COSMOPOL INT'L(00120) - 2025 - 中期业绩

Performance Summary Financial and Business Highlights H1 2025 saw a sharp revenue decline, but gross profit improved, and operating and attributable losses significantly narrowed Financial Summary for the Six Months Ended June 30, 2025 | Indicator | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | % Change | | :--- | :--- | :--- | :--- | | Revenue | 16.0 | 314.3 | -94.9% | | Gross profit | 2.3 | 1.4 | +64.3% | | Operating loss before depreciation, finance costs and tax | (20.9) | (35.4) | -41.0% | | Loss attributable to owners of the parent | (56.5) | (169.0) | -66.6% | | Basic loss per share attributable to owners of the parent | HKD (3.84) cents | HKD (11.50) cents | -66.6% | | Net asset value per share attributable to owners of the parent (Basic) | HKD 0.50 | HKD 0.46 | +8.7% | | Net asset value per share attributable to owners of the parent (Fully diluted) | HKD 0.27 | HKD 0.25 | +8.0% | Consolidated Results Overview H1 2025 loss significantly narrowed due to reduced tax expenses, despite slow property sales in a weak Chinese market - The Group's loss attributable to shareholders decreased from HKD 169.0 million in the same period of 2024 to HKD 56.5 million in 2025, primarily due to reduced tax expenses[5][6] - The overall property market in China remained weak, resulting in slow property sales for the Group's two integrated development projects in Chengdu and Tianjin, primarily comprising commercial and retail components[5][7] - All development works for the Chengdu Regal International New City project are substantially complete, with completion certificates issued for the last four office towers and the shopping mall, and the Group is actively planning to sell the remaining units[5][7] Management Discussion and Analysis Business Review The Group primarily engages in property development and investment in China, with projects nearing completion and active efforts to sell remaining units, alongside other strategic investments - The Group's principal activities are property development and investment (mainly in China), and other investments such as financial assets[10] - The persistent weakness in China's property market has impacted the sales progress of properties in Chengdu and Tianjin[7][13][14] - The Group exercised its redemption right in September 2024 and received approximately HKD 132.2 million in redemption proceeds for Interra Acquisition Corporation Class A shares in October 2024[16] Property Development The Group's China property projects, including Chengdu, Tianjin, and Xinjiang, are largely complete, with ongoing sales efforts for remaining units despite a weak market - All development works for the Chengdu Regal International New City project are substantially complete, including the hotel, commercial complex, and office towers, with active plans to sell remaining units[12] - Sales progress for Chengdu project office and retail units is slow, with approximately 15,017 square meters of office units and 274 square meters of retail units sold, generating total sales proceeds of RMB 128.9 million and RMB 8.1 million respectively[12][13] - All residential units in the Tianjin Regal New Gate project have been sold, while sales of the remaining commercial complex and office towers are affected by a weak market, with a total area of 16,050 square meters of retail units sold, generating total sales proceeds of approximately RMB 374.1 million[14] - The Xinjiang afforestation project has completed afforestation on approximately 4,300 mu of land, and its legal rights remain valid, with future prospects for obtaining real estate development rights or monetary compensation for approximately 1,843 mu of land[15][45] Chengdu Project—Regal International New City Chengdu project residential units are sold, with retail and parking sales ongoing; commercial and office unit sales are slow, leading to revised sales plans - Phase 3 residential units of the Chengdu project were sold in previous years, generating total sales revenue of approximately RMB 2,048.3 million[11] - Retail unit sales amounted to 4,002 square meters, with total sales proceeds of approximately RMB 93.2 million; 548 parking spaces have been sold or contracted for sale, generating total sales revenue of approximately RMB 56.3 million[11] - The hotel property obtained its completion certificate in January 2024 and its property ownership certificate in January 2025[12] - The remaining commercial components (including the commercial complex and five office towers) are substantially complete, but sales of office and retail units are slow, and the Group is actively revising its sales plan[12][13] Tianjin Project—Regal New Gate All residential units in the Tianjin project are sold, with ongoing retail sales, but remaining office towers face a weak market, requiring continued monitoring for timely sales - All residential units in the Tianjin project have been sold, and retail unit sales within the commercial complex totaled 16,050 square meters, with total sales proceeds of approximately RMB 374.1 million[14] - The remaining components primarily include two office towers, and the overall market conditions for the Tianjin real estate industry remain weak, particularly for commercial properties[14] Xinjiang Project The Xinjiang project involves afforestation on 7,600 mu, with 4,300 mu completed and 1,843 mu for development, where the Group's legal rights for