中国诚通发展集团(00217) - 2025 - 中期业绩

Financial Statements Condensed Consolidated Statement of Profit or Loss The company experienced a significant year-on-year decline in revenue, gross profit, profit before tax, and profit attributable to owners Key Financial Data from Condensed Consolidated Statement of Profit or Loss | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 205,410 | 323,471 | -36% | | Gross Profit and Net Interest Income | 79,519 | 118,953 | -33% | | Profit Before Tax | 21,995 | 52,157 | -58% | | Profit Attributable to Owners of the Company | 9,881 | 26,694 | -63% | | Basic and Diluted Earnings Per Share | 0.17 HK Cents | 0.45 HK Cents | -62% | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The company's total comprehensive income shifted from a loss to a profit year-on-year, driven by a significant increase in net exchange differences from foreign currency translation Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | Profit for the Period | 10,011 | 26,855 | | Fair Value Change of Equity Investments at Fair Value Through Other Comprehensive Income | 20,828 | (7,848) | | Net Exchange Differences Arising from Translation of Foreign Operations | 82,014 | (80,959) | | Total Comprehensive Income for the Period | 112,853 | (61,952) | Condensed Consolidated Statement of Financial Position Total assets and liabilities increased, with a substantial rise in net current assets and non-current liabilities, indicating asset expansion and a shift in liability structure Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Non-current Assets | 3,788,406 | 3,861,767 | -2% | | Current Assets | 5,342,700 | 4,515,607 | +18% | | Total Assets | 9,131,106 | 8,377,374 | +9% | | Current Liabilities | (3,107,392) | (3,515,666) | -12% | | Non-current Liabilities | (3,153,280) | (2,092,198) | +51% | | Total Liabilities | (6,260,672) | (5,607,864) | +12% | | Net Current Assets | 2,235,308 | 999,941 | +124% | | Equity Attributable to Owners of the Company | 2,865,129 | 2,764,335 | +4% | Notes to the Condensed Consolidated Financial Statements Basis of Preparation The condensed consolidated financial statements are prepared in accordance with HKAS 34 and HKEX Listing Rules, extracted from the 2024 annual report with an unqualified opinion - The statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the HKEX Listing Rules[9] - The 2024 statutory annual report has been delivered to the Registrar of Companies, and the auditor's report was unqualified[9] Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the 2024 annual report, and new HKFRS amendments have no material impact - The statements are prepared on a historical cost basis, except for certain properties and financial instruments measured at fair value[10] - Accounting policies are consistent with those presented in the Group's annual financial statements for the year ended December 31, 2024, except for changes due to the application of amendments to HKFRS[10] - New amendments to HKFRS have no material impact on the Group's financial position and performance during the current and prior periods[11] Revenue Total revenue significantly decreased by 36% year-on-year, primarily due to reduced property sales and leasing income, with property sales experiencing the largest decline Revenue Breakdown by Account | Business Type | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Property Sales | 9,439 | 58,373 | -84% | | Consulting Service Income from Lease Arrangements | 7,621 | – | Not Applicable | | Marine Tourism and Hotel Services Income | 16,520 | 18,227 | -9% | | Revenue from Customer Contracts | 33,580 | 76,600 | -56% | | Rental Income from Investment Properties | 933 | 1,362 | -31% | | Rental Income from Operating Leases of Own Machinery and Equipment | 43,720 | 54,942 | -20% | | Interest Income from Loans Receivable | 127,081 | 189,789 | -33% | | Finance Lease Income | 96 | 778 | -88% | | Total Revenue | 205,410 | 323,471 | -36% | Segment Information Leasing remains the primary revenue source but saw significant declines in revenue and performance, property development and investment also performed poorly, while marine tourism and hotel services revenue slightly decreased but gross profit increased Revenue and Performance Analysis by Reportable Segment | Business Segment | 2025 H1 Revenue (HKD Thousands) | 2024 H1 Revenue (HKD Thousands) | Revenue Y-o-Y Change | 2025 H1 Segment Results (HKD Thousands) | 2024 H1 Segment Results (HKD Thousands) | Results Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Leasing | 178,518 | 245,509 | -27% | 46,154 | 73,878 | -38% | | Property Development and Investment | 10,372 | 59,735 | -83% | (2,695) | 14,232 | -119% | | Marine Tourism Services and Hotel | 16,520 | 18,227 | -9% | (2,251) | (1,950) | +15% | | Total | 205,410 | 323,471 | -36% | 21,995 (Profit Before Tax) | 52,157 (Profit Before Tax) | -58% | - Unallocated corporate income primarily includes interest income from deposits and related parties, not directly attributable to any operating segment[18] - Unallocated corporate expenses mainly include depreciation, head office staff costs, exchange differences, and legal and professional fees, not directly attributable to any operating segment[19] Other Income and Gains, Net Other income and gains, net, decreased by 36% year-on-year, mainly due to lower interest income from deposits and other financial assets, despite an increase in gains from disposal of investment properties Details of Other Income and Gains, Net | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | Interest Income from Deposits and Other Financial Assets | 4,829 | 9,521 | | Interest Income from Related Parties | 1,015 | 1,116 | | Government Grants | 196 | 74 | | Gain on Disposal of Investment Properties | 140 | – | | Gain on Disposal of Property, Plant and Equipment | 116 | 26 | | Others | 787 | 278 | | Total | 7,083 | 11,015 | Finance Costs Total finance costs decreased by 37% year-on-year, primarily due to reduced interest on bank borrowings and asset-backed securities, while corporate bond interest began to accrue Details of Finance Costs | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 40,003 | 69,345 | | Interest on Asset-Backed Securities | 24,628 | 42,397 | | Interest on Corporate Bonds | 5,612 | – | | Interest on Loans from Related Parties | 3,108 | 4,048 | | Interest on Lease Liabilities | 78 | 166 | | Total Finance Costs | 73,429 | 115,956 | | Less: Amount Capitalized into Cost of Sales | (66,341) | (100,605) | | Net Finance Costs | 7,088 | 15,351 | Income Tax Expense Income tax expense decreased by 53% year-on-year, mainly due to lower China corporate income tax and land appreciation tax, with deferred tax shifting from expense to income Details of Income Tax Expense | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | China Corporate Income Tax | 16,122 | 24,232 | | China Land Appreciation Tax | 893 | 3,099 | | Total Current Tax | 17,015 | 27,331 | | Deferred Tax | (5,031) | (2,029) | | Total Income Tax Expense | 11,984 | 25,302 | Profit for the Period Profit for the period was net of staff costs, impairment losses on expected credit losses, depreciation, and net exchange losses, with depreciation and expected credit loss impairment increasing Items Deducted from Profit for the Period | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | | :--- | :--- | :--- | | Total Staff Costs | 27,967 | 29,241 | | Impairment Losses on Expected Credit Losses | 4,735 | 2,211 | | Depreciation of Property, Plant and Equipment | 68,433 | 52,006 | | Cost of Inventories Sold (included in cost of sales) | 13,042 | 50,717 | | Net Exchange Losses | 5,255 | 6,105 | Dividends The company declared a final dividend of 0.20 HK cents per share for 2024, totaling HKD 11.929 million, but the board resolved not to declare any interim dividend for the current period - A final dividend of 0.20 HK cents per share for the year ended December 31, 2024 (2024: 0.34 HK cents per share for the year ended December 31, 2023) was declared to the owners of the Company[24] - The total final dividend declared for the interim period was HKD 11,929,000 (2024: approximately HKD 20,280,000)[24] - As of the end of the interim period, the directors resolved not to declare any dividend for the current interim period[25] Earnings Per Share Basic and diluted earnings per share for the period were 0.17 HK cents, a significant decrease year-on-year, with no dilutive equity instruments, thus diluted EPS equals basic EPS Earnings Per Share Data | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HKD Thousands) | 9,881 | 26,694 | | Weighted Average Number of Ordinary Shares (Thousands) | 5,952,885 | 5,952,885 | | Basic and Diluted Earnings Per Share | 0.17 HK Cents | 0.45 HK Cents | - As there are no dilutive potential equity instruments, diluted earnings per share are the same as basic earnings per share[26] Finance Lease Receivables and Loans Receivable Net finance lease receivables and loans receivable slightly increased, with a corresponding rise in credit loss provisions; most receivables are from state-owned enterprises, and some are pledged as collateral Key Data for Finance