泓盈城市服务(02529) - 2025 - 中期业绩

Financial Highlights The company reported a slight revenue increase, stable net profit, and a decrease in gross profit margin and basic and diluted earnings per share for the first half of 2025, with no interim dividend recommended Key Financial Indicators for H1 2025 (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Year-over-year change (%) | | :--- | :--- | :--- | :--- | | Revenue | 316.2 | 311.6 | 1.5 | | Gross profit | 85.1 | 86.7 | -1.8 | | Gross profit margin | 26.9% | 27.8% | -0.9pp | | Net profit for the period | 38.5 | 38.1 | 1.0 | | Net profit attributable to equity holders of the Company | 38.5 | 38.2 | 0.8 | | Basic and diluted earnings per share | RMB 0.24 | RMB 0.29 | -17.2 | - The Board does not recommend the distribution of any interim dividend for the reporting period[3] Performance This section presents the interim condensed consolidated financial statements, including statements of profit or loss, financial position, changes in equity, and cash flows, for the reporting period Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income As of June 30, 2025, the company's revenue slightly increased to RMB 316.2 million, but gross profit and gross profit margin slightly decreased, while profit and total comprehensive income for the period remained stable, and earnings per share declined due to increased share capital Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 316,190 | 311,609 | | Cost of sales | (231,093) | (224,934) | | Gross profit | 85,097 | 86,675 | | Operating profit | 50,949 | 49,871 | | Profit before tax | 52,077 | 50,932 | | Income tax | (13,542) | (12,882) | | Total profit and comprehensive income for the period | 38,535 | 38,050 | | Attributable to equity holders of the Company | 38,537 | 38,177 | | Basic and diluted earnings per share | 0.24 | 0.29 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total non-current and current assets both increased, with a significant rise in prepayments, trade and other receivables, while current liabilities also increased, but net assets maintained stable growth Interim Condensed Consolidated Statement of Financial Position (As of June 30, 2025 and December 31, 2024) | Indicator | 2025年6月30日 (RMB thousands) | 2024年12月31日 (RMB thousands) | | :--- | :--- | :--- | | Non-current assets | 62,112 | 59,560 | | Current assets | 869,895 | 836,988 | | Current liabilities | 552,027 | 518,031 | | Net current assets | 317,868 | 318,957 | | Total assets less current liabilities | 379,980 | 378,517 | | Non-current liabilities | 3,724 | 3,999 | | Net assets | 376,256 | 374,518 | | Total equity attributable to equity holders of the Company | 376,250 | 374,513 | - Prepayments, trade and other receivables increased from RMB 187,013 thousand as of December 31, 2024, to RMB 238,958 thousand as of June 30, 2025[9] Interim Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, the company's total equity increased from RMB 374,518 thousand on January 1, 2025, to RMB 376,256 thousand, primarily driven by profit for the period and non-controlling interest contributions, while dividends approved for the previous year were paid Summary of Changes in Equity (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Balance at January 1 (Total equity) | 374,518 | 255,854 | | Total profit and comprehensive income for the period | 38,535 | 38,050 | | Dividends approved for the previous year | (36,800) | - | | Contributions from non-controlling interests | 3 | 127 | | Balance at June 30 (Total equity) | 376,256 | 376,032 | - In the first half of 2024, the company issued shares through an initial public offering, increasing share capital by RMB 40,000 thousand and share premium by RMB 42,001 thousand, totaling an RMB 82,001 thousand increase in equity[11] Interim Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash generated from operating activities increased, but net cash used in investing activities significantly rose due to payments for time deposits, ultimately leading to a net decrease in cash and cash equivalents Interim Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 30,283 | 28,849 | | Net cash used in investing activities | (63,328) | (921) | | Net cash generated from financing activities | (299) | 107,688 | | Net (decrease)/increase in cash and cash equivalents | (33,344) | 135,616 | | Cash and cash equivalents at June 30 | 321,326 | 346,085 | - Net cash used in investing activities significantly increased to RMB 63,328 thousand in the first half of 2025, primarily due to the payment of RMB 60,000 thousand for time deposits[13] Notes to the Interim Condensed Financial Information This section provides detailed notes on the basis of preparation, accounting policy changes, revenue and segment reporting, income tax, earnings per share, and various financial assets and liabilities Basis of Preparation This interim financial report is prepared in accordance with HKEX Listing Rules and IAS 34, authorized for issue on August 27, 2025, and has been reviewed by KPMG but not audited - This interim financial report is prepared in accordance with