compensation remain valid - The Xinjiang project has completed afforestation on approximately 4,300 mu of land, with an estimated 1,843 mu available for real estate development, and the Group is entitled to participate in bidding and receive compensation for afforestation costs[15] - Based on legal opinions obtained, the Group's legitimate rights and interests under the relevant afforestation contracts remain legally valid and effective[15] Other Investments The Group invested in Interra Acquisition Corporation's Class A shares, which were redeemed in September 2024, yielding HKD 132.2 million in October - The Group previously subscribed for 12,210,000 Class A shares of Interra Acquisition Corporation at a subscription price of approximately HKD 122.1 million[16] - The redemption right was exercised in September 2024, and approximately HKD 132.2 million in redemption proceeds was received in October 2024[16] Outlook The Board expects continued government support for China's property sector, anticipating substantial revenue from remaining Chengdu and Tianjin properties upon market recovery - The central government is expected to continue introducing supportive fiscal policies and administrative measures to stabilize China's property sector and reverse the downward trend[9] - The Board is optimistic that the remaining properties in the Chengdu and Tianjin development projects will generate substantial revenue upon the recovery of China's commercial property market[9] Financial Review Net assets increased, but cash decreased, with higher total debt and gearing; operating cash flow improved, finance costs were stable, and no dividends were declared Asset Value As of June 30, 2025, net assets attributable to owners were HKD 730.0 million, or HKD 0.50 per share, with fully diluted net assets at HKD 0.27 per share Overview of Net Assets | Indicator | As of June 30, 2025 (HKD million) | | :--- | :--- | | Net assets attributable to owners of the parent | 730.0 | | Net asset value per share (Basic) | HKD 0.50 | | Net asset value per share (Fully diluted) | HKD 0.27 | Capital Resources and Funding The Group maintains prudent financial policies, extending HKD 857.0 million loan facilities to 2027 to align with project sales, funding development costs internally and through pre-sales - The Group adopts prudent funding and financial policies, with cash balances primarily held in banks[18] - A supplemental agreement was entered into with Regal Group to extend the repayment date for loan facilities totaling HKD 857.0 million from October 12, 2024, to October 12, 2027, to align with the sales progress of development projects[19] - Construction and related costs for property development projects are primarily funded by internal resources, proceeds from pre-sale units, and loan facilities granted by Regal Group[19] Cash Flow Net cash used in operating activities for H1 2025 improved to HKD 73.3 million, with net interest expenses remaining stable Cash Flow Overview | Indicator | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Net cash flow used in operating activities | 73.3 | 157.7 | | Net interest expenses | 12.4 | 12.8 | Debt and Gearing Ratio As of June 30, 2025, cash decreased, total debt net of cash rose to HKD 1,403.7 million, and the gearing ratio increased to 42.2% Debt and Gearing Ratio Overview | Indicator | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Cash and bank balances together with time deposits | 35.0 | 52.5 | | Total debt net of cash | 1,403.7 | 1,324.0 | | Gearing ratio | 42.2% | 40.1% | | Total assets | 3,326.9 | 3,303.5 | Lease Liabilities As of June 30, 2025, the Group had no lease liabilities, consistent with the prior year-end position - As of June 30, 2025, the Group had no lease liabilities[23] Pledge of Assets The Group pledged equity interests in property project companies to secure debts, with certain bank deposits and financial assets also pledged for banking facilities - The Group has pledged equity interests in companies holding interests in certain property projects to secure its other debts[24] - As of December 31, 2024, bank deposits of HKD 27.2 million and financial assets at fair value through profit or loss were pledged to secure general banking facilities[24] Capital Commitments Details of the Group's capital commitments as of June 30, 2025, are presented in the interim financial statements - Details of the Group's capital commitments as of June 30, 2025, are set out in the interim financial statements[25] Contingent Liabilities Details of the Group's contingent liabilities as of June 30, 2025, are presented in the interim financial statements - Details of the Group's contingent liabilities as of June 30, 2025, are set out in the interim financial statements[26] Dividends The Board resolved not to declare an interim dividend for the financial year ending December 31, 2025, consistent with 2024 - The Board resolved not to declare an interim dividend for the financial year ending December 31, 2025[27] Financial Statements Condensed Consolidated Statement of Profit or Loss H1 2025 revenue decreased, gross profit grew, operating and pre-tax losses narrowed, and a tax credit led to a reduced loss for the period Summary of Condensed Consolidated Statement of Profit or Loss | Indicator | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Revenue | 16.0 | 314.3 | | Cost of sales | (13.7) | (312.9) | | Gross profit | 2.3 | 1.4 | | Other income