星盛商业(06668) - 2025 - 中期业绩

Performance Highlights Star Properties' H1 2025 revenue decreased by 9.4% to RMB 284.2 million, while the overall gross profit margin increased by 0.7 percentage points to 52.3%, with profit attributable to owners decreasing by 2.5% to RMB 86.9 million, and an interim dividend of HK 5.0 cents per ordinary share declared H1 2025 Performance Overview For the six months ended June 30, 2025, Star Properties' revenue decreased by 9.4% to RMB 284.2 million, but the overall gross profit margin increased by 0.7 percentage points to 52.3%, with profit attributable to owners decreasing by 2.5% to RMB 86.9 million, and an interim dividend of HK 5.0 cents per ordinary share declared 2025 H1 Key Financial Data (RMB million) | Indicator | For the six months ended June 30, 2025 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | | Revenue | 284.2 | -9.4% | | Overall Gross Profit Margin | 52.3% | +0.7 percentage points | | Profit Attributable to Owners of the Company | 86.9 | -2.5% | | Interim Dividend (per ordinary share) | 5.0 HK cents | N/A | Financial Statements This section presents the Group's unaudited condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, and the statement of financial position Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This section presents the unaudited condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, and 2024, reflecting key financial performance metrics Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | 284,229 | 313,780 | | Cost of Services | (135,548) | (151,900) | | Gross Profit | 148,681 | 161,880 | | Other Income | 15,585 | 18,745 | | Other Losses | (1,131) | (802) | | Net Impairment Losses | (707) | (1,295) | | Selling Expenses | (6,676) | (14,688) | | Administrative Expenses | (26,346) | (31,752) | | Finance Costs | (18,451) | (18,144) | | Share of Results of a Joint Venture | – | (74) | | Profit Before Tax | 110,955 | 113,870 | | Income Tax Expense | (24,902) | (27,374) | | Profit and Total Comprehensive Income for the Period | 86,053 | 86,496 | | Profit Attributable to Owners of the Company | 86,896 | 89,100 | | Non-controlling Interests | (843) | (2,604) | | Basic Earnings Per Share (RMB cents) | 8.58 | 8.80 | Condensed Consolidated Statement of Financial Position This section provides the unaudited condensed consolidated statement of financial position as of June 30, 2025, and December 31, 2024, detailing the Group's assets, liabilities, and equity structure Condensed Consolidated Statement of Financial Position (RMB thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current Assets | | | | Property and Equipment | 778 | 1,152 | | Investment Properties | 783,532 | 780,445 | | Deferred Tax Assets | 50,014 | 44,205 | | Current Assets | | | | Short-term Bank Deposits | 870,808 | 655,905 | | Cash and Cash Equivalents | 497,609 | 710,599 | | Total Current Assets | 1,425,297 | 1,417,359 | | Current Liabilities | | | | Trade and Other Payables | 223,171 | 286,286 | | Lease Liabilities | 23,111 | 22,268 | | Dividends Payable | 76,793 | – | | Total Current Liabilities | 358,286 | 359,562 | | Total Equity | | | | Equity Attributable to Owners of the Company | 1,257,646 | 1,246,877 | | Non-controlling Interests | 7,964 | 8,807 | | Total Equity | 1,265,610 | 1,255,684 | | Non-current Liabilities | | | | Lease Liabilities | 653,117 | 647,151 | Notes to the Financial Statements This section provides detailed notes explaining the basis of preparation, accounting policies, and specific financial statement items Basis of Preparation The financial information is prepared in accordance with Hong Kong Accounting Standard 34 and applicable disclosure requirements of the HKEX Listing Rules - Financial information is prepared in accordance with HKAS 34 and HKEX Listing Rules[7] Principal Accounting Policies The financial information is prepared on a historical cost basis, with accounting policies consistent with the 2024 consolidated financial statements, and no significant impact from new HKFRS amendments - Financial information is prepared on a historical cost basis, with accounting policies consistent with 2024[8] - Application of HKFRS amendments in the current period has no significant impact on financial position or performance[9] Revenue and Segment Information The Group's revenue primarily derives from commercial property operation services in Mainland China, categorized into entrusted management, brand and management output, and master lease services, operating as a single segment