合生创展集团(00754) - 2025 - 中期业绩

Report Overview This section provides a financial summary, industry overview, and the Group's business strategies for the period Financial Highlights For the six months ended June 30, 2025, Hopson Development Holdings recorded revenue of HKD 6,471 million, a loss attributable to owners of HKD 1,732 million, and basic and diluted loss per share of HKD 0.46 | Indicator | H1 2025 (million HKD) | | :--- | :--- | | Revenue | 6,471 | | Loss attributable to owners | 1,732 | | Basic and diluted loss per share | 0.46 (HKD) | Industry Overview In H1 2025, global economic recovery was weak, while China's economy grew 5.3% year-on-year, with the real estate market showing a weak recovery despite accelerated policy support - China's GDP grew by 5.3% year-on-year in H1 2025, exceeding the full-year target of 5%, demonstrating economic resilience[3] - The overall Chinese real estate market continued a weak recovery trend of stabilizing and rebounding, with new home supply and demand increasing month-on-month, but market sentiment remained low, and the trend of price adjustments had not been completely reversed[5] - Since Q2, the pace of China's real estate policy implementation has accelerated, with the central government emphasizing "greater efforts to promote the stabilization and recovery of the real estate market," and local governments actively introducing favorable measures[5] Group Business Strategy The Group maintains a prudent operating strategy, expanding through agency construction and sales, transforming into a "lifestyle leader," and strengthening financial resilience through diversified financing - The Group adheres to a prudent and stable operating strategy, rapidly expanding its agency construction and sales business to continuously optimize its business structure[6] - The Group is transforming into a "lifestyle leader," building a full-cycle service ecosystem from "product delivery" to "lifestyle customization"[6] - The Group strengthens its social responsibility, upholding its commitment to "ensure delivery, quality, and people's livelihood," and promotes diversified financing strategies to enhance financial resilience[6] Operating Performance This section details the Group's contracted sales, property delivery, and development progress, including land bank changes for the period Contracted Sales Performance In H1 2025, the Group's total contracted sales decreased by 10.4% to RMB 7,928 million, driven by a 15.3% decline in property sales, despite a 117% increase in decoration sales | Indicator | H1 2025 (million RMB) | H1 2024 (million RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total contracted sales and pre-sales | 7,928 | 8,850 | -10.4 | | Property contracted sales | 7,225 | 8,526 | -15.3 | | Decoration contracted sales | 703 | 324 | +117.0 | - The average selling price of property contracted sales was RMB 25,070 per square meter, a year-on-year decrease of approximately 7% compared to RMB 26,955 per square meter in H1 2024[68] Regional Sales Details Guangzhou region saw growth in sales GFA and book value, while Huizhou, Shanghai, Beijing, and Tianjin experienced declines in both metrics | Region | H1 2025 GFA (square meters) | H1 2024 GFA (square meters) | H1 2025 Book Value (million RMB) | H1 2024 Book Value (million RMB) | | :--- | :--- | :--- | :--- | :--- | | Guangzhou | 82,956 | 41,903 | 1,613 | 1,246 | | Huizhou | 49,076 | 51,107 | 312 | 516 | | Shanghai | 84,223 | 109,275 | 3,809 | 4,628 | | Beijing and Tianjin | 71,931 | 114,025 | 2,194 | 2,460 | - Shanghai region's contracted sales amounted to RMB 3,809 million, accounting for 48% of the Group's total contracted sales, making it the primary contributing region[68] Property Delivery and Development As of June 30, 2025, properties sold but undelivered increased, while delivered GFA significantly decreased, and the land bank slightly declined Properties Sold but Undelivered As of June 30, 2025, the Group had 919,227 square meters of properties sold but undelivered, with an estimated revenue of HKD 28,220 million | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | GFA sold but undelivered (square meters) | 919,227 | 844,098 | | Estimated revenue to be recognized (million HKD) | 28,220 | N/A | Properties Delivered In H1 2025, the Group delivered 125,754 square meters of properties, a significant decrease compared to the same period last year | Indicator | H1 2025 (square meters) | H1 2024 (square meters) | | :--- | :--- | :--- | | GFA delivered | 125,754 | 438,051 | Project Development Progress and Land Bank As of June 30, 2025, the Group's land bank was 26.56 million square meters, slightly down from year-end 2024, with