the HKEX Listing Rules and International Accounting Standard 34 'Interim Financial Reporting'[16] - The report was authorized for issue on August 27, 2025, and has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[16][17] Changes in Accounting Policies The Group has applied amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," which had no significant impact on this interim report due to the absence of foreign currency non-exchangeable transactions - The Group has applied the amendments to International Accounting Standard 21 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability'[18] - As the Group did not enter into any foreign currency transactions where one currency is not exchangeable into another, the amendments had no significant impact on this interim report[18] Revenue and Segment Reporting The Group's revenue primarily stems from property management, city services, and commercial operation services, with property management and commercial operation services showing growth, while city services revenue decreased, and Changsha Urban Development Group Co., Ltd. remains a key client Revenue Classification The Group's revenue from contracts with customers is primarily derived from property management, municipal sanitation, lighting system operation, commercial operation, landscaping and engineering, and parking lot services Revenue from Contracts with Customers by Major Service Items (Six Months Ended June 30) | Service Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Property management services | 140,970 | 134,432 | | Municipal sanitation services | 23,288 | 28,589 | | Lighting system operation services | 33,635 | 30,953 | | Commercial operation services | 33,910 | 30,346 | | Landscaping and engineering services | 56,399 | 65,394 | | Parking lot services | 25,183 | 19,855 | | Total revenue from contracts with customers | 313,385 | 309,569 | | Sub-leased parking lots (other sources) | 2,805 | 2,040 | | Total revenue | 316,190 | 311,609 | Information on Major Customers Changsha Urban Development Group Co., Ltd. and its subsidiaries are the Group's major customers, contributing over 10% of its revenue Revenue Contribution from Major Customers (Six Months Ended June 30) | Customer | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Changsha Urban Development Group Co., Ltd. and its subsidiaries | 113,441 | 117,168 | Segment Reporting The Group's operations are categorized into three reportable segments: property management, city services, and commercial operation services, with property management and commercial operation services revenue increasing, city services revenue decreasing, and overall gross profit remaining stable Revenue and Gross Profit by Segment (Six Months Ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | 2025 Gross Profit (RMB thousands) | 2024 Gross Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Property management services | 147,028 | 134,432 | 26,508 | 27,169 | | City services | 135,252 | 146,831 | 37,440 | 40,134 | | Commercial operation services | 33,910 | 30,346 | 21,149 | 19,372 | | Total | 316,190 | 311,609 | 85,097 | 86,675 | - All of the Group's revenue and assets are derived from within mainland China, thus no geographical segment analysis is presented[28] Income Tax The Group's income tax increased from RMB 12.9 million in H1 2024 to RMB 13.5 million in H1 2025, primarily due to higher profit before tax, with some entities benefiting from a preferential 5% tax rate as small-profit enterprises Composition of Income Tax (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current tax – PRC enterprise income tax | 14,623 | 13,449 | | Under/(over) provision in prior years | 199 | (86) | | Deferred tax | (1,280) | (481) | | Total income tax | 13,542 | 12,882 | - Entities within the Group in mainland China are subject to a 25% PRC income tax, with some small-profit enterprises enjoying a preferential effective tax rate of 5%[33] Earnings Per Share For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 0.24, a decrease from RMB 0.29 in the prior year, mainly due to an increase in the weighted average number of ordinary shares in issue Earnings Per Share Calculation (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (RMB thousands) | 38,537 | 38,177 | | Weighted average number of ordinary shares in issue (shares) | 160,000,000 | 129,890,110 | | Basic and diluted earnings per share (RMB) | 0.24 | 0.29 | - There were no dilutive shares for the six months ended June 30, 2025 and 2024[32] Prepayments, Trade and Other Receivables As of June 30, 2025, trade receivables (net of allowance) increased to RMB 215.0 million, primarily due to higher receivables from related parties and third parties, with all receivables expected to be recovered within one year Prepayments, Trade and Other Receivables (As of June 30, 2025 and December 31, 2024) | Item | 2025年6月30日 (RMB thousands) | 2024年12月31日 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables (net of allowance) | 214,995 | 165,427 | | Other receivables (net of allowance) | 6,669 | 6,225 | | Amounts due from related