鲁商服务(02376) - 2025 - 中期业绩

Financial Highlights Financial Highlights For the six months ended June 30, 2025, Lushang Life Services Co., Ltd. saw revenue decline by 4.8% to RMB 293.8 million and net profit decrease by 27.1% to RMB 16.0 million, despite a gross profit margin increase from 19.6% to 21.1% Financial Performance Summary | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 293,850 | 308,549 | -4.8% | | Gross Profit | 62,058 | 60,455 | +2.7% | | Gross Profit Margin | 21.1% | 19.6% | +1.5pp | | Profit Before Tax | 21,266 | 28,897 | -26.4% | | Net Profit | 15,989 | 21,928 | -27.1% | | Net Profit Attributable to Owners of the Parent | 16,034 | 21,667 | -26.0% | | Basic Earnings Per Share (RMB) | 0.12 | 0.16 | -25.0% | | GFA Under Management (million sq.m.) | 23.1 | 23.5 | -1.7% | | Contracted GFA (million sq.m.) | 26.0 | 26.8 | -3.0% | - The Board resolved not to declare an interim dividend for the period[5] Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company's revenue decreased by 4.8% to RMB 294 million, with operating costs, taxes, and finance costs declining, while administrative and R&D expenses increased, and credit impairment losses significantly rose, leading to a substantial drop in operating profit and net profit Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item | June 30, 2025 (RMB) | June 30, 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 293,849,628.79 | 308,549,283.42 | -4.8% | | Cost of Sales | 231,791,940.13 | 248,094,201.19 | -6.6% | | Administrative Expenses | 24,747,828.25 | 23,572,203.44 | +5.0% | | Research and Development Expenses | 3,530,783.29 | 2,463,604.88 | +43.3% | | Finance Costs | -2,589,553.45 | -2,289,369.13 | +13.1% (decrease in expenses) | | Credit Impairment Losses | -13,627,852.13 | -7,158,903.19 | +90.4% (increase in losses) | | Operating Profit | 21,361,288.69 | 27,486,579.91 | -22.3% | | Profit Before Tax | 21,265,760.31 | 28,896,622.78 | -26.4% | | Net Profit | 15,988,719.39 | 21,928,273.60 | -27.1% | | Net Profit Attributable to Owners of the Parent | 16,034,324.40 | 21,666,723.76 | -26.0% | | Basic Earnings Per Share | 0.12 | 0.16 | -25.0% | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets decreased by 2.4% to RMB 907 million, with current assets remaining dominant but cash, bills receivable, and contract assets declining, while accounts receivable, other receivables, and inventories increased; total liabilities decreased by 6.6% mainly due to lower accounts payable and contract liabilities, with shareholder equity remaining stable and the gearing ratio improving Interim Condensed Consolidated Statement of Financial Position | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Assets | | | | | Total Current Assets | 801,752,795.82 | 825,295,747.75 | -2.8% | | Cash and Cash Equivalents | 397,758,342.49 | 426,558,420.34 | -6.8% | | Bills Receivable | 34,656,861.39 | 46,441,738.61 | -25.4% | | Accounts Receivable | 295,358,344.98 | 276,364,740.99 | +6.9% | | Contract Assets | 58,274,162.74 | 61,756,374.04 | -5.7% | | Total Non-current Assets | 105,158,383.93 | 103,796,917.18 | +1.3% | | Total Assets | 906,911,179.75 | 929,092,664.93 | -2.4% | | Liabilities and Equity | | | | | Total Current Liabilities | 336,493,467.36 | 360,262,951.93 | -6.6% | | Accounts Payable | 152,433,363.87 | 165,827,631.03 | -8.1% | | Contract Liabilities | 67,473,120.52 | 80,569,022.21 | -16.3% | | Total Liabilities | 336,493,467.36 | 360,262,951.93 | -6.6% | | Total Equity Attributable to Owners of the Parent | 566,480,594.13 | 564,846,989.73 | +0.3% | | Total Equity | 570,417,712.39 | 568,829,713.00 | +0.3% | | Total Liabilities and Equity | 906,911,179.75 | 929,092,664.93 | -2.4% | Notes to the Interim Condensed Consolidated Financial Statements Company Information Lushang Life Services Co., Ltd., established in China in 2006 and listed on the HKEX Main Board in July 2022, primarily provides property management, value-added services to property owners, and value-added services to non-property owners in China, with Lushang Furida Pharmaceutical Co., Ltd. as its direct parent and Shandong Commercial Group Co., Ltd. as its ultimate parent - The company was established in China on March 24, 2006, and converted into a joint stock company on March 12, 2021[14] - The company's H shares were listed on the Main Board of the Hong Kong Stock Exchange on July 8, 2022[15] - The Group is principally engaged in providing property management services, value-added services to property owners, and value-added services to non-property