significant completions expected in H2 2025 | Indicator | June 30, 2025 (million square meters) | December 31, 2024 (million square meters) | | :--- | :--- | :--- | | Land bank | 26.56 | 26.80 | - Total GFA completed in H1 2025 was approximately 100,139 square meters[12] - Total GFA expected to be completed in H2 2025 is approximately 1,351,634 square meters[12] Financial Performance Analysis This section analyzes the Group's financial performance, including income statement, comprehensive income, and financial position, highlighting key changes and drivers Condensed Consolidated Income Statement The Group turned from profit to loss in H1 2025, reporting a loss attributable to owners of HKD 1,732 million, mainly due to decreased revenue, fair value losses on investment properties, and loss from disposal of an associate | Indicator | H1 2025 (thousand HKD) | H1 2024 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 6,470,600 | 13,809,260 | -53.1 | | Gross profit | 2,551,545 | 3,761,440 | -32.1 | | Fair value (losses) / gains on investment properties | (382,046) | 524,931 | Turned to loss | | Other (losses) / gains, net | (1,803,718) | 12,619 | Turned to loss | | (Loss) / profit before tax | (1,307,777) | 2,069,700 | Turned to loss | | (Loss) / profit for the period | (1,722,523) | 1,083,067 | Turned to loss | | (Loss) / profit attributable to owners of the Company | (1,732,167) | 1,072,878 | Turned to loss | Revenue H1 2025 revenue was HKD 6,471 million, a 53% year-on-year decrease, primarily due to a reduction in total gross floor area delivered from property development | Indicator | H1 2025 (million HKD) | H1 2024 (million HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 6,471 | 13,809 | -53.1 | | Total GFA delivered (square meters) | 125,754 | 438,051 | -71.3 | - The overall average selling price of properties delivered and completed in H1 2025 was RMB 19,461 per square meter, a 3% decrease from the same period last year[66] Gross Profit Gross profit for H1 was HKD 2,552 million, down 32.1% year-on-year, but gross profit margin increased from 27% to 39% due to a higher proportion of high-margin commercial property investment revenue | Indicator | H1 2025 (million HKD) | H1 2024 (million HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 2,552 | 3,761 | -32.1 | | Gross profit margin | 39% | 27% | +12 percentage points | - The increase in gross profit margin was mainly due to the higher proportion of revenue from high-margin commercial property investment business in the Group's total revenue[68] Fair Value Changes of Investment Properties In H1 2025, fair value changes of investment properties turned from a gain to a loss of HKD 382 million compared to the prior year | Indicator | H1 2025 (million HKD) | H1 2024 (million HKD) | | :--- | :--- | :--- | | Fair value (losses) / gains on investment properties | (382) | 525 | Other (Losses) / Gains, Net Net other gains turned from a gain of HKD 13 million to a loss of HKD 1,804 million, primarily due to a HKD 1,810 million loss from the disposal of an associate | Indicator | H1 2025 (million HKD) | H1 2024 (million HKD) | | :--- | :--- | :--- | | Other (losses) / gains, net | (1,804) | 13 | | Of which: Loss on disposal of an associate | (1,810) | (32) | Operating Costs and Other Expenses Operating costs (selling and marketing, general and administrative expenses) decreased by 34% to HKD 799 million, while asset impairment provisions significantly increased to HKD 623 million | Indicator | H1 2025 (million HKD) | H1 2024 (million HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Selling and marketing, general and administrative expenses | 799 | 1,212 | -34.1 | | Asset impairment provisions | 623 | 101 | +516.8 | - Asset impairment provisions include ordinary residential properties, parking spaces, commercial shops, and debt investments[72] Finance Income and Costs Net finance costs for H1 were HKD 463 million, a decrease from the prior year, with total interest expenses before capitalization down 24% due to a lower average borrowing rate | Indicator | H1 2025 (thousand HKD) | H1 2024 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Finance income | 86,377 | 48,382 | +78.5 | | Finance costs | (549,229) | (644,468) | -14.8 | | Net finance costs | (462,852) | (596,086) | -22.3 | - Total interest expenses before capitalization decreased by 24% to HKD 2,058 million, mainly due to a decrease in the average borrowing interest rate from 6.0% to 5.4%[73] Taxation Total taxation for H1 was HKD 415 million, a significant decrease year-on-year, with an increase in PRC land appreciation tax but a lower effective tax rate excluding it due to losses | Indicator | H1 2025 (thousand