方圆生活服务(09978) - 2025 - 中期业绩

Announcement Summary Interim Results Announcement Fangyuan Life Service Group Co, Ltd announced its unaudited results for the six months ended June 30, 2025, highlighting uncertainty about its ability to continue as a going concern - The company announced its unaudited condensed consolidated financial results for the six months ended June 30, 2025[2] - For the six months ended June 30, 2025, the Group recorded a net loss of approximately RMB 6,520,000[3] - As of June 30, 2025, the Group's current liabilities exceeded its current assets by approximately RMB 36,167,000, indicating a material uncertainty that may cast significant doubt on its ability to continue as a going concern[3] Board of Directors As of the announcement date, the company's Board of Directors comprises executive and independent non-executive directors - Executive Directors include Mr Fang Ming (Chairman), Mr Sun Ligong, Mr Han Shuguang, and Ms Xie Lihua[5] - Independent Non-executive Directors include Mr Leung Wai Hung, Mr Tian Qiusheng, and Mr Du Chenghua[5] Corporate Information Board and Committee Composition The company's Board includes executive and independent non-executive directors, with established Audit, Remuneration, and Nomination Committees - The Chairman of the Board is Mr Fang Ming, and the Chief Executive Officer is Mr Sun Ligong[8] - The Audit Committee is chaired by Mr Leung Wai Hung, the Remuneration Committee by Mr Tian Qiusheng, and the Nomination Committee by Mr Fang Ming[8] Key Contact Information The company has disclosed key contact information including its registered office, headquarters, and principal business locations - The registered office is in the Cayman Islands, the China headquarters is in Guangzhou, and the principal place of business in Hong Kong is in the United Centre, Admiralty[9][10][11] - The auditor is ZHONGHUI ANDA CPA Limited, and principal bankers include Industrial Bank, Agricultural Bank of China, and Shanghai Pudong Development Bank[9] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Financial Performance for H1 2025 For the six months ended June 30, 2025, the company's revenue and gross profit decreased, while net loss and basic loss per share narrowed significantly Key Financial Data for H1 2025 (RMB'000) | Indicator | H1 2025 | H1 2024 | Y-o-Y Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 168,431 | 186,085 | (17,654) | -9.5% | | Cost of services | (135,000) | (148,094) | 13,094 | -8.8% | | Gross profit | 33,431 | 37,991 | (4,560) | -12.0% | | Loss before income tax | (9,212) | (13,313) | 4,101 | -30.8% | | Loss for the period | (6,520) | (12,310) | 5,790 | -47.0% | | Loss attributable to owners of the Company | (5,999) | (14,673) | 8,674 | -59.1% | | Basic and diluted loss per share (RMB cents) | (1.50) | (3.67) | 2.17 | -59.1% | - Net impairment losses on financial assets decreased by 28.2% from RMB 32,816 thousand in H1 2024 to RMB 23,576 thousand in H1 2025[14] - Exchange differences on translation of foreign operations shifted from a loss of RMB 107 thousand in H1 2024 to a gain of RMB 1,756 thousand in H1 2025[14] Unaudited Condensed Consolidated Statement of Financial Position Asset and Liability Structure As of June 30, 2025, the company's total assets and total equity decreased, while net current liabilities expanded, indicating continued liquidity pressure Key Financial Position Data as of June 30, 2025 (RMB'000) | Indicator | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total non-current assets | 120,813 | 121,564 | (751) | -0.6% | | Total current assets | 227,426 | 245,178 | (17,752) | -7.2% | | Total current liabilities | 263,593 | 273,193 | (9,600) | -3.5% | | Net current liabilities | (36,167) | (28,015) | (8,152) | 29.1% | | Net assets | 77,620 | 85,724 | (8,104) | -9.5% | | Equity attributable to owners of the Company | 29,812 | 34,055 | (4,243) | -12.5% | | Non-controlling interests | 47,808 | 51,669 | (3,861) | -7.5% | | Total equity | 77,620 | 85,724 | (8,104) | -9.5% | - Trade receivables (net of impairment loss) decreased from RMB 83,956 thousand on December 31, 2024, to RMB 79,689 thousand on June 30, 2025[15] - Amounts due from related companies (net of impairment loss) increased from RMB 21,439 thousand on December 31, 2024, to RMB 40,833 thousand on June 30, 2025[15] Unaudited Condensed Consolidated Statement of Changes in Equity Analysis of Changes in Equity For the six months ended June 30, 2025, equity attributable to owners decreased due to the period's loss and exchange differences, while non-controlling interests also declined