金轮天地控股(01232) - 2025 - 中期业绩

Financial Summary The Group's revenue declined while its net loss narrowed in H1 2025 amid a challenging property market Financial Summary for H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 288.1 | 429.7 | -33.0% | | Gross Contracted Sales | 302.2 | 276.1 | +9.5% | | Loss for the period | (215.8) | (507.7) | Loss narrowed | | Fair value loss on investment properties | (68.5) | (325.9) | Loss narrowed | | Total cash and bank deposits (at period end) | 117.0 | 135.6 (as of Dec 31, 2024) | -13.7% | | Total investment properties (at period end) | 1,295.1 | 3,726.5 (as of Dec 31, 2024) | -65.2% | - The Group's revenue for H1 2025 decreased by 33.0% year-on-year to RMB 288.1 million, while the loss for the period narrowed to RMB 215.8 million, primarily due to the severe real estate market environment, a decline in sales of developed properties, and fair value losses on investment properties[2] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's loss for the period narrowed significantly due to reduced fair value losses and finance costs Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric (RMB thousand) | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 288,123 | 429,748 | | Cost of sales | (154,710) | (355,113) | | Gross profit | 133,413 | 74,635 | | Changes in fair value of investment properties | (68,506) | (325,866) | | Other income, expenses, gains and losses | 15,902 | (49,942) | | Selling and marketing expenses | (15,541) | (15,272) | | Administrative expenses | (61,206) | (72,055) | | Operating profit/(loss) | 4,062 | (388,500) | | Finance costs | (11,566) | (138,166) | | Share of (loss)/profit of associates | (705) | 747 | | Share of loss of joint ventures | (30,399) | (5,311) | | Loss before tax | (38,608) | (531,230) | | Income tax | (177,225) | 23,538 | | Loss for the period | (215,833) | (507,692) | | Loss attributable to equity holders of the Company | (215,772) | (560,500) | | Non-controlling interests | (61) | 52,808 | | Total comprehensive expense for the period | (214,123) | (506,751) | - The Group recorded a loss for the period of RMB 215.8 million in H1 2025, a significant reduction from the RMB 507.7 million loss in the same period last year, mainly benefiting from a notable decrease in fair value losses on investment properties and finance costs[3][4] Condensed Consolidated Statement of Financial Position The Group's financial position weakened, with total equity turning negative and net liabilities recorded Condensed Consolidated Statement of Financial Position (As of June 30) | Metric (RMB thousand) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 144,480 | 412,869 | | Investment properties | 1,295,140 | 3,726,537 | | Interests in associates | 53,730 | 54,435 | | Interests in joint ventures | 383,591 | 413,990 | | Other financial assets | 165,290 | 165,855 | | Restricted bank deposits | 9,363 | 9,355 | | Deferred tax assets | 15,609 | 77,790 | | Total non-current assets | 2,067,203 | 4,860,831 | | Current assets | | | | Properties under development for sale | 1,365,038 | 1,289,595 | | Completed properties for sale | 1,069,217 | 1,165,005 | | Contract costs | 846 | 836 | | Trade and other receivables | 620,220 | 595,582 | | Prepayments for land appreciation tax and income tax | 77,447 | 80,444 | | Restricted bank deposits | 20,776 | 28,413 | | Cash and cash equivalents | 86,825 | 97,876 | | Total current assets | 3,240,369 | 3,257,751 | | Assets held for sale | 2,616,703 | – | | Total assets | 5,857,072 | 8,118,582 | | Current liabilities | | | | Trade and other payables | 1,241,409 | 1,892,970 | | Contract liabilities | 210,481 | 184,584 | | Rental deposits received | 24,687 | 27,696 | | Lease liabilities | 34,965 | 42,866 | | Bank loans | 408,252 | 489,041 | | Current tax | 709,174 | 589,878 | | Senior notes | – | 3,354,557 | | Financial guarantee contracts | – | 306,983 | | Total current liabilities | 2,628,968 | 6,888,575 | | Liabilities directly associated with assets held for sale | 4,878,392 | – | | Total current liabilities | 7,507,360 | 6,888,575 | | Net current liabilities | (1,650,288) | (3,630,824) | | Total assets less current liabilities | 416,915 | 1,230,007 | | Non-current liabilities | | | | Lease liabilities | 68,398 | 83,242 | | Bank loans | 226,544 | 217,368 | | Deferred tax liabilities | 146,399 | 739,700 | | Total non-current liabilities | 441,341 | 1,040,310 | | Net (liabilities)/assets | (24,426) | 189,697 | | Capital and reserves | | | | Share capital | 112,883 | 112,883 | | Reserves | (420,341) | (206,279) | | Total deficit attributable to equity holders of the Company | (307,458) | (93,396) | | Non-controlling interests | 283,032 | 283,093 | | Total (deficit)/equity | (24,426) | 189,697 | - As of June 30, 2025, the Group's total assets less current liabilities were RMB 416.9 million, a significant decrease from the end of 2024; total equity turned negative, with net liabilities of RMB 24.4 million, reflecting sustained financial pressure[5][6] Notes This section details accounting policies, segment performance, and significant financial items General Information and Basis of Preparation The Company, incorporated in the Cayman Islands, primarily engages in property development, leasing, and hotel operations - The Company was incorporated in the Cayman Islands on April 26, 2012, and its shares have been listed on the Hong Kong Stock Exchange since January 16, 2013[7] - The Group is principally engaged in property development, property leasing, and hotel operations[7] - The condensed consolidated interim financial statements are presented in RMB and prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting"[7][8] Material Uncertainties Related to Going Concern The Group faces significant going concern uncertainties due to net losses, net current liabilities, and debt defaults - The Group incurred a net loss of approximately RMB 215.8 million, had net current liabilities of approximately RMB 1,650.3 million, and net liabilities of approximately RMB 24.4 million during the period[10] - There were cross-defaulted bank loans of approximately RMB 319.2 million and events of default related to the failure to repay cumulative interest of US$91.9 million (approximately RMB 652.1 million) and outstanding principal of US$466.7 million (approximately RMB 3,340.7 million) on senior notes[11][12] - Current real estate industry volatility may pose increasing difficulties for the Group and could impair its ability to generate sufficient cash flows from future operations to meet its financing obligations[13] Consideration of Going Concern Assumption The Board prepared the financial statements on a going concern basis despite material uncertainties - A debt restructuring plan has been approved by relevant debt holders and shareholders, involving the issuance of new notes to settle principal debt and the transfer of a 95% interest in Golden Wheel Diamond to the issuer[14] - The Company will issue new shares to scheme creditors to offset accrued interest, and with all scheme conditions fulfilled, the scheme became effective on June 24, 2025[16] - Management is negotiating with lenders and creditors to extend repayment dates and has formulated business strategies to generate cash flow from existing operations, including accelerating property sales and receivables collection while implementing stricter cost controls[19] Changes in Accounting Policies The Group's accounting policies remained consistent with those applied in the previous annual financial statements - The Group's accounting policies have not changed from those applied in the consolidated financial statements for the year ended December 31, 2024[20] Revenue and Segment Reporting The Group's operations are divided into three reportable segments: property development, property leasing, and hotel operations - The Group has identified three operating and reportable segments: property development, property leasing, and hotel operations[21] Disaggregation of Revenue Total revenue for H1 2025 was RMB 288.1 million, primarily from property development Disaggregation of Revenue (For the six months ended June 30) | Business Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Property development | 176,903 | 293,467 | | Property leasing | 63,596 | 87,832 | | Hotel operations | 47,624 | 48,449 | | Total revenue | 288,123 | 429,748 | - Disaggregated by customer's geographical location, all revenue is derived from Mainland China[22] Information about Profit or Loss, Assets and Liabilities The property development segment turned profitable, contributing to a total reportable segment profit of RMB 63.1 million Reportable Segment Revenue and Profit/(Loss) (For the six months ended June 30) | Metric (RMB thousand) | Property Development (2025) | Property Development (2024) | Property Leasing (2025) | Property Leasing (2024) | Hotel Operations (2025) | Hotel Operations (2024) | Total (2025) | Total (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue from contracts with customers (point in time) | 176,903 | 293,467 | – | – | – | – | 176,903 | 293,467 | | Rental income | – | – | 63,596 | 87,832 | 47,624 | 48,449 | 111,220 | 136,281 | | Reportable segment revenue | 176,903 | 293,467 | 63,596 | 87,832 | 47,624 | 48,449 | 288,123 | 429,748 | | Reportable segment profit/(loss) | 24,915 | (39,701) | 35,262 | 40,397 | 2,955 | (93) | 63,132 | 603 | Reconciliation of Reportable Segment Profit or Loss Reportable segment profit was reconciled to a consolidated loss before tax of RMB 38.6 million Reconciliation of Reportable Segment Profit or Loss (For the six months ended June 30) | Metric (RMB thousand) | 2025 | 2024 | | :--- | :--- | :--- | | Reportable segment profit | 63,132 | 603 | | Changes in fair value of investment properties | (68,506) | (325,866) | | Other income, expenses, gains and losses | 15,902 | (49,942) | | Unallocated head office and corporate expenses | (6,466) | (13,295) | | Finance costs | (11,566) | (138,166) | | Share of (loss)/profit of associates | (705) | 747 | | Share of loss of joint ventures | (30,399) | (5,311) | | Consolidated loss before tax | (38,608) | (531,230) | Loss Before Tax The Group's pre-tax loss narrowed significantly, driven by lower finance costs and a turnaround in other income Finance Costs Finance costs decreased substantially to RMB 11.6 million due to a significant reduction in senior note interest Breakdown of Finance Costs (For the six months ended June 30) | Finance Cost Item (RMB thousand) | 2025 | 2024 | | :--- | :--- | :--- | | Interest on bank loans | (23,662) | (33,500) | | Interest on lease liabilities | (3,660) | (3,994) | | Interest on senior notes | – | (161,804) | | Less: Interest expense capitalized to properties under development for sale and investment properties under development | 15,756 | 61,132 | | Total interest expense | (11,566) | (138,166) | Other Income, Expenses, Gains and Losses The Group recorded net other income of RMB 15.9 million, a significant improvement from a net loss previously Breakdown of Other Income, Expenses, Gains and Losses (For the six months ended June 30) | Item (RMB thousand) | 2025 | 2024 | | :--- | :--- | :--- | | Dividend and interest income | 26 | 1,100 | | Government grants | 30 | 67 | | Compensation income for early termination of leases | 1,607 | 8,687 | | Compensation income for termination of property sales contracts | 391 | 1,113 | | Net foreign exchange gain/(loss) | 3,271 | (32,398) | | Net change in fair value of other financial assets | 10,558 | (1,167) | | Loss on surrender of insurance for early redemption | (609) | – | | Gain on disposal of property, plant and equipment | 573 | 1,022 | | Change in financial guarantee contracts | – | (24,270) | | Impairment loss on amounts due from former subsidiaries | – | (5,083) | | Donations | (328) | (5) | | Others | 383 | 992 | | Total | 15,902 | (49,942) | Other Items The cost of properties sold was RMB 145.9 million, with a reversal of impairment loss on completed properties Breakdown of Other Items (For the six months ended June 30) | Item (RMB thousand) | 2025 | 2024 | | :--- | :--- | :--- | | Cost of properties sold | 145,891 | 199,497 | | Impairment loss (reversal)/provision on completed properties for sale | (53,490) | 101,499 | | Direct operating expenses arising from properties that generated rental income | 11,556 | 11,777 | | Provision for impairment loss on right-of-use assets | 9,197 | – | | Depreciation of property, plant and equipment | 26,110 | 35,193 | Income Tax The Group recorded an income tax expense of RMB 177.2 million, a reversal from an income tax credit last year Breakdown of Income Tax (For the six months ended June 30) | Income Tax Item (RMB thousand) | 2025 | 2024 | | :--- | :--- | :--- | | Current tax - China enterprise income tax | 17,308 | 31,010 | | Current tax - Land appreciation tax | 111,116 | 121,556 | | Deferred tax | 48,801 | (176,104) | | Total | 177,225 | (23,538) | - The increase in income tax expense was mainly due to the derecognition of deferred tax assets arising from differences in land appreciation tax[28][68] Loss Per Share The Group's basic and diluted loss per share both narrowed significantly to RMB 1.20 Basic Loss Per Share Basic loss per share was RMB 1.20, based on a loss attributable to equity holders of RMB 215.8 million Basic Loss Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to equity holders of the Company (RMB thousand) | 215,772 | 560,500 | | Weighted average number of ordinary shares in issue (shares) | 179,902,000 | 179,902,000 | | Basic loss per share (RMB) | (1.20) | (3.12) | - The