owners in China[14] Summary of Significant Accounting Policies The company has changed its financial statement preparation basis from IFRS to China Accounting Standards for Business Enterprises since the interim report for the six months ended June 30, 2023, and these financial statements are prepared under the going concern assumption - Since the interim report for the six months ended June 30, 2023, the company has prepared its financial statements in accordance with China Accounting Standards for Business Enterprises to improve efficiency and reduce costs[17][18] - These financial statements are prepared on a going concern basis, with no matters or circumstances identified that would cast significant doubt on the company's ability to continue as a going concern[19] Details of Notes This section details the composition, changes, and bad debt provisions for the company's assets, liabilities, and equity accounts, along with specifics on revenue, costs, income tax expense, and earnings per share, noting decreases in bills receivable and contract assets, increases in accounts receivable and inventories, reductions in accounts payable and contract liabilities, and an increase in other payables, alongside declines in revenue, costs, income tax expense, and earnings per share 3 Bills Receivable As of June 30, 2025, the carrying amount of bills receivable was RMB 34.66 million, a 25.4% decrease from RMB 46.44 million as of December 31, 2024, primarily comprising related party and aging portfolios Bills Receivable | Category | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Carrying amount of Bills Receivable | 34,656,861.39 | 46,441,738.61 | | Of which: Related Party Portfolio | 31,238,500.05 | 40,153,712.46 | | Aging Portfolio | 3,203,788.45 | 6,288,026.15 | 4 Accounts Receivable As of June 30, 2025, the carrying amount of accounts receivable was RMB 295.36 million, a 6.9% increase from RMB 276.36 million as of December 31, 2024, with the provision for bad debts ratio rising from 9.70% to 12.80% Accounts Receivable | Category | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Carrying amount of Accounts Receivable | 295,358,344.98 | 276,364,740.99 | | Provision for Bad Debts Ratio | 12.80% | 9.70% | | Of which: Aging Portfolio | 180,775,699.95 | 145,739,659.44 | | Related Party Portfolio | 114,582,645.03 | 130,625,081.55 | - As of June 30, 2025, the aging portfolio of accounts receivable showed the highest proportion within 1 year, totaling RMB 210 million[22] 5 Contract Assets As of June 30, 2025, the carrying amount of contract assets was RMB 58.27 million, a 5.7% decrease from RMB 61.76 million as of December 31, 2024, primarily due to reductions in contract assets for landscape greening and fine decoration projects Contract Assets | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Carrying amount of Contract Assets | 58,274,162.74 | 61,756,374.04 | | Of which: Landscape Greening Projects | 36,312,508.53 | 37,287,909.42 | | Design Services | 9,671,019.60 | 6,746,784.79 | | Fine Decoration Projects | 12,290,634.61 | 17,721,679.83 | 6 Property, Plant and Equipment As of June 30, 2025, the carrying amount of property, plant and equipment was RMB 49.03 million, a slight increase of 0.6% from RMB 48.74 million as of December 31, 2024, with additions to original cost of RMB 3.35 million and accumulated depreciation increasing by RMB 3.04 million during the period Property, Plant and Equipment | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Carrying amount of Property, Plant and Equipment | 49,025,988.42 | 48,738,575.11 | | Original Cost, Period-end Balance | 77,779,384.61 | 74,956,549.17 | | Accumulated Depreciation, Period-end Balance | 28,753,396.19 | 26,217,974.06 | 7 Accounts Payable As of June 30, 2025, total accounts payable amounted to RMB 152.43 million, an 8.1% decrease from RMB 165.83 million as of December 31, 2024, primarily due to reductions in payables for project costs and other items Accounts Payable | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Accounts Payable | 152,433,363.87 | 165,827,631.03 | | Of which: Payables for Engineering Projects | 75,560,742.63 | 72,234,232.98 | | Payables for Project Costs | 65,443,902.52 | 83,817,728.39 | - Accounts payable with an aging of less than 1 year accounted for the highest proportion, totaling RMB 105 million[26] 8 Contract Liabilities As of June 30, 2025, total contract liabilities amounted to RMB 67.47 million, a 16.3% decrease from RMB 80.57 million as of December 31, 2024, mainly due to a