HKD) | H1 2024 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total taxation | 414,746 | 986,633 | -58.0 | | PRC Land Appreciation Tax | 440,068 | 322,477 | +36.5 | | Tax rate excluding Land Appreciation Tax | 2% | 32% | -30 percentage points | - The tax rate excluding Land Appreciation Tax decreased by 30 percentage points, primarily due to negative income tax resulting from losses[74] Losses) / Profits Attributable to Owners of the Company In H1 2025, the loss attributable to owners of the Company was HKD 1,732 million, compared to a profit of HKD 1,073 million in the prior year, with core profit decreasing by 16% | Indicator | H1 2025 (million HKD) | H1 2024 (million HKD) | | :--- | :--- | :--- | | (Loss) / profit attributable to owners of the Company | (1,732) | 1,073 | | Core profit | 790 | 936 (estimated) | - Core profit calculation has added back fair value losses on investment properties, donations, loss on disposal of an associate, loss on disposal of assets, and asset impairment provisions[76] Loss) / Earnings Per Share Basic and diluted loss per share for H1 2025 was HKD 0.457, compared to earnings per share of HKD 0.283 in the prior year | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | | :--- | :--- | :--- | | Basic and diluted (loss) / earnings per share | (0.457) | 0.283 | - The weighted average number of ordinary shares outstanding during the period was 3,792,541,000 shares, consistent with the same period last year[56] Condensed Consolidated Statement of Comprehensive Income Total comprehensive income for H1 2025 was HKD 86,101 thousand, a significant decrease year-on-year, primarily influenced by a favorable currency translation difference | Indicator | H1 2025 (thousand HKD) | H1 2024 (thousand HKD) | | :--- | :--- | :--- | | (Loss) / profit for the period | (1,722,523) | 1,083,067 | | Currency translation differences (reclassifiable to profit or loss) | 2,061,269 | (464,230) | | Other comprehensive income / (loss) for the period, net of tax | 1,808,624 | (620,425) | | Total comprehensive income for the period | 86,101 | 462,642 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets and liabilities remained largely stable compared to year-end 2024, with investment properties and properties for sale being major components | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Total assets | 256,677,436 | 256,882,175 | | Total equity | 98,980,282 | 98,915,482 | | Total liabilities | 157,697,154 | 157,966,693 | | Net assets | 98,980,282 | 98,915,482 | Assets Total non-current assets slightly decreased, with investment properties remaining the largest component, while total current assets slightly increased, driven by properties for sale | Asset Category | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Total non-current assets | 108,266,802 | 110,028,814 | | Investment properties | 86,261,552 | 85,081,273 | | Investments in associates | 3,562,787 | 6,077,397 | | Investments in joint ventures | 8,396,449 | 7,263,128 | | Total current assets | 148,410,634 | 146,853,361 | | Properties under development for sale | 62,387,630 | 59,613,710 | | Completed properties held for sale | 41,020,964 | 40,884,691 | | Cash and bank balances | 8,425,091 | 11,398,148 | Equity and Liabilities Total equity remained stable, non-current liabilities slightly decreased, and current liabilities increased, notably due to a significant rise in contract liabilities | Liability Category | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Total equity | 98,980,282 | 98,915,482 | | Total non-current liabilities | 64,741,991 | 66,610,032 | | Borrowings (non-current) | 48,568,914 | 50,465,675 | | Total current liabilities | 92,955,163 | 91,356,661 | | Borrowings (current) | 21,775,728 | 24,606,585 | | Contract liabilities | 28,219,976 | 24,701,612 | Liquidity and Financial Position This section assesses the Group's liquidity, borrowing structure, asset pledges, foreign exchange risk, and dividend policy Overall Liquidity Indicators As of June 30, 2025, the Group's current ratio was 1.60, debt-to-asset ratio was 61%, and net asset value per share was HKD 26.10, indicating a stable financial position | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 1.60 | 1.61 | | Debt-to-asset ratio | 61% | 62% | | Net asset value per share (HKD) | 26.10 | N/A | Borrowing Structure and Repayment Total bank and financial institution borrowings decreased by 6% to HKD 69,812 million, with the gearing ratio down 1 percentage point to 63%, and agreements reached for defaulted borrowings | Indicator | June 30, 2025 (million HKD) | December 31, 2024 (million HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total bank and financial