雅生活服务(03319) - 2025 - 中期业绩

I. Company Overview and Financial Summary 1.1 Financial Summary For the six months ended June 30, 2025, the company's revenue decreased by 8.3% YoY to RMB 6,465.4 million, while net profit turned positive to RMB 448.2 million Financial Highlights | Indicator | 2025 (RMB in millions) | 2024 (Restated, RMB in millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | 6,465.4 | 7,050.8 | -8.3% | | Gross Profit | 939.3 | 1,192.4 | -21.2% | | Gross Profit Margin | 14.5% | 16.9% | -2.4 p.p. | | Net Profit/(Loss) | 448.2 | (1,544.4) | N/A | | Adjusted Net Profit | 587.6 | 708.4 | -17.0% | | Adjusted Net Profit Margin | 9.1% | 10.0% | -0.9 p.p. | | Profit/(Loss) Attributable to Company Shareholders | 350.3 | (1,646.3) | N/A | | Basic Earnings/(Loss) Per Share (RMB) | 0.25 | (1.16) | N/A | | Proposed Interim Dividend (Per Share, RMB) | 0.062 | 0.03 | 106.7% | | Total Proposed Interim Dividend (RMB in millions) | 87.9 | 42.6 | 106.5% | - The Group's revenue from all four business segments declined year-over-year: Property Management Services decreased by 0.8% to RMB 5,328.0 million; Value-added Services to Owners decreased by 32.7% to RMB 519.5 million; City Services decreased by 14.6% to RMB 577.0 million; and Extended Value-added Services decreased by 82.4% to RMB 40.9 million[3] - The Board of Directors has proposed an interim dividend of RMB 0.062 per share (pre-tax) for the six months ended June 30, 2025, to reward shareholders[3] II. Chairman's Statement 2.1 Macroeconomic and Industry Environment The property management industry faced challenges amid global geopolitical turmoil and a bottoming real estate market, but policy guidance is steering it toward high-quality development - Global geopolitical instability and escalating Sino-US trade friction persisted, while China's economy remained stable under proactive macroeconomic policies, with a steady recovery in the consumer market[5] - The real estate market continued to navigate fluctuations with policy support, showing a narrowing decline and positive developments in corporate debt restructuring[5] - The property management industry faced economic challenges, but policy is guiding it toward standardization and high quality, requiring companies to enhance service, innovate, and leverage technology[5] 2.2 Business Review and Strategic Direction The Group achieved a turnaround to profitability in the first half by focusing on service quality, optimizing its business structure, and controlling operational risks - The Group centered its strategy on property owners, refining service quality to meet residents' expectations for "good housing" and "good services"[6] - By optimizing its business structure, focusing on core operations, managing risks, and improving efficiency, the Group achieved a turnaround to profitability in the first half, maintaining stable scale and operations[6] III. Business Review and Operational Highlights 3.1 Overall Performance and Scale The Group achieved revenue of RMB 6,465.4 million and net profit of RMB 448.2 million, with a total gross floor area under management reaching 516.7 million square meters Overall Performance | Indicator | Amount (RMB in millions) | | :--- | :--- | | Revenue | 6,465.4 | | Gross Profit | 939.3 | | Net Profit | 448.2 | | Profit Attributable to Company Shareholders | 350.3 | | Basic Earnings Per Share (RMB) | 0.25 | - As of June 30, 2025, the Group's gross floor area (GFA) under management was 516.7 million sq.m., with a contracted GFA of 692.3 million sq.m., covering various residential and non-residential property types[7] 3.2 Service Quality Improvement and Standardization The Group enhanced its service system by updating over 100 service standards and releasing a comprehensive residential service product manual - The Group is committed to making service quality its core competency, upgrading its service system and completing revisions to over 100 service standards[8] - The "A-Living Residential Graded Service Product Manual" was released, covering 24 service scenarios and over 700 service items to meet diverse needs[8] - The Group participated in drafting the national "Property Service Customer Satisfaction Evaluation" standard, demonstrating its industry influence[8] 3.3 Smart and Digital Empowerment The Group advanced its digital transformation by applying AI technologies and launching the "Ya AI" intelligent decision-making hub to enhance operational efficiency - Increased investment in intelligent and digital upgrades, applying AI technology to security, parking, quality inspection, and emergency management[9] - The Group pioneered the localization of the DeepSeek model to build the "Ya AI" intelligent decision-making hub, improving operational efficiency and reducing management costs[9] - A seamless community access solution, "Touch," was launched in collaboration with Alipay and Ele.me, and has been implemented in projects across more than 100 cities[9] 3.4 Market Expansion and Regional Layout Optimization The Group adopted a prudent market strategy, focusing on about 50 key cities to enhance project density and divesting from inefficient projects - A proactive yet prudent market strategy was adopted to secure high-quality projects and ensure stable renewals, maintaining a leading market scale[10] - The Group enhanced clustering effects by focusing on project density in core cities and strategically adjusting its layout to target approximately 50 key cities for market expansion[10] - Expanded advantages in the non-residential market by acquiring premium public building projects while divesting from inefficient and isolated projects[10] 3.5 Business Structure Adjustment and Synergies The Group is transitioning from a scale-driven to a quality-and-efficiency-driven model, optimizing its industrial structure for sustainable development - The Group is transitioning from a "scale and speed" model to a "quality and efficiency" model, continuously adjusting its industrial structure for sustainable development[11] - Value-added services to owners focused on "local lifestyle" and "asset operation," significantly improving cash flow through an asset-light model and product optimization[11] - The city services business