Revenue from Commercial Property Operation Services by Operation Model (RMB thousand) | Operation Model | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Entrusted Management Services | 185,706 | 209,691 | | Brand and Management Output Services | 34,439 | 43,458 | | Master Lease Services | 64,084 | 60,631 | | Total | 284,229 | 313,780 | Revenue from Commercial Property Operation Services by Service Type (RMB thousand) | Service Type | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Market Positioning, Design & Construction Consulting, and Tenant Sourcing Services | 20,985 | 29,180 | | Operation Management Services | 182,235 | 198,323 | | Value-added Services | 52,884 | 57,616 | | Total (Revenue from Contracts with Customers) | 256,104 | 285,119 | - The Group operates as a single operating segment, with all business and non-current assets located in Mainland China[13][14] Income Tax Expense Income tax expense for the six months ended June 30, 2025, was RMB 24.9 million, primarily comprising current and deferred tax Income Tax Expense (RMB thousand) | Tax Type | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | PRC Enterprise Income Tax, net | 29,268 | 38,532 | | Deferred Tax | (4,366) | (11,158) | | Total | 24,902 | 27,374 | Profit for the Period Profit for the period is calculated after deducting staff costs, depreciation, and direct operating expenses for investment properties, with total staff costs at RMB 89.7 million and investment property depreciation at RMB 23.1 million Components of Profit for the Period (RMB thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Total Staff Costs | 89,719 | 99,022 | | Depreciation of Property and Equipment | 300 | 585 | | Depreciation of Investment Properties | 23,082 | 23,102 | | Gross Rental Income from Investment Properties | (28,125) | (28,661) | | Less: Direct Operating Expenses Arising from Investment Properties during the Period | 27,405 | 27,615 | Dividends The Board declared an interim dividend of HK 5.0 cents per ordinary share for the six months ended June 30, 2025, with total dividend distribution recognized during the period amounting to RMB 77.1 million Dividend Distribution Recognized During the Period (RMB thousand) | Dividend Type | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Final dividend for 2024 of HK 8.3 cents per ordinary share | 77,108 | – | | Final dividend for 2023 of HK 13.0 cents per ordinary share | – | 120,066 | | Total | 77,108 | 120,066 | - The Board declared an interim dividend of HK 5.0 cents per ordinary share for the six months ended June 30, 2025[16] Earnings Per Share Basic earnings per share attributable to owners of the Company was RMB 8.58 cents, calculated based on profit attributable to owners and the weighted average number of ordinary shares, with no diluted EPS presented due to absence of potential ordinary shares Basic Earnings Per Share Calculation Data | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (RMB thousand) | 86,896 | 89,100 | | Weighted Average Number of Ordinary Shares (thousand shares) | 1,012,579 | 1,012,635 | - No diluted earnings per share is presented for the two interim periods as there are no outstanding potential ordinary shares[20] Trade and Other Receivables As of June 30, 2025, total trade and other receivables amounted to RMB 72.9 million, with trade receivables at RMB 26.0 million, and most trade receivables (net of credit loss provision) aged within 0-10 days Analysis of Trade and Other Receivables (RMB thousand) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 25,985 | 23,961 | | Other Receivables | 46,883 | 45,604 | | Total | 72,868 | 69,565 | Ageing Analysis of Trade Receivables (Net of Provision for Credit Losses) (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 10 days | 15,597 | 15,129 | | 11 to 30 days | 391 | 453 | | 31 to 60 days | 2,946 | 207 | | 61 to 90 days | 374 | 367 | | Over 90 days | 1,262 | 2,390 | | Total | 20,570 | 18,546 | Trade and Other Payables As of June 30, 2025, total trade and other payables were RMB 223.2 million, with trade payables at RMB 30.5 million, and most trade payables aged within 0-30 days Analysis of Trade and Other Payables (RMB thousand) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 30,482 | 40,286 | | Other Payables | 192,689 | 246,000 | | Total | 223,171 | 286,286 | Ageing Analysis of Trade Payables (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 30,479 | 40,283 | | Over 90 days | 3 | 3 | | Total | 30,482 | 40,286 | Share Capital As of June 30, 