institution borrowings | 69,812 | 74,434 | -6.2 | | Net borrowings | 67,071 | 68,109 | -1.5 | | Gearing ratio (net bank and financial institution borrowings as % of shareholders' equity) | 63% | 64% | -1 percentage point | | Repayment Period | Total as of June 30, 2025 (million HKD) | Percentage (%) | | :--- | :--- | :--- | | Within one year | 26,927 | 36 | | One to two years | 8,213 | 11 | | Two to five years | 25,118 | 33 | | After five years | 15,238 | 20 | - The Group failed to repay certain borrowings totaling HKD 846.555 million in principal and interest by the agreed repayment dates, triggering cross-defaults of HKD 7,562.935 million[63] - As of the approval date of the condensed consolidated financial statements, the Group has reached consensus with relevant creditors on the extension terms for the aforementioned defaulted borrowings[61][64] Asset Pledges and Financial Guarantees As of June 30, 2025, assets totaling HKD 81,212 million and equity interests in subsidiaries of HKD 10,470 million were pledged, with HKD 14,167 million in mortgage loan guarantees for property buyers | Indicator | June 30, 2025 (million HKD) | December 31, 2024 (million HKD) | | :--- | :--- | :--- | | Total pledged assets | 81,212 | 85,643 | | Pledged equity interests in subsidiaries | 10,470 | 10,872 | | Mortgage loan guarantees for property buyers | 14,167 | 13,841 | Foreign Exchange Fluctuation Risk The Group faces foreign exchange risk from RMB fluctuations against HKD and USD, but directors anticipate no significant losses in the near term - The Group primarily earns revenue and incurs costs in RMB, exposing it to foreign exchange fluctuation risks against HKD and USD[84] - The directors do not anticipate any significant foreign exchange losses arising from currency fluctuations in the foreseeable future[84] Dividend Policy The Board does not recommend an interim dividend for H1 2025, aiming to conserve cash and strengthen liquidity for future business development - The Board does not recommend the payment of an interim dividend for H1 2025, consistent with the same period in 2024[57][65] - This decision aims to conserve cash and strengthen the Group's liquidity position for future business development and plans[65] Notes and Other Information This section covers general information, basis of preparation, accounting policy changes, segment information, receivables, payables, and post-reporting period events General Information Hopson Development Holdings Limited and its subsidiaries primarily engage in residential property development, commercial property investment, property management, infrastructure, and investment businesses in mainland China - The Group's principal activities include residential property development, commercial property investment, property management, infrastructure business, and investment business[25] Basis of Preparation and Going Concern Interim financial information is prepared under HKAS 34; despite loan defaults, directors have taken measures to improve liquidity and deem the going concern basis appropriate - The interim condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[27] - The Group has loan defaults of HKD 846.555 million and cross-defaults of HKD 7,562.935 million, indicating a material uncertainty[28] - The directors have taken measures such as debt restructuring negotiations, loan extension discussions, accelerating property sales and cash collection, and strict expenditure control, believing the Group will have sufficient working capital to maintain normal operations[28][29] Changes in Accounting Policies The Group adopted HKAS 21 (Revised) "Lack of Exchangeability" this period, but it had no impact on interim financial information as all currencies used for transactions are exchangeable - The Group first adopted Hong Kong Accounting Standard 21 (Revised) "Lack of Exchangeability," which specifies how an entity should assess currency exchangeability and estimate spot exchange rates[31][32] - As the currencies used by the Group for transactions are all exchangeable, this revision had no impact on the interim condensed consolidated financial information[32] Segment Information The Group operates five reportable segments: property development, commercial property investment, property management, infrastructure, and investment, with property segments further divided by region - The Group has five reportable operating segments: property development, commercial property investment, property management, infrastructure, and investment[33][34] - The property development and commercial property investment segments are further divided into three main regions: South China, East China, and North China[33] - Segment