reduction in property management fee contract liabilities Contract Liabilities | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Contract Liabilities | 67,473,120.52 | 80,569,022.21 | | Of which: Property Management Fees | 58,469,712.36 | 79,092,601.23 | | Value-added Services to Property Owners | 9,003,408.16 | 1,476,420.98 | 9 Other Payables As of June 30, 2025, other payables by nature amounted to RMB 51.55 million, a 4.2% increase from RMB 49.45 million as of December 31, 2024, primarily due to increases in deposits and guarantees, and entrusted funds Other Payables | Nature of Payment | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Other Payables | 51,545,137.87 | 49,454,437.43 | | Of which: Deposits and Guarantees | 30,014,908.38 | 28,084,358.15 | | Entrusted Funds | 9,422,820.36 | 8,553,839.88 | 10 Share Capital, 11 Capital Reserve, 12 Surplus Reserve As of June 30, 2025, the company's share capital, capital reserve, and surplus reserve remained stable with no changes Share Capital, Capital Reserve, Surplus Reserve | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Share Capital | 133,340,000.00 | 133,340,000.00 | | Capital Reserve | 213,924,223.38 | 213,924,223.38 | | Surplus Reserve | 16,964,526.57 | 16,964,526.57 | 13 Revenue, Cost of Sales For the six months ended June 30, 2025, the company's total revenue was RMB 294 million and total cost of sales was RMB 232 million, both decreasing year-on-year, with property management services revenue increasing while value-added services to non-property owners and value-added services to property owners revenue declined Revenue and Cost of Sales | Item | January-June 2025 (RMB) | January-June 2024 (RMB) | | :--- | :--- | :--- | | Total Revenue | 293,849,628.79 | 308,549,283.42 | | Total Cost of Sales | 231,791,940.13 | 248,094,201.19 | | Property Management Services Revenue | 182,327,043.76 | 165,518,934.84 | | Value-added Services to Non-Property Owners Revenue | 47,129,630.01 | 75,737,995.23 | | Value-added Services to Property Owners Revenue | 64,392,955.02 | 67,292,353.35 | 14 Income Tax Expense For the six months ended June 30, 2025, income tax expense was RMB 5.28 million, a 24.3% decrease from RMB 6.97 million in the same period of 2024, primarily due to a reduction in current income tax and an increase in deferred income tax expense Income Tax Expense | Item | January-June 2025 (RMB) | January-June 2024 (RMB) | | :--- | :--- | :--- | | Total Income Tax Expense | 5,277,040.92 | 6,968,349.18 | | China Mainland Corporate Income Tax | 7,723,040.29 | 8,072,056.63 | | Deferred Income Tax Expense | -2,445,999.37 | -1,103,707.45 | - The Group had no assessable income in Hong Kong during the year, hence no Hong Kong income tax[32] 15 Return on Equity and Earnings Per Share As of June 30, 2025, the return on equity attributable to ordinary shareholders of the parent company was 2.81%, with both basic and diluted earnings per share at RMB 0.12 Return on Equity and Earnings Per Share | Item | Return on Equity (%) | Basic Earnings Per Share (RMB) | Diluted Earnings Per Share (RMB) | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Ordinary Shareholders of the Parent | 2.81 | 0.12 | 0.12 | | Net Profit Attributable to Ordinary Shareholders of the Parent (Excluding Non-recurring Items) | 2.81 | 0.12 | 0.12 | Management Discussion and Analysis Business Review As a leading integrated property management service provider in Shandong Province, the company managed 100 projects with a total GFA under management of 23.1 million sq.m. as of June 30, 2025, a 1.7% year-on-year decrease, with revenue primarily derived from property management services, value-added services to non-property owners, and value-added services to property owners, where property management services revenue grew while the other two declined - As of June 30, 2025, the Group managed 100 projects, with a total GFA under management of 23.1 million sq.m., a 1.7% decrease compared to June 30, 2024[34] - The company's business scope covers almost all prefecture-level cities in Shandong Province, as well as Beijing and Harbin, with Shandong Province being a strategic development focus[34] - Revenue is primarily derived from three service lines: property management services, value-added services to non-property owners, and value-added services to property owners[35] Property Management Services Property management services revenue accounted for approximately 62.1% of total revenue, reaching RMB 182.3 million for the period, a 10.2% year-on-year increase, primarily