optimized its project layout based on efficiency, leading to significant cash flow improvement and enhanced operational quality[11] 3.6 Operational Management and Brand Building The Group enhanced operational efficiency through refined management, strengthened collection of receivables, and consolidated its brand matrix with multiple brands ranked in the industry's top 100 - Continuously improved project operational efficiency through refined management, strengthened collection of receivables, and actively resolved historical outstanding payments[12] - Strengthened centralized management of engineering services and increased the proportion of centralized procurement for outsourced vendors to leverage economies of scale[12] - The Group's integration model has resulted in multiple subsidiary brands being ranked among the top 100 industry brands, solidifying its brand matrix[12] IV. Future Outlook 4.1 Strategic Transformation and Development Direction The Group will continue its transition to a "quality and efficiency" model, focusing on owner-centric services and optimizing its layout to balance profitability and reputation - The Group will adhere to a long-term, owner-centric approach, strategically optimizing its layout to balance operational efficiency and service quality[13] - The transformation toward a "quality and efficiency" enterprise will continue, enabling self-renewal and breakthroughs in response to global economic uncertainties and intense industry competition[13] 4.2 Service Quality and Product Upgrades The Group will advance its standardization efforts, upgrade its service products to the mid-to-high end, and enhance community culture to build customer loyalty - Continue standardization to improve basic service quality, clarify grading standards, and progressively implement a residential graded standard system[14] - Accelerate the development of a non-residential standard system and upgrade service products to the mid-to-high end to meet market demands[14] - Strengthen community culture and build a service system that is "commensurate with price and quality" to enhance customer stickiness[14] 4.3 Digital and Intelligent Transformation The Group will accelerate its digital transformation by embracing new productive forces and leveraging AI to create a "future community living" experience - Accelerate the "digital and intelligent" transformation by embracing new productive forces and applying AI to provide personalized, forward-looking service experiences[15] - In the second half of the year, the focus will be on advancing the smart parking system and promoting the informatization of operations, quality, and management to support data-driven business analysis[15] 4.4 Business Structure and Regional Layout Optimization The Group will streamline its city layout from over 200 to 50 key cities, deepening its presence in core regions to create clustering effects - Further optimize business structure and regional layout by streamlining the number of cities and deepening the presence in key regions to create clustering effects[16] - The residential market expansion layout will be streamlined from over 200 cities to 50 key cities, with a particular focus on Guangzhou, Shenzhen, and Shanghai[16] - Inefficient and isolated projects will be divested to concentrate resources in core areas, while member enterprise resources will be integrated to selectively expand high-quality projects[16] 4.5 Financial Management and Operational Efficiency The Group will focus on its operational fundamentals by strengthening receivables collection, controlling costs through an "expenditure based on revenue" principle, and achieving quality growth - Return to operational fundamentals by continuously strengthening the collection of receivables, controlling the scale of accounts receivable, and divesting inefficient projects to reduce overall operational risk[18] - Adhere to an "expenditure based on revenue" principle, achieving refined management through intelligent and information-based systems to ensure quality growth[18] - Upgrade the full-cycle cost management model with a focus on quality, restructure the cost procurement organization, and solidify long-term strategic partnerships with high-quality suppliers[18] 4.6 Organizational Empowerment and Talent Development The Group will act as an "enabler" by implementing precise empowerment mechanisms, deepening post-investment management, and fostering a symbiotic ecosystem with member enterprises - As an "enabler," the Group will implement precise empowerment mechanisms such as "one policy for one district, one city, and one enterprise" to deepen post-investment management and enhance corporate governance[19] - A platform-based mindset will be used to integrate strategic resources and break down management barriers with digital tools, creating a symbiotic ecosystem for the Group and its member enterprises[19] - Promote internal reform by streamlining management levels, improving talent quality, and configuring frontline positions in a grid-based manner to unleash team potential[19] 4.7 Industry Outlook and Core Competitiveness The Group will navigate industry cycles by positioning service quality as its core competency, leveraging technology for refined operations, and pursuing a long-term development model - The Group has proactively adjusted its strategy to effectively control operational risks in response to industry cyclical fluctuations and accelerated consolidation[20] - Quality will be the core competency, allowing the Group to move beyond homogeneous competition, ensure profitability, improve efficiency, and strengthen its reputation[20] - Technology-enabled refined operations will consolidate the Group's leading position in its areas of strength, ensuring stability and pursuing a long-term development model[20] V. Condensed Consolidated Financial Statements 5.1 Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the Group's revenue was RMB 6,465,350 thousand, with a net profit of RMB 448,233 thousand Condensed Consolidated Statement of Profit or Loss | Indicator | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Revenue | 6,465,350 | 7,050,750 | | Cost of sales | (5,526,080) | (5,858,330) | | Gross