performance is evaluated based on adjusted profit/loss before tax, excluding finance income and costs, and head office and corporate expenses[35] Segment Revenue In H1 2025, property development revenue significantly decreased, while commercial property investment revenue remained stable, property management revenue grew, and investment business turned profitable | Business Segment | H1 2025 Revenue (thousand HKD) | H1 2024 Revenue (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Property development | 2,793,813 | 9,889,808 | -71.8 | | Commercial property investment | 2,214,539 | 2,251,973 | -1.7 | | Property management | 709,368 | 654,965 | +8.3 | | Infrastructure | 549,380 | 1,438,990 | -61.8 | | Investment | 203,500 | (426,476) | Turned to profit | - Property development contributed HKD 2,794 million in revenue, accounting for 43% of total sales; commercial property investment contributed HKD 2,215 million, accounting for 34%[77] Segment Results In H1 2025, property development segment results significantly declined to a loss, investment segment losses expanded, while commercial property investment and property management segments remained profitable | Business Segment | H1 2025 Segment Results (thousand HKD) | H1 2024 Segment Results (thousand HKD) | | :--- | :--- | :--- | | Property development (South China) | 282,427 | 108,935 | | Property development (East China) | (51,249) | 55,054 | | Property development (North China) | (459,178) | 1,432,286 | | Commercial property investment (South China) | 557,560 | 155,395 | | Commercial property investment (East China) | 247,316 | 47,511 | | Commercial property investment (North China) | 264,067 | 1,058,817 | | Property management | 87,746 | 181,051 | | Infrastructure | (105,478) | 193,214 | | Investment | (1,666,545) | (472,510) | Segment Assets As of June 30, 2025, total assets for each business segment remained largely unchanged from year-end 2024, with property development holding the largest share | Business Segment | June 30, 2025 Segment Assets (thousand HKD) | December 31, 2024 Segment Assets (thousand HKD) | | :--- | :--- | :--- | | Property development (South China) | 46,117,994 | 45,449,478 | | Property development (East China) | 41,001,308 | 39,218,595 | | Property development (North China) | 53,957,575 | 54,177,562 | | Commercial property investment (South China) | 23,948,270 | 23,045,103 | | Commercial property investment (East China) | 34,125,748 | 33,699,754 | | Commercial property investment (North China) | 39,407,164 | 39,158,641 | | Property management | 3,773,979 | 3,638,818 | | Infrastructure | 4,116,525 | 3,955,676 | | Investment | 9,019,978 | 13,296,213 | Trade and Other Receivables As of June 30, 2025, total trade and other receivables were HKD 4,370 million, with the largest portion, HKD 2,922 million, overdue by more than 12 months | Ageing | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | 0 to 3 months | 640,992 | 716,628 | | 3 to 6 months | 290,094 | 421,972 | | 6 to 9 months | 300,721 | 207,918 | | 9 to 12 months | 216,229 | 193,444 | | Over 12 months | 2,922,181 | 2,518,753 | | Total | 4,370,217 | 4,058,715 | - Trade and other receivables are mainly related to several independent customers and related parties, and are denominated in RMB[59] Trade and Other Payables and Accruals As of June 30, 2025, total trade and other payables were HKD 15,172 million, with the largest portion, HKD 11,370 million, overdue by more than 12 months | Ageing | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | 0 to 3 months | 1,531,197 | 812,344 | | 3 to 6 months | 689,273 | 837,684 | | 6 to 9 months | 766,748 | 1,446,203 | | 9 to 12 months | 814,805 | 1,308,762 | | Over 12 months | 11,370,031 | 10,259,837 | | Total | 15,172,054 | 14,664,830 | - Trade and other payables are denominated in RMB, and their carrying amounts approximate their fair values[62] Events After the Reporting Period As of the approval date of the condensed consolidated financial statements, the Group reached agreements with creditors on extension terms for defaulted borrowings existing at the reporting period end - As of June 30, 2025, the Group's total short-term bank and other borrowings amounted to HKD 22,028,863,000, with cash and cash equivalents of HKD 8,010,998,000[64] - The Group failed to repay certain borrowings totaling HKD 846,555,000 in principal and interest, leading to cross-defaults of HKD 7,562,935,000[64] - As of the approval date of the condensed consolidated financial statements, the Group has reached consensus with relevant creditors on the extension terms for the aforementioned defaulted borrowings[64] Corporate Governance and Employees This section outlines