driven by optimizing project portfolio and strategically expanding integrated complex businesses, with GFA under management from related parties increasing and third-party GFA under management decreasing due to the exit of low-profit projects Property Management Services Revenue and GFA Under Management | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Property Management Services Revenue | 182,327 | 165,519 | +10.2% | | Proportion of Total Revenue | 62.1% | 53.6% | +8.5pp | | Related Party GFA Under Management (thousand sq.m.) | 16,461 | 15,691 | +4.9% | | Third-Party GFA Under Management (thousand sq.m.) | 6,614 | 7,818 | -15.4% | | Total GFA Under Management (thousand sq.m.) | 23,075 | 23,509 | -1.8% | - The decrease in third-party GFA under management was mainly due to the company exiting some low-profit resettlement housing projects[37] - The company provides property management for a diversified property portfolio, including residential and non-residential properties, contributing to diversified revenue sources[40] Value-added Services to Non-Property Owners Value-added services to non-property owners revenue accounted for approximately 16.0% of total revenue, reaching RMB 47.1 million for the period, a 37.8% year-on-year decrease, primarily due to reduced pre-delivery services revenue amid a sluggish real estate market and decreased landscape beautification services revenue following the disposal of a subsidiary (Chengfa Decoration) Value-added Services to Non-Property Owners Revenue | Service Type | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Value-added Services to Non-Property Owners Revenue | 47,130 | 75,738 | -37.8% | | Design Services | 18,973 | 17,188 | +10.4% | | Landscape Beautification Services | 20,993 | 49,994 | -58.0% | | Early-stage Property Management Services | 5,433 | 5,983 | -9.2% | | Pre-delivery Services | 1,073 | 1,641 | -34.6% | - The decrease in revenue was mainly due to reduced pre-delivery services revenue caused by the sluggish real estate market, and decreased landscape beautification services revenue due to the disposal of a subsidiary (Chengfa Decoration)[41] Value-added Services to Property Owners Value-added services to property owners revenue accounted for approximately 21.9% of total revenue, reaching RMB 64.4 million for the period, a 4.3% year-on-year decrease, primarily due to a reduction in community living services asset disposal business, with parking space management services revenue increasing while community living services revenue declined Value-added Services to Property Owners Revenue | Service Type | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Value-added Services to Property Owners Revenue | 64,393 | 67,292 | -4.3% | | Parking Space Management Services | 21,907 | 18,757 | +16.8% | | Community Living Services | 23,771 | 29,292 | -18.8% | | Water and Electricity Management Services | 15,244 | 14,439 | +5.6% | - The decrease in revenue was mainly due to a reduction in community living services asset disposal business[44] Financial Review During the period, the company's total revenue decreased by 4.8% year-on-year, primarily impacted by a significant decline in value-added services to non-property owners revenue; while cost of sales decreased with revenue, gross profit margin improved, but increased administrative and R&D expenses led to a 27.1% year-on-year decrease in profit for the period Revenue Total revenue for the period was RMB 293.8 million, a 4.8% year-on-year decrease, primarily due to a 37.8% reduction in value-added services to non-property owners revenue and a 4.3% reduction in value-added services to property owners revenue, while property management services revenue increased by 10.2% Revenue by Service Line | Service Line | 2025 (RMB thousands) | 2024 (RMB thousands) | Growth Rate (%) | | :--- | :--- | :--- | :--- | | Property Management Services | 182,327 | 165,519 | +10.2% | | Value-added Services to Non-Property Owners | 47,130 | 75,738 | -37.8% | | Value-added Services to Property Owners | 64,393 | 67,292 | -4.3% | | Total | 293,850 | 308,549 | -4.8% | - The decrease in value-added services to non-property owners revenue was mainly due to reduced pre-delivery services revenue caused by the sluggish real estate market, and decreased landscape beautification services revenue due to the disposal of Chengfa Decoration[46] - The increase in property management services revenue was mainly due to optimizing the project portfolio and strategically expanding integrated complex