路劲(01098) - 2025 - 中期业绩

Executive Summary The group's key financial and operational data for the six months ended June 30, 2025, shows a decline in property sales and deliveries, increased loss attributable to owners, and a higher net equity gearing ratio. | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Property Sales (including JVs and associates) | RMB 5.232 billion | RMB 7.304 billion | | Property Deliveries (including JVs and associates) | RMB 6.367 billion | RMB 22.135 billion | | Indonesian Toll Road Project Toll Revenue | HKD 878 million | HKD 919 million | | Loss Attributable to Company Owners | HKD 2.034 billion | HKD 1.027 billion | | Total Assets (June 30 / December 31) | HKD 53.329 billion | HKD 57.513 billion | | Equity Attributable to Company Owners (June 30 / December 31) | HKD 9.183 billion | HKD 10.815 billion | | Net Asset Value Per Share Attributable to Company Owners (June 30 / December 31) | HKD 12.25 | HKD 14.43 | | Net Equity Gearing Ratio (June 30 / December 31) | 63% | 55% | Performance The group's financial performance for the period reflects a significant decline in revenue, expanded gross loss, and a doubling of loss attributable to company owners. Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the group experienced a substantial revenue decrease, expanded gross loss, and a doubled loss attributable to company owners, leading to a significant increase in basic loss per share. Condensed Consolidated Statement of Profit or Loss Key Data | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,784,898 | 3,468,218 | -48.5% | | Cost of Sales | (2,481,116) | (3,831,805) | -35.2% | | Gross Loss | (696,218) | (363,587) | +91.5% | | (Loss) Profit Before Tax | (1,597,589) | 37,334 | Not Applicable | | Loss for the Period | (1,590,215) | (393,508) | +304.1% | | Loss Attributable to Company Owners | (2,034,386) | (1,026,865) | +98.1% | | Basic Loss Per Share | (HKD 2.71) | (HKD 1.37) | +97.8% | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The group's total comprehensive expense for the period significantly increased, primarily due to an expanded loss for the period, despite an improvement in exchange differences. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Loss for the Period | (1,590,215) | (393,508) | | Exchange Differences Arising from Translation of Overseas Operations | 217 | (187,062) | | Exchange Differences Arising from Translation to Presentation Currency | 4,793 | (353,424) | | Total Comprehensive Expense for the Period | (1,585,701) | (932,682) | | Total Comprehensive (Expense) Income Attributable to Company Owners for the Period | (2,029,802) | (1,462,090) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the group's total assets and equity attributable to company owners decreased, while the net equity gearing ratio rose, indicating financial pressure. Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Assets | 53,329,055 | 57,513,135 | | Non-Current Assets | 21,941,752 | 22,936,711 | | Current Assets | 31,387,303 | 34,576,424 | | Total Equity | 19,169,339 | 20,900,179 | | Equity Attributable to Company Owners | 9,182,835 | 10,815,447 | | Total Liabilities | 34,159,716 | 36,612,956 | | Non-Current Liabilities | 14,052,302 | 14,350,791 | | Current Liabilities | 20,107,414 | 22,262,165 | - The net equity gearing ratio increased from 55% as of December 31, 2024, to 63% as of June 30, 2025[2] Notes to the Condensed Consolidated Financial Statements This section details the accounting policies, going concern assumptions, and specific financial statement items, highlighting the group's financial challenges and reporting basis. 1. Basis of Preparation The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and Listing Rules disclosure requirements, primarily on a historical cost basis. - These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[7] - These condensed consolidated financial statements are prepared on the historical cost basis, except for investment properties and certain financial instruments which are measured at fair value[12] Going Concern The group faces significant going concern uncertainties due to suspended interest payments on certain senior notes and offshore bank borrowings, potentially triggering accelerated debt repayment, despite management's restructuring and asset realization plans. - The group recorded a loss of HKD 1,590,215 thousand and a net operating cash outflow of HKD 367,900 thousand for the six months ended June 30, 2025[8] - The group has suspended interest payments totaling USD 23.36 million (equivalent to HKD 181.742 million) on two senior notes and offshore bank borrowings[8] - This suspension may lead