profit | 939,270 | 1,192,420 | | Selling and marketing expenses | (15,619) | (23,603) | | Administrative expenses | (275,176) | (341,183) | | Net impairment losses on financial assets | (104,361) | (2,883,872) | | Other income | 54,986 | 41,705 | | Other losses — net | (11,961) | (32,583) | | Operating profit/(loss) | 587,139 | (2,047,116) | | Finance costs | (17,070) | (19,757) | | Share of post-tax profits of joint ventures and associates | 20,657 | 19,479 | | Profit/(loss) before income tax | 590,726 | (2,047,394) | | Income tax (expense)/credit | (142,493) | 502,997 | | Profit/(loss) for the period | 448,233 | (1,544,397) | | Profit/(loss) attributable to shareholders of the Company | 350,298 | (1,646,253) | | Non-controlling interests | 97,935 | 101,856 | | Basic and diluted earnings/(loss) per share (RMB/share) | 0.25 | (1.16) | 5.2 Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the Group's total comprehensive income for the period was RMB 448,233 thousand Condensed Consolidated Statement of Comprehensive Income | Indicator | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Profit/(loss) for the period | 448,233 | (1,544,397) | | Other comprehensive income | – | – | | Total comprehensive income/(expense) for the period | 448,233 | (1,544,397) | | Attributable to shareholders of the Company | 350,298 | (1,646,253) | | Attributable to non-controlling interests | 97,935 | 101,856 | 5.3 Condensed Consolidated Balance Sheet As of June 30, 2025, the Group's total assets were RMB 20,346,538 thousand, with total equity of RMB 11,524,884 thousand and total liabilities of RMB 8,821,654 thousand Condensed Consolidated Balance Sheet | Indicator | June 30, 2025 (RMB in thousands) | Dec 31, 2024 (Restated, RMB in thousands) | Jan 1, 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | :--- | | Assets | | | | | Total non-current assets | 7,587,879 | 7,686,869 | 7,885,115 | | Total current assets | 12,758,659 | 12,910,880 | 16,533,439 | | Total assets | 20,346,538 | 20,597,749 | 24,418,554 | | Equity | | | | | Equity attributable to shareholders of the Company | 9,713,560 | 9,452,474 | 12,874,921 | | Non-controlling interests | 1,811,324 | 1,742,622 | 1,635,991 | | Total equity | 11,524,884 | 11,195,096 | 14,510,912 | | Liabilities | | | | | Total non-current liabilities | 481,729 | 663,919 | 624,433 | | Total current liabilities | 8,339,925 | 8,738,734 | 9,283,209 | | Total liabilities | 8,821,654 | 9,402,653 | 9,907,642 | | Total equity and liabilities | 20,346,538 | 20,597,749 | 24,418,554 | VI. Notes to the Condensed Consolidated Financial Statements 6.1 General Information A-Living Smart City Services Co., Ltd. was incorporated in China in 1997, listed on the Hong Kong Stock Exchange in 2018, and primarily provides property management and related services - The Company was incorporated in the PRC on June 26, 1997, and was listed on the Hong Kong Stock Exchange on February 9, 2018[28][29] - The Group is principally engaged in providing property management services, related value-added services, and city sanitation and cleaning services in the PRC[29] 6.2 Basis of Preparation and Business Combination under Common Control The interim financial information was prepared in accordance with HKAS 34, and prior period financial statements were restated due to a business combination under common control - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of Appendix D2 of the Listing Rules[32] - The Company's acquisition of 100% equity interest in Liaocheng Agile Environmental Protection Technology Co., Ltd. was accounted for as a business combination under common control using merger accounting[33][34] - The condensed consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for prior periods have been restated to include the results of the target company[36] 6.3 Accounting Policies The accounting policies adopted are consistent with the previous financial year, except for the treatment of business combinations under common control and estimated income tax - Except for the merger accounting for business combinations of entities under common control and estimated income tax, the accounting policies adopted are consistent with those of the previous financial year[43] - Certain revised standards became applicable during the current reporting period, but the Group did not change its accounting policies or make retrospective adjustments as a result[45] - The Group has begun assessing the impact of new or revised standards and does not expect them to have a significant effect on its results or financial position[46] 6.4 Revenue Breakdown The Group's revenue is primarily derived from property management services, which contributed RMB 5,328,030 thousand for the six months ended June 30, 2025 Revenue by Category | Revenue Category | Timing of Revenue Recognition | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | :--- | | Property management services | Over time | 5,328,030 | 5,371,520 | | Value-added services related to property management — Other value-added services | Over time | 527,558 | 867,078 | | Value-added services related to property management — Sales of goods | At a point in time | 32,784 | 136,908 | | City sanitation, cleaning services and others | Over time | 576,978 | 675,244 | | Total revenue | | 6,465,350 | 7,050,750 | 6.5 Other Income For the six months ended June 30, 2025, the Group's other income totaled RMB 54,986 thousand, mainly from government grants and interest income Other Income by Source | Income Source | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Interest income — from deposits and loans to third parties | 22,763 | 30,250 | | Interest income — from loans to related parties | 259 | 223 | | Government grants | 28,808 | 7,116 | | Tax credits | 1,161 | 2,555 | | Rental income | 445 | 434 | | Others | 1,550 | 1,127 | | Total | 54,986 | 41,705 | - Government grants mainly consist of financial subsidies from local governments, and there are no unfulfilled conditions attached to the recognized grants[50] - Tax credits mainly comprise additional VAT deductions applicable to the Company and certain subsidiaries[50] 6.6 Other Losses — Net For the six months ended June 30, 2025, the Group's net other losses