Equity Changes in H1 2025 (RMB'000) | Indicator | Jan 1, 2025 | Loss for the period | Exchange differences | Dividends paid to non-controlling interests | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 34,055 | (5,999) | 1,756 | - | 29,812 | | Non-controlling interests | 51,669 | (521) | - | (3,340) | 47,808 | | Total equity | 85,724 | (6,520) | 1,756 | (3,340) | 77,620 | - In H1 2025, the loss attributable to owners of the Company was RMB 5,999 thousand, a significant reduction from the RMB 14,673 thousand loss in H1 2024[17] - Dividends paid to non-controlling interests in H1 2025 amounted to RMB 3,340 thousand, a decrease from RMB 3,845 thousand in H1 2024[17] Unaudited Condensed Consolidated Statement of Cash Flows Cash Flow Analysis For the six months ended June 30, 2025, net cash used in operating, investing, and financing activities all decreased, leading to a smaller net decrease in cash and cash equivalents Cash Flow for H1 2025 (RMB'000) | Cash Flow Activity | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (18,762) | (22,551) | 3,789 | -16.8% | | Net cash used in investing activities | (276) | (1,016) | 740 | -72.8% | | Net cash used in financing activities | (1,689) | (10,392) | 8,703 | -83.7% | | Net decrease in cash and cash equivalents | (20,727) | (33,959) | 13,232 | -39.0% | | Cash and cash equivalents at end of period | 44,036 | 54,317 | (10,281) | -18.9% | - In investing activities, expenditure on property, plant and equipment decreased from RMB 917 thousand in H1 2024 to RMB 113 thousand in H1 2025[18] - In financing activities, there were no repayments of bank borrowings in H1 2025, compared to RMB 6,000 thousand in H1 2024[18] Notes to the Unaudited Condensed Consolidated Financial Statements 1. General Information The company, incorporated in the Cayman Islands, primarily provides property management and value-added services in China, with a defined ultimate controlling shareholder structure - The Company and its subsidiaries are principally engaged in providing professional property management services and value-added services for residential and non-residential properties in China[19] - Mr Fang Ming, Ms Xie Lihua, and Mr Huang Peng are the ultimate controlling shareholders of the Group under a concert party deed[20] 2. Basis of Preparation The financial statements are prepared under HKFRS using the historical cost basis, with the company facing material uncertainty regarding its going concern status - The consolidated financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (HKFRSs) and the disclosure requirements of the Hong Kong Companies Ordinance[21] - For the six months ended June 30, 2025, the Group recorded a net loss of approximately RMB 6,520,000, and its current liabilities exceeded its current assets by approximately RMB 36,167,000, indicating a material going concern uncertainty[24] - Directors have taken measures to mitigate liquidity pressure, including financial support from shareholders, negotiating repayment plans with suppliers, cutting costs, and expect positive operating cash flow[25][29] 3. Significant Accounting Policies The accounting policies used in these interim financial statements are consistent with the 2024 annual financial statements, with no significant impact expected from new HKFRS amendments - The accounting policies used in the preparation of these interim financial statements are consistent with those used in the annual financial statements for the year ended December 31, 2024[28] - The directors are not aware of any significant impact on the Group's financial statements from the application of new and revised HKFRSs for the six months ended June 30, 2025, and in the future[28] 4. Segment Reporting The company's main operating segments are integrated real estate agency services and professional property management services, with the former's revenue declining sharply in H1 2025 - The Group's reportable and operating segments are the provision of integrated real estate agency services and professional property management services[30] Segment Revenue and (Loss)/Profit (RMB'000) | Segment | H1 2025 Revenue | H1 2025 (Loss)/Profit | H1 2024 Revenue | H1 2024 (Loss)/Profit | | :--- | :--- | :--- | :--- | :--- | | Real estate agency services | 692 | (4,430) | 5,432 | (14,251) | | Property management services | 167,739 | 13,684 | 180,653 | 18,804 | | Total | 168,431 | 9,254 | 186,085 | 4,553 | - Revenue from real estate agency services decreased by 87.3% year-on-year, while revenue from property management services decreased by 7.1%[32] 5. Revenue The company's