to immediate repayment demands for approximately USD 1,529.082 million (equivalent to HKD 11.894686 billion) in offshore bank borrowings and senior notes[8] - The group has formulated various plans and measures to improve liquidity and cash flow, including a financial restructuring plan and the realization of designated assets[9][10] - The group's ability to continue as a going concern depends on successfully negotiating a financial restructuring plan with offshore creditors and finding buyers for designated assets[11][14] 2. Significant Accounting Policies During the interim period, the group adopted revised HKFRS standards, which had no significant impact on its financial position or performance. - During the interim period, the group first applied the revised Hong Kong Financial Reporting Standards (HKFRS) accounting standards issued by the Hong Kong Institute of Certified Public Accountants, which are mandatorily effective for annual periods beginning on January 1, 2025[13] - The application of these revised HKFRS accounting standards did not have a significant impact on the group's financial position and performance for the current and prior periods, and/or on the disclosures contained in these condensed consolidated financial statements[13] 3. Revenue The group's total revenue significantly decreased in the first half of 2025, primarily driven by a substantial reduction in property sales revenue and a decline in commercial rental and other income. Group Total Revenue Composition | Revenue Category | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Property Sales and Services Revenue | 1,682,334 | 3,340,666 | | Commercial Rental and Other Income | 102,564 | 127,552 | | Group Total Revenue | 1,784,898 | 3,468,218 | | Group's Share of Revenue from Property Joint Ventures and Associates | 2,559,449 | 7,001,562 | | Group's Share of Toll Revenue from Infrastructure Joint Operations/Ventures | 357,677 | 671,222 | | Group Revenue and Group's Share of Revenue from Joint Operations/Ventures and Associates | 4,702,024 | 11,141,002 | Revenue from Customer Contracts by Goods and Services Category | Goods and Services Category | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Property Sales | 1,293,923 | 2,932,810 | | Property Management and Services Revenue | 388,411 | 407,856 | | Total | 1,682,334 | 3,340,666 | 4. Segment Information The group's main operating segments include property development and investment, toll roads, and industrial investment and asset management, with property development showing a significantly expanded loss and toll road profit sharply declining in H1 2025. - The group's main operating segments are property development and investment, toll roads, and industrial investment and asset management[18] Segment (Loss) Profit | Segment | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Property Development and Investment | (1,067,702) | (936,873) | | Toll Roads | 95,624 | 1,689,555 | | Industrial Investment and Asset Management | (594,329) | (1,104,818) | | Total | (1,566,407) | (352,136) | Total Segment Assets | Segment | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Property Development and Investment | 43,127,962 | 46,656,622 | | Toll Roads | 4,455,913 | 4,468,757 | | Industrial Investment and Asset Management | 5,501,802 | 6,023,059 | | Total Segment Assets | 53,085,677 | 57,148,438 | 5. Other Gains and Losses Total other gains and losses significantly decreased in H1 2025, mainly due to reduced impairment losses on loans receivable and investment property fair value changes, and a shift from net exchange loss to gain. Other Gains and Losses | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Net Exchange Gain (Loss) | 1,227 | (299,338) | | Gain on Repurchase of Senior Notes | – | 344,175 | | Gain on Disposal of Interest in a Joint Venture | 17,316 | – | | Impairment Loss on Loans Receivable | (96,567) | (639,984) | | Impairment Loss on Amounts Due from Joint Ventures | (268,240) | (176,489) | | Fair Value Change of Investment Properties | (209,970) | (284,848) | | Total | (557,612) | (1,105,037) | 6. Gain on Disposal of a Subsidiary In the first half of 2024, the group recognized a pre-tax gain of HKD 1,862,976 thousand from the disposal of its interest in Road King (China) Infrastructure Limited, with no such gain in H1 2025. - On November 17, 2023, the group entered into a sale and purchase agreement to dispose of its interest in Road King (China) Infrastructure Limited to an independent third party for a consideration of RMB 4.4118 billion (equivalent to HKD 4.902 billion)[24] Gain on Disposal of a Subsidiary | Item | 2024 (HKD thousands) | | :--- | :--- | | Cash