Lease Receivables and Loans Receivable | Metric | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | Gross Finance Lease Receivables and Loans Receivable | 6,672,707 | 6,631,636 | | Less: Provision for Credit Losses | (69,399) | (62,795) | | Net Amount | 6,603,308 | 6,568,841 | | Current Assets | 3,352,240 | 3,255,832 | | Non-current Assets | 3,251,068 | 3,313,009 | - Provision for credit losses increased by 11% to approximately HKD 69,399,000[28][30][57] - Effective annual interest rates for fixed-rate loans receivable ranged from 3.42% to 9.40%, and for floating-rate loans receivable from 3.04% to 7.84%[31] - Approximately 99% of net lease receivables are from state-owned enterprises[54] - Approximately HKD 3.064 billion of finance lease receivables and loans receivable are pledged as collateral for bank borrowings, and approximately HKD 1.390 billion are pledged as collateral for asset-backed securities[32][86][87] Trade and Other Receivables Total trade and other receivables slightly decreased, with most trade receivables aged within 30 days, and some pledged as collateral for bank borrowings and asset-backed securities Details of Trade and Other Receivables | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | Trade Receivables and Bills Receivable | 2,543 | 2,760 | | Other Prepayments and Deposits | 4,989 | 3,596 | | Other Receivables | 16,941 | 14,149 | | Other Recoverable Taxes | – | 7,952 | | Amounts Due from a Related Company | 2,458 | 1,319 | | Amounts Due from Fellow Subsidiaries | 494 | – | | Total | 27,425 | 29,776 | Ageing Analysis of Trade Receivables and Bills Receivable | Ageing | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | 1 to 30 days | 1,471 | 2,351 | | 31 to 90 days | 1,046 | 177 | | Over 90 days | 26 | 232 | | Total | 2,543 | 2,760 | - Approximately HKD 191,000 of trade receivables are pledged as collateral for bank borrowings, and approximately HKD 1,260,000 are pledged as collateral for asset-backed securities[33][86][87] Trade and Other Payables Total trade and other payables significantly decreased, mainly due to reduced trade payables and deposits received, with some deposits classified as non-current liabilities Details of Trade and Other Payables | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | Trade Payables and Bills Payable | 6,868 | 112,448 | | Other Payables and Accruals | 83,030 | 73,721 | | Deposits Received | 242,993 | 308,003 | | Accrued Construction Costs | 6,966 | 11,554 | | Amounts Due to Ultimate Holding Company | 2,071 | 8,074 | | Amounts Due to Immediate Holding Company | 11 | 1,691 | | Amounts Due to Fellow Subsidiaries | 1,914 | 197 | | Total | 343,853 | 515,688 | | Current Liabilities | 198,147 | 300,704 | | Non-current Liabilities | 145,706 | 214,984 | Ageing Analysis of Trade Payables and Bills Payable | Ageing | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | 1 to 30 days | 172 | 106,095 | | 31 to 90 days | 6,352 | 6,695 | | Over 90 days | 1 | 1 | | Total | 6,868 | 112,448 | - Approximately HKD 145,706,000 of deposits received are presented as non-current liabilities[34] Corporate Bonds The company issued two tranches of corporate bonds totaling RMB 1 billion (approx. HKD 1.07 billion) with effective annual interest rates of 2.17% to 2.18%, a five-year term, and early redemption, put option, and coupon rate adjustment features - Two tranches of corporate bonds were issued at par during the interim period, each with a principal amount of RMB 500,000,000 (equivalent to HKD 535,000,000)[35] - The corporate bonds have an effective annual interest rate ranging from 2.17% to 2.18%, a five-year term, with interest paid annually[35][36] - The corporate bonds include early redemption options, put options, and coupon rate adjustment options[36][37][38] Capital Commitments As of the reporting period, the company had no contracted but unprovided capital commitments, unlike the prior year which had minor commitments for property, plant, and equipment purchases Capital Commitments | Item | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | | :--- | :--- | :--- | | Contracted but not provided for: Purchase of property, plant and equipment | – | 135 | - The Group had no capital commitments as of June 30, 2025[88] Contingent Liabilities The company provided contingent liability guarantees of approximately HKD 236 million for mortgage loans to property buyers of the Chengtong Xiangxie Li project, with directors deeming the financial impact insignificant and no major litigation - The Group's contingent liabilities for guarantees amounted to