2025, the Company's authorized share capital was 2,000,000,000 shares, with 1,014,516,000 shares issued and fully paid, and no share repurchases or cancellations during the period Share Capital Details | Indicator | Number of Shares | Share Capital (HK$ thousand) | Share Capital (RMB thousand) | | :--- | :--- | :--- | :--- | | Authorized Share Capital (par value HK$0.01 per share) | 2,000,000,000 | 20,000 | 16,755 | | Issued and Fully Paid Share Capital (as of June 30, 2025) | 1,014,516,000 | 10,145 | 8,487 | - Ordinary shares repurchased in December 2023 and January 2024 were cancelled in February 2024[23] Company Profile and Business Model This section outlines Star Properties' position as a leading commercial property operation service provider in the Greater Bay Area and details its diverse business models Company Profile Star Properties is a leading commercial property operation service provider in the Greater Bay Area, managing 52 projects across 21 cities in China with a total contracted GFA of approximately 2.65 million sq.m., and holding recognized brands - As of June 30, 2025, the Group provides services to 52 commercial property projects across 21 cities in China, with a total contracted GFA of approximately 2.65 million sq.m[24] - The Group owns well-recognized brand systems including "COCO Park", "COCO City", "iCO", and "The Third Space"[24] - In H1 2025, the Group received multiple industry honors, including "Top 10 Commercial Real Estate Operators in China 2025" from China Index Academy[25] Business Model The Group provides commercial property operation services through entrusted management, brand and management output, and master lease service models, each differing in management involvement, customer base, and service offerings - The Group provides commercial property operation services through three operating models: entrusted management, brand and management output, and master lease services[26] Entrusted Management Service Model Under this model, the Group is fully entrusted by owners to manage commercial properties, deploying a complete management team to provide comprehensive services, aiming for optimal operational performance and revenue growth - The Group is fully entrusted by owners to manage commercial properties, deploying a complete management team[27] - Services include market positioning, design and construction consulting, tenant sourcing, operation management, and value-added services[27][28] - This model grants the Group high autonomy, contributing to better operational performance and revenue growth[29] Brand and Management Output Service Model As a professional manager, the Group deploys only a core management team, with owners bearing most personnel and operating costs, resulting in lower capital and human resource investment, higher gross profit margins, and facilitating rapid regional expansion - The Group only deploys a core management team for projects, with owners responsible for most project personnel and operating costs[30][32] - Revenue sources include fixed fees for positioning, construction consulting, and tenant sourcing services, as well as a predetermined percentage or fixed fee for operation management services[31][32] - This model requires less capital and human resource investment, generally yields higher gross profit margins, and facilitates rapid regional expansion[33] Master Lease Service Model The Group leases commercial properties from owners and subleases them to tenants, taking full responsibility for management and operational performance, potentially offering renovation services, a model that maximizes project revenue but carries higher risks and is adopted cautiously - The Group leases commercial properties from owners and subleases commercial spaces to tenants, taking full responsibility for management and operational performance[34] - Services include property leasing, operation management, and value-added services, with revenue primarily from rent and management fees[36] - This model can maximize project revenue but faces higher risks, thus adopted cautiously, primarily for projects with high growth potential[35] Business Operations Review This section reviews the Group's project portfolio, opened retail commercial properties, regional distribution, and average occupancy rates Project Portfolio As of June 30, 2025, the Group's total service projects numbered 52, with a total contracted GFA of approximately 2.65 million sq.m., noting a decrease in brand and management output service