Consideration | 4,902,000 | | Net Assets Disposed | (2,998,204) | | Direct Transaction Costs and Fees | (40,820) | | Pre-tax Gain on Disposal | 1,862,976 | | Income Tax Expense | (372,511) | | Net After-tax Gain on Disposal | 1,490,465 | - There was no gain on disposal of subsidiaries in the first half of 2025[3] 7. Share of Profits of Joint Operations/Ventures The group's share of profits from joint operations/ventures significantly decreased in H1 2025, primarily due to a reduction in profits from infrastructure joint operations/ventures. Share of Profits of Joint Operations/Ventures | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Share of Profits of Infrastructure Joint Operations/Ventures (before amortization and tax) | 191,365 | 420,165 | | Less: Share of Amortization of Toll Road Operating Rights | (29,753) | (75,560) | | Less: Share of Income Tax (Expense) Credit | (30,846) | 13,097 | | Share of Profits of Property and Other Joint Ventures | 154,399 | 96,607 | | Total | 285,165 | 454,309 | 8. Finance Costs Group finance costs decreased in H1 2025, mainly attributable to lower interest on borrowings and reduced capitalization of borrowing costs for properties under development for sale. Finance Costs Composition | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest on Borrowings | 440,434 | 657,473 | | Interest on Lease Liabilities | 310 | 617 | | Other Interest and Finance Charges | 23,052 | 66,237 | | Subtotal | 463,796 | 724,327 | | Less: Capitalized as Cost of Properties Under Development for Sale | (159,515) | (290,255) | | Total | 304,281 | 434,072 | 9. (Loss) Profit Before Tax The group recorded a significant pre-tax loss in H1 2025, a stark contrast to the pre-tax profit in the prior year, primarily due to a substantial increase in property inventory costs, including impairment. - Pre-tax (loss) profit shifted from a profit of HKD 37,334 thousand in H1 2024 to a loss of HKD 1,597,589 thousand in H1 2025[3] - Property inventory costs recognized as expense (including property inventory impairment) were HKD 2,047,080 thousand (H1 2024: HKD 3,390,921 thousand), with property inventory impairment increasing from HKD 110,865 thousand to HKD 472,103 thousand[27] 10. Income Tax Credit (Expense) The group recorded an income tax credit in H1 2025, compared to an expense in the prior year, mainly due to a shift to a land appreciation tax credit in China and a significant reduction in corporate income tax expense. Current Period Tax | Tax Category | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 253 | 1,468 | | China Corporate Income Tax | 120,540 | 409,665 | | China Land Appreciation Tax | (123,523) | 49,240 | | Withholding Tax | 21,202 | 64,685 | | Subtotal | 18,472 | 525,058 | | Deferred Tax | (25,846) | (94,216) | | Total | (7,374) | 430,842 | - The 2024 first half corporate income tax included an income tax expense of HKD 372,511 thousand from the disposal of mainland toll road projects[28] 11. Dividends Paid The group did not declare or pay any interim dividends for the six-month periods ended June 30, 2025, and 2024. - The group did not pay any final dividends during the interim periods of 2025 and 2024[30] - The Board declared no interim dividends for the six months ended June 30, 2025, and 2024[30] 12. Loss Per Share The group's basic loss per share significantly increased in H1 2025, with no dilutive potential ordinary shares outstanding. Loss Per Share Calculation Data | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss Attributable to Company Owners for Basic Loss Per Share (HKD thousands) | (2,034,386) | (1,026,865) | | Weighted Average Number of Ordinary Shares for Basic Loss Per Share (thousands of shares) | 749,337 | 749,337 | | Basic Loss Per Share | (HKD 2.71) | (HKD 1.37) | - There were no dilutive potential ordinary shares outstanding for the six-month periods ended June 30, 2025, and 2024, hence no diluted loss per share is presented[31] 13. Trade and Other Receivables, Deposits and Prepayments As of June 30, 2025, the group's total trade and other receivables, deposits, and prepayments slightly decreased, with the majority of trade receivables falling within 60 days aging. Trade and Other Receivables, Deposits and Prepayments | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Receivables from Sales of Goods and Services to Customers | 175,963 | 138,893 | | Prepaid Land Development Costs | 536,481 | 536,481 | | Deposits Paid for Acquisition of Property Inventories | 377,449 | 385,036 | | Prepaid Value Added Tax and Other Taxes | 495,966 | 539,600 | | Other Receivables, Deposits and Prepayments | 704,759 | 707,959 | | Total | 2,395,538 | 