approximately HKD 236,040,000 (December 31, 2024: approximately HKD 230,470,000), provided for mortgage loans granted by banks to certain property unit buyers of the Group's Chengtong Xiangxie Li project[39] - The directors of the Company believe that the financial impact arising from providing these financial guarantees is insignificant and thus not recognized in these condensed consolidated financial statements[40] - The Group is not involved in any material litigation or arbitration, nor are the directors aware of any outstanding or threatened material litigation or claims against the Group[40] Management Discussion and Analysis Financial Performance Review Overall financial performance significantly declined, with substantial reductions in revenue, gross profit, and profit attributable to shareholders, influenced by global economic slowdown, geopolitical shifts, and China's lower interest rates and tight supply of quality assets Key Financial Performance Review Data | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 205,410 | 323,471 | -36% | | Consolidated Gross Profit and Net Interest Income | 79,519 | 118,953 | -33% | | Profit Before Tax | 21,995 | 52,157 | -58% | | Profit Attributable to Shareholders | 9,881 | 26,694 | -63% | - Financial performance was primarily affected by slow global economic recovery, ongoing geopolitical and economic shifts, and China's declining interest rates and scarcity of quality assets[42] - Consolidated cost of sales decreased by 38% to approximately HKD 125.89 million, consistent with the reduced business volume in the leasing segment during the review period[43] - Net impairment loss under the expected credit loss model was approximately HKD 4.74 million, an increase of 114% compared to 2024 H1[44] - Fair value loss on investment properties was approximately HKD 75,000, a significant reduction from approximately HKD 7.78 million in 2024 H1[45] Business Review The company's main businesses include leasing, property development and investment, and marine tourism and hotel services; leasing faces challenges but is expanding, property development is impacted by market downturns, and marine tourism and hotel services show improved gross margins Segment Performance Segment performance varied, with significant declines in revenue and results for leasing and property development and investment, while marine tourism and hotel services saw slightly lower revenue but substantially improved gross margins Leasing Business Leasing business revenue and segment results significantly decreased due to reduced new placements and lower lease receivables balances; the company is actively expanding into new areas like aircraft leasing and strengthening risk control and financing channels Leasing Business Segment Performance | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Interest Income | 127,177 | 190,567 | -33% | | Consulting Service Fees | 7,621 | – | Not Applicable | | Rental Income | 43,720 | 54,942 | -20% | | Segment Revenue | 178,518 | 245,509 | -27% | | Cost of Sales | (112,852) | (153,802) | -27% | | Gross Profit and Net Interest Income | 65,666 | 91,707 | -28% | | Gross Profit Margin | 37% | 37% | 0% | | Segment Results | 46,154 | 73,878 | -38% | - 14 new sale-and-leaseback arrangements were entered into, with a total lease principal of approximately HKD 1.90924 billion, lease terms of 1 to 5 years, and floating annual interest rates ranging from 2.85% to 3.9%[48] - Successfully launched its first aircraft leasing business, further diversifying the Group's lease asset types[69] - Net lease receivables were approximately HKD 6.60331 billion, a slight increase from December 31, 2024, accounting for 72% of total assets[53] - Approximately 99% of net lease receivables are from state-owned enterprises, indicating relatively low default risk[54][58] - Total provision for expected credit losses increased by 11% compared to December 31, 2024[57] Property Development and Investment Property development and investment revenue and gross profit significantly declined due to continuous market price adjustments and fewer housing deliveries; the company aims to complete project sales as soon as possible Property Development and Investment Segment Performance | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Property Sales | 9,439 | 58,373 | -84% | | Rental Income | 933 | 1,362 | -31% | | Segment Revenue | 10,372 | 59,735 | -83% | | Cost of Sales | (6,711) | (40,561) | -83% | | Gross Profit | 3,661 | 19,174 | -81% | | Gross Profit Margin | 32% | 35% | -3% | | Segment Results | (2,695) | 