深圳控股(00604) - 2025 - 中期业绩

Financial Performance Overview This section provides a high-level summary of the group's financial results, including income statement, comprehensive income, and balance sheet highlights Condensed Consolidated Income Statement For the six months ended June 30, 2025, the Group's revenue significantly increased to HK$10.35 billion, but loss attributable to equity holders expanded to HK$2.62 billion due to associate losses, asset impairment, and higher taxes | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 10,349,995 | 3,756,918 | 6,593,077 | +175.5% | | Gross Profit | 1,773,267 | 1,085,837 | 687,430 | +63.3% | | Operating Profit | 704,387 | 245,732 | 458,655 | +186.6% | | Loss Before Income Tax | (1,906,874) | (945,851) | (961,023) | +101.6% | | Interim Loss | (2,507,333) | (1,141,862) | (1,365,471) | +119.6% | | Loss Attributable to Equity Holders of the Company | (2,618,042) | (1,101,144) | (1,516,898) | +137.8% | | Basic and Diluted Loss Per Share (HK Cents) | (29.42) | (12.37) | (17.05) | +137.8% | Condensed Consolidated Statement of Comprehensive Income The Group's total comprehensive loss for the six months ended June 30, 2025, narrowed to HK$1.57 billion, primarily due to a positive foreign currency translation difference from overseas operations | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Interim Loss | (2,507,333) | (1,141,862) | (1,365,471) | | Share of other comprehensive income of an associate | 1,238 | (117,511) | 118,749 | | Exchange differences on translation of overseas operations | 936,496 | (447,105) | 1,383,601 | | Total Comprehensive Loss for the Period | (1,569,599) | (1,706,478) | 136,879 | | Total Comprehensive Loss Attributable to Equity Holders of the Company | (1,786,071) | (1,622,390) | (163,681) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets slightly decreased to HK$167.83 billion, total equity to HK$43.74 billion, and total liabilities also decreased, maintaining a relatively stable capital structure | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 167,828,420 | 171,169,614 | (3,341,194) | -1.95% | | Non-current Assets | 54,077,814 | 54,952,289 | (874,475) | -1.59% | | Current Assets | 113,750,606 | 116,217,325 | (2,466,719) | -2.12% | | Total Equity | 43,744,174 | 45,319,959 | (1,575,785) | -3.48% | | Total Liabilities | 124,084,246 | 125,849,655 | (1,765,409) | -1.40% | | Non-current Liabilities | 34,656,690 | 30,933,115 | 3,723,575 | +12.04% | | Current Liabilities | 89,427,556 | 94,916,540 | (5,488,984) | -5.78% | Overall Performance In H1 2025, the Group's turnover surged by 175% to HK$10.35 billion, with gross profit of HK$1.77 billion and operating profit of HK$0.70 billion, yet loss attributable to equity holders reached HK$2.62 billion due to various adverse factors - In H1 2025, the Group's turnover reached HK$10.35 billion, a year-on-year increase of 175%[64] - Gross profit was HK$1.77 billion, with an overall gross profit margin of 17.1%[64] - Operating profit was HK$0.70 billion[64] - Loss attributable to equity holders of the Company was HK$2.62 billion, primarily impacted by declining gross profit margin, losses from associates, significant asset impairment provisions, and increased income tax expenses[64] - Excluding fair value changes of investment properties and financial assets, impairment of inventories, results of joint ventures and associates, and provisions, the loss attributable to equity holders of the Company was HK$0.49 billion[64] Notes to the Financial Statements This section details the accounting policies, segment information, revenue breakdown, expense analysis, and other financial disclosures supporting the consolidated financial statements General Information and Basis of Preparation This section outlines Shenzhen Holdings Limited's basic information, business scope, holding structure, and the basis of preparation and accounting policies for the interim financial information, including the adoption of new standards - The Company is an investment holding company incorporated in Hong Kong, primarily engaged in property development, property investment, property management, and production operations[10] - The direct holding company is Shum Yip (Group) Company Limited, and the ultimate holding company is Shum Yip Group Co, Ltd[10] - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 and should be read in conjunction with the 2024 annual consolidated financial statements[13] - The Group has adopted the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability," which had no significant impact on the interim condensed consolidated financial information as the Group's transaction currencies are convertible[14] - Hong Kong Financial Reporting Standard 18, effective January 1, 