revenue is primarily derived from property management services, though both property management and community value-added service revenues have declined Revenue Breakdown (RMB'000) | Revenue Type | Recognition Timing | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | Real estate agency services income | Point in time | 692 | 5,432 | (4,740) | -87.3% | | Property management services income | Over time | 147,455 | 152,648 | (5,193) | -3.4% | | Value-added services to non-property owners income | Over time | 4,881 | 7,983 | (3,102) | -38.9% | | Community value-added services income - Other | Point in time | 15,240 | 19,511 | (4,271) | -21.9% | | Community value-added services income - Sale of goods | Over time | 163 | 511 | (348) | -68.1% | | Total Revenue | | 168,431 | 186,085 | (17,654) | -9.5% | - Property management services income remains the largest revenue source but decreased by 3.4% year-on-year[36] - Income from value-added services to non-property owners and community value-added services decreased by 38.9% and 21.9% respectively[36] 6. Other Income, Losses and Gains, Net In H1 2025, the company's other income, losses and gains, net, turned negative, mainly due to fair value losses on investment properties and exchange losses Other Income, Losses and Gains, Net (RMB'000) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Fair value loss on investment properties | (291) | - | (291) | | Government grants | 109 | 52 | 57 | | Interest income | 3 | 105 | (102) | | Net exchange (loss)/gain | (382) | 105 | (487) | | Fair value gain on financial assets at FVTPL | 148 | 199 | (51) | | Total other income, losses and gains, net | (359) | 795 | (1,154) | - A fair value loss on investment properties of RMB 291 thousand was recorded in H1 2025, with no such loss in the prior period[37] - Net exchange gain of RMB 105 thousand in H1 2024 turned into a net exchange loss of RMB 382 thousand in H1 2025[37] 7. Loss Before Income Tax The company's loss before income tax narrowed in H1 2025, primarily due to a significant reduction in net impairment losses on financial assets Components of Loss Before Income Tax (RMB'000) | Item | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Auditor's remuneration | 22 | 109 | (87) | -79.8% | | Employee benefit expenses | 65,531 | 71,136 | (5,605) | -7.9% | | Short-term lease expenses | 1,346 | 2,188 | (842) | -38.5% | | Net impairment losses on financial assets | 23,576 | 32,816 | (9,240) | -28.2% | | - Trade receivables | 16,468 | 19,755 | (3,287) | -16.6% | | - Amounts due from related companies | 6,894 | 4,987 | 1,907 | 38.2% | | - Amounts due from fellow subsidiaries/related companies | - | 7,123 | (7,123) | -100.0% | - The 28.2% decrease in net impairment losses on financial assets was the main driver for the reduced loss before income tax[38] - Employee benefit expenses and short-term lease expenses decreased by 7.9% and 38.5% respectively[38] 8. Income Tax In H1 2025, the company's income tax turned from a credit to a charge, mainly influenced by changes in deferred tax Income Tax Components (RMB'000) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Current tax - PRC Enterprise Income Tax | 1,924 | 1,431 | 493 | | Deferred tax | (4,616) | (2,434) | (2,182) | | Total | (2,692) | (1,003) | (1,689) | - The Group's PRC entities are subject to an income tax rate of 25%, but certain subsidiaries enjoy a preferential rate of 5% as qualified small and micro enterprises[43] 9. Dividends No dividends were paid or declared by the company for the six months ended June 30, 2025 - No dividend was paid or declared by the Company for the six months ended June 30, 2025 (six months ended June 30, 2024: nil), nor has any dividend been proposed since the end of the reporting period[40] 10. Loss Per Share The company's basic and diluted loss per share narrowed significantly in H1 2025, reflecting the reduced loss for the period Loss Per Share (RMB cents) | Indicator | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (RMB'000) | (5,999) | (14,673) | 8,674 | -59.1% | | Weighted average number of ordinary shares | 400,000,000 | 400,000,000 | 0 | 0.0% | | Basic and diluted loss per share | (1.50) | (3.67) | 2.17 | -59.1% | - As there were no potential dilutive ordinary shares issued for the six months ended June 30, 2025 and 2024, diluted loss per share is the same as the basic loss per share[41] 11. Property, Plant and Equipment In H1 2025, the company's expenditure on purchasing property, plant and equipment decreased, and a loss was incurred on the disposal of related assets Changes in Property, Plant