2,398,980 | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 60 days | 117,046 | 81,882 | | 61 to 90 days | 10,729 | 10,991 | | Over 90 days | 48,188 | 46,020 | 14. Trade and Other Payables and Accruals As of June 30, 2025, the group's total trade and other payables and accruals decreased, primarily due to reductions in accrued construction costs and trade payables. Trade and Other Payables and Accruals | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Payables | 931,894 | 1,136,969 | | Accrued Construction Costs | 1,774,397 | 1,885,507 | | Accrued Taxes (excluding Corporate Income Tax and Land Appreciation Tax) | 230,639 | 227,583 | | Deposits Received for Property Sales | 124,275 | 265,201 | | Other Payables | 566,181 | 643,145 | | Total | 4,062,473 | 4,602,375 | 15. Total Assets Less Current Liabilities / Net Current Assets As of June 30, 2025, both the group's total assets less current liabilities and net current assets decreased. - As of June 30, 2025, the group's total assets less current liabilities were HKD 33,221,641 thousand (December 31, 2024: HKD 35,250,970 thousand)[34] - As of June 30, 2025, the group's net current assets were HKD 11,279,889 thousand (December 31, 2024: HKD 12,314,259 thousand)[34] 16. Events After the Reporting Period Subsequent to the reporting period, the group failed to obtain consent for its senior notes and decided to suspend principal and interest payments on all offshore bank borrowings, senior notes, and perpetual capital securities, potentially leading to accelerated repayment of approximately HKD 11.895 billion in debt. - On August 8, 2025, the group failed to obtain consent solicitation for its five senior notes due between 2028 and 2030[35] - The group decided to suspend payment of all principal and interest on all offshore bank borrowings, senior notes, and perpetual capital securities, with suspended interest totaling approximately USD 23.36 million (equivalent to HKD 181.742 million)[35] - This suspension may lead to accelerated repayment demands for approximately USD 1,529.082 million (equivalent to HKD 11.894686 billion) in offshore bank borrowings and senior notes[35] Business Review This section provides an overview of the group's operational performance, market conditions, and strategic adjustments across its property, toll road, and other industrial segments. First Half 2025 Performance The group's H1 2025 saw significant declines in property sales and deliveries, a slight decrease in Indonesian toll road revenue, and a substantial expansion of both loss for the period and loss attributable to shareholders. H1 2025 Key Performance Indicators | Indicator | Amount | | :--- | :--- | | Property Sales (including JVs and associates) | RMB 5.232 billion (approx. 28% year-on-year decrease) | | Indonesian Toll Road Project Toll Revenue | HKD 878 million (approx. 4% year-on-year decrease) | | Loss for the Period | HKD 1.590 billion | | Loss Attributable to Shareholders | HKD 2.034 billion | | Loss Per Share | HKD 2.71 | | Net Asset Value Per Share | HKD 12.25 | Business Highlights This section details the challenges in the property market, sales and delivery performance, land bank strategy, toll road business results, and the restructuring of other industrial businesses. Property Market Overview In H1 2025, the mainland property market continued its bottoming-out and recovery, with core cities' momentum weakening after a brief rebound, while third and fourth-tier cities remained under pressure despite government support policies. - In the first half of 2025, the mainland property market continued its bottoming-out and recovery trend, with core cities experiencing a weakening recovery momentum after a brief rebound, while third and fourth-tier cities remained under pressure from high inventory and falling home prices[38] - The government continued to introduce favorable policies, emphasizing "consolidating the stable trend of the real estate market" and "increasing the supply of high-quality housing," and proposing a "stop decline and stabilize" target, but market response was not active, and the policy effects and their sustainability were limited[38] - The Hong Kong property market, stimulated by interest rate cut expectations and government support policies, helped release short-term purchasing power, but the overall economic and market downturn still posed pressure on the property market[38] Property Sales and Deliveries Due to the ongoing market downturn, the group's H1 2025 property sales and deliveries significantly decreased, leading to a loss in the property segment. - The group achieved property sales (including joint ventures and