2027, will introduce new requirements for profit or loss presentation, and the Group is currently assessing its impact on the financial statements[18] Segment Information The Group's operating segments include property development, investment, management, manufacturing, and other businesses, with property development revenue significantly increasing in H1 2025, despite negative impacts from investment property fair value changes and associate losses 2025 H1 Segment Revenue (HK$ Thousand) | Segment | Revenue from contracts with customers (recognized at a point in time) | Revenue from contracts with customers (recognized over time) | Rental income | Total Segment Revenue | Revenue from external customers | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Development | 7,463,987 | – | – | 7,463,987 | 7,463,987 | | Property Investment | – | – | 656,308 | 656,308 | 647,266 | | Property Management | 9,443 | 1,667,508 | – | 1,676,951 | 1,593,777 | | Manufacturing | 231,863 | – | – | 231,863 | 231,863 | | Others | 167,517 | 262,415 | – | 429,932 | 413,102 | | Total | 7,872,810 | 1,929,923 | 656,308 | 10,459,041 | 10,349,995 | 2025 H1 Segment Results (HK$ Thousand) | Segment | Segment Results before fair value decrease of investment properties | Fair value changes of investment properties and loss on transfer to investment properties | Segment Results after fair value decrease of investment properties | | :--- | :--- | :--- | :--- | | Property Development | 459,737 | – | 459,737 | | Property Investment | 389,436 | (99,669) | 289,767 | | Property Management | 151,805 | – | 151,805 | | Manufacturing | 7,966 | – | 7,966 | | Others | (268,600) | – | (268,600) | | Total | 740,344 | (99,669) | 640,675 | - Share of results of joint ventures and associates (including impairment losses) was a loss of HK$1.92 billion, significantly impacting overall performance[20] Revenue The Group's revenue primarily derives from property sales, property management services, industrial product sales, and rental income, with property sales becoming the main revenue driver in H1 2025 due to substantial growth Revenue by Major Product and Service Line (HK$ Thousand) | Revenue Source | 2025 | 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Sales of properties | 7,463,987 | 1,017,626 | 6,446,361 | +633.5% | | Property management service income | 1,593,777 | 1,472,128 | 121,649 | +8.3% | | Sales of industrial products | 231,863 | 182,277 | 49,586 | +27.2% | | Others (from contracts with customers) | 413,102 | 408,825 | 4,277 | +1.0% | | Total revenue from contracts with customers | 9,702,729 | 3,080,856 | 6,621,873 | +214.9% | | Rental income | 647,266 | 676,062 | (28,796) | -4.3% | | Total Revenue | 10,349,995 | 3,756,918 | 6,593,077 | +175.5% | Expense Analysis The Group's H1 2025 total expenses, including cost of sales, distribution, administrative, and other expenses, significantly increased, mainly due to higher cost of properties sold and inventories, while net finance costs and income tax expenses also rose Expenses by Nature (HK$ Thousand) | Expense Category | 2025 | 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Cost of properties sold and inventories | 6,602,696 | 641,072 | 5,961,624 | +930.0% | | Cost of services provided | 1,974,032 | 1,841,918 | 132,114 | +7.2% | | Employee benefit expenses | 393,049 | 441,525 | (48,476) | -11.0% | | Write-down of properties under development and completed properties held for sale | 186,422 | 188,091 | (1,669) | -0.9% | | Advertising and promotion expenses | 110,678 | 51,787 | 58,891 | +113.7% | | Depreciation of property, plant and equipment | 37,925 | 61,903 | (23,978) | -38.7% | | Other taxes and surcharges | 85,946 | 86,906 | (960) | -1.1% | | Others | 257,206 | 280,764 | (23,558) | -8.4% | | Total | 9,647,954 | 3,593,966 | 6,030,918 | +167.8% | Other Income (HK$ Thousand) | Income Source | 2025 | 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Government grants | 4,621 | 21,238 | (16,617) | -78.2% | | Interest income from joint ventures and a non-controlling interest | 87,252 | 82,140 | 5,112 | +6.2% | | Total | 108,875 | 116,476 | (7,601) | -6.5% | Net Finance Costs (HK$ Thousand) | Item | 2025 | 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Finance income (interest income from bank deposits) | (43,437) | (81,101) | 37,664 | -46.4% | | Total finance costs | 1,136,193 | 1,491,472 | (355,279) | -23.8% | | Less: Amount capitalized on qualifying assets | (405,068) | (769,222) | 364,154 | -47.3% | | Net Finance Costs | 687,688 | 641,149 | 46,539 | +7.3% | Income Tax Expense (HK$ Thousand) | Tax Category | 2025 | 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Current income tax | 651,848 | 240,372 | 411,476 | +171.2% | | Deferred income tax | (51,389) | (44,361) | (7,028) | +15.8% | | Total | 600,459 | 196,011 | 404,448 | +206.3% | - The statutory corporate income tax rate in mainland China is 25%, and land appreciation tax is levied at progressive rates from 30% to 60%[27] - The Group has recognized deferred income tax liabilities for withholding tax on planned profit distributions from certain PRC subsidiaries to offshore holding companies[28] Loss Per Share and Dividends The Group's basic and diluted loss per share for H1 2025 expanded to 29.42 HK Cents, and the Board resolved not to declare an interim dividend for the period ended June 30, 2025 Loss Per Share (HK Cents) | Indicator | 2025 | 2024 | Change (HK Cents) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Loss Attributable to Equity Holders of the Company (HK$ Thousand) | (2,618,042) | (1,101,144) | (1,516,898) | +137.8% | | Weighted average number of ordinary shares in issue | 8,898,793,115 | 8,898,793,115 | 0 | 0% | | Basic and Diluted Loss Per Share (HK Cents) | (29.42) | (12.37) | (17.05) | +137.8% | - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[31][101] - The 2023 final dividend of 7 HK Cents per share, totaling approximately HK$0.623 billion, was paid on July 4, 2024[31] Investments and Financial Assets The Group's investments in associates significantly decreased, primarily due to a substantial impairment loss recognized on the investment in Road King Infrastructure Limited, while financial assets at fair value through profit or loss mainly comprise listed and unlisted equity investments in mainland China Investments in Associates (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Beginning balance | 2,263,641 | 4,545,599 | (2,281,958) | -50.2% | | Share of results (including impairment losses) | (1,803,634) | (271,138) | (1,532,496) | +565.2% | | Ending balance | 470,123 | 4,154,746 | (3,684,623) | -88.7% | - Due to Road King Infrastructure Limited's debt default, the Group conducted an impairment test on its investment, recognizing a total share of results and impairment losses of HK$1.806 billion[32] - Non-current financial assets at fair value through profit or loss primarily include listed and unlisted equity investments in mainland China, totaling HK$0.143 billion[33] Trade and Other Receivables and Payables The Group's total trade and other receivables increased, driven by growth in other receivables and prepayments, while total trade and other payables decreased, mainly due to reductions in trade payables and amounts due to non-controlling interests Trade and Other Receivables (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Non-current: Other receivables – net | 684,787 | 661,023 | 23,764 | +3.6% | | Current: Trade receivables – net | 1,242,750 | 1,448,618 | (205,868) | -14.2% | | Current: Other receivables – net | 10,389,790 | 9,291,542 | 1,098,248 | +11.8% | | Current: Prepayments | 821,295 | 144,033 | 677,262 | +470.2% | | Total | 12,453,835 | 10,884,193 | 1,593,406 | +14.6% | - Current prepayments significantly increased, mainly due to prepayments for land acquisition rising from HK$15,368 thousand to HK$626,818 thousand[37] Trade and Other Payables (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 5,182,559 | 5,803,323 | (620,764) | -10.7% | | Other payables and accrued expenses | 11,947,226 | 12,655,152 | (707,926) | -5.6% | | Other taxes payable | 178,290 | 361,191 | (182,901) | -50.6% | | Total | 17,308,075 | 18,819,666 | (1,511,591) | -8.0% | - Among trade payables, those due within one year accounted for the largest portion, at HK$4.26 billion[40] - Other payables and accrued expenses primarily include property buyer deposits and amounts due to the Group's joint ventures, fellow subsidiaries, and non-controlling interests[41] Borrowings and Commitments The Group's total bank and other borrowings remained stable, with an increased proportion of long-term borrowings, while it provides financial guarantees to property buyers and related parties and has capital commitments for land and property development costs Bank and Other Borrowings (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Non-current borrowings | 27,159,952 | 22,804,481 | 4,355,471 | +19.1% | | Current borrowings | 10,028,586 | 14,560,568 | (4,531,982) | -31.1% | | Total | 37,188,538 | 37,365,049 | (176,511) | -0.5% | - Approximately HK$8.19 billion of loans are secured by certain assets of the Group, including properties under development, completed properties held for sale, and investment properties[38] - For the six months ended June 30, 2025, the average effective interest rate for bank and other borrowings was 3.58% per annum, a decrease of 0.4 percentage points from the same period last year[38] Capital Commitments (HK$ Thousand) | Commitment Category | June 30, 