narrowed to RMB 11,961 thousand, primarily from fair value losses on investment properties Net Other Losses by Category | Loss Category | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Net fair value gains on financial assets at FVTPL | – | 50 | | Gains on redemption and disposal of financial assets at FVTPL | 1,721 | 15,653 | | Gain/(loss) on disposal of investments accounted for using the equity method | 1 | (28,156) | | Loss on disposal of subsidiaries | (2,689) | (12,655) | | Exchange losses | (365) | (97) | | Fair value losses on investment properties | (6,618) | (6,571) | | Loss on disposal of property, plant and equipment | (3,340) | (750) | | Others | (671) | (57) | | Total | (11,961) | (32,583) | 6.7 Finance Costs For the six months ended June 30, 2025, the Group's finance costs decreased to RMB 17,070 thousand, mainly comprising interest expenses on borrowings Finance Costs by Category | Cost Category | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Interest expenses on borrowings | 16,320 | 18,154 | | Interest and finance charges paid/payable on lease liabilities | 750 | 1,603 | | Total | 17,070 | 19,757 | 6.8 Income Tax For the six months ended June 30, 2025, the Group recorded an income tax expense of RMB 142,493 thousand, compared to a tax credit in the prior period Income Tax Breakdown | Tax Category | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Current income tax — PRC enterprise income tax | 183,034 | 236,899 | | Deferred income tax — PRC enterprise income tax | (40,541) | (739,896) | | Total | 142,493 | (502,997) | - The applicable enterprise income tax rate for group entities in Mainland China is 25%[56] - Guangzhou Yatian Network Technology Co., Ltd. enjoys a preferential income tax rate of 15% as a high-tech enterprise, and certain subsidiaries in western cities or the Hainan Free Trade Zone also benefit from a 15% rate[56][57] - Certain subsidiaries of the Group are entitled to preferential income tax treatment for small and micro enterprises, with an income tax rate of 20%[57] 6.9 Earnings/(Loss) Per Share For the six months ended June 30, 2025, basic earnings per share was RMB 0.25, with no dilutive potential ordinary shares outstanding Earnings Per Share Calculation | Indicator | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Profit/(loss) attributable to shareholders of the Company | 350,298 | (1,646,253) | | Weighted average number of ordinary shares in issue (excluding treasury shares) (in thousands) | 1,419,611 | 1,420,001 | | Basic earnings/(loss) per share (RMB/share) | 0.25 | (1.16) | - For the six months ended June 30, 2025 and 2024, the Company had no potential ordinary shares in issue, and diluted earnings/(loss) per share was equal to basic earnings/(loss) per share[59] 6.10 Property, Plant and Equipment and Right-of-Use Assets As of June 30, 2025, the net carrying amount of property, plant and equipment was RMB 820,280 thousand, and right-of-use assets was RMB 85,132 thousand Asset Breakdown | Asset Category | Net Carrying Amount at June 30, 2025 (RMB in thousands) | Net Carrying Amount at Jan 1, 2025 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Buildings | 333,874 | 336,898 | | Transportation equipment | 98,973 | 103,122 | | Office equipment | 18,963 | 22,378 | | Machinery | 368,470 | 415,231 | | Subtotal of Property, Plant and Equipment | 820,280 | 877,629 | | Right-of-use assets | 85,132 | 86,399 | | Total | 905,412 | 964,028 | - During the period, additions to property, plant and equipment amounted to RMB 32,596 thousand, and additions to right-of-use assets were RMB 17,128 thousand[61] - As of June 30, 2025, certain self-used property, plant and equipment with a net carrying amount of RMB 318,748 thousand were pledged as collateral for the Group's borrowings[62] 6.11 Investment Properties As of June 30, 2025, the Group's investment properties had a carrying amount of RMB 189,214 thousand, with a revaluation loss of RMB 6,618 thousand recognized during the period Investment Property Movement | Indicator | 2025 (RMB in thousands) | 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Beginning of the period | 195,832 | 262,995 | | Revaluation losses recognized in profit or loss | (6,618) | (6,571) | | End of the period | 189,214 | 256,424 | - As of June 30, 2025, all of the Group's investment properties were classified as Level 3 of the fair value hierarchy, valued based on significant unobservable inputs[67] - The fair value of investment properties was estimated using the direct comparison method, with the main Level 3 input being market price (RMB 12,000–28,000 per sq.m.)[67][70] 6.12 Other Intangible Assets and Goodwill As of June 30, 2025, the net carrying amount of other intangible assets was RMB 823,817 thousand, and goodwill was RMB 2,543,438 thousand Asset Breakdown | Asset Category | Net Carrying Amount at June 30, 2025 (RMB in thousands) | Net Carrying Amount at Jan 1, 2025 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Computer software | 15,438 | 18,013 | | Trademarks | 3,130 | 3,650 | | Customer relationships and uncompleted contracts | 805,249 | 892,558 | | Subtotal of Other Intangible Assets | 823,817 | 914,221 | | Goodwill | 2,543,438 | 2,551,858 | | Total | 3,367,255 | 3,466,079 | - Management assessed that no impairment provision for goodwill was recognized for the periods ended June 30, 2025 and 2024[72] 6.13 Trade and Other Receivables and Prepayments As of June 30, 2025, the Group's total trade and other receivables and prepayments amounted to RMB 9,970,623 thousand, with the majority of trade receivables aged within one year Receivables and Prepayments Breakdown | Category | June 30, 2025 (RMB in thousands) | Dec 31, 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Trade receivables (net of impairment provision) | 4,766,916 | 4,396,682 | | Other receivables (net of impairment provision) | 3,570,959 | 2,538,790 | | Prepayments (net of impairment provision) | 1,632,748 | 1,450,333 | | Subtotal | 9,970,623 | 8,385,805 | | Less: Non-current portion of prepayments | (1,009,504) | (966,256) | | Current portion | 8,961,119 | 7,419,549 | Aging Analysis of Trade Receivables | Trade Receivables Aging | June 30, 2025 (RMB in thousands) | Dec 31, 