associates) of RMB 5.232 billion in the first half of 2025, of which contracted sales amounted to RMB 4.769 billion[39] - The Guangdong-Hong Kong-Macao Greater Bay Area and the Yangtze River Delta region were the main sales areas, with an average selling price of RMB 21,000 per square meter[39] - Hong Kong projects completed total sales of HKD 1.567 billion and deliveries of HKD 1.635 billion in the first half of the year[39] - The group's mainland and Hong Kong property deliveries (including joint ventures and associates) totaled approximately RMB 6.367 billion, covering an area of approximately 0.27 million square meters[39] - Affected by the continued sluggish property market and price reductions by competitors, the group's property sales volume and price both declined, leading to a loss of HKD 1.068 billion in the property segment during the period[39] Land Bank To preserve funds for debt repayment and operations, the group ceased land acquisitions in H1 2025, resulting in no new projects or land parcels, with a total land bank of approximately 2.36 million square meters. - To preserve funds for loan repayment and support the group's daily operations, the group ceased participating in land auctions and therefore did not acquire new projects or land parcels during the period[40] - As of June 30, 2025, the group's total land bank was approximately 2.36 million square meters, of which 0.38 million square meters had been sold but not yet delivered[40] Toll Road Business The group's Indonesian toll road project saw a slight increase in daily average traffic volume in H1 2025, but revenue decreased year-on-year due to the depreciation of the Indonesian Rupiah against the Hong Kong Dollar, and segment profit significantly declined due to prior year's one-off disposal gains and tax credits. - The group's Indonesian toll road project recorded a daily average mixed traffic volume of 91,100 vehicle trips, a year-on-year increase of 1%; toll revenue was HKD 878 million, a year-on-year decrease of 4%[40] - The decrease in toll revenue was mainly due to the depreciation of the Indonesian Rupiah against the Hong Kong Dollar; excluding the impact of exchange rate fluctuations, toll revenue remained flat year-on-year[41] - The group's share of profit from the Indonesian toll road project joint venture was HKD 131 million, a decrease of HKD 93 million compared to the same period last year, mainly due to the recognition of a one-off deferred tax asset of approximately HKD 100 million for unused tax losses available to offset future profits in the prior period[41] - The toll road segment profit was HKD 96 million, a decrease of HKD 1.594 billion from HKD 1.690 billion in the same period last year, mainly due to the recognition of a one-off after-tax net gain of approximately HKD 1.490 billion from the disposal of mainland toll roads in the prior period[41] Other Industrial Businesses Other industrial businesses (including property fund investments and cultural tourism) have undergone restructuring and consolidation, resulting in a significant reduction in scale, with non-core businesses closed and non-core assets sold. - Other original industrial businesses, mainly including property fund investments and cultural tourism businesses, have significantly reduced in scale after restructuring and consolidation[41] - Non-core businesses have been closed and non-core assets have been sold[41] Financial Review This section reviews the group's liquidity, financial resources, asset pledges, exchange rate and interest rate risks, financial guarantee contracts, and employee information. Liquidity and Financial Resources The group's liquidity and financial resources continued to deteriorate, with a decrease in equity attributable to company owners and cash balances, an increase in net equity gearing ratio, and a suspension of offshore debt principal and interest payments, indicating ongoing debt and liquidity pressures. Liquidity and Financial Resources Key Data | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity Attributable to Company Owners | HKD 9.183 billion | HKD 10.815 billion | | Net Asset Value Per Share Attributable to Company Owners | HKD 12.25 | HKD 14.43 | | Bank Balances and Cash | HKD 3.084 billion | HKD 4.274 billion | | Net Equity Gearing Ratio | 63% | 55% | | Net Debt to Total Capital Ratio | 39% | Not Applicable | - The group has suspended payment of all due principal and interest on all offshore bank borrowings, notes, and perpetual securities[44] - The group anticipates facing continued debt and liquidity pressure in the future and will maintain cautious financial and treasury policies[43] Pledged