the Group's employee information, adherence to securities transaction codes for directors, corporate governance practices, and board composition Employee Information As of June 30, 2025, the Group employed 8,327 staff (excluding associates and joint ventures), with employee costs of HKD 555 million, maintaining its remuneration policy | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of employees | 8,327 | 8,506 | | Employee costs (million HKD) | 555 | 688 (H1 2024) | Standard Code for Securities Transactions by Directors The Company adopted the Standard Code for Securities Transactions by Directors as per Appendix C3 of the Listing Rules, with all directors confirming full compliance during the period - The Company has adopted the Standard Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions[88] - All directors confirmed full compliance with the required standards set out in the Standard Code for the six months ended June 30, 2025[88] Corporate Governance The Company complied with the Corporate Governance Code during the period, though the Chairman's absence from the AGM was noted, with effective shareholder communication ensured - The Company has complied with the code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules throughout the period[89] - The Chairman of the Board was unable to attend the 2025 Annual General Meeting due to other commitments but had reviewed relevant documents and received minutes of the meeting[89] Purchase, Redemption and Sale of the Company's Listed Securities For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, redeemed, or sold any of its listed securities, and no treasury shares were held - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[90] - As of June 30, 2025, the Company did not hold any relevant treasury shares[90] Audit Committee and Review of Results The Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles, risk management, internal controls, financial reporting, and interim results - The Audit Committee is composed of all three independent non-executive directors[92] - The Audit Committee has reviewed the accounting principles, risk management, internal controls, and financial reporting matters with management, and has reviewed these interim results[92][93] Board of Directors As of the announcement date, the Board of Directors consists of eight members, including five executive directors and three independent non-executive directors - The Board of Directors includes eight directors: Ms. Zhu Jierong (Chairman), Mr. Zhang Fan (Co-President), Mr. Ou Weijian, Mr. Bao Wenge, Mr. Luo Taibin (Executive Directors); Mr. Chen Longqing, Mr. Cheng Rulong, Mr. Mr. Ye Weilin (Independent Non-executive Directors)[96] Outlook This section provides an outlook on the macroeconomic environment, real estate market trends, and the Group's future strategic directions Macroeconomic and Real Estate Market Outlook China's economy is expected to continue a moderate recovery in H2 2025, with real estate policies focusing on stabilization, demand activation, and risk mitigation, creating structural opportunities - China's economy is expected to continue a moderate recovery in H2 2025, with policies maintaining strategic focus to ensure economic operations remain within a reasonable range[13] - The real estate industry is at a critical turning point, with policies shifting from encouraging supply volume to supporting supply quality, comprehensively focusing on stabilizing expectations, activating demand, optimizing supply, and mitigating risks[13] - Sales year-on-year decline may slightly expand in H2, but the entry of high-quality projects in core cities and urban renewal policies will bring structural opportunities, and industry inventory pressure is expected to improve[13] Group's Future Strategy The Group will deepen diversified operations, enhance core capabilities, and explore new real estate development models while maintaining financial security and optimizing its overall market presence - The Group will continue to adhere to a prudent and stable approach, deepen its diversified operating strategies, focus on enhancing core corporate capabilities, and strengthen profitability resilience while strictly maintaining financial security[14] - The Group will focus on optimizing its overall layout, cultivating brand assets, enhancing market recognition, building a diverse talent pipeline, and comprehensively advancing its operational capabilities[14] - Leveraging over thirty years of accumulated brand power and operational capabilities, the Group will continue to explore new real estate development models to create sustainable long-term value for shareholders, customers, and society[14]