2025 | December 31, 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Commitments for acquisition of land and buildings and development costs of properties under development | 7,443,206 | 7,144,700 | 298,506 | +4.2% | | Uncalled capital commitments to Shenzhen King Infrastructure Co, Ltd | 1,450,000 | 1,542,500 | (92,500) | -6.0% | Financial Guarantees (HK$ Thousand) | Guarantee Category | June 30, 2025 | December 31, 2024 | Change (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Financial guarantees provided to property buyers of the Group for mortgages | 13,611,249 | 13,070,659 | 540,590 | +4.1% | | Financial guarantees provided to related parties of the Group | 869,878 | 1,445,322 | (575,444) | -39.8% | | Financial guarantees provided for loans to relocated parties of urban renewal projects | 325,164 | 323,381 | 1,783 | +0.6% | Share Capital As of June 30, 2025, the number of issued and fully paid ordinary shares and the amount of share capital remained unchanged from December 31, 2024 Share Capital (HK$ Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Issued and fully paid ordinary shares (shares) | 8,898,793,115 | 8,898,793,115 | | Share capital amount | 22,071,756 | 22,071,756 | Operating Review and Outlook This section reviews the Group's H1 operating achievements, outlines H2 plans to stabilize performance, and discusses its strategic transformation towards asset management and urban comprehensive operations Review of H1 Operating Performance In H1 2025, the Group achieved solid results in transformation and business development, with significant revenue growth, outperforming property sales, stable property leasing and urban comprehensive operations, and orderly progress in technology industry investments, despite negative impacts from associate losses and asset impairment - H1 operating revenue was HK$10.35 billion, a year-on-year increase of 175%; gross profit was HK$1.77 billion, up 63% year-on-year; operating profit was HK$0.70 billion[49] - Loss attributable to equity holders of the Company was HK$2.62 billion, mainly due to losses from associates, significant asset impairment provisions, and increased tax expenses[49] - Property contracted sales were approximately RMB 6.8 billion (approximately HK$7.4 billion), a year-on-year increase of 10%, outperforming the national new home sales decline of 5.5%[50] - Development revenue recognized was approximately HK$7.46 billion, a significant increase of 633% from the same period last year; development gross profit margin was 14%, a year-on-year decrease of 18 percentage points[50] - Investment property income was approximately HK$0.65 billion, with an overall occupancy rate maintained at 90%, outperforming market levels[51] - Property management income was approximately HK$1.59 billion, up 8% from the same period last year, with a net expansion of 3.11 million sq.m. in operating area[52] - Hotel operation income was approximately HK$0.21 billion, a 3% increase from the same period last year, with a total of 8 hotels in operation or under management, and 9 more under construction[52] - Advanced manufacturing business revenue and net profit increased by 27% and 106% respectively year-on-year. Modern agriculture revenue grew by 108%, with agricultural products sold to Hong Kong for the first time[53] - Successfully arranged and replaced a HK$4.0 billion syndicated loan, reducing HKD-denominated net debt by HK$0.7 billion, and administrative expenses decreased by 18% compared to the same period last year[54] - Full impairment provisions have been made for the long-term equity investment in Road King Infrastructure Limited, which will not have a significant impact on the Group's future performance[54] H2 Operating Plan The Group will focus on "stabilizing performance" in H2 by accelerating property sales, enhancing real estate asset management, strengthening urban comprehensive operations, actively advancing strategic resource implementation, and reinforcing financial risk control to achieve full-year targets - Accelerate property sales and destocking through differentiated strategies, focusing on key projects, maintaining sales velocity for high-traffic projects, targeting new market entries, and rigorously managing inventory to optimize inventory structure[55] - Enhance real estate asset management by strengthening leasing and operations, optimizing rental strategies, promoting renovation and upgrading of older properties, and proactively planning for major ongoing projects[56] - Strengthen urban comprehensive operation businesses by expanding property operation scale through various means, improving management efficiency and profitability; commercial operations will enhance scalable replication capabilities to ensure timely