14,232 | -119% | - Sales revenue significantly decreased by 84%, mainly due to continuous downward market price adjustments, weak willingness of homeowners to take possession, and a year-on-year reduction in actual housing deliveries[60] - The average selling price per square meter of residential area for the Chengtong Xiangxie Li project decreased to approximately RMB 4,800[60] - Completed and unsold residential and commercial area was approximately 37,286 square meters[60] Marine Tourism Services and Hotel Marine tourism services and hotel business revenue slightly decreased, but gross profit significantly increased, primarily due to a higher proportion of hotel sales revenue and reduced cost of sales Marine Tourism Services and Hotel Segment Performance | Metric | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Segment Revenue | 16,520 | 18,227 | -9% | | Cost of Sales | (6,331) | (10,156) | -38% | | Gross Profit | 10,189 | 8,071 | +26% | | Gross Profit Margin | 62% | 44% | +18% | | Segment Results | (2,251) | (1,950) | +15% | - Sales revenue from the hotel business accounted for nearly 80% of this segment's revenue[62] Other Income and Gains Total other income and gains decreased by 36% year-on-year, mainly due to lower interest income from deposits, other financial assets, and related party loans - Total other income and gains were approximately HKD 7.08 million, a 36% decrease compared to 2024 H1[63] - Interest income from deposits and other financial assets, and loans granted to a related party, was approximately HKD 5.84 million, a decrease from approximately HKD 10.64 million in 2024 H1[63] Selling and Administrative Expenses Selling expenses significantly increased by 70% due to increased marketing activities, while administrative expenses decreased by 8% due to reduced office expenses, amortization, and depreciation Selling and Administrative Expenses | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Selling Expenses | 9,560 | 5,608 | +70% | | Administrative Expenses | 43,149 | 46,865 | -8% | - The increase in selling expenses was primarily due to increased marketing costs for promoting the Group's Chengtong Xiangxie Li project sales[64] - The decrease in administrative expenses was mainly due to reduced office expenses, amortization, and depreciation across various business segments[65] Finance Costs Total finance costs decreased by 37% year-on-year, and net finance costs decreased by 54%, primarily due to reduced asset-backed securities maturities, bank loan repayments, and lower Hong Kong interest rates Finance Costs | Item | 2025 H1 (HKD Thousands) | 2024 H1 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Total Interest Expense | 73,429 | 115,956 | -37% | | Less: Interest Expense Transferred to Cost of Sales | (66,341) | (100,605) | -34% | | Net Finance Costs | 7,088 | 15,351 | -54% | - The decrease in total finance costs was mainly due to the reduction in asset-backed securities after maturity and repayment of bank borrowings[67] - Net finance costs decreased by approximately 54%, primarily due to lower interest rates in Hong Kong during the review period[67] Outlook The company's leasing business will focus on national priority areas, accelerate specialization, diversify financing, and strengthen risk control; property development and investment will expedite existing property sales; marine tourism and hotel services will restructure customer channels, enhance customer management, and boost online traffic - Breakthroughs were achieved in new leasing projects, with multiple successful implementations, including the first Airbus A321-200 aircraft lease order, diversifying the Group's lease asset types[69] - Chengtong Financial Leasing was rated as a 'Beijing AAA Credit Enterprise' and '2025 Beijing Credit Commitment Enterprise' by the Beijing Leasing Industry Association[69] - Successfully issued two tranches of corporate bonds, totaling RMB 1 billion, with coupon rates setting a historical low for AA+ leasing companies' bonds of the same tenor[70] - In the second half, the leasing business will maintain strategic focus on business layout, increase investment in nationally supported sectors, and accelerate the pace of business specialization[71] - The property development and investment business will closely monitor industry policies, accelerate the sale of existing property units, and recover funds for the core leasing business[72] - In the second half, the marine tourism services and hotel business will focus on restructuring customer source channels, strengthening customer