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Within 1 year | 3,469,913 | 3,422,627 | | 1 to 2 years | 1,465,219 | 1,927,848 | | 2 to 3 years | 2,611,470 | 2,416,349 | | 3 years and above | 1,357,533 | 695,352 | | Total | 8,904,135 | 8,462,176 | - Trade receivables of RMB 107,236 thousand were pledged as collateral for borrowings of subsidiaries[74] 6.14 Share Capital As of June 30, 2025, the Company's issued and fully paid-up share capital remained unchanged at 1,420,000,800 shares, amounting to RMB 1,420,001 thousand Share Capital Details | Indicator | June 30, 2025 (Number of shares) | Dec 31, 2024 (Number of shares) | June 30, 2025 (RMB in thousands) | Dec 31, 2024 (RMB in thousands) | | :--- | :--- | :--- | :--- | :--- | | Issued and fully paid-up share capital | 1,420,000,800 | 1,420,000,800 | 1,420,001 | 1,420,001 | 6.15 Trade and Other Payables As of June 30, 2025, the Group's total trade and other payables amounted to RMB 6,189,036 thousand, with the majority of trade payables aged within one year Payables Breakdown | Category | June 30, 2025 (RMB in thousands) | Dec 31, 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Trade payables — related parties | 150,034 | 156,983 | | Trade payables — third parties | 2,793,399 | 2,831,774 | | Other payables — related parties | 175,106 | 287,244 | | Other payables — third parties | 2,111,793 | 2,287,269 | | Dividends payable | 80,089 | 80,162 | | Accrued payroll | 801,180 | 860,353 | | Other tax payables | 77,435 | 77,125 | | Total trade and other payables | 6,189,036 | 6,580,910 | | Less: Non-current portion of other payables | (10,692) | (6,989) | | Current portion of trade and other payables | 6,178,344 | 6,573,921 | Aging Analysis of Trade Payables | Trade Payables Aging | June 30, 2025 (RMB in thousands) | Dec 31, 2024 (Restated, RMB in thousands) | | :--- | :--- | :--- | | Within 1 year | 2,409,470 | 2,416,986 | | 1 to 2 years | 308,161 | 364,525 | | 2 to 3 years | 150,101 | 161,611 | | 3 years and above | 75,701 | 45,635 | | Total | 2,943,433 | 2,988,757 | 6.16 Dividends The Board proposed an interim dividend of RMB 0.062 per share (pre-tax) for the six months ended June 30, 2025, totaling RMB 87,950 thousand - The Board of Directors proposed an interim dividend of RMB 0.062 per share (pre-tax) for the six months ended June 30, 2025[77] - The total interim dividend of RMB 87,950 thousand is subject to approval by shareholders at the upcoming extraordinary general meeting[77] - This dividend has not been recognized as a liability in the interim condensed consolidated financial statements and will be recognized in equity for the year ending December 31, 2025[77] VII. Management Discussion and Analysis 7.1 Business Review In the first half of 2025, the Group focused on operational quality and efficiency, enhancing service quality and strengthening its core business amid a complex environment - The Group focused on operational quality and efficiency, striving to enhance service quality and solidify the foundation of its main business[79] - Strengthened strategic focus, optimized city and business layouts, promoted high-quality expansion, and implemented an "expenditure based on revenue" operational strategy to enhance refined management and collections[79] - Drove upgrades to its information platform through technological innovation to optimize quality management and operational control, continuously improving business performance[79] 7.2 Financial Review The Group's revenue decreased by 8.3% YoY to RMB 6,465.4 million in H1 2025, while net profit turned positive to RMB 448.2 million, largely due to a significant reduction in impairment losses on financial assets 7.2.1 Revenue Analysis The Group's total revenue for the six months ended June 30, 2025, was RMB 6,465.4 million, a year-over-year decrease of 8.3% Revenue by Business Line | Business Line | 2025 Revenue (RMB in millions) | Revenue Mix | 2024 Revenue (Restated, RMB in millions) | Revenue Mix | Growth Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | Property management services | 5,328.0 | 82.4% | 5,371.5 | 76.2% | -0.8% | | — Residential property projects | 2,289.5 | 35.4% | 2,328.0 | 33.0% | -1.7% | | — Non-residential property projects | 3,038.5 | 47.0% | 3,043.5 | 43.2% | -0.2% | | Value-added services to owners | 519.5 | 8.1% | 771.5 | 10.9% | -32.7% | | City services | 577.0 | 8.9% | 675.3 | 9.6% | -14.6% | | Subtotal | 6,424.5 | 99.4% | 6,818.3 | 96.7% | -5.8% | | Extended value-added services | 40.9 | 0.6% | 232.5 | 3.3% | -82.4% | | — Pre-delivery property management services | 40.7 | 0.6% | 148.7 | 2.1% | -72.6% | | — Other extended value-added services | 0.2 | 0.0% | 83.8 | 1.2% | -99.8% | | Total | 6,465.4 | 100.0% | 7,050.8 | 100.0% | -8.3% | 7.2.2 Property Management Services Property management services revenue was RMB 5,328.0 million, with a total GFA under management of 516.7 million square meters as of June 30, 2025 - Revenue from property management services reached RMB 5,328.0 million, a decrease of 0.8% from the same period last year[83] - As of June 30, 2025, the Group's total GFA under management was 516.7 million sq.m., with approximately 81.8% from third-party projects[84] - The number of projects under management was 4,194, covering 28 provinces and 201 cities, with a total contracted GFA of 692.3 million sq.m.