Assets As of June 30, 2025, the group had HKD 40 million in bank balances and HKD 8.071 billion in properties pledged as collateral for loans, with certain borrowings also secured by equity interests in subsidiaries. - As of June 30, 2025, bank balances of HKD 40 million (December 31, 2024: HKD 421 million) were pledged to banks[45] - Properties with a book value of HKD 8.071 billion (December 31, 2024: HKD 9.493 billion) were also pledged as collateral for certain credit facilities[45] - As of June 30, 2025, borrowings with an outstanding principal amount of HKD 456 million (December 31, 2024: HKD 468 million) were secured by equity shares in certain subsidiaries of the company[45] Exchange Rate Fluctuations and Interest Rate Risk The group faces exchange rate risks from RMB and USD fluctuations and interest rate risks from RMB and USD denominated borrowings, which it will closely monitor and hedge as appropriate. - The group's borrowings are primarily denominated in Renminbi and US Dollars, while its cash flows mainly originate from Renminbi-denominated project income, thus exposing the group to exchange rate risks from fluctuations in Renminbi and US Dollars[46] - The group faces interest rate risk primarily from interest rate fluctuations related to its Renminbi and US Dollar denominated borrowings[46] - The group will continue to closely monitor these risks and implement hedging arrangements when appropriate and cost-effective[46] Financial Guarantee Contracts As of June 30, 2025, the group provided HKD 3.387 billion in mortgage loan guarantees for property buyers and HKD 1.587 billion in financing guarantees for joint ventures. - As of June 30, 2025, the group provided guarantees to banks for mortgage loans granted to property buyers of the group's properties totaling HKD 3.387 billion (December 31, 2024: HKD 4.042 billion)[47] - As of June 30, 2025, the group also provided guarantees for financing granted by banks to joint ventures totaling HKD 1.587 billion (December 31, 2024: HKD 2.061 billion)[47] Employees As of June 30, 2025, the group had 3,458 employees, with staff costs of HKD 355 million, and provided various benefits. - The group had a total of 3,458 employees as of June 30, 2025[48] - Staff costs (including staff seconded to or participating in joint operations/ventures and associates, but excluding directors' emoluments) amounted to HKD 355 million[48] - Employee remuneration is determined based on performance and contribution, with other employee benefits including provident funds, insurance, medical coverage, training programs, and share option schemes[48] Outlook The group anticipates continued differentiated adjustments in the mainland property market, with core cities showing resilience, and expects further government policy support and improved financing conditions, while focusing on operational stability, optimizing toll road business, and actively pursuing offshore debt restructuring. - Looking ahead to the second half of the year, the mainland property market is expected to continue its differentiated adjustment trend, with core cities remaining resilient, but the overall market is still in a bottoming-out phase[49] - The central government is expected to introduce more incremental policies and promote the implementation of existing policies, while in terms of finance, the financing environment for property developers is expected to further improve, and mortgage rates may be moderately lowered to stimulate demand[49] - The group's property operations team will relentlessly ensure the stability of daily operations, guarantee timely property deliveries, and strictly control cash flow[50] - Regarding the toll road business, the group will continue to optimize its Indonesian toll road operations and proceed with the proposed sale of the Indonesian toll road[50] - For offshore debt, the group will actively explore solutions and, after consulting advisors, promptly initiate communication with creditors to seek support and cooperation from all creditors to protect the interests of Road King Company, all creditors, and other stakeholders[50] Purchase, Sale or Redemption of the Group's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the group's listed securities during the six months ended June 30, 2025. - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the group's listed securities during the six months ended June 30, 2025[51] Review of Interim Results This section covers the audit committee's review of the interim financial statements and the independent auditor's disclaimer of conclusion due to significant uncertainties regarding the group's going concern. Audit