lifecycle management, and leveraging platforms to enhance online traffic[73] Asset Structure, Capital Liquidity and Financial Resources Total assets and liabilities increased, with lease receivables remaining the largest component; liquidity improved, ample credit facilities are available, and total borrowings, primarily RMB-denominated, also increased Asset Structure and Liability Status | Metric | June 30, 2025 (HKD Thousands) | December 31, 2024 (HKD Thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 2,865,130 | 2,764,340 | +4% | | Total Assets | 9,131,106 | 8,377,374 | +9% | | Total Liabilities | 6,260,672 | 5,607,864 | +12% | | Lease Receivables as % of Total Assets | 72% | 78% | -6% | | Current Ratio | 1.72 times | 1.28 times | +34% | | Cash and Deposits | 1,775,330 | 1,033,794 | +72% | | Total Borrowings | 5,698,770 | 4,904,290 | +16% | - Possesses over HKD 13.6 billion in ample standby credit facilities, ensuring the Group's stable business development while maintaining liquidity[75] - Total borrowings are primarily denominated in RMB, including bank loans, senior asset-backed securities, outstanding corporate bonds, and related party loans[77] Financial Leverage Ratios Total debt-to-equity and total debt-to-asset ratios increased due to higher bank borrowings, but the interest coverage ratio remained at 4 times, indicating sufficient funds for interest payment obligations Financial Leverage Ratios | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Debt / Total Equity | 1.99 times | 1.77 times | | Total Debt / Total Assets | 0.62 times | 0.59 times | | Total Debt / EBITDA | 58 times | 23 times | | Interest Coverage | 4 times | 4 times | - The interest coverage ratio of 4 times indicates the Group has sufficient buffer funds to ensure fulfillment of its interest payment obligations[79] Material Investments As of the reporting period, the company had no material investments exceeding 5% of total assets and will continue to focus on core leasing business while prudently investing in other financial assets - The Group has no material investments exceeding 5% of its total asset value[80] - The Group will continue to focus on and invest in its core leasing business, while prudently investing in other financial assets to maximize shareholder value[80] Financial Policies The company faces interest rate and foreign exchange risks; most lease receivables use floating rates, effectively hedging interest rate risk from China bank borrowings; RMB appreciation against HKD increased foreign exchange reserves; no hedging measures are currently in place, but risks are monitored for timely management Interest Rate Risk The company faces interest rate risk, but most lease receivables are at floating rates, effectively hedging interest rate risk arising from China bank borrowings - The Group's bank borrowings amounted to approximately HKD 3.08647 billion, of which approximately HKD 1.81207 billion are floating-rate and approximately HKD 1.27440 billion are fixed-rate[82] - Most of the Group's lease receivables are accounted for at floating interest rates, effectively hedging the interest rate risk arising from China bank borrowings[83] Foreign Exchange Risk The company's primary business is in RMB, with assets and liabilities denominated in HKD and RMB; RMB appreciation against HKD increased foreign exchange reserves; no hedging measures are currently in place, but currency fluctuations are monitored for timely risk management - The Group's business is primarily conducted in RMB, with most assets and liabilities denominated in HKD and RMB[84] - Due to the appreciation of RMB against HKD during the review period, the Group's foreign exchange reserves increased by approximately HKD 81.42 million as of June 30, 2025[84] - Currently, the Group has not adopted any measures to hedge these risks but will closely monitor changes in interest rates and foreign currency exchange rates, and implement risk management and hedging transactions as appropriate[85] Pledge of Assets As of the reporting period, the company had pledged bank deposits, lease receivables, and trade receivables as collateral for bank borrowings and asset-backed securities - Pledged bank deposits amounted to approximately HKD 2.71 million, of which HKD 2.54 million was pledged for bank financing granted to mortgagees of the Chengtong Xiangxie Li project[86] - Lease receivables with a carrying amount of approximately HKD 3.06435 billion and trade receivables of approximately HKD 191,000 are pledged as collateral for bank borrowings[86] - Lease receivables