and Equipment (RMB'000) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total cost of purchases | 855 | 930 | (75) | | Net book value of disposals | 63 | 563 | (500) | | (Loss)/gain on disposals | (10) | 202 | (212) | - The disposal of property, plant and equipment resulted in a loss of RMB 10 thousand in H1 2025, compared to a gain of RMB 202 thousand in the prior period[42] 12. Investment Properties The company holds investment properties, including shops, commercial properties, residential units, and parking spaces, to earn rental income or for capital appreciation - The Group holds investment properties for the purpose of earning rental income or for capital appreciation[44] - As of June 30, 2025, investment properties included one leased shop, ten commercial properties, one residential property, and eight parking spaces[44] 13. Leases The company has entered into multiple lease agreements for offices, shops, and parking spaces in China with terms of two to seven years - The Group has entered into several lease agreements for the use of offices, shop properties, and parking spaces in China with lease terms of two to seven years[45] Lease Liabilities (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current liabilities | 303 | 298 | 5 | | Non-current liabilities | 564 | 696 | (132) | | Total | 867 | 994 | (127) | 14. Trade Receivables As of June 30, 2025, gross trade receivables increased, but a larger impairment provision led to a decrease in the net balance, with a notable decline in receivables aged within one year Trade Receivables (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Gross trade receivables | 178,425 | 166,224 | 12,201 | 7.3% | | Less: Impairment loss | (98,736) | (82,268) | (16,468) | 20.0% | | Net amount | 79,689 | 83,956 | (4,267) | -5.1% | | Ageing: Within 1 year | 39,192 | 61,946 | (22,754) | -36.7% | | Ageing: 1 to 2 years | 26,890 | 17,975 | 8,915 | 49.6% | | Ageing: Over 2 years | 13,607 | 4,035 | 9,572 | 237.2% | - For the six months ended June 30, 2025, an additional provision of RMB 16,468,000 was made for gross trade receivables[50] 15. Amounts due from/to fellow subsidiaries/related companies, related companies and non-controlling interests Amounts due from fellow subsidiaries/related companies were reclassified, and both gross amounts and impairment losses for amounts due from related companies increased significantly - Amounts due from fellow subsidiaries/related companies were reclassified to amounts due from related companies after March 20, 2024[51] Amounts due from related companies (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Gross amounts due from related companies | 170,910 | 63,802 | 107,108 | 167.9% | | Less: Impairment loss | (130,077) | (42,363) | (87,714) | 207.1% | | Net amount | 40,833 | 21,439 | 19,394 | 90.5% | | Ageing: Over 1 year | 37,476 | 18,534 | 18,942 | 102.2% | Amounts due to related companies and non-controlling interests (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Amounts due to related companies (within 1 year) | 1,049 | 21 | 1,028 | 4895.2% | | Amounts due to non-controlling interests (within 1 year) | 2,900 | 159 | 2,741 | 1723.9% | 16. Financial assets at fair value through profit or loss The total value of the company's financial assets at FVTPL decreased, primarily due to a reduction in unlisted investments Financial Assets at FVTPL (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Unlisted partnership investment | 5,555 | 5,407 | 148 | 2.7% | | Unlisted investment | - | 1,016 | (1,016) | -100.0% | | Total | 5,555 | 6,423 | (868) | -13.5% | - The fair value change of the partnership investment is recognised in "other income, losses and gains, net" in the consolidated statement of profit or loss and other comprehensive income[57] 17. Restricted bank balances, bank balances and cash As of June 30, 2025, the company's total bank balances and cash decreased significantly, with the majority held in RMB-denominated deposits in China Bank Balances and Cash (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total bank balances and cash | 45,337 | 66,550 | (21,213) | -31.9% | | Less: Restricted bank balances | (1,301) | (1,785) | 484 | -27.1% | | Cash and cash equivalents | 44,036 | 64,765 | (20,729) | -32.0% | - Approximately RMB 44,570,000 is deposited with banks in China and denominated in RMB, which is not a freely convertible currency[58] 18. Trade Payables As of June 30, 2025, the company's total trade payables decreased slightly, with amounts due within one year remaining the largest component Trade Payables (RMB'000) | Ageing | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Within 1 year | 61,028 | 62,696 | (1,668) | -2.7% | | Over 1 year | 10,032 | 11,770 | (1,738) | -14.8% | | Total | 71,060 | 74,466 | (3,406) | -4.6% | - Trade payables mainly represent commissions payable to cooperative real estate agents and amounts due to property management service suppliers[59] 19. Share Capital As of June 30, 2025, the company's authorised and issued share capital remained unchanged in both number and amount Share Capital Details | Item | Number | Amount (HKD'000) | Amount (RMB'000) | | :--- | :--- | :--- | :--- | | Authorised Share Capital (par value HK$0.01 per share) | 10,000,000,000 | 100,000 | - | | Issued and Fully Paid Share Capital (par value HK$0.01 per share) | 400,000,000 | 4,000 | 3,403 | - From January 1, 2024, to June 30, 2025, there were no changes to the company's authorised and issued share capital[60][61] 20. Commitments and Contingent Liabilities As of June 30, 2025, the company had no significant capital commitments or contingent liabilities - As at June 30, 2025, the Group did not have any significant capital commitments[61] - As at June 30, 2025, the Group did not have any significant contingent liabilities[62] 21. Related Party Transactions In H1 2025, the structure of the company's related party transactions changed, with increased revenue from related companies and decreased revenue from fellow subsidiaries/related companies Related Party Transaction Revenue (RMB'000) | Transaction Type | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Property management service income from related companies | 8,297 | - | 8,297 | | Property management service income from fellow subsidiaries/related companies | - | 2,272 | (2,272) | | Value-added services to non-property owners income from related companies | 2,942 | - | 2,942 | | Value-added services to non-property owners income from fellow subsidiaries/related companies | - | 2,926 | (2,926) | | Short-term lease payments to related companies | 1,091 | - | 1,091 | | Short-term lease payments to fellow subsidiaries/related companies | - | 1,708 | (1,708) | - All related party transactions were conducted on terms mutually agreed upon by the parties[63] Management Discussion and Analysis Business Review The company continued to optimize its business structure, focusing on property management and community value-added services, yet total revenue decreased by 9.5% year-on-year - The Company continued to optimize its business structure, further focusing on the development of property management services and ancillary community value-added services[64] - For the six months ended June 30, 2025, the Group's total revenue was approximately RMB 168.4 million, a decrease of approximately 9.5% from the same period last year[64] - The decrease in revenue was mainly due to a decline of approximately RMB 4.7 million in the real estate agency services segment and RMB 12.9 million in the property management services segment[64] Integrated Real Estate Agency Services Segment Revenue from real estate agency services plummeted by 87.3% due to the prolonged downturn in the real estate industry and a strategic shift in focus - For the six months ended June 30, 2025, the real estate agency services segment recorded revenue of approximately RMB 0.7 million, a decrease of 87.3% from the same period last year[65] - The decrease was mainly due to the continued downturn in the real estate industry and the company's strategic decision to shift its primary resources to property management services[65] Professional Property Management Services Segment The property management services segment's revenue declined by 7.1% year-on-year, primarily due to a reduction in contracted and managed GFA - The professional property management services segment recorded revenue of approximately RMB 167.7 million, a year-on-year decrease of 7.1%[66] - The decrease in revenue was mainly due to the reduction in contracted and managed gross floor area (GFA)[66] Property Management Services Segment Revenue (RMB million) | Service Type | H1 2025 | H1 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Property management services | 147.5 | 152.6 | -3.4% | | Value-added services to non-property owners | 4.9 | 8.0 | -38.9% | | Community value-added services | 15.4 | 20.0 | -23.1% | - As of June 30, 2025, the contracted GFA was approximately 17.9 million sq.m. and the GFA under management was approximately 14.3 million sq.m., representing decreases of 4.3% and 5.2% respectively from December 31, 2024[67] Industry Review and Outlook China's