weighted average number of ordinary shares in issue has been adjusted for the effect of the share consolidation as if it had occurred on January 1, 2024[30] Diluted Loss Per Share Diluted loss per share was the same as basic loss per share as there were no potential dilutive ordinary shares - The Group had no potential dilutive ordinary shares in issue during the six months ended June 30, 2025[31] - Therefore, the diluted loss per share for both periods was the same as the basic loss per share[31] Investment Properties and Other Property, Plant and Equipment This chapter discloses changes in assets, including impairment losses and transfers to assets held for sale Right-of-use Assets There were no significant changes to the Group's right-of-use assets in H1 2025 - There were no significant changes for the Group during the six months ended June 30, 2025[32] - For the six months ended June 30, 2024, the Group terminated lease agreements and derecognized right-of-use assets of RMB 7,114,000 and lease liabilities of RMB 11,172,000, respectively[32] Acquisition and Disposal of Owner-occupied Assets The Group acquired assets costing RMB 5.2 million and disposed of assets costing RMB 0.6 million Acquisition and Disposal of Owner-occupied Assets (For the six months ended June 30) | Item (RMB thousand) | 2025 | 2024 | | :--- | :--- | :--- | | Cost of acquisition of plant, property and equipment | 5,227 | 4,908 | | Cost of disposal of plant, property and equipment | 592 | 1,085 | | Cost of investment properties sold | 17,279 | 12,954 | Impairment Loss An impairment loss of RMB 9.2 million was recognized for certain right-of-use assets - For the six months ended June 30, 2025, the Group wrote down the carrying amount of certain right-of-use assets to their recoverable amount of RMB 7,700,000[34] - An impairment loss of RMB 9,197,000 was recognized in "cost of sales"[34] Valuation A net loss of RMB 68.5 million was recognized due to fair value changes in investment properties - The valuation of investment properties was updated on June 30, 2025, by an independent and qualified professional valuer[35] - A net loss of RMB 68,506,000 on changes in fair value of investment properties was recognized in profit or loss for the period (H1 2024: net loss of RMB 325,866,000)[35] - The unrealized revaluation loss was mainly due to the negative impact of the economic downturn on the market value of investment properties[63] Transfer to Assets Held for Sale Assets with a carrying amount of approximately RMB 2.6 billion were transferred to assets held for sale - For the six months ended June 30, 2025, certain property, plant and equipment with a carrying amount of approximately RMB 236,160,000 and investment properties with a carrying amount of approximately RMB 2,371,000,000 were transferred to assets held for sale for the proposed restructuring[36] Other Financial Assets The Group's other financial assets primarily consist of unlisted equity securities in Xiamen International Bank Other Financial Assets (As of June 30) | Item (RMB thousand) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss - unlisted equity securities | 165,290 | 154,732 | | Financial assets at fair value through profit or loss - others | – | 11,123 | | Amount presented under non-current assets | 165,290 | 165,855 | - The unlisted equity securities represent an equity interest in Xiamen International Bank and have been pledged to a bank as security for certain banking facilities granted to the Group[37] - During the six months ended June 30, 2025, the Company surrendered an insurance policy to obtain its cash value and received proceeds of approximately RMB 10.5 million, resulting in an other loss of RMB 0.6 million[37] Trade and Other Receivables Total trade and other receivables amounted to RMB 620.2 million as of June 30, 2025 Aging Analysis of Trade and Other Receivables (As of June 30) | Item (RMB thousand) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables within 1 year | 68,946 | 64,594 | | Amounts due from associates and joint ventures | 100,732 | 104,024 | | Other receivables | 290,436 | 279,968 | | Amounts due from former subsidiaries | 622,585 | 632,142 | | Less: Provision for credit losses | (650,299) | (659,856) | | Financial assets measured at amortized cost | 432,400 | 420,872 | | Advances to contractors | 48,905 | 34,825 | | Other prepaid taxes | 138,915 | 139,885 | | Total | 620,220 | 595,582 | Disposal Group Held for Sale The Issuer Group was classified as a disposal group held for sale with net