parties | 6,535 | 6,151 | | Prepayments | 5,976 | 4,349 | | Total | 238,958 | 187,013 | Ageing Analysis of Trade Receivables (Net of Loss Allowance) | Ageing | 2025年6月30日 (RMB thousands) | 2024年12月31日 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 148,028 | 123,907 | | 1 to 2 years | 63,646 | 39,116 | | Over 2 years | 3,321 | 2,404 | | Total | 214,995 | 165,427 | Trade and Other Payables As of June 30, 2025, total trade and other payables increased to RMB 518.1 million, mainly due to a significant rise in receipts on behalf of property owners and tenants, while trade payables slightly decreased Trade and Other Payables (As of June 30, 2025 and December 31, 2024) | Item | 2025年6月30日 (RMB thousands) | 2024年12月31日 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 308,271 | 328,131 | | Amounts due to related parties | 7,187 | 4,009 | | Accrued salaries and other benefits | 23,318 | 29,384 | | Receipts on behalf of property owners and tenants | 52,177 | 17,390 | | Dividends payable | 36,800 | – | | Total | 518,100 | 480,002 | Ageing Analysis of Trade Payables | Ageing | 2025年6月30日 (RMB thousands) | 2024年12月31日 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 245,014 | 279,148 | | 1 to 2 years | 47,059 | 40,094 | | Over 2 years | 16,198 | 8,889 | | Total | 308,271 | 328,131 | Capital, Reserves and Dividends The Board does not recommend any interim dividend for the reporting period, and the company settled the final dividend of RMB 36.8 million for the previous financial year in July 2025 - The Board does not recommend the distribution of any interim dividend for the reporting period[37] - In July 2025, the company settled the final dividend of RMB 36,800 thousand (RMB 0.23 per share) for the previous financial year[37] Management Discussion and Analysis This section provides an overview of the Group's business performance, future outlook, and financial review for the reporting period, including details on revenue, costs, and financial position Business Review The Group, a state-owned urban services and operations provider deeply rooted in Hunan Province, listed on the HKEX in May 2024, offering property management, city services, and commercial operation services, and ranked 42nd among the Top 100 Property Service Enterprises in China in 2025 Project Portfolio As of June 30, 2025, the Group managed a total of 330 projects with a gross floor area of approximately 12.4 million square meters, showing an increase compared to the previous year Project Portfolio (As of June 30) | Operating Segment | 2025 Number of Projects | 2025 Gross Floor Area Under Management (million sq.m.) | 2024 Number of Projects | 2024 Gross Floor Area Under Management (million sq.m.) | | :--- | :--- | :--- | :--- | :--- | | Property management services | 73 | 11.6 | 84 | 10.9 | | City services | 200 | – | 160 | – | | Commercial operation services | 57 | 0.8 | 54 | 0.8 | | Total | 330 | 12.4 | 298 | 11.7 | - City service projects are not calculated by gross floor area under management, and landscaping and engineering projects are one-off in nature[43] Property Management Services Property management services revenue grew by 9.4% to RMB 147.0 million, accounting for approximately 46.5% of total revenue, driven by an increase in gross floor area under management, project numbers, and enhanced market expansion efforts - Revenue from property management services was approximately RMB 147.0 million, representing a year-on-year increase of approximately 9.4%[42] - Gross floor area under management was approximately 11.6 million square meters, a year-on-year increase of 6.4%, with the number of projects increasing to 84[44] - The growth was primarily attributable to leveraging Chengtou Group's business resources and actively expanding into independent third-party clients[44] City Services City services revenue was approximately RMB 135.3 million, a decrease of approximately 7.9% year-on-year, accounting for about 42.8% of total revenue, mainly due to a reduction in landscaping and engineering projects affected by local government debt resolution and slower infrastructure investment growth - Revenue from city services was approximately RMB 135.3 million, representing a year-on-year decrease of approximately 7.9%[46] - The decrease in revenue was primarily attributable to a reduction in landscaping and engineering projects, affected by local government debt resolution and a slowdown in infrastructure investment growth, leading to an overall market contraction[46] Commercial Operation Services Commercial operation services revenue increased by 11.7% to RMB 33.9 million, representing approximately 10.7% of total revenue, with the number of commercial properties under management at 54 and a stable gross floor area of approximately 0.8 million square meters - Revenue from commercial operation services increased by 11.7% to RMB 33.9 million[47] - As of June 30, 2025, services were provided to 54 commercial properties, with a total gross floor area under management of approximately 0.8 million square meters, remaining stable compared to the same period