economy grew steadily in H1 2025, but the property service industry is shifting from scale-driven growth to value creation, with future competition hinging on service depth and technology integration - In H1 2025, China's GDP grew by approximately 5%, and the real estate market showed initial signs of stabilization through policy intervention[70] - The property service industry is transitioning from scale-driven growth to a dual focus on value creation and operational excellence, with competitive advantage depending on technology enablement and value-added service capabilities[70] - The company will focus on standardization, explore smart service models, promote co-governance, innovate the "property + lifestyle services" model, and introduce trust-based property services[71] Financial Review In H1 2025, the company's total revenue declined, but reduced costs and impairment losses led to a significant narrowing of net loss and loss per share Financial Performance Summary (RMB million) | Indicator | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 168.4 | 186.1 | (17.7) | -9.5% | | Cost of services | 135.0 | 148.1 | (13.1) | -8.8% | | Administrative expenses | 18.6 | 18.4 | 0.2 | 1.1% | | Net impairment losses on financial assets | 23.6 | 32.8 | (9.2) | -28.2% | | Loss for the period | 6.5 | 12.3 | (5.8) | -47.0% | | Net profit margin | -3.9% | -6.6% | 2.7% | - | - The reduction in net impairment losses on financial assets was the primary reason for the narrowed net loss, partially offset by a decrease in gross profit[76] - The value of investment properties increased by approximately 3.4% to RMB 14.7 million[78] Liquidity and Financial Resources The company's primary source of funds is cash from operations, but an increase in net current liabilities and a decrease in cash balances indicate heightened liquidity pressure - In 2025, the Group's primary source of funds was cash generated from operating activities[79] Liquidity and Financial Resources (RMB million) | Indicator | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net current liabilities | 36.2 | 28.0 | 8.2 | 29.3% | | Total assets | 348.2 | 366.7 | (18.5) | -5.0% | | Equity attributable to owners of the Company | 29.8 | 34.1 | (4.3) | -12.6% | | Total bank balances and cash | 45.3 | 66.6 | (21.3) | -32.0% | Trade Receivables and Amounts due from Related Companies Trade receivables decreased slightly, while amounts due from related companies increased significantly, mainly related to property management, real estate agency services, and earnest money payments - Trade receivables decreased from approximately RMB 84.0 million as of December 31, 2024, to approximately RMB 79.7 million as of June 30, 2025[81] - Amounts due from related companies increased from approximately RMB 38.3 million to approximately RMB 40.8 million[81] Indebtedness As of June 30, 2025, the company had no short-term or long-term bank borrowings - As at June 30, 2025, the Group had no short-term borrowings and no long-term borrowings[82] Foreign Exchange Risk The company's foreign exchange risk is considered insignificant as its main operations are denominated in RMB, and it currently has no foreign currency hedging policy - As the Group's sales are denominated in RMB and its purchases and expenses are denominated in RMB or HKD, foreign exchange risk is considered insignificant[83] - The Group currently does not have a foreign currency hedging policy, and management continuously monitors foreign exchange risk[83] Interest Rate Risk The company considers its interest rate risk to be insignificant as it has no interest-bearing financial liabilities with a contractual term of more than one year - The Group considers its interest rate risk to be insignificant as it has no interest-bearing financial liabilities with a contractual term of more than one year[84] Gearing Ratio As of June 30, 2025, the company's gearing ratio increased slightly to 78% Gearing Ratio | Indicator | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 78% | 77% | 1% | Employees and Group Remuneration Policy As of June 30, 2025, the total number of employees decreased due to lower demand for real estate agency and property management services Number of Employees | Indicator | June 30, 2025 | June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Employees | 1,478 | 1,629 | (151) | -9.3% | - The decrease in employees was mainly due to the decline in demand for real estate agency and property management services[86] - The company provides employees with comprehensive welfare benefits, career development opportunities, and