liabilities of RMB 2,261.7 million - The Issuer Group (comprising designated assets and hotel operations) was classified as a disposal group held for sale as of June 30, 2025, in connection with the debt restructuring plan[39] - All scheme conditions have been fulfilled, the scheme became effective on June 24, 2025, and the transfer is expected to be completed before the restructuring effective date[39] Assets and Liabilities of Disposal Group Held for Sale (As of June 30, 2025) | Item (RMB thousand) | Amount | | :--- | :--- | | Assets: | | | Property, plant and equipment | 236,160 | | Investment properties | 2,371,000 | | Trade and other receivables | 1,008 | | Cash and cash equivalents | 8,535 | | Total assets held for sale | 2,616,703 | | Liabilities: | | | Deferred tax liabilities | (579,921) | | Senior notes | (3,340,650) | | Interest payable on senior notes | (652,110) | | Financial guarantee contracts | (305,711) | | Total liabilities directly associated with assets held for sale | (4,878,392) | | Net liabilities directly associated with assets held for sale | (2,261,689) | Trade and Other Payables Total trade and other payables decreased to RMB 1,241.4 million due to reclassification for restructuring Aging Analysis of Trade and Other Payables (As of June 30) | Item (RMB thousand) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables within 180 days | 410,631 | 465,179 | | Trade payables from 181 to 365 days | 41,907 | 142,865 | | Trade payables over 1 year | 242,900 | 133,106 | | Total trade payables | 695,438 | 741,150 | | Other payables | 301,889 | 915,473 | | Amounts due to associates and joint ventures | 244,082 | 236,347 | | Total | 1,241,409 | 1,892,970 | - During the six months ended June 30, 2025, interest payable on senior notes with a carrying amount of approximately RMB 652,110,000, included in other payables, was transferred to liabilities directly associated with assets held for sale for the proposed restructuring[43] Comparative Information Certain comparative figures have been reclassified to conform with the current period's presentation - Certain comparative figures have been reclassified to conform with the current period's presentation[44] Business Review The Group navigated a challenging real estate market through debt restructuring and strategic sales Market Environment and Group Overview The Group faced a sluggish real estate market, mitigating financial pressure through asset sales and debt restructuring - China's real estate market has faced severe challenges since the pandemic, with factors such as weak demand, developer debt crises, and low homebuyer confidence leading to a market downturn[45] - The Group's operating conditions remained sluggish, and it has taken measures such as price reductions, asset sales, and debt restructuring to alleviate financial pressure[46] - As of June 30, 2025, the Group achieved contracted sales of RMB 302.2 million (H1 2024: RMB 276.1 million), a year-on-year increase of 9.5%[46] - Property leasing revenue decreased by approximately 27.6% to about RMB 63.6 million, while the hotel operations business remained stable with average occupancy rates of 82% and 76% respectively[46] Debt Restructuring Progress The Group's debt restructuring plan was approved by creditors and the court, with implementation expected in H2 2025 - The debt restructuring plan was approved by a majority of scheme creditors and sanctioned by the court at a hearing on June 24, 2025[47] - The Group will focus on completing the implementation and execution of the restructuring plan in the second half of 2025 to ensure its completion within a reasonably practicable timeframe[47] - Upon completion of the restructuring, the Group's gearing ratio will be substantially reduced, its financial position will be greatly improved, and its business operations can gradually regain vitality[47] Property Development The Group's gross contracted sales increased by 9.5% year-on-year, while no new land was acquired Contracted Sales Gross contracted sales reached approximately RMB 302.2 million, a 9.5% increase year-on-year Contracted Sales Data (For the six months ended June 30) | Metric | 2025 | 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Gross Contracted Sales (RMB million) | 302.2 | 276.1 | +9.5% | | Contracted Sales GFA (sq.m.) | 28,283 | 19,286 | +46.7% | Property Sales Revenue from property sales reached RMB 176.9 million, with an average selling price of RMB 12,607 per sq.m - For the six months ended June 30, 2025, the Group's revenue from