and gains | 1.7 | 5.9 | | Operating loss | (21.2) | (36.0) | | Finance costs | (39.0) | (39.3) | | Loss before tax | (60.2) | (75.3) | | Income tax | 3.7 | (93.7) | | Loss for the period | (56.5) | (169.0) | | Basic and diluted loss per share attributable to owners of the parent | HKD (3.84) cents | HKD (11.50) cents | Condensed Consolidated Statement of Comprehensive Income H1 2025 loss was HKD 56.5 million, with foreign exchange gains offsetting equity investment losses, leading to a significantly narrowed total comprehensive loss Summary of Condensed Consolidated Statement of Comprehensive Income | Indicator | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Loss for the period | (56.5) | (169.0) | | Exchange differences on translating foreign operations | 51.5 | (40.9) | | Fair value change of equity investments designated at fair value through other comprehensive income | (0.8) | 3.6 | | Total comprehensive loss for the period | (5.8) | (206.3) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, non-current assets were HKD 203.4 million, current assets increased significantly, and net assets grew to HKD 734.1 million Summary of Condensed Consolidated Statement of Financial Position | Indicator | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Total non-current assets | 203.4 | 196.0 | | Total current assets | 3,123.5 | 3,107.5 | | Properties under development | – | 1,207.6 | | Properties held for sale | 2,917.5 | 1,660.2 | | Total current liabilities | (1,186.4) | (925.6) | | Total non-current liabilities | (1,406.4) | (1,696.8) | | Net assets | 734.1 | 681.1 | | Equity attributable to owners of the parent | 730.0 | 681.1 | Notes to the Financial Statements Basis of Preparation and Accounting Policies The condensed consolidated financial statements adhere to HKAS 34, with consistent accounting policies, and the going concern assumption is based on future cash flows and post-reporting events - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants[33] - The amendments to HKAS 21 were initially adopted, but as the Group's transaction currency and functional currency are convertible, these amendments had no impact on the condensed consolidated financial statements[34] - The going concern assumption is based on estimated cash flows for the next 12 months, property promotion plans, and a share placement completed after the reporting period[34] Segment Information The Group's property development segment saw revenue decline but loss narrow, while financial assets turned profitable, leading to reduced overall operating and pre-tax losses - The Group's business is divided into property development and investment (including property development and sales, and property leasing) and financial asset investment (trading financial assets at fair value through profit or loss and other financial asset investments)[35][36] Revenue and Profit/(Loss) by Segment | Segment | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Property Development and Investment | | | | Sales to external customers | 15.0 | 313.5 | | Segment results | (12.2) | (12.7) | | Financial Asset Investment | | | | Sales to external customers | 1.0 | 0.8 | | Segment results | 1.3 | (10.9) | | Consolidated | | | | Sales to external customers | 16.0 | 314.3 | | Operating loss | (21.2) | (36.0) | | Loss before tax | (60.2) | (75.3) | | Loss for the period | (56.5) | (169.0) | Analysis of Revenue, Other Income and Gains Revenue primarily stemmed from property sales, rental income, and net financial asset gains, with other income mainly comprising interest income Analysis of Revenue, Other Income and Gains | Item | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Revenue | | | | Proceeds from property sales | 13.9 | 312.8 | | Rental income | 1.1 | 0.7 | | Net gain on disposal of financial assets at fair value through profit or loss | 0.4 | – | | Dividend income from listed investments | 0.6 | 0.8 | | Other income and gains | | | | Bank interest income | – | 0.1 | | Other interest income | 1.6 | – | | Gain on disposal of items of property, plant and equipment | 0.1 | – | | Others | – | 5.8 | Analysis of Profit from Property Sales and Depreciation Net profit from property sales increased to HKD 0.4 million, with property, plant, and equipment depreciation at HKD 0.3 million Analysis of Profit from Property Sales and Depreciation | Item | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Net profit on disposal of properties | 0.4 | 0.1 | | Depreciation of property, plant and equipment | 0.3 | 0.4 | | Depreciation of right-of-use assets | – | 0.2 | Analysis of Finance Costs Total finance costs for the period were HKD 39.0 million, comparable to the prior year, mainly comprising interest on other debts and convertible notes Analysis of Finance Costs | Item | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Interest on a bank loan | 0.2 | 0.4 | | Interest on convertible notes | 1.7 | 1.7 | | Interest on other debts | 37.1 | 37.2 | | Total | 39.0 | 39.3 | Analysis of Income Tax Expense/(Credit) The period recorded an income tax credit of HKD 3.7 million, mainly from land appreciation and deferred tax credits, a shift from the prior year's tax expense Analysis of Income Tax Expense/(Credit) | Item | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Current － PRC tax expense for the period | – | 6.4 | | Underprovision in prior years | 0.3 | – | | Land Appreciation Tax | (3.0) | 78.6 | | Deferred