opening of major projects; hotel operations will leverage resource integration to expand scale and improve operational efficiency[57] - Actively advance strategic resource implementation, prudently promote integrated benefit and urban renewal projects, and closely monitor market opportunities to expand market share[57] - Strengthen financial risk control, continue to reduce HKD-denominated debt, optimize debt maturity structure, strictly control investment standards, and ensure efficient capital allocation and stable returns[58] Transformation Strategy Facing the shift from incremental expansion to existing asset renewal in the real estate market, the Group will accelerate business transformation, build new business models focused on real estate asset management and comprehensive operations, and develop technology industry investment services to achieve sustainable growth and long-term shareholder returns - China's urbanization is transitioning from rapid growth to stable development, with urban development shifting from large-scale incremental expansion to existing asset quality improvement, eliminating the basis for large-scale real estate expansion[59] - The Group will transform into a "real estate asset management and comprehensive operation service provider," gradually reducing the proportion of development business, expanding real estate management scale, enhancing operational service capabilities, and building a full-cycle asset management system encompassing investment, financing, construction, management, and exit[59] - Over the next three years, flagship projects and high-end hotels will commence operations, continuously optimizing the asset portfolio, strategically investing in high-quality operational real estate when appropriate, and developing agency construction services[60] - Strengthen real estate operation and management, providing high-quality services aligned with consumption trends and industry demands, enhancing rental returns and asset operating efficiency through refined operations, and deepening brand output and model innovation[61] - Build a closed-loop real estate capital system, engaging in real estate fund management, expanding diversified financing channels, and promoting the securitization of mature assets through REITs and other means to achieve capital recovery and premium exit[61] - Develop technology industry investment service capabilities, building a business matrix of "industrial space + technology services + investment incubation," focusing on technology sectors, improving park efficiency, and strengthening incubation and investment capabilities for technology enterprises[62] Business Segment Details This section provides detailed performance reviews for each of the Group's core business segments, including property development, property investment, urban comprehensive operations, advanced manufacturing, and agricultural operations Property Development Business In H1 2025, the Group's property development business saw a 633% surge in recognized sales revenue to HK$7.46 billion, with contracted sales increasing by 10% to HK$7.39 billion, while new construction and completed areas both reached approximately 0.37 million sq.m., and land reserves remained healthy with 69% in the Greater Bay Area - In H1, recognized property sales area was approximately 0.292 million sq.m., a year-on-year increase of approximately 439%; recognized sales revenue was approximately HK$7.46 billion, a year-on-year increase of approximately 633%[65] - The gross profit margin for real estate development sales was 13.8%, a decrease of 18 percentage points from the same period last year[65] - H1 contracted sales amounted to approximately RMB 6.81 billion (approximately HK$7.39 billion), a year-on-year increase of 10%; contracted sales area was approximately 0.300 million sq.m., a year-on-year increase of 26%[68] - Projects in the Guangdong-Hong Kong-Macao Greater Bay Area accounted for 80% of contracted sales value, with residential products accounting for 88%[68] - In H1, new construction area was approximately 0.370 million sq.m., and completed area was approximately 0.373 million sq.m.