property sales amounted to approximately RMB 176.9 million[49] - A total gross floor area of approximately 14,032 sq.m. was sold and delivered, with an average selling price of about RMB 12,607 per sq.m[49] - As of June 30, 2025, the unrecognized gross contracted sales amounted to approximately RMB 282.7 million, which is expected to be recognized upon completion and delivery of the relevant projects in the second half of 2025[49] Land Bank The Group's total land bank GFA was 680,892 sq.m., with no new acquisitions during the period - For the six months ended June 30, 2025, the Group did not acquire any new land, nor did it invest in any new joint ventures or associates[50] - As of June 30, 2025, the gross floor area of the Group's total land bank was 680,892 sq.m.[50] Property Leasing The Group's completed investment properties maintained an overall occupancy rate of over 82% - As of June 30, 2025, the Group had completed investment properties with a total gross floor area of approximately 56,876 sq.m.[51] - For the six months ended June 30, 2025, the overall occupancy rate of the Group's investment properties exceeded 82%[51] Metro Leasing and Operational Management Business The Group manages three metro station shopping centers with a total leasable GFA of 11,013 sq.m - As of June 30, 2025, the Group held leasing and operational management contracts for 3 metro station shopping centers in two cities in Mainland China (Nanjing and Wuxi)[52] - The total leasable gross floor area is approximately 11,013 sq.m., with an overall occupancy rate exceeding 82%[52] Hotel Operations The Group operates five hotels with a total of 772 rooms, achieving an average occupancy rate of 76% - As of June 30, 2025, the Group had five operating hotels with a total of 772 guest rooms[53] - For the six months ended June 30, 2025, the average room occupancy rate of the five hotels during the reporting period was approximately 76%[53] Other Investments The Group's primary investment is a 61.5 million share stake in Xiamen International Bank - As of June 30, 2025, the Group's primary investment was its equity investment in Xiamen International Bank Co., Ltd[54] - The Group holds 61.5 million unlisted equity shares of Xiamen International Bank Co., Ltd, with a carrying amount of approximately RMB 165.3 million[54] Outlook The Group is confident in long-term market recovery and will focus on project delivery and restructuring in H2 2025 - While a full recovery of the real estate market may take time, the Group is confident in its long-term development, believing that the central government's support policies will gradually take effect[55] - The Group will make every effort to complete its delivery schedule and restructuring plan for the second half of 2025, and will continue to actively explore opportunities for new projects and businesses[55] Financial Review This section analyzes the Group's operating results, liquidity, and capital resources for the period Operating Performance The Group's revenue declined, but gross profit grew significantly, and key expenses were effectively controlled Revenue Total revenue decreased by 33.0% to RMB 288.1 million, driven by lower property development and leasing income Revenue Composition (For the six months ended June 30) | Business Category | 2025 (RMB thousand) | % of Total | 2024 (RMB thousand) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Property development | 176,903 | 61.4 | 293,467 | 68.3 | | Property leasing | 63,596 | 22.1 | 87,832 | 20.4 | | Hotel operations | 47,624 | 16.5 | 48,449 | 11.3 | | Total | 288,123 | 100.0 | 429,748 | 100.0 | - Revenue decreased by approximately 33.0% from approximately RMB 429.7 million for the six months ended June 30, 2024 to approximately RMB 288.1 million for the six months ended June 30, 2025, mainly due to a decrease in revenue generated from property development and property leasing[57] Property Development Revenue Property development revenue decreased by 39.7% due to a reduction in gross floor area sold - Revenue from the property development business decreased by approximately 39.7% from approximately RMB 293.5 million for the six months ended June 30, 2024 to approximately RMB 176.9 million for the six months ended June 30, 2025[58] - The decrease was mainly due to the reduction in the gross floor area sold and the absence of any project completions and handovers during the period[58] Property Leasing Revenue Property leasing revenue decreased by 27.6% to RMB 63.6 million - For the six months ended June 30, 