businesses[47] Cost of Sales Cost of sales for the period was approximately RMB 231.8 million, a 6.6% year-on-year decrease, primarily due to reduced pre-delivery services costs amid a sluggish real estate market and decreased landscape beautification services costs following the disposal of Chengfa Decoration Cost of Sales | Item | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 231.8 | 248.1 | -6.6% | - The decrease in cost of sales was mainly due to reduced pre-delivery services costs caused by the sluggish real estate market, and decreased landscape beautification services costs due to the disposal of Chengfa Decoration[48] Gross Profit and Gross Profit Margin Gross profit for the period was approximately RMB 62.1 million, a 2.7% year-on-year increase, with the gross profit margin improving from 19.6% to 21.1%, notably with a significant rise in value-added services to non-property owners gross profit margin, while property management services gross profit margin slightly declined due to the expansion of integrated complex businesses Gross Profit and Gross Profit Margin by Service Type | Service Type | 2025 Gross Profit (RMB thousands) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousands) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 33,547 | 18.4 | 32,202 | 19.5 | | Value-added Services to Non-Property Owners | 11,871 | 25.2 | 10,737 | 14.1 | | Value-added Services to Property Owners | 16,639 | 25.8 | 17,516 | 26.0 | | Total | 62,058 | 21.1 | 60,455 | 19.6 | - The increase in gross profit margin for value-added services to non-property owners was mainly due to increased revenue from high-margin design services and decreased revenue from low-margin landscape beautification services[50] - The decline in property management services gross profit margin was mainly due to the relatively lower gross profit margin of integrated complex businesses expanded during the period[50] Administrative and Research and Development Expenses Administrative and research and development expenses for the period were approximately RMB 28.3 million, an 8.8% year-on-year increase, primarily due to higher administrative costs incurred to enhance management quality and expand external business Administrative and Research and Development Expenses | Item | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative and Research and Development Expenses | 28.3 | 26.0 | +8.8% | - The increase in expenses was mainly due to higher administrative costs incurred to enhance management quality and expand external business[51] Profit for the Period Profit for the period was approximately RMB 16.0 million, a 27.1% year-on-year decrease Profit for the Period | Item | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 16.0 | 21.9 | -27.1% | Liquidity and Capital Resources The company's total current assets slightly decreased, but its current ratio remained robust; trade receivables increased while trade payables decreased, and cash and cash equivalents declined primarily due to increased operational investments, with the gearing ratio improving and financial position remaining sound - The company's primary source of liquidity is cash flow from operations, and it adopts a prudent capital management policy[59] Current Assets As of June 30, 2025, current assets were approximately RMB 801.8 million, a 2.8% decrease from RMB 825.3 million as of December 31, 2024, with the current ratio improving to approximately 2.4 times from 2.3 times at the end of 2024 Current Assets and Current Ratio | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Current Assets | 801.8 | 825.3 | -2.8% | | Current Ratio | 2.4 times | 2.3 times | +0.1 times | Property, Plant and Equipment, Right-of-Use Assets As of June 30, 2025, property, plant and equipment and right-of-use assets were approximately RMB 49.6 million, a slight decrease of RMB 0.1 million from RMB 49.7 million as of December 31, 2024, primarily due to depreciation during the period Property, Plant and Equipment, Right-of-Use Assets | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment, Right-of-Use Assets | 49.6 | 49.7 | -0.1 | Trade and Bills Receivable As of June 30, 2025, trade and bills receivable amounted to approximately RMB 330.1 million, an increase of RMB 7.3 million from RMB 322.8 million as of December 31, 2024, primarily due to the growth in property business scale and property owners' payment habits Trade and Bills Receivable | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Trade and Bills Receivable | 330.1 | 322.8 | +7.3 | - The