with a carrying amount of approximately HKD 1.39021 billion and trade receivables of approximately HKD 1.26 million are pledged as collateral for asset-backed securities[87] Capital Commitments and Contingent Liabilities As of the reporting period, the company had no capital commitments; details of contingent liabilities are provided in Notes 18 and 19 to the financial statements - The Group had no capital commitments as of June 30, 2025[88] - Details of the Group's capital commitments and contingent liabilities are provided in Notes 18 and 19 to the financial statements in this announcement, respectively[88] Future Plans for Material Investments or Capital Assets Except as disclosed in this announcement, the company has no other future plans for material investments or capital assets for the coming year - Except as disclosed in this announcement, the Group has no other future plans for material investments or capital assets for the coming year[89] Human Resources and Remuneration Policies As of the reporting period, the company had 202 employees with total staff costs of approximately HKD 28 million; remuneration policies are based on experience, skills, qualifications, responsibilities, and market trends, with training provided - As of June 30, 2025, the Group had 202 employees (December 31, 2024: 230 employees)[90] - During the review period, the Group's total staff costs (including directors' emoluments and MPF) were approximately HKD 28 million[90] - Employee remuneration is determined based on employee experience, skills, qualifications, nature of responsibilities, and current market trends[90] - The Group provides or sponsors various training programs and courses for its employees based on business needs[91] Events After the Reporting Period No material events occurred after the reporting period - No material events occurred after the review period[92] Other Information Purchase, Sale and Redemption of Listed Securities During the review period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[93] Standard Code for Securities Transactions by Directors The company adopted a code of conduct for directors' securities transactions, meeting HKEX Listing Rules Appendix C3 standards, and all directors confirmed compliance during the review period - The Company has adopted a code of conduct for directors' securities transactions, the standards of which are no less exacting than those set out in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules[94] - Following specific enquiries with each of the Company's directors, the Company has received confirmation from all directors that they have complied with the required standards of the code of conduct and the Model Code throughout the review period[94] Corporate Governance The company complied with all Corporate Governance Code provisions, but a deviation exists as the Chairman and CEO roles are not separated; the company is seeking a suitable candidate to rectify this - The directors believe that the Company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the review period[95] - The roles of Chairman and Chief Executive Officer should be separate and not performed by the same individual; however, Mr. Li Qian serves concurrently as Chairman of the Board and oversees daily business management, representing a deviation[96] - The Company is seeking a suitable candidate for the position of Managing Director and/or Chief Executive Officer to re-comply with Code Provision C.2.1 of the Corporate Governance Code[97] Review of Accounts The Board believes the financial information complies with HKEX Listing Rules Appendix D2 and has been reviewed by the Audit Committee and auditors in accordance with HKSRE 2410 - The Board believes that the financial information disclosed in this announcement complies with the requirements of Appendix D2 of the Listing Rules[98] - The Company's Audit Committee has reviewed the Group's unaudited interim financial information for the review period, which has also been reviewed by the Company's auditors in accordance with Hong Kong Standard on Review Engagements 2410 issued by the HKICPA[98] Publication of Interim Results Announcement and Interim Report The results announcement has been published on the HKEX and company websites, and the interim report will be published in due course - This results announcement is published on the HKEX website www.hkexnews.hk and the Company's website www.hk217.com[99](index=99&type=chunk) - The Company's 2025 interim report will be published on the aforementioned websites in due course[99]