[86][88] 7.2.3 Value-added Services to Owners Revenue from value-added services to owners decreased by 32.7% to RMB 519.5 million, primarily due to adjustments in community retail and a decline in the home decoration business - Revenue from value-added services to owners reached RMB 519.5 million, a decrease of 32.7% from the same period in 2024, accounting for about 8.1% of total revenue[89] - Revenue from living and comprehensive services decreased by 55.0%, mainly due to structural adjustments in community retail, changes in the home services business model, and reduced demand for second-hand housing brokerage[89] - Revenue from home decoration and furnishing services decreased by 46.3%, primarily due to the continued downturn in the real estate market[89] - Revenue from space operation and other services decreased by 2.5%, as the occupancy rate and unit price of community advertising spaces declined[91] - Revenue from institutional value-added services decreased by 29.9%, due to changes in institutional client demand and the withdrawal from certain catering services[91] 7.2.4 City Services City services revenue decreased by 14.6% to RMB 577.0 million as the Group continued to divest projects with poor collection records to ensure operational quality - The city services business continued to replace projects, exiting those with poor collection records to ensure operational quality and receivables collection[90] - During the period, revenue from city services reached RMB 577.0 million, a decrease of 14.6% from the same period in 2024, accounting for about 8.9% of total revenue[90] 7.2.5 Extended Value-added Services Revenue from extended value-added services fell sharply by 82.4% to RMB 40.9 million due to the sluggish real estate market and a strategic reduction in cyclical businesses - Revenue from extended value-added services reached RMB 40.9 million, a decrease of 82.4% from the same period last year, accounting for about 0.6% of total revenue[92] - The decline was mainly due to the sluggish real estate development and sales market, which reduced demand for pre-delivery property management services[92] - The Group prioritized cash flow by proactively reducing cyclical businesses to control risks and enhance operational quality[92] 7.2.6 Cost of Sales The cost of sales decreased by 5.7% to RMB 5,526.1 million, a smaller decline than revenue due to investments in quality improvement and rigid labor costs - The cost of sales was RMB 5,526.1 million, a year-over-year decrease of 5.7%[93] - The decrease was mainly due to the reduced scale of extended and owner value-added services, but the cost reduction was less than the revenue decline due to increased investment in quality improvement and rigid labor costs[93] 7.2.7 Gross Profit Analysis The Group's gross profit decreased by 21.2% to RMB 939.3 million, with the gross profit margin declining by 2.4 percentage points to 14.5% Gross Profit by Business Line | Business Line | 2025 Gross Profit (RMB in millions) | 2025 Gross Margin | 2024 Gross Profit (Restated, RMB in millions) | 2024 Gross Margin | Growth Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | Property management services | 732.9 | 13.8% | 879.7 | 16.4% | -16.7% | | Value-added services to owners | 112.9 | 21.7% | 150.7 | 19.5% | -25.1% | | City services | 83.8 | 14.5% | 121.5 | 18.0% | -31.0% | | Subtotal | 929.6 | 14.5% | 1,151.9 | 16.9% | -19.3% | | Extended value-added services | 9.7 | 23.6% | 40.5 | 17.4% | -76.2% | | Total | 939.3 | 14.5% | 1,192.4 | 16.9% | -21.2% | - The gross profit margin for property management services decreased by 2.6 p.p., mainly due to increased investment in service quality and limited room for price increases in non-residential projects[96] - The gross profit margin for value-added services to owners increased by 2.2 p.p., due to optimized business structure and flexible operational strategies[96] - The gross profit margin for city services decreased by 3.5 p.p. due to the replacement of projects with poor collection records, while the margin for extended value-added services increased by 6.2 p.p. from exiting low-efficiency projects[101] 7.2.8 Selling and Marketing Expenses Selling and marketing expenses decreased by 34.0% to RMB 15.6 million, representing 0.2% of total revenue - Selling and marketing expenses were RMB 15.6 million, a decrease of 34.0% from the same period in 2024, accounting for 0.2% of revenue[97] 7.2.9 Administrative Expenses Administrative expenses decreased by 19.3% to RMB 275.2 million, representing 4.3% of total revenue - Administrative expenses were RMB 275.2 million, a decrease of 19.3% from the same period in 2024, accounting for 4.3% of revenue[98] 7.2.10 Net Impairment Losses on Financial Assets Net impairment losses on financial assets decreased sharply by 96.4% to RMB 104.4 million, as no significant new provisions were made for related party receivables - Net impairment losses on financial assets were RMB 104.4 million, a decrease of 96.4% from the same period in 2024[99] - The decrease was mainly because no significant new impairment provisions were made for trade and other receivables from related parties during the period[99] 7.2.11 Other Income Other income increased by 31.8% to RMB 55.0 million, primarily due to changes in government grants - Other income was RMB 55.0 million, an increase of 31.8% from the same period in 2024, mainly due to changes in government grants[100] 7.2.12 Income Tax The Group recorded an income tax expense of RMB 142.5 million, compared to a tax credit of RMB 503.0 million in the prior period - The income tax expense was RMB 142.5 million, compared to an income tax credit of RMB 503.0 million in the same period of 2024[102] - The income tax rate was 24.1%, a decrease of 0.5 percentage points from the same period in 2024[102] 7.2.13 Profit The Group achieved a net profit of RMB 448.2 million, a significant turnaround from a net loss of RMB 1,544.4 million in the prior period - Net profit was RMB 448.2 million, compared to a net loss of RMB 1,544.4 million in the same period of 2024, mainly because no significant new impairment provisions were made for related party receivables[103] - The net profit margin increased by 28.8 percentage points to 6.9% from –21.9% in the same period of 2024[103] - Adjusted net profit was RMB 587.6 million, a decrease of 17.0% from the same period in 2024, with the adjusted net profit margin decreasing by 0.9 percentage points to 9.1%[103] 7.2.14 Current Assets, Reserves and Capital Structure As of June 30, 2025, the Group's total equity increased by 2.9% to RMB 11,524.9 million, while cash and cash equivalents decreased by 22.4% - Current assets reached RMB 12,758.7 million, a decrease of 1.2% from December 31, 2024[104] - Cash and cash equivalents were RMB 2,574.7 million, a decrease of 22.4% from December 31, 2024[104] - Total equity was RMB 11,524.9 million, an increase of 2.9% from December 31, 2024, mainly contributed by the profit realized during the period[104] 7.2.15 Property, Plant and Equipment The net amount of property, plant and equipment decreased by 6.5% to RMB 