projects due to contract termination with Zhuhai Galaxy COCO Park Total Contracted GFA and Number of Properties by Operation Model | Operation Model | June 30, 2025 No. of Properties | June 30, 2025 GFA (thousand sq.m.) | December 31, 2024 No. of Properties | December 31, 2024 GFA (thousand sq.m.) | | :--- | :--- | :--- | :--- | :--- | | Entrusted Management Services | 12 | 886 | 12 | 886 | | Brand and Management Output Services | 33 | 1,345 | 34 | 1,408 | | Master Lease Services | 7 | 416 | 7 | 416 | | Total | 52 | 2,647 | 53 | 2,710 | - In H1 2025, the Group negotiated and terminated the contract with the owner of Zhuhai Galaxy COCO Park, leading to a reduction in brand and management output service projects[37] Opened Retail Commercial Property Projects As of June 30, 2025, the Group operated 27 opened retail commercial property projects, with a total opened GFA of approximately 1.65 million sq.m., located in various cities including Shenzhen, Changzhou, and Shanghai Overview of Selected Opened Retail Commercial Property Projects | No. | Commercial Property | Location | Opening Date | Operation Model | Owner | | :--- | :--- | :--- | :--- | :--- | :--- | | 1. | Shenzhen Futian Galaxy COCO Park (North District) | Shenzhen | Sep 2006 | Entrusted Management Services | Galaxy Holdings Group Co., Ltd. and its associates | | 4. | Shenzhen Longgang Galaxy COCO Park | Shenzhen | Sep 2012 | Entrusted Management Services | Galaxy Holdings Group Co., Ltd. and its associates | | 6. | Shenzhen Longhua Galaxy iCO | Shenzhen | Dec 2015 | Brand and Management Output Services | Independent third-party property developer | | 8. | Changzhou Wujin Hutang Galaxy COCO City | Changzhou | Aug 2016 | Master Lease Services | Galaxy Holdings Group Co., Ltd. and its associates | | 21. | Xiamen Galaxy COCO Park | Xiamen | May 2023 | Master Lease Services | Independent third-party property developer | | 27. | Shanghai Pudong Galaxy COCO Garden | Shanghai | May 2024 | Brand and Management Output Services | Galaxy Holdings Group Co., Ltd. and its associates | Regional Distribution As of June 30, 2025, the Group's business is primarily concentrated in the Greater Bay Area, contributing 74.9% of revenue and 56.7% of contracted GFA, with the Yangtze River Delta contributing 15.0% of revenue and 15.9% of contracted GFA Contracted GFA and Revenue by Geographical Location | Region | June 30, 2025 No. of Properties | June 30, 2025 Contracted GFA (thousand sq.m.) | June 30, 2025 Revenue (RMB thousand) | June 30, 2025 Revenue Share (%) | | :--- | :--- | :--- | :--- | :--- | | Greater Bay Area | 32 | 1,500 | 212,938 | 74.9 | | －Shenzhen | 19 | 777 | 186,135 | 65.5 | | Yangtze River Delta | 9 | 422 | 42,499 | 15.0 | | Other Regions | 10 | 725 | 28,792 | 10.1 | | Total | 52 | 2,647 | 284,229 | 100.0 | Average Occupancy Rate As of June 30, 2025, the average occupancy rate for the Group's operating retail commercial properties was 92.5%, a slight increase from 92.4% at December 31, 2024, with COCO Park achieving the highest rate at 93.9% Average Occupancy Rate of Operating Retail Commercial Properties | Product Type | June 30, 2025 (%) | December 31, 2024 (%) | | :--- | :--- | :--- | | COCO Park | 93.9 | 93.8 | | COCO City and iCO | 90.9 | 90.7 | | Others | 93.7 | 93.9 | | Total | 92.5 | 92.4 | Future Outlook and Strategy This section outlines the Group's strategic priorities and work plan for the second half of 2025, focusing on asset value, digital intelligence, cost awareness, and regional expansion H2 2025 Work Plan In H2 2025, Star Properties will focus on "Cost-Benefit Year" and "Focused Strategy," emphasizing asset value enhancement, digital intelligence, cost awareness, and regional expansion - H2 2025 core work will focus on the "Cost-Benefit Year" theme, implementing a "Focused Strategy" across four areas: enhancing asset value, improving digital intelligence, strengthening cost awareness, and deepening regional expansion[42] Enhance Asset Value, Solidify Benchmark Status The Group plans to enhance asset value by upgrading benchmark projects, targeted tenant attraction, refined management, diversified revenue expansion, and improved customer stickiness, with three new projects scheduled to open in H2 - Key projects will continue to optimize tenant mix and brands to achieve asset appreciation, with Shenzhen Futian Galaxy COCO Park reinforcing its youthful positioning and trendsetter image[43][45] - Diversified tenant attraction strategies, including "strategic co-development," "first-entry