last year[47] Future Outlook The Group plans to consolidate its position in Hunan Province, expand its business scale through M&A and leveraging Chengtou Group's resources, enhance brand awareness, service quality, and customer satisfaction, and continue investing in technology for digitalization and automation Consolidate position in Hunan Province, continuously expand business scale through multiple channels The Group plans to expand its business scale through various methods such as mergers and acquisitions and equity investments, continue to leverage Chengtou Group's project reserves, actively pursue its future development projects, and collaborate with independent third parties to enhance business expansion capabilities - Expand business scale through various methods such as mergers and acquisitions and equity investments, and improve the selection process for M&A targets[49] - Continue to leverage Chengtou Group's project reserves and actively seek projects to be developed by Chengtou Group and its associates in the future[49] - Enhance business expansion capabilities through cooperation with independent third-party property developers and other clients[49] Continuously enhance the Group's brand awareness, service quality, and customer satisfaction The Group will focus on customer satisfaction, continuously improve service quality, provide more detailed, comprehensive, attentive, and efficient property and value-added services to diverse clients, and collaborate with local governments to expand city service projects - Focus on customer satisfaction, continuously improve service quality, and provide more detailed, comprehensive, attentive, and efficient property and value-added services[50] - Leverage Chengtou Group's advantages to actively expand business scope, undertake more projects, and collaborate with local governments to increase output value by focusing on city services[50] Continue to invest in technology, further enhance the Group's technological strength, and improve its digitalization and automation The Group will continue to develop and optimize internal management information system functions, focusing on online management of labor-intensive tasks, contracts, finance, and assets, and improve various business operating systems to achieve data linkage and information resource sharing - Continue to develop and optimize internal management information system functions, focusing on online management of labor-intensive tasks, contracts, finance, and assets[51] - Develop and improve various business operating systems to achieve functional development, data linkage, and information resource sharing[51] Financial Review The Group's revenue remained stable during the reporting period, with growth in property management and commercial operation services, a decrease in city services revenue, and a slight decline in gross profit margin due to increased cost of sales and expected credit losses, while cash and cash equivalents decreased due to investing activities Revenue Total revenue remained relatively stable, with property management services revenue increasing by 9.4% to RMB 147.0 million, commercial operation services revenue growing by 11.7% to RMB 33.9 million, and city services revenue decreasing by 7.9% to RMB 135.3 million Segment Revenue Changes (Six Months Ended June 30) | Segment | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Property management services | 147.0 | 134.4 | 9.4 | | City services | 135.3 | 146.8 | -7.9 | | Commercial operation services | 33.9 | 30.3 | 11.7 | | Total revenue | 316.2 | 311.6 | 1.5 | - The increase in property management services revenue was primarily due to an increase in gross floor area under management and the number of projects[52] - The decrease in city services revenue was primarily due to a reduction in landscaping and engineering projects, affected by local government debt resolution and a slowdown in infrastructure investment growth[52] Cost of Sales Cost of sales increased by 2.7% from RMB 224.9 million to RMB 231.1 million, mainly due to revenue growth and increased service costs in certain property management segments Cost of Sales Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 231.1 | 224.9 | 2.7 | - The increase in cost of sales was primarily due to higher costs resulting from revenue growth, and increased service costs in certain property management segments where sales centers were converted to residential projects after delivery[54] Gross Profit and Gross Profit Margin The Group's overall gross profit margin slightly decreased from 27.8% to 26.9%, influenced by the aforementioned changes in revenue and cost of sales Gross Profit and Gross Profit Margin Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 85.1 | 86.7 | -1.8 | | Gross profit margin | 26.9% | 27.8% | -0.9pp | Net Other Income Net other income decreased by 80.1% to RMB 0.1 million, primarily due to a reduction in non-recurring government subsidies and exchange gains Net Other Income Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net other income | 0.1 | 0.6 | -80.1 | - The