tax | (1.0) | 8.7 | | Total tax expense/(credit) for the period | (3.7) | 93.7 | - No provision for Hong Kong profits tax was made for the current period, and profits tax for PRC subsidiaries is calculated at applicable tax rates[42][43] - PRC Land Appreciation Tax is levied at progressive rates from 30% to 60% on the appreciation value derived from the sale or transfer of state-owned land use rights, buildings, and their ancillary facilities[43] Dividends No dividends were paid or declared during the six months ended June 30, 2025, nor after the reporting period - No dividends were paid or declared during the six months ended June 30, 2025[44] Loss Per Share Basic loss per share for H1 2025 significantly reduced to HKD (3.84) cents, with no dilution adjustment due to anti-dilutive convertible notes Loss Per Share | Indicator | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the parent | HKD 56,500,000 | HKD 169,000,000 | | Weighted average number of ordinary shares in issue | 1,469,200,000 shares | 1,469,200,000 shares | | Basic loss per share | HKD (3.84) cents | HKD (11.50) cents | - No adjustment was made for the dilutive effect on the loss per share presented for these periods, as the outstanding convertible notes had an anti-dilutive impact on the loss per share[44] Deposits, Prepayments and Other Assets As of June 30, 2025, non-current prepayments for the Xinjiang project are fully recoverable, and current assets include HKD 132.2 million from financial asset redemption Analysis of Deposits, Prepayments and Other Assets | Item | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Non-current prepayments | 152.5 | 144.3 | | Current trade receivables | 0.9 | 0.5 | | Current prepayments | 26.1 | 19.6 | | Other receivables | 138.0 | 135.8 | | Total | 165.1 | 156.0 | - Non-current prepayments primarily relate to Xinjiang afforestation project costs, which the directors believe are fully recoverable in the future[45] - Other receivables include HKD 132.2 million due from a brokerage firm, representing proceeds from the redemption of certain financial assets[47] Aging Analysis of Trade Receivables | Aging | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Within 3 months | 0.4 | – | | Over 1 year | 1.0 | 1.0 | | Total (before impairment) | 1.4 | 1.0 | | Impairment | (0.5) | (0.5) | | Total (after impairment) | 0.9 | 0.5 | Other Debts As of June 30, 2025, total other debts were HKD 1,398.0 million, including secured notes and other loans, with varying repayment terms and some secured by property project equity Analysis of Other Debts | Item | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Secured notes | 468.0 | 468.0 | | Other loans | 930.0 | 857.0 | | Total | 1,398.0 | 1,325.0 | | Repayment terms | | | | Within one year | 541.0 | 156.0 | | In the second year | – | 312.0 | | In the third to fifth year | 857.0 | 857.0 | - The Group issued three-year unsecured Note A (US$20,000,000) and three-year secured Note B (US$40,000,000); after the issuance of Note B, the Group pledged equity interests in the holding company of the Chengdu property development project to the holders of Notes A and B[48][49] - Other loans include a term loan of HKD 357.0 million and a revolving loan of HKD 500.0 million from fellow subsidiaries, both secured by equity interests in holding companies related to property development projects and maturing on October 12, 2027[49] Other Information Events After Reporting Period On July 31, 2025, the Company agreed to place up to 100,000,000 new ordinary shares at HKD 0.108 each, completing the placing on August 15, 2025 - On July 31, 2025, the Company entered into a placing agreement with a placing agent to place up to 100,000,000 new ordinary shares at a placing price of HKD 0.108 per share[50] - The placing was formally completed on August 15, 2025[50] Repurchase, Sale or Redemption of the Company's Listed Securities During H1 2025, neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities[51] Review of Results The Group's H1 2025 condensed consolidated financial statements are unaudited but reviewed by Ernst & Young and the Audit Committee - The Group's condensed consolidated financial statements for the six months ended June 30, 2025, are unaudited but have been reviewed by external auditor Ernst & Young[52] - The Audit Committee has reviewed the condensed consolidated financial statements, including the accounting principles and practices adopted, with the external auditor[52] Corporate Governance The Company complied with the Corporate Governance Code for H1 2025, except for the non-segregation of Chairman and CEO roles - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025[53] - The roles of Chairman and Chief Executive Officer are not segregated and held by two separate individuals, which is an exception to the Corporate Governance Code[53] Board of Directors The Board comprises executive directors, including the Chairman and CEO, Vice Chairmen, COO, and CFO, alongside independent non-executive directors - The Board of Directors includes Executive Directors Mr. Lo Yuk Sui (Chairman and Chief Executive Officer), Mr. Lo Chun To (Vice Chairman and Managing Director), Ms. Lo Po Man (Vice Chairman), Mr. Wong Po Man (Chief Operating Officer), and Mr. Leung So Po (Chief Financial Officer)[54] - Independent Non-executive Directors include Mr. Poon Sul Ying, Ms. Kan Lai Kuen, Mr. Lee Ka Fai, Mr. Shih Lai Him, and Mr. Ng Kai Kai[54]