brands," and "innovative brands," will be adopted, with "one-store-one-policy" plans to improve occupancy and rental income[46] - Diversified revenue channels will be expanded, utilizing mall advertising spaces, venue rentals, and value-added services, alongside external collaborations for commercial consulting and training[47] - Three new projects, Shenzhen Guangming Galaxy COCO City, Shenzhen Galaxy WORLD • COCO Park Phase II, and Nanjing Galaxy COCO City, are scheduled to open in H2, with strict control over construction and preparation to ensure timely and quality openings[49] Enhance Digital Intelligence, Drive Business Growth The Group will optimize its full-scenario digital platform covering consumers, merchants, and building management, integrate financial and tenant attraction systems, build a leasing settlement (ERP) system, and deploy AI algorithms and IoT devices to enhance operational efficiency and customer experience - The B-side system "Star Butler" mini-program will be optimized to address high-frequency merchant needs and management efficiency, enabling online and paperless merchant services[50] - Existing financial and tenant attraction management systems will be integrated to build a leasing settlement (ERP) system for financial-business integration, while strengthening the C-side marketing platform to enhance smart and convenient consumer experiences[51] - Data middle-ground management standards will be improved, AI algorithms introduced for data application optimization, the BI data platform upgraded, and IoT temperature and humidity sensors deployed to enhance customer experience and save energy[52] Strengthen Cost Awareness, Optimize Resource Allocation The Group will reduce costs and energy consumption in new project preparation and ongoing operations through refined management and control, and advance the "Baichuan Plan" to optimize parking revenue structure and property cost monitoring - Cost awareness will be strengthened during new project preparation to precisely plan capital investment and reduce unnecessary expenses[53] - Operating projects will focus on energy saving and consumption reduction, including air conditioning energy-saving renovations, optimizing system operation logic, and strengthening equipment maintenance[53] - The "Baichuan Plan" will be actively promoted to refine parking revenue structure management, establish a dynamic property cost monitoring mechanism, and optimize parking fee strategies and smart device applications[54] Deepen Regional Cultivation and Expansion, Innovate Business for Efficiency The Group will continue to focus on the Greater Bay Area, selectively develop the Yangtze River Delta with targeted expansion strategies, and actively explore innovative light-asset business models to enhance competitiveness and operational performance - Adhering to the 14th Five-Year Plan strategic direction, the Group will deepen and strengthen its presence in the Greater Bay Area, selectively develop the Yangtze River Delta, and formulate targeted expansion strategies for key cities[55] - Innovative light-asset business models will be actively explored, expanding full-process consulting services for non-listed commercial properties and phased specialized service projects, aiming for breakthroughs in core businesses[56] Financial Performance Analysis This section provides a detailed analysis of the Group's financial performance, including revenue, costs, gross profit, and other income and expenses Revenue For the six months ended June 30, 2025, the Group's revenue was approximately RMB 284.2 million, a 9.4% year-on-year decrease, with entrusted management and brand and management output services revenue declining, while master lease services revenue increased by 5.7% Total Revenue by Operation Model (RMB thousand) | Operation Model | For the six months ended June 30, 2025 Revenue (RMB thousand) | Share (%) | For the six months ended June 30, 2024 Revenue (RMB thousand) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Entrusted Management Services | 185,706 | 65.3 | 209,691 | 66.8 | | Brand and Management Output Services | 34,439 | 12.1 | 43,458 | 13.8 | | Master Lease Services | 64,084 | 22.6 | 60,631 | 19.4 | | Total | 284,229 | 100.0 | 313,780 | 100.0 | - Entrusted management service revenue decreased by approximately 11.4% year-on-year, primarily due to a reduction in projects[59] - Brand and management output service revenue decreased by approximately 20.8% year-on-year, mainly affected by market