decrease was primarily due to a reduction in non-recurring government subsidies and exchange gains[56] Selling Expenses Selling expenses decreased by 36.1% to RMB 1.5 million, mainly due to reduced marketing expenses as projects entered a stable operational phase Selling Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Selling expenses | 1.5 | 2.4 | -36.1 | - The decrease was primarily due to reduced marketing expenses as projects entered a stable operational phase[57] Administrative Expenses Administrative expenses decreased by 10.5% to RMB 28.2 million, primarily due to increased expenses related to listing activities in the previous year Administrative Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 28.2 | 31.5 | -10.5 | - The decrease was primarily due to increased expenses related to listing activities in the previous year[58] Expected Credit Losses Expected credit losses increased by 30.5% to RMB 4.5 million, primarily due to the ageing of certain trade receivables and contract assets Expected Credit Losses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Expected credit losses | 4.5 | 3.4 | 30.5 | - The increase was primarily due to the ageing of certain trade receivables and contract assets[59] Finance Income Finance income increased by 14.6% to RMB 1.0 million, primarily due to an increase in bank balances Finance Income Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Finance income | 1.0 | 0.9 | 14.6 | - The increase was primarily due to higher finance income resulting from increased bank balances[60] Share of profits less losses of associates and joint ventures Share of profits less losses of associates and joint ventures remained relatively stable at RMB 0.2 million for both periods Share of Profits Less Losses of Associates and Joint Ventures (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Share of profits less losses of associates and joint ventures | 0.2 | 0.2 | Income Tax Income tax increased by 5.1% to RMB 13.5 million, primarily due to an increase in profit before tax Income Tax Changes (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Income tax | 13.5 | 12.9 | 5.1 | - The increase was primarily due to higher profit before tax[62] Total Profit and Comprehensive Income for the Period Total profit and comprehensive income for the period remained relatively stable at RMB 38.5 million and RMB 38.1 million, respectively Total Profit and Comprehensive Income for the Period (Six Months Ended June 30) | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Total profit and comprehensive income for the period | 38.5 | 38.1 | Inventories Inventories remained relatively stable at approximately RMB 3.5 million Inventories (As of June 30, 2025 and December 31, 2024) | Indicator | 2025年6月30日 (RMB millions) | 2024年12月31日 (RMB millions) | | :--- | :--- | :--- | | Inventories | 3.5 | 3.7 | Contract Assets Contract assets decreased to RMB 242.9 million, primarily due to the settlement and recognition of certain contract assets Contract Assets (As of June 30, 2025 and December 31, 2024) | Indicator | 2025年6月30日 (RMB millions) | 2024年12月31日 (RMB millions) | | :--- | :--- | :--- | | Contract assets | 242.9 | 286.3 | - The decrease was primarily due to the settlement and recognition of certain contract assets[65] Trade Receivables Trade receivables increased by 30.0% to RMB 215.0 million, primarily due to the settlement of certain contract assets converted to trade receivables and the ageing of certain trade receivables Trade Receivables (As of June 30, 2025 and December 31, 2024) | Indicator | 2025年6月30日 (RMB millions) | 2024年12月31日 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables | 215.0 | 165.4 | 30.0 | - The increase was primarily due to the settlement of certain contract assets converted to trade receivables and the ageing of certain trade receivables[66] Other Receivables Other receivables increased by 7.1% to RMB 6.7 million, primarily due to an increase in deposits and guarantees Other Receivables (As of June 30, 2025 and December 31, 2024) | Indicator | 2025年6月30日 (RMB millions) | 2024年12月31日 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Other receivables | 6.7 | 6.2 | 7.1 | - The increase was primarily due to an increase in deposits and guarantees[67] Trade Payables Trade payables decreased by 6.1% to RMB 308.3 million, primarily due to payments made by the Group for trade payables Trade Payables (As of June 30, 2025 and December 31, 2024) | Indicator | 2025年6月30日 (RMB millions) | 2024年12月31日 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 308.3 | 328.1 | -6.1 | - The decrease was primarily due to payments made by the Group for trade payables[68] Property, Plant and Equipment The carrying value of property, plant and equipment remained relatively stable at approximately RMB 17.3 million Property, Plant and Equipment (As of June 30, 2025 and December 31, 2024) | Indicator | 2025年6月30日 (RMB millions) | 2024年12月31日 (RMB millions) | | :--- | :--- | :--- | | Property, plant and equipment | 17.3 | 17.3 | Liquidity and Capital Resources and Current Assets The Group maintained