a share option scheme[86] Disclosure of Interests Model Code for Securities Transactions by Directors The company has adopted a code of conduct for securities transactions by directors on terms no less exacting than the required standard, with all directors confirming compliance - The Company has adopted a code of conduct for securities transactions by directors on terms no less exacting than the Model Code set out in Appendix C3 to the Listing Rules[87] - All directors have confirmed that they have complied with the required standards set out in the Model Code for the six months ended June 30, 2025[87] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures As of June 30, 2025, Mr Fang Ming, Ms Xie Lihua, and Mr Han Shuguang held long positions in the company's shares, with the former two deemed to have interests in the majority due to a concert party deed Directors' and Chief Executive's Shareholdings | Name | Nature of Interest | Total Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr Fang Ming | Interest of controlled corporation & legal and beneficial owner | 225,948,000 | 56.49% | | Ms Xie Lihua | Interest of controlled corporation & legal and beneficial owner | 225,948,000 | 56.49% | | Mr Han Shuguang | Interest of controlled corporation | 4,500,000 | 1.125% | - Mr Fang Ming, Ms Xie Lihua, and Mr Huang Peng are parties acting in concert, and therefore Mr Fang and Ms Xie are deemed to be interested in the total number of shares in which each of them is interested[90] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares and Debentures As of June 30, 2025, several individuals and entities, including Ms He Kangkang and Mansion Green, were disclosed as substantial shareholders holding 5% or more of the issued share capital Substantial Shareholders' Shareholdings | Name/Entity | Nature of Interest | Number of Shares Held | Approx. Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms He Kangkang | Interest of spouse | 225,948,000 | 56.49% | | Mr Zheng Muming | Interest of spouse | 225,948,000 | 56.49% | | Mr Huang Peng | Interest of controlled corporation, spouse, and beneficial owner | 225,948,000 | 56.49% | | Ms Zheng Hui | Interest of spouse and beneficial owner | 225,948,000 | 56.49% | | Mansion Green | Legal and beneficial owner | 97,200,000 | 24.3% | | Aspiring Vision | Legal and beneficial owner | 64,800,000 | 16.2% | | Huiyu Investment | Legal and beneficial owner | 60,000,000 | 15% | - Ms He Kangkang is the spouse of Mr Fang Ming, Mr Zheng Muming is the spouse of Ms Xie Lihua, and Ms Zheng Hui is the spouse of Mr Huang Peng, and are thus deemed to have interests under the SFO[91] - Mansion Green is wholly-owned by Mr Fang Ming through his holding companies, thus several other entities are deemed to be interested in the same number of shares as Mansion Green[91] Other Information Directors' Rights to Acquire Shares or Debentures During the six months ended June 30, 2025, no arrangements were made to enable directors to acquire benefits by means of the acquisition of shares in or debentures of the company - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries or associated corporations was a party to any arrangement to enable the directors and chief executive of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or its associated corporations[93] Changes in Directors' Information Mr Leung Wai Hung resigned as an independent non-executive director of Wing Lee Engineering Holdings Limited on July 14, 2025 - Mr Leung Wai Hung resigned as an independent non-executive director of Wing Lee Engineering Holdings Limited (stock code: 9639) on July 14, 2025[94] Purchase, Sale or Redemption of the Company's Listed Securities During the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed 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, sold or redeemed any of the Company's listed securities on the Stock Exchange or any other stock exchange by way of private arrangement or general offer[95] - As at June 30, 2025, the Company did not hold any treasury shares[95] Share Option Scheme The company adopted a share option scheme in 2017, under which no options were granted, exercised, or lapsed as of June 30, 2025, with 40,000,000 options available for grant - The Company adopted a share option scheme on October 23, 2017[96] - As at June 30, 2025, no share options had been granted, agreed, exercised, cancelled or lapsed under the Scheme, and there were no outstanding share options[96] - As at the date of this interim report, a total of 40,000,000 shares were available for issue under the Scheme, representing 10% of