820.3 million as of June 30, 2025 - The net amount of property, plant and equipment reached RMB 820.3 million, a decrease of 6.5% from December 31, 2024[105] 7.2.16 Other Intangible Assets The carrying value of intangible assets decreased by 9.9% to RMB 823.8 million as of June 30, 2025 - The carrying value of intangible assets was RMB 823.8 million, a decrease of 9.9% from December 31, 2024[106] - Intangible assets mainly include the trademark value of member enterprises (RMB 28.9 million), customer relationships and uncompleted contracts (RMB 1,764.0 million), and self-developed and purchased software[106] 7.2.17 Goodwill Goodwill stood at RMB 2,543.4 million as of June 30, 2025, with no significant impairment risk identified during the period - Goodwill reached RMB 2,543.4 million[107] - During the period, no significant goodwill impairment risk was identified[108] 7.2.18 Financial Assets at Fair Value Through Profit or Loss Financial assets at FVTPL decreased by 48.7% to RMB 1,023.7 million due to the redemption of certain financial products - Financial assets at fair value through profit or loss were RMB 1,023.7 million, a decrease of 48.7% from December 31, 2024[109] - The decrease was mainly due to the redemption of certain financial products[109] 7.2.19 Trade and Other Receivables and Prepayments Total trade and other receivables and prepayments increased by 18.9% to RMB 9,970.6 million, driven by an increase in third-party business transactions - Total trade and other receivables and prepayments amounted to RMB 9,970.6 million, an increase of 18.9% from December 31, 2024[110] - Trade receivables were RMB 8,904.1 million, an increase of 5.2% from December 31, 2024, mainly due to the impact of the collection cycle[110] - Other receivables were RMB 4,826.3 million, an increase of 26.6% from December 31, 2024, mainly due to an increase in business transactions with third parties[110] 7.2.20 Trade and Other Payables Total trade and other payables decreased by 6.0% to RMB 6,189.0 million due to the settlement of matured payments and cost control measures - Total trade and other payables amounted to RMB 6,189.0 million, a decrease of 6.0% from December 31, 2024[111] - The decrease was mainly due to the payment of matured amounts and cost control[111] 7.2.21 Borrowings As of June 30, 2025, the Group had long-term borrowings of RMB 325.5 million and short-term borrowings of RMB 104.0 million - The Group had long-term borrowings of RMB 325.5 million, of which RMB 178.9 million is repayable within one year[112] - The Group also had short-term borrowings with a maturity of less than one year amounting to RMB 104.0 million[112] 7.2.22 Gearing Ratio The Group's gearing ratio was 3.7% as of June 30, 2025 - As of June 30, 2025, the gearing ratio was 3.7%[113] 7.2.23 Current and Deferred Income Tax Liabilities Current income tax liabilities decreased by 3.9% to RMB 447.0 million due to lower taxable income - Current income tax liabilities were RMB 447.0 million, a decrease of 3.9% from December 31, 2024, mainly due to a decrease in taxable income[114] - Deferred income tax liabilities decreased from RMB 246.8 million as of December 31, 2024, to RMB 220.4 million[114] 7.3 Pledge of Assets As of June 30, 2025, borrowings totaling RMB 265.8 million were secured by certain of the Group's assets - As of June 30, 2025, long-term borrowings of RMB 207.9 million and short-term borrowings of RMB 57.9 million were secured by certain of the Group's property, plant and equipment, investment properties, and trade receivables[115] 7.4 Material Investments Held, and Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures The Group had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the period - During the period, the Group did not hold any material investments, nor did it have any material acquisitions or disposals of subsidiaries, associates, or joint ventures[116] 7.5 Contingent Liabilities The Group had no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no significant contingent liabilities[117] 7.6 Principal Risks and Uncertainties The Group faces industry risks from macroeconomic changes, rising operational costs, and potential impairment losses, as well as foreign exchange risk 7.6.1 Industry Risks The Group's operations are exposed to risks from China's macroeconomic and real estate environments, rising labor costs, and potential impairment of receivables - The Group's operations are affected by changes in the macroeconomic environment of China's economy and real estate industry, as well as the regulatory environment and measures affecting the property management industry[119] - The Group's profit margin and operating results may be adversely affected by increases in labor or other operating costs[120] - Failure to collect property management fees from customers in a timely manner may result in impairment losses on receivables and affect goodwill assessment and operating cash flow[120] 7.6.2 Foreign Exchange Risk The Group's foreign exchange risk is limited as its business is primarily in China, with management continuously monitoring exposure and considering hedging strategies - The Group's business is primarily concentrated in China, and apart from bank deposits and financial assets denominated in HKD, USD, and AUD, the Group does not face any other significant direct exchange rate fluctuation risks[121] - Management will continue to monitor foreign exchange risks and adopt prudent measures to formulate hedging strategies to mitigate exchange risks when appropriate[121] 7.7 Employees and Remuneration Policies As of June 30, 2025, the Group had 81,872 employees, with total staff costs amounting to RMB 2,712.1 million - As of June 30, 2025, the Group had 81,872 employees, and total staff costs for the period were RMB 2,712.1 million[122] - The remuneration plan is determined with reference to market levels, employee performance, and contributions, and provides a comprehensive benefits plan and career development opportunities[122] VIII. Material Events After the Reporting Period 8.1 Interim Dividend The Board proposed an interim dividend of RMB 0.062 per share (pre-tax), which is subject to a 10% withholding tax for non-resident enterprise