[72] - As of June 30, 2025, the Group's land reserve had a total planned GFA of approximately 6.025 million sq.m., of which 69% is located in the Greater Bay Area[75] - The second phase of Shenzhen Chegongmiao First Urban Renewal Unit project completed the land contract signing for the South plot, with a land price of approximately RMB 1.1 billion and a total GFA of 0.488 million sq.m., to be developed into a TOD urban complex[75] Property Investment Business In H1 2025, the Group's property investment income was approximately HK$0.65 billion, with a gross profit margin of 70.1%, maintaining an overall occupancy rate of 90% despite market downturns, and enhancing asset value and rental income through property upgrades and refined operations - H1 property investment income was approximately HK$0.65 billion, with a property investment business gross profit margin of approximately 70.1%[79] - As of June 30, 2025, the total area of investment properties was approximately 1.734 million sq.m., with a fair value of approximately HK$33.50 billion[79] - The overall occupancy rate was 90%, with rental increases of up to 180% achieved through renovation and upgrading of older properties[79] - Shenye Shangcheng office building pioneered the "0-cost fitted-out delivery" model, securing 7 new corporate clients against market trends, with 13 Fortune Global 500 companies, maintaining its position as second in Shenzhen[79] Urban Comprehensive Operation Business The Group's urban comprehensive operation business generated approximately HK$1.59 billion in H1 revenue, up 8% year-on-year, with a gross profit margin of 15.0%, expanding property management area by 3.11 million sq.m., launching a "3+X" commercial strategy with 29% sales growth, and increasing hotel operation revenue by 3% while expanding its scale - H1 property management business income was approximately HK$1.59 billion, up 8% from the same period last year, with a gross profit margin of approximately 15.0%[80] - Contracted management area was approximately 105.85 million sq.m., and managed area was approximately 102.40 million sq.m., with independent third-party projects accounting for approximately 81% and non-residential formats for approximately 71%[80] - Shenye Operations net expanded managed area by approximately 3.11 million sq.m., with total contract value of RMB 0.41 billion, achieving continuous breakthroughs in urban property management and public building property sectors[81] - Launched the "3+X" commercial product line strategy, opened 77 new stores, with Shenye Shangcheng's footfall exceeding 20 million, and sales increasing by 29% year-on-year[82] - Hotel operating income was approximately HK$0.21 billion, up 3% from the same period last year, with a gross profit margin of approximately 22.9%, a year-on-year increase of 8.7 percentage points[83] - The total number of hotels under operation, management, and planning is 17, of which 8 are already in operation[83] - Shenzhen Mandarin Oriental Hotel's room revenue ranked first in the Shenzhen luxury hotel competitive set, and Wuyishan Jingju Resort Hotel successfully opened[83] Advanced Manufacturing Business The Group's advanced manufacturing business achieved HK$0.23 billion in H1 revenue, up 27% year-on-year, with a gross profit margin of 26.2%, as its subsidiary Jinghua Company, a national "specialized and new small giant" enterprise, saw a 25% increase in shipments, optimized cost control, and continued R&D efforts - H1 manufacturing business income was HK$0.23 billion, up 27% year-on-year, with a gross profit margin of approximately 26.2%, a year-on-year increase of 1.9 percentage points[88] - Jinghua Company's shipments increased by 25% compared to the same period last year, inventory decreased by 17%, and 2 invention patents were applied for and 1 invention patent was granted in H1[88] Agricultural Operations Business The Group's agricultural operations business generated approximately HK$0.14 billion in H1 revenue, a significant 108% year-on-year increase, with a gross profit margin of 3.1%, achieving a "zero breakthrough" in agricultural product exports and stable operation of agri-tourism projects - H1 agricultural operations income was approximately HK$0.14 billion, a significant year-on-year increase of 108%, with a gross profit margin of approximately 3.1%, a year-on-year increase of 5.2 percentage points[89] - Frozen pork was supplied to Hong Kong for the first time, achieving a "zero breakthrough" in agricultural product exports[89] - The project matrix of "3 Four Seasons Gardens + 2 Four Seasons Flower Valleys" has largely taken shape, with Shenzhen Dapeng Four Seasons Coastal Garden focusing on research and study tourism, and Nanao Four Seasons Garden Homestay gaining market recognition[89] Financial and Other Matters This section covers the Group's financial management, including successful syndicated loan refinancing, debt structure, and the impact of exchange rate fluctuations, alongside other significant items such as increased other expenses, associate performance, asset pledges, and legal proceedings Financial Management Overview The Group successfully refinanced a HK$4.0 billion syndicated loan, optimizing its capital structure, with total bank and other borrowings at HK$37.19 billion and a net gearing ratio of 73.0% as of June 30, 2025, while administrative