward foreign exchange contracts - The Group's primary business is in Mainland China, with external financing mainly in HKD and revenue mainly in RMB, exposing it to exchange rate fluctuation risks[67] - The Group reduces the impact of exchange rate fluctuations by adjusting the proportion of foreign currency borrowings and using exchange rate hedging instruments (such as forward foreign exchange contracts or capped forward contracts)[67] Interest Rate Risk Most of the Group's borrowings are interest-bearing at floating rates; to mitigate interest rate risk, it has entered into interest rate swap agreements to pay fixed interest on a notional amount of HKD 800 million in borrowings; as of June 30, 2025, 42.1% of borrowings were interest-bearing at fixed rates - Most of the Group's borrowings are interest-bearing at floating rates, and an increase in interest rates would raise finance costs[68] - To mitigate interest rate risk, the Group has entered into interest rate swap agreements to pay fixed interest monthly on a notional amount of HKD 800 million[68] - As of June 30, 2025, 42.1% (December 31, 2024: 41.3%) of the Group's borrowings were interest-bearing at fixed rates[68] Pledges of Group Assets As of June 30, 2025, the Group pledged inventories with a carrying amount of HKD 3.682 billion, property, plant and equipment of HKD 570 million, investment properties of HKD 523 million, and 100% equity interest in a subsidiary as collateral for bank credit facilities and mortgage loans Pledged Assets | Asset Type | June 30, 2025 (HKD billion) | December 31, 2024 (HKD billion) | | :--- | :--- | :--- | | Inventories | 3.682 | 4.265 | | Property, plant and equipment | 0.570 | 0.312 | | Investment properties | 0.523 | 0.317 | | 100% equity interest in a subsidiary | - | - | Financial Guarantees and Contingent Liabilities As of June 30, 2025, the Group provided bank guarantees of HKD 3.938 billion for mortgage financing granted to property purchasers; the directors consider the fair value of these financial guarantees not to be material - As of June 30, 2025, guarantees provided to banks for mortgage financing granted to purchasers of the Group's properties amounted to HKD 3.938 billion (December 31, 2024: HKD 4.681 billion)[69] - These guarantees will terminate upon the issuance of property ownership certificates or repayment of mortgage loans by the purchasers[69] - The directors consider the fair value of the financial guarantees not to be material at initial recognition and at the end of each subsequent reporting period[69] Employees As of June 30, 2025, the Group's total number of employees (including directors) decreased by 6.3% to 926; total remuneration and benefits for directors and employees amounted to HKD 141 million during the period - As of June 30, 2025, the Group's total number of employees (including directors) decreased by 6.3% to 926 (June 30, 2024: 988)[70] - For the six months ended June 30, 2025, the total remuneration and benefits for the Group's directors and employees amounted to HKD 141 million (June 30, 2024: HKD 167 million)[70] Other Information Corporate Governance The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025, except for code provisions B.2.2 (Chairman and Managing Director not subject to retirement by rotation), C.2.1 (Chairman also Executive Director), and F.1.3 (Chairman unable to attend AGM) - The Company has complied with the code provisions set out in the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[71] - Deviations include: the Chairman and Managing Director are not required to retire by rotation; Mr. He Jianbo, an executive director, also serves as the Chairman of the Board; and Chairman Mr. He Jianbo was unable to attend the Annual General Meeting due to other work arrangements[71][73] Code for Securities Transactions by Directors The Company has established a code for securities transactions, and all directors have confirmed their compliance with this code for the six months ended June 30, 2025 - The Company has established a set of guidelines, "Rules and Procedures for Securities Transactions by Directors and Relevant Employees of the Company," whose provisions are no less stringent than the Model Code set out in Appendix C3 of the Listing Rules[74] - All directors have confirmed their compliance with the Code for Securities Transactions for the six months ended June 30, 2025[74] Review by Audit Committee The Company's Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, and Deloitte Touche Tohmatsu, the independent auditor, has also reviewed these statements in accordance with Hong Kong Standard on Review Engagements 2410 - The Company's Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025[75] - Deloitte Touche Tohmatsu, the independent auditor, has also reviewed these financial statements in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[75] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[76] Board of Directors As of the date of this announcement, the Board of Directors comprises nine directors, including Mr. He Jianbo as Chairman and Executive Director, three other Executive Directors, two Non-executive Directors, and three Independent Non-executive Directors - As of the date of this announcement, the Board of Directors comprises nine directors, including Mr. He Jianbo as Chairman and Executive Director, Mr. Dai Pengyu, Mr. Chen Xingwu, and Mr. Yang Shangping as Executive Directors, Ms. He Xiaoli and Mr. Huang Guoping as Non-executive Directors, and Ms. Lo Fan Chiu Fun, Professor Wang Xiuli, and Mr. Su Luming as Independent Non-executive Directors[77]