H-shareholders - The Board of Directors proposed to distribute an interim dividend of RMB 0.062 per share (pre-tax) for the six months ended June 30, 2025, subject to approval at an extraordinary general meeting[124] - The interim dividend payable to H-shareholders will be declared in RMB and paid in HKD, with the exchange rate based on the average RMB to HKD exchange rate published by the People's Bank of China for the five business days preceding the EGM[124] - A 10% enterprise income tax must be withheld when a PRC domestic enterprise distributes dividends for 2008 and subsequent years to non-resident enterprise H-shareholders[125] 8.2 Interim Dividend for Southbound Trading Investors Dividends for Southbound Trading investors are paid in RMB, with a 20% personal income tax withheld for individual investors - Cash dividends for Southbound Trading investors are distributed in RMB[127] - For individual investors from mainland China investing in H-shares through Southbound Trading, the H-share company will withhold personal income tax at a rate of 20%[128] - For enterprise investors from mainland China, the H-share company will not withhold dividend income tax, which should be self-declared; dividends are exempt from enterprise income tax if the H-shares are held continuously for 12 months[128] 8.3 Closure of Register of Members The register of members for H-shares will be closed from December 1 to December 4, 2025, to determine entitlement to the interim dividend - To determine the list of H-shareholders entitled to the interim dividend, the register of members for H-shares will be closed from Monday, December 1, 2025, to Thursday, December 4, 2025 (both days inclusive)[130] - All completed share transfer forms, accompanied by the relevant share certificates, must be lodged with the Company's H-share registrar in Hong Kong, Tricor Investor Services Limited, by 4:30 p.m. on Friday, November 28, 2025[130] 8.4 Despatch of Circular A circular containing details of the proposed interim dividend will be published on or before November 20, 2025 - A circular containing information on the proposed interim dividend, along with the notice of the EGM and the proxy form, will be published on the websites of the Hong Kong Stock Exchange and the Company on or before November 20, 2025, as additional time is needed for its preparation[131] IX. Other Information 9.1 Review of Interim Results The Audit Committee has reviewed the Group's interim financial statements, which were approved by the Board on August 26, 2025 - The Company's Audit Committee has reviewed the Group's financial statements for the period, including discussions with management on accounting principles, internal controls, and financial reporting matters[132] - The Audit Committee comprises independent non-executive Directors Mr. Wang Gonghu (Chairman), Mr. Weng Guoqiang, and Mr. Lai Kah Ho[132] - The unaudited interim financial information was approved and authorized for issue by the Board of Directors on August 26, 2025[133] 9.2 Compliance with the Model Code for Securities Transactions by Directors and Supervisors The Company has adopted a code for securities transactions by directors and supervisors, and all have confirmed compliance during the period - The Company has adopted a code for securities transactions by directors and supervisors with terms no less exacting than the standards set out in the Model Code in Appendix C3 of the Listing Rules[134] - Specific inquiries were made to all directors and supervisors, and they have confirmed their compliance with the securities dealing code during the period[134] - The Company has also established written guidelines for securities transactions by employees who may possess unpublished price-sensitive information, which are no less stringent than the Model Code[134] 9.3 Compliance with the Corporate Governance Code The Board has reviewed the Company's corporate governance practices and confirmed full compliance with the applicable code provisions during the period - The Company has adopted the principles and code provisions contained in the Corporate Governance Code in Part 2 of Appendix C1 of the Listing Rules[135] - The Board has reviewed the Company's corporate governance practices and is satisfied that the Company has fully complied with all applicable code provisions of the Corporate Governance Code during the period[135] 9.4 Purchase, Sale or Redemption of the Company's Listed Securities During the period, the Company repurchased 1,460,250 H-shares for a total consideration of HK$4,214,002.50, which are held as treasury shares - During the period, the Company repurchased a total of 1,460,250 H-shares on the Hong Kong Stock Exchange for a total consideration of HK$4,214,002.50, which are held as treasury shares[136] - As of June 30, 2025, the Company held a total of 1,460,250 treasury shares[136] - Save as disclosed above, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[137] 9.5 Publication of Interim Results and Interim Report This announcement is available on the websites of the Company and the Hong Kong Stock Exchange, with the interim report to be published in due course - This announcement is published on the websites of the Company (www.agileliving.com.cn) and the Hong Kong Stock Exchange (www.hkex.com.hk)[138](index=138&type=chunk) - The interim report for the period, containing all information required by the Listing Rules, will be available on the above websites in due course, with printed copies sent to shareholders who have opted to receive them[138] 9.6 Board of Directors As of the date of this announcement, the Board of Directors consists of seven members, including four executive directors and three independent non-executive directors - As of the date of this announcement, the Board of Directors consists of seven members: Mr. Chan Cheuk Hung (Co-chairman), Mr. Wang Haiyang (Co-chairman), Mr. Li Dalong (President and CEO), Mr. Chan Sze Yeung (Vice President), Mr. Wang Gonghu, Mr. Weng Guoqiang, and Mr. Lai Kah Ho[139] - Mr. Chan Cheuk Hung, Mr. Wang Haiyang, Mr. Li Dalong, and Mr. Chan Sze Yeung are executive Directors; Mr. Wang Gonghu, Mr. Weng Guoqiang, and Mr. Lai Kah Ho are independent non-executive Directors[139][140]