conditions and the real estate industry, leading to reduced upfront service revenue from consulting projects[59] - Master lease service revenue increased by approximately 5.7% year-on-year, primarily due to steady growth in operating income from master lease projects opened in recent years[60] Cost of Services For the six months ended June 30, 2025, cost of services was approximately RMB 135.5 million, a 10.8% year-on-year decrease, mainly due to fewer entrusted management projects and reduced operating costs from refined operations - Cost of services decreased by approximately 10.8% year-on-year, primarily due to a reduction in entrusted management projects and lower operating costs from refined operations[61] Gross Profit and Gross Profit Margin For the six months ended June 30, 2025, gross profit was approximately RMB 148.7 million, an 8.2% year-on-year decrease, while the overall gross profit margin increased by 0.7 percentage points to 52.3%, driven by a significant 11.8 percentage point increase in master lease services gross profit margin to 24.5% Gross Profit and Gross Profit Margin by Operation Model | Operation Model | For the six months ended June 30, 2025 Gross Profit (RMB thousand) | For the six months ended June 30, 2025 Gross Profit Margin (%) | For the six months ended June 30, 2024 Gross Profit (RMB thousand) | For the six months ended June 30, 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Entrusted Management Services | 107,144 | 57.7 | 121,503 | 57.9 | | Brand and Management Output Services | 25,835 | 75.0 | 32,675 | 75.2 | | Master Lease Services | 15,702 | 24.5 | 7,702 | 12.7 | | Total | 148,681 | 52.3 | 161,880 | 51.6 | - Overall gross profit margin increased by approximately 0.7 percentage points to 52.3%[65] - Master lease service gross profit margin increased by approximately 11.8 percentage points to 24.5%, primarily due to steady growth in operating income and cost reduction efforts[69] Other Income For the six months ended June 30, 2025, other income was approximately RMB 15.6 million, mainly comprising bank interest income - Other income was approximately RMB 15.6 million, primarily consisting of bank interest income[66] Other Gains and Losses For the six months ended June 30, 2025, net other losses were approximately RMB 1.1 million, mainly due to foreign exchange differences - Net other losses were approximately RMB 1.1 million, primarily due to foreign exchange differences[67] Impairment Losses Recognized Under Expected Credit Loss Model For the six months ended June 30, 2025, impairment losses recognized by the Group were approximately RMB 0.7 million, a decrease from RMB 1.3 million in the prior period, mainly due to changes in estimated future recovery of trade receivables - Impairment losses recognized were approximately RMB 0.7 million, a year-on-year decrease, primarily due to changes in estimated future recovery of trade receivables[68] Selling Expenses For the six months ended June 30, 2025, selling expenses were approximately RMB 6.7 million, a significant 54.5% year-on-year decrease, mainly due to fewer entrusted management projects and effective cost control through targeted marketing activities - Selling expenses decreased by approximately 54.5% year-on-year, primarily due to a reduction in entrusted management projects and targeted marketing activities[70] Administrative Expenses For the six months ended June 30, 2025, administrative expenses were approximately RMB 26.3 million, a 17.0% year-on-year decrease, mainly due to continuous optimization of organizational structure and improved management efficiency - Administrative expenses decreased by approximately 17.0% year-on-year, primarily due to continuous optimization of organizational structure and improved management efficiency[71] Finance Costs For the six months ended June 30, 2025, finance costs were approximately RMB 18.5 million, largely consistent with the prior year, primarily representing interest expenses on lease liabilities recognized for master lease projects under HKFRS 16 - Finance costs were approximately RMB 18.5 million, largely consistent with the prior year, primarily representing interest expenses on lease liabilities for master lease projects[72] Share of Results of a Joint Venture For the six months ended June 30, 2025, the Group's share of results of a joint venture was nil, compared to a loss of approximately RMB 0.1 million in the prior year - Share of results of a joint venture was nil, compared to a loss of approximately