increase was mainly due to the natural increase in accounts receivable resulting from the growth in property business scale and property owners' payment habits[55] Prepayments and Other Receivables As of June 30, 2025, prepayments and other receivables amounted to approximately RMB 7.0 million, an increase of RMB 0.5 million from RMB 6.5 million as of December 31, 2024, primarily due to an increase in deposits received as the catering business expanded Prepayments and Other Receivables | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Prepayments and Other Receivables | 7.0 | 6.5 | +0.5 | - The increase was mainly due to an increase in deposits received as the catering business expanded[56] Trade Payables As of June 30, 2025, trade payables amounted to approximately RMB 152.4 million, a decrease of RMB 13.4 million from RMB 165.8 million as of December 31, 2024, primarily due to reductions in landscape beautification outsourcing fees and design outsourcing fees Trade Payables | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Trade Payables | 152.4 | 165.8 | -13.4 | - The decrease was mainly due to reductions in landscape beautification outsourcing fees and design outsourcing fees[57] Other Payables As of June 30, 2025, other payables amounted to approximately RMB 95.2 million, an increase of RMB 11.0 million from RMB 84.2 million as of December 31, 2024, primarily due to an increase in dividends payable Other Payables | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (RMB millions) | | :--- | :--- | :--- | :--- | | Other Payables | 95.2 | 84.2 | +11.0 | - The increase was mainly due to an increase in dividends payable within other payables[58] Cash and Cash Equivalents As of June 30, 2025, cash and cash equivalents amounted to approximately RMB 395.3 million, a 7.0% year-on-year decrease, primarily due to increased investment in daily maintenance and upkeep of building facilities and equipment Cash and Cash Equivalents | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 395.3 | 425.2 | -7.0% | - The decrease was mainly due to increased investment in daily maintenance and upkeep of building facilities and equipment to enhance service quality during the period[60] Interest-bearing Borrowings As of June 30, 2025, interest-bearing borrowings amounted to RMB 8.01 million, remaining unchanged from December 31, 2024, all bearing a fixed annual interest rate of 3.1% and maturing on March 17, 2026 Interest-bearing Borrowings | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Interest-bearing Borrowings | 8.01 | 8.01 | - Interest-bearing borrowings bear a fixed annual interest rate of 3.1% and are due on March 17, 2026[61] Pledge of Assets As of June 30, 2025, the company had not pledged any assets - As of June 30, 2025, the company had not pledged any assets[62] Gearing Ratio As of June 30, 2025, the gearing ratio was 37.1%, a decrease from 38.8% as of December 31, 2024 Gearing Ratio | Item | June 30, 2025 (%) | December 31, 2024 (%) | | :--- | :--- | :--- | | Gearing Ratio | 37.1% | 38.8% | Material Investments, Acquisitions and Disposals On March 21, 2025, the company entered into a capital increase agreement with an investor to inject RMB 36,320,000.00 into Shandong Lan'an Landscape Engineering Co., Ltd.; upon completion of the capital increase, the target company ceased to be a subsidiary and became an associate of the company, with no other material investments, acquisitions, or disposals during the period - The company entered into a capital increase agreement with an investor to inject RMB 36,320,000.00 into Shandong Lan'an Landscape Engineering Co., Ltd[64] - Upon completion of the capital increase, the investor and the company will own 51% and 49% respectively of the enlarged equity interest in the target company, which will cease to be a subsidiary and become an associate of the company[65] - The capital increase was completed on July 1, 2025[67] Future Plans for Material Investments and Capital Assets During the period, the Group had no future plans for material investments or capital assets but will continue to identify new business development opportunities - The Group had no future plans for material investments or capital assets but will continue to identify new business development opportunities[68] Contingent Liabilities and Commitments As of June 30, 2025, the company had no other outstanding guarantees or other material contingent liabilities - As of June 30, 2025, the company had no other outstanding guarantees or other material contingent