expenses decreased by 18% through lean management - Successfully arranged and replaced a HK$4.0 billion syndicated loan, ensuring capital security[90] Funding and Financing Situation (HK$ Billion) | Item | June 30, 2025 | December 31, 2024 | Change (HK$ Billion) | | :--- | :--- | :--- | :--- | | Bank loans and other borrowings | 37.19 | 37.37 | (0.18) | | – Long-term borrowings | 27.16 | 22.81 | 4.35 | | – Short-term borrowings | 10.03 | 14.56 | (4.53) | | Cash (including restricted cash) | 10.35 | 11.80 | (1.45) | | Net gearing ratio | 73.0% | 66.3% | +6.7% | - The proportion of floating-rate borrowings and fixed-rate borrowings was 68% and 32% respectively; the proportion of long-term borrowings and short-term borrowings was 73% and 27% respectively[90] - The proportion of HKD-denominated borrowings and RMB-denominated borrowings was 38% and 62% respectively[90] - The depreciation of the RMB exchange rate led to a HK$0.94 billion fluctuation in RMB assets and earnings relative to HKD, recognized in other comprehensive income[92] - Administrative expenses decreased by 18% compared to the same period last year, saving approximately HK$0.11 billion in expenses[93] Other Significant Matters The Group's other expenses significantly increased in H1, mainly due to inventory impairment provisions, with major joint ventures and associates, particularly Road King Infrastructure, performing poorly and incurring substantial losses, while the Group has asset-backed loans and financial guarantees, and faces a lawsuit of approximately RMB 0.22 billion - In H1 2025, other expenses were approximately HK$0.34 billion, a year-on-year increase of 113%, primarily due to inventory impairment provisions of approximately HK$0.19 billion[94] - The performance of major joint ventures and associates was unsatisfactory, with Road King Infrastructure Limited contributing a loss (including impairment losses) of approximately HK$1.81 billion[95] - The Group's remaining book value of equity in Road King Infrastructure is approximately HK$0.17 billion, which fairly reflects its market value, and future performance will not have a significant negative impact[96] - As of June 30, 2025, the Group had asset-backed loans totaling HK$8.19 billion and provided guarantees totaling HK$0.87 billion[97][98] - Shenye Tairan Company faces a lawsuit of approximately RMB 0.22 billion, which is currently under trial, and the Company is assessing its financial impact[99] - As of June 30, 2025, the Group employed a total of 20,261 employees, with total remuneration of approximately RMB 1.228 billion[100] Corporate Governance This section addresses the Group's adherence to corporate governance principles, including the decision not to declare an interim dividend, compliance with the Corporate Governance Code, the composition and review activities of the Audit Committee, and the absence of securities transactions Interim Dividends The Board of Directors has resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[101] Corporate Governance The Company complied with the Corporate Governance Code during the reporting period, though the Chairman and CEO roles are temporarily held by the same individual, and the company is seeking a suitable candidate to meet code requirements - The Company has applied and complied with the principles and all code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[102] - Mr. Wang Yuwen continued to serve as the Company's President after assuming the role of Chairman of the Board on April 29, 2025; this arrangement deviates from Code Provision C.2.1 but is temporary, and the Company is seeking a suitable candidate[102] Audit Committee The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's adopted accounting principles and practices, and the unaudited condensed consolidated financial information for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors: Mr. Li Wai Keung, Dr. Wong Yau Kar, and Professor Gong Peng[103] - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and the unaudited condensed consolidated financial information for the six months ended June 30, 2025[103] Securities Transactions 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 - 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[104] Acknowledgements The Board of Directors expresses sincere gratitude to investors, shareholders, fellow directors, and all employees for their trust, support, diligent work, loyal service, and contributions during the reporting period - The Board expresses its sincere gratitude to the Group's investors and shareholders for their trust and support, and to fellow directors and all employees of the Group for their diligent work, loyal service, and contributions during the six months ended June 30, 2025[105]