RMB 0.1 million in the prior year[73] Income Tax Expense For the six months ended June 30, 2025, income tax expense was approximately RMB 24.9 million, a 9.0% year-on-year decrease, primarily due to a reduction in profit before tax - Income tax expense decreased by approximately 9.0% year-on-year, primarily due to a reduction in profit before tax[74] Profit for the Period For the six months ended June 30, 2025, the Group's profit for the period was approximately RMB 86.1 million, a 0.5% year-on-year decrease, with profit attributable to owners of the Company decreasing by 2.5% to RMB 86.9 million - The Group's profit for the period decreased by approximately 0.5% to RMB 86.1 million[75] - Profit attributable to owners of the Company decreased by approximately 2.5% to RMB 86.9 million[75] Financial Position and Liquidity This section analyzes the Group's financial position, including trade and other receivables/payables, contingent liabilities, liquidity, and gearing ratio Trade and Other Receivables As of June 30, 2025, trade and other receivables were approximately RMB 47.3 million, an increase of approximately 7.5% from December 31, 2024, mainly due to increased engineering investment in new projects and cyclical differences in settling management service fees with owners - Trade and other receivables increased by approximately 7.5% to RMB 47.3 million, primarily due to increased engineering investment in new projects and cyclical differences in management service fee settlements[76] Trade and Other Payables As of June 30, 2025, trade and other payables were approximately RMB 223.2 million, a decrease of approximately 22.0% from December 31, 2024, mainly due to the payment of year-end bonuses accrued in the previous year and other payables - Trade and other payables decreased by approximately 22.0% to RMB 223.2 million, primarily due to the payment of prior year's accrued year-end bonuses and other payables[77] 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[78] Liquidity and Capital Resources The Group maintains a stable financial position with ample liquidity and bank balances; as of June 30, 2025, short-term bank deposits, cash, and cash equivalents totaled approximately RMB 1,368.4 million, largely consistent with December 31, 2024 - The Group maintains a stable financial position with ample liquidity and bank balances[79] - Short-term bank deposits, cash, and cash equivalents totaled approximately RMB 1,368.4 million, largely consistent with December 31, 2024[79] Bank Loans and Other Borrowings As of June 30, 2025, the Group had no bank loans or other borrowings - As of June 30, 2025, the Group had no bank loans or other borrowings[80] Gearing Ratio As of June 30, 2025, the gearing ratio was approximately 44.8%, largely consistent with 44.9% at December 31, 2024 - The gearing ratio was approximately 44.8%, largely consistent with December 31, 2024[81] Foreign Exchange Risk The Group's primary business and most financial assets and liabilities are denominated in RMB; while no forward foreign exchange contracts are used for hedging, management continues to monitor and mitigate risks - The Group's primary business is denominated in RMB, and it has not entered into forward foreign exchange contracts to hedge foreign exchange risk[82] Use of Proceeds This section details the net proceeds from the global offering and over-allotment option, including their revised intended uses and utilization status Net Proceeds from Global Offering and Over-allotment Option The Company raised approximately RMB 841.8 million in net proceeds from its global offering and over-allotment option; the Board resolved on August 25, 2022, to change the intended use to capitalize on master lease service market opportunities, with approximately RMB 471.8 million utilized by June 30, 2025, primarily for leasing and renovation of retail commercial properties under the master lease service model - Net proceeds from the global offering and over-allotment option totaled approximately RMB 841.8 million[83][85] - The Board resolved on August 25, 2022, to change the intended use of net proceeds to capitalize on master lease service market opportunities[84] Use of Net Proceeds (As of June 30, 2025, RMB million) | Revised Use | Share (%) | Unutilized as of Jan 1, 2025 | Utilized in H1 2025 | Cumulative Utilized | Unutilized as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Leasing and renovation of retail commercial properties under master lease service model | 75% | 