liabilities[69] Use of Proceeds from Listing and Foreign Exchange Risk The company's H shares were listed on July 8, 2022, with net proceeds of approximately HKD 138 million to be used as planned in the prospectus; the company conducts its business in RMB and has not adopted a foreign currency hedging policy but will continue to monitor foreign exchange risk - The company's H shares were listed on July 8, 2022, with net proceeds of approximately HKD 138 million to be used as planned in the prospectus[70] - The Group conducts its business in RMB and has not adopted any foreign currency hedging policy but will continue to monitor foreign exchange risk[71] Employees and Remuneration Policy As of June 30, 2025, the Group had 1,369 employees, a decrease from the end of 2024, and continues to optimize its remuneration incentive mechanism based on a "performance-based pay, excellent performance, excellent reward" principle, while advancing management structure reforms and talent development through various programs to enhance employee capabilities and talent reserves Employee Count | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Employees | 1,369 | 1,405 | - The company continues to optimize its remuneration incentive mechanism, based on a "star rating" system, linking performance to salary growth, and advancing management structure reforms[72] - In talent development, the company continues to upgrade its tiered and categorized training system, focusing on enhancing the capabilities of middle and senior management, reserve cadres, and new employees through "Head Goose Program," "Gold Casting Program," and "Spark Program"[73] Events After Reporting Period Except for the capital increase disclosed in this announcement, no other disclosable events that could significantly impact the Group's operations and financial performance occurred between June 30, 2025, and the date of this announcement - Except for those disclosed in this announcement, no other disclosable events that could significantly impact the Group's operations and financial performance occurred between June 30, 2025, and the date of this announcement[74] Other Information Compliance with Corporate Governance Code The Group has adopted and complied with the code provisions set out in Part 2 of Appendix C1 to the Listing Rules of the Stock Exchange - The Group has adopted and complied with the code provisions set out in Part 2 of Appendix C1 to the Listing Rules of the Stock Exchange[75] Compliance with Model Code for Securities Transactions The company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for directors and supervisors in securities transactions, and all directors and supervisors confirm compliance with this code - The company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for directors and supervisors in securities transactions[76] - All directors and supervisors confirmed that they have complied with the Model Code during the period[77] Purchase, Sale or Redemption 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, and no treasury shares were held at the end of the period - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[78] - As of the end of the period, the company held no treasury shares[78] Review of Interim Results The company's audit committee has reviewed the Group's unaudited consolidated financial information and discussed accounting principles with management and auditors; independent auditor Shinewing has conducted a review of the interim financial information in accordance with China Review Standards for Certified Public Accountants - The company's audit committee has reviewed the Group's unaudited consolidated financial information[79] - Independent auditor Shinewing has conducted a review of the interim financial information in accordance with China Review Standards for Certified Public Accountants No. 2101[79] Dividends The Board resolved not to declare an interim dividend for the period - The Board resolved not to declare an interim dividend for the period[80] Publication of Interim Results and Interim Report This announcement has been published on the company's website and the Stock Exchange website; the 2025 interim report will be available for review on these websites in September 2025 - This announcement is published on the company's website (www.lushangfuwu.com) and the Stock Exchange website (www.hkexnews.hk)[81](index=81&type=chunk) - The 2025 interim report will be available for review on the company's and the Stock Exchange's websites in September 2025[81]