sound liquidity with no outstanding borrowings or bank facilities as of June 30, 2025, while cash and cash equivalents decreased by 9.4% to RMB 321.3 million, primarily due to net cash used in investing activities - As of June 30, 2025, the Group had no outstanding borrowings or bank facilities[70] Changes in Cash and Cash Equivalents | Indicator | 2025年6月30日 (RMB millions) | 2024年12月31日 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 321.3 | 354.7 | -9.4 | - The decrease in cash was primarily attributable to net cash used in investing activities of RMB 63.3 million, which included RMB 60.0 million for time deposits[71] Foreign Currency Risk The Group's primary activities are in China, and it does not face significant foreign exchange fluctuation risks, except for HKD-denominated proceeds from its listing, and it will continue to monitor and mitigate foreign exchange risks without using hedging instruments during the reporting period - The Group's primary activities are conducted in China, and it does not face any significant risks directly related to foreign exchange fluctuations, except for certain net proceeds from its listing denominated in HKD[72] - The Group will continue to monitor its foreign exchange risk and take prudent measures to mitigate it, with no financial instruments used for hedging purposes during the reporting period[72] Capital Commitments and Capital Expenditures The Group primarily has capital commitments for contributions to associates and joint ventures, with capital expenditures contracted but not yet incurred amounting to approximately RMB 6.5 million as of June 30, 2025 Capital Expenditures (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Additions to property, plant and equipment | 4,287 | 1,836 | - As of June 30, 2025, capital expenditures contracted but not yet incurred amounted to approximately RMB 6.5 million[73] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[76] Pledged Assets As of June 30, 2025, none of the Group's assets were pledged - As of June 30, 2025, none of the Group's assets were pledged[77] Use of Proceeds from Global Offering The company listed in May 2024, with net proceeds from the global offering of approximately HKD 86.4 million, most of which remained unutilized at the end of the reporting period and will be used as planned in the prospectus for strategic acquisitions, vehicle and equipment procurement, technology investments, talent training, and working capital - The net proceeds from the global offering were approximately HKD 86.4 million[78] Use and Application of Proceeds from Global Offering (As of June 30, 2025) | Use | Planned Allocation (HKD millions) | Unutilized as of December 31, 2024 (HKD millions) | Utilized during Reporting Period (HKD millions) | Unutilized as of June 30, 2025 (HKD millions) | | :--- | :--- | :--- | :--- | :--- | | Strategic acquisitions | 25.2 | 25.2 | – | 25.2 | | Procurement of municipal sanitation service vehicles | 17.1 | 17.1 | – | 17.1 | | Procurement of lighting system operation service vehicles and equipment | 1.0 | 1.0 | – | 1.0 | | Technology investments (development and optimization of internal management information system) | 7.4 | 5.1 | – | 5.3 | | Technology investments (development and improvement of business operating systems) | 6.4 | 6.4 | – | 6.4 | | Technology investments (development of equipment connection system) | 7.4 | 7.4 | – | 7.4 | | Technology investments (recruitment of software development and maintenance engineers) | 0.7 | 0.7 | – | 0.7 | | Talent training and retention (expansion of dedicated team) | 11.8 | 11.8 | 0.6 | 11.2 | | Talent training and retention (optimization of talent development plan) | 1.4 | 1.4 | – | 1.4 | | Working capital | 8.0 | 8.0 | 8.0 | – | | Total | 86.4 | 84.1 | 8.6 | 75.7 | - There were no significant changes in the actual use of net proceeds compared to the proposed use[80] Employees and Remuneration Policy As of June 30, 2025, the Group had 547 employees with total staff costs of RMB 49.4 million, and its remuneration policy is determined based on market levels, industry standards, inflation, operating performance, and employee performance, alongside continuous learning and training programs Employee and Remuneration Information (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total number of employees | 547 | - | | Total staff costs (RMB millions) | 49.4 | 48.4 | - The remuneration policy is determined based on factors such as local market remuneration levels, industry standards, inflation, corporate operating performance, and employee performance[81] - The Group provides continuous learning and training programs for employees to enhance their skills and knowledge, and has not encountered significant recruitment difficulties or staff turnover[82] Compliance with Laws and Regulations During the reporting period, the Group complied with all relevant laws and regulations applicable in Hong Kong and China - During the reporting period, the Group complied with all applicable laws and regulations in Hong Kong and China that would have a significant impact on