the Company's issued share capital on that date[96] Compliance with the Corporate Governance Code The Board has reviewed and confirmed that the company complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The Board has reviewed the Group's corporate governance practices and is satisfied that the Company has complied with all the code provisions set out in the Corporate Governance Code in Appendix C1 to the Listing Rules for the six months ended June 30, 2025[97] Directors' Interests in Competing Business For the six months ended June 30, 2025, the directors were not aware of any business or interest of a director or controlling shareholder that competes or may compete with the company's business - The Directors are not aware of any business or interest of the Directors or the controlling shareholders of the Company or any of their respective close associates that competes or is likely to compete, either directly or indirectly, with the business of the Group for the six months ended June 30, 2025[98] - None of them is engaged in any business that competes or is likely to compete with the business of the Group or has any other conflict of interest with the Group, other than those disclosed in the Prospectus[99] Pledge of Assets A subsidiary of the company had secured a bank loan with trade receivables and equity, which has been fully repaid, although the equity pledge release is still pending - A subsidiary of the Company had secured a bank loan of approximately RMB 19,930,000 with certain trade receivables[100] - A subsidiary of the Company pledged approximately 68.9% of the equity interest in Fangyuan Modern Life[100] - The bank loan was fully repaid before its maturity, but the relevant procedures for the release of the equity pledge had not been completed as of the date of this interim report[100] Material Investments, Acquisitions and Disposals For the six months ended June 30, 2025, the company had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group did not have any material acquisitions or disposals of subsidiaries, associates and joint ventures[101] Progress of Past Connected Transactions The company's swap agreement with Heshan Fudu involving 23 properties is pending physical delivery, and legal action may be taken if obligations are not met - An indirect wholly-owned subsidiary of the Company entered into a swap agreement with Heshan Fudu Property Development Co, Ltd involving 23 properties to offset outstanding receivables[102] - The physical delivery of the 23 properties is subject to the issuance of the construction project completion acceptance certificate and the housing survey report for the relevant properties[102] - If Heshan Fudu fails to fulfill its obligations by the final deadline of November 28, 2025, the Company will consider taking necessary legal measures to recover the outstanding receivables[102] Outstanding Earnest Money Balance The company is addressing an outstanding earnest money balance, having obtained a favorable judgment for a portion and is negotiating the recovery of the remainder - The outstanding earnest money balance, which was initially expected to be settled by December 31, 2023, remains outstanding[104] - The Company has initiated civil legal proceedings for the outstanding earnest money balance of approximately RMB 14,180,000 owed by Fangyuan Huijin and has obtained a favorable judgment and enforcement order[104] - The Company is still in communication and negotiation with the relevant members of Fangyuan Group to recover the remaining balance of the outstanding earnest money[105] Interim Dividend The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[106] Review by Audit Committee The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025, and found them compliant with applicable standards - The Audit Committee has reviewed the unaudited interim results of the Group for the six months ended June 30, 2025[107] - The Audit Committee is of the view that the unaudited interim results comply with the applicable accounting standards and the Listing Rules and that adequate disclosures have been made[107] Acknowledgement The Chairman, on behalf of the Board, expresses gratitude to shareholders, business partners, customers, directors, management, and employees - The Chairman, on behalf of the Board, would like to express his sincere gratitude to the shareholders, business partners and customers for their continuous support to the Group[108] - He also extends his appreciation to all directors, management and employees for their hard work and dedication during the period[108]