346.7 | 52.3 | 337.0 | 294.4 | | Minority equity investments in companies owning quality commercial properties | 10% | 45.2 | – | 39.0 | 45.2 | | Enhancing information technology systems | 5% | 32.0 | 1.6 | 11.6 | 30.4 | | General business purposes and working capital | 10% | – | – | 84.2 | – | | Total | 100% | 423.9 | 53.9 | 471.8 | 370.0 | - As of the date of this announcement, approximately RMB 370.0 million of unutilized net proceeds has been deposited in licensed banks and is intended to be used as originally planned[85][86] Other Important Information This section covers additional key information, including employee numbers, remuneration policy, future investment plans, corporate governance, and dividend arrangements Number of Employees and Remuneration Policy As of June 30, 2025, the Group had 840 employees, a decrease from 954 at December 31, 2024; remuneration is based on qualifications, experience, job nature, and performance, including cash bonuses, medical plans, retirement plans, and share awards - As of June 30, 2025, the Group had 840 employees, a decrease of 114 from December 31, 2024[87] - Remuneration is based on employee qualifications, experience, job nature, and performance, including cash performance bonuses, medical plans, retirement plans, share option schemes, and restricted share unit awards[87] - Staff costs for H1 2025 included share-based payment expenses of approximately RMB 981,000[87] Future Plans for Material Investments and Capital Assets For the six months ended June 30, 2025, the Group had no specific plans for material investments or acquisitions of major capital assets or other businesses, beyond the expansion plans outlined in the prospectus - Beyond the expansion plans outlined in the prospectus, the Group has no specific plans for material investments or acquisitions of major capital assets or other businesses[88] Material Investments, Acquisitions, and Disposals of Subsidiaries, Associates, and Joint Ventures For the six months ended June 30, 2025, the Group had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[89] Pledges of Assets As of June 30, 2025, the Group had not pledged any assets - As of June 30, 2025, the Group had not pledged any assets[90] Corporate Governance The Company is committed to maintaining high corporate governance standards, complying with the Model Code for Securities Transactions by Directors and the Corporate Governance Code as set out in the HKEX Listing Rules - The Company's directors have complied with the required standards set out in the Model Code for the six months ended June 30, 2025[91] - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[92] - The Company has applied the principles of good corporate governance and complied with the code provisions set out in Part 2 of the Corporate Governance Code in Appendix C1 of the Listing Rules[94] Interim Dividend and Closure of Register of Members The Board declared an interim dividend of HK 5.0 cents per ordinary share for the six months ended June 30, 2025; the register of members will be closed from November 28 to December 1, 2025, with the interim dividend expected to be paid on or around December 19, 2025 - The Board declared an interim dividend of HK 5.0 cents per ordinary share for the six months ended June 30, 2025[95] - The register of members will be closed from Friday, November 28, 2025, to Monday, December 1, 2025[95] - The proposed interim dividend is expected to be paid on or around Friday, December 19, 2025[95] Review of Interim Results The unaudited interim financial information for the six months ended June 30, 2025, has been reviewed by the Company's auditor, Deloitte Touche Tohmatsu, and discussed and reviewed by the Audit Committee with management - The unaudited interim financial information has been reviewed by the Company's auditor, Deloitte Touche Tohmatsu[96] - The Company's Audit Committee, together with management, has reviewed the accounting principles and practices adopted by the Group and discussed matters including internal control, risk management, and financial reporting[96] Publication of Interim Results and Interim Report This announcement has been published on the HKEX and Company websites; the Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and posted on the HKEX and Company websites in due course - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.g-cre.com)[97](index=97&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and posted on the HKEX and Company websites in due course[97]