the Group[83] Compliance with Corporate Governance Code The company has adopted and complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the HKEX Listing Rules during the reporting period - The company has adopted the Corporate Governance Code as set out in Appendix C1 Part 2 of the HKEX Listing Rules and complied with all applicable code provisions during the reporting period[84] Compliance with Model Code for Securities Transactions The company has adopted the Model Code as set out in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed compliance during the reporting period, with no non-compliance by senior management - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[85] - All directors and supervisors have confirmed their compliance with the Model Code during the reporting period, and the company is not aware of any non-compliance by senior management[85] Compliance with Equity Entrustment Agreements To avoid potential competition, the company entered into equity entrustment agreements with Changsha Xingshui and its shareholder Zhongnan Huayun, as well as Gas Group and Hunan Changran, with the relevant entities confirming compliance for the year ended December 31, 2024 - The company has entered into an equity entrustment agreement with Changsha Xingshui and its sole shareholder Zhongnan Huayun, entrusting the company to manage and operate Changsha Xingshui and committing to resolve competition issues[86] - The company also entered into an equity entrustment agreement with Gas Group and Hunan Changran, entrusting the company to manage and operate Hunan Changran and committing to resolve competition issues[86] - Zhongnan Huayun, Changsha Xingshui, Hunan Changran, and Gas Group have confirmed their respective compliance with the relevant equity entrustment agreements[87] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and as of June 30, 2025, the company held no treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[88] - As of June 30, 2025, the company held no treasury shares[88] Interim Dividend The Board does not recommend the distribution of any interim dividend for the reporting period - The Board does not recommend the distribution of any interim dividend for the reporting period[89] Audit Committee The Audit Committee has reviewed the Group's unaudited interim results and this announcement, agreeing with the accounting treatments adopted by the company and confirming that the interim financial results comply with relevant accounting standards, rules, and regulations, with appropriate disclosures made - The Audit Committee has reviewed the Group's unaudited interim results and this announcement, and agreed with the accounting treatments adopted by the company[90] - The Audit Committee is of the opinion that the interim financial results for the six months ended June 30, 2025, comply with relevant accounting standards, rules, and regulations, and appropriate disclosures have been made[90] Review of Interim Results The condensed interim financial statements are unaudited but have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 - The condensed interim financial statements are unaudited but have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[91] Events After the Reporting Period From June 30, 2025, to the date of this announcement, the company is not aware of any significant post-reporting period events that would materially affect the Group's operations and financial performance and require disclosure - From June 30, 2025, to the date of this announcement, the company is not aware of any significant post-reporting period events that would materially affect the Group's operations and financial performance and require disclosure[92] Publication of Interim Results Announcement and 2025 Interim Report on the Websites of The Stock Exchange of Hong Kong Limited and the Company This interim results announcement has been published on the HKEX website and the company's website, and the 2025 interim report will be dispatched to shareholders and published on the respective websites in due course - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (www.hollwingroup.com)[93](index=93&type=chunk) - The 2025 interim report will be dispatched to the company's shareholders in due course, in accordance with their chosen method of receiving corporate communications, and will be published on the respective websites of the HKEX and the company[93] By Order of the Board This announcement is issued by Mr. Xie Yi, Chairman and Executive Director of Hongying Urban Operation Services Group Co., Ltd., on behalf of the Board, and lists the Board members as of the announcement date - This announcement is issued by Mr. Xie Yi, Chairman and Executive Director of Hongying Urban Operation Services Group Co., Ltd., on behalf of the Board[94] - As of the date of this announcement, the Board members include Executive Directors Mr. Xie Yi, Mr. Yang Xin, Mr. Duan Wenming, and Mr. Wang Guofu; Non-executive Director Mr. Yu Xiao; and Independent Non-executive Directors Ms. Chen Jiali, Dr. Dai Xiaofeng, and Mr. Xie Zhiwei[95]