Committee Review The company's Audit Committee, in conjunction with the external auditor, reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including accounting principles and practices. - The company's Audit Committee, together with the company's external auditor, has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, and the accounting principles and practices adopted therein[52] Extract from Review Report on Condensed Consolidated Financial Statements The independent auditor issued a disclaimer of conclusion on the condensed consolidated financial statements due to significant uncertainties regarding the group's going concern, stemming from failed senior note consent and suspended offshore debt payments, and insufficient evidence to assess management's plans. Basis for Disclaimer of Conclusion The group's failure to obtain consent for senior notes and suspension of offshore debt payments, potentially triggering accelerated repayment of approximately HKD 11.895 billion, raises significant doubt about its going concern, and auditors could not obtain sufficient evidence to assess management's restructuring and asset realization plans. - On August 8, 2025, the group failed to obtain consent solicitation for its five senior notes due between 2028 and 2030 and decided to suspend payment of all principal and interest on all offshore bank borrowings, senior notes, and perpetual capital securities[53] - The group has suspended interest payments totaling USD 23.36 million (equivalent to HKD 181.742 million) on two senior notes and offshore bank borrowings, which may lead to immediate repayment demands for approximately USD 1,529.082 million (equivalent to HKD 11.894686 billion) in offshore debt[53] - The existence of these events or conditions may cast significant doubt on the group's ability to continue as a going concern[54] - The group has formulated various plans and measures to improve liquidity and cash flow, including a financial restructuring plan and the realization of designated assets, but the auditor was unable to obtain necessary and sufficient appropriate evidence to assess the likelihood of their successful implementation[54][55] Disclaimer of Conclusion Due to the inability to obtain sufficient appropriate evidence to assess the appropriateness of the going concern accounting basis and the adequacy of related disclosures, the auditor disclaims a conclusion on the condensed consolidated financial statements. - Due to the significance of the matters described in the "Basis for Disclaimer of Conclusion" section, the auditor was unable to obtain sufficient appropriate evidence to assess the appropriateness of the directors' use of the going concern accounting basis and the adequacy of related disclosures in the condensed consolidated financial statements, thereby forming a conclusion on the condensed consolidated financial statements[57] - Therefore, the auditor does not express a conclusion on these condensed consolidated financial statements[57] Corporate Governance Code The company complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2025. - The company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited throughout the six months ended June 30, 2025[59] Publication of Interim Results and Interim Report The interim results announcement is published on the company's and HKEXnews websites, with the full interim report to be published and distributed to shareholders as required. - This results announcement has been published on the company's website (www.roadking.com.hk) and the HKEXnews website (www.hkexnews.hk)[60](index=60&type=chunk) - The interim report, containing all relevant information required by the Listing Rules, will also be published on the aforementioned websites and distributed to the company's shareholders (if requested) in due course[60] Acknowledgement The Board expresses gratitude to business partners, customers, shareholders for their support, and to colleagues for their diligence. - On behalf of the Board, sincere thanks are extended to business partners, customers, and shareholders for their long-term support, and to colleagues for their diligence and hard work[61] Board Information This section lists the current composition of the Board of Directors, including executive, non-executive, and independent non-executive directors. - As of the date of this announcement, the Board of Directors comprises Executive Directors Mr. Shan Weibiao, Mr. Fong Siu Leung, and Mr. Wu Kuan Hsiung[62] - Non-Executive Directors Ms. Cai Xun and Mr. Yuan Yang[62] - Independent Non-Executive Directors Mr. Wong Wai Ho, Mr. Cheung Hon Kit, Mr. Ho Tai Wai, and Ms. Lam Man Kuen[62]