2025, revenue from property leasing decreased by approximately 27.6% to about RMB 63.6 million[59] Hotel Operations Revenue Hotel operations revenue remained stable, declining slightly by 1.7% - The hotel operations business remained stable; for the six months ended June 30, 2025, revenue from hotel operations decreased by approximately 1.7% to about RMB 47.6 million[60] Cost of Sales Cost of sales decreased significantly by 56.4%, in line with the decline in property development revenue Breakdown of Cost of Sales (For the six months ended June 30) | Item (RMB thousand) | 2025 | % of Total | 2024 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Property development | | | | | | －Land acquisition cost | 59,367 | 38.4 | 69,730 | 19.6 | | －Construction cost | 63,597 | 41.1 | 75,839 | 21.4 | | －Capitalized finance costs | 22,591 | 14.6 | 53,096 | 15.0 | | －Tax expenses | 336 | 0.2 | 832 | 0.2 | | Impairment of inventories | (53,490) | (34.6) | 101,499 | 28.6 | | Subtotal | 92,401 | 59.7 | 300,996 | 84.8 | | Property leasing | 20,753 | 13.4 | 11,777 | 3.3 | | Hotel operations | 41,556 | 26.9 | 42,340 | 11.9 | | Total | 154,710 | 100.0 | 355,113 | 100.0 | - Cost of sales decreased by approximately 56.4% from approximately RMB 355.1 million for the six months ended June 30, 2024 to approximately RMB 154.7 million for the six months ended June 30, 2025, which was mainly due to the decrease in cost of sales for property development, consistent with the decrease in revenue from sales of developed properties[61] Gross Profit/(Loss) and Gross Profit/(Loss) Margin The Group's gross profit increased significantly, driven by improved margins in property development - The Group recorded a gross profit of approximately RMB 133.4 million for the six months ended June 30, 2025 (H1 2024: gross profit of approximately RMB 74.6 million)[62] - The increase in gross profit was mainly due to the improvement in the gross profit of the Group's sales of developed properties, which contributed a 47.8% gross profit margin for the six months ended June 30, 2025, compared to a gross loss margin of 2.6% in the same period last year[62] - The gross profit margin for property leasing decreased from approximately 86.6% for the six months ended June 30, 2024 to approximately 67.4% for the six months ended June 30, 2025; the gross profit margin for hotel operations remained stable at approximately 12.7%[62] Changes in Fair Value of Investment Properties The fair value loss on investment properties narrowed to RMB 68.5 million but was still impacted by the economic downturn - For the six months ended June 30, 2025, the Group recorded a fair value loss on investment properties of approximately RMB 68.5 million (H1 2024: fair value loss of approximately RMB 325.9 million)[63] - The unrealized revaluation loss was mainly due to the negative impact of the economic downturn on the market value of investment properties[63] Other Income, Expenses, Gains and Losses The Group recorded net other income of RMB 15.9 million, a significant turnaround from a net loss last year - The Group recorded a net gain on other income, expenses, gains and losses of approximately RMB 15.9 million for the six months ended June 30, 2025 (H1 2024: net loss of RMB 49.9 million)[64] - The net gain for the six months ended June 30, 2025 mainly comprised a net foreign exchange gain of RMB 3.3 million and a net change in fair value of other financial assets of RMB 10.6 million[64] Selling and Marketing Expenses Selling and marketing expenses increased slightly to RMB 15.5 million - Selling and marketing expenses increased slightly from approximately RMB 15.3 million for the six months ended June 30, 2024 to approximately RMB 15.5 million for the six months ended June 30, 2025[65] Administrative Expenses Administrative expenses decreased by 15.1% to RMB 61.2 million due to strict cost control policies - Administrative expenses decreased from approximately RMB 72.1 million for the six months ended June 30, 2024 to approximately RMB 61.2 million for the six months ended June 30, 2025, a decrease of approximately 15.1% year-on-year[66] - The Group continued to maintain a strict cost control policy, including controlling headcount, implementing salary reductions for all staff, and reducing year-end bonuses[66] Finance Costs Finance costs decreased significantly to RMB 11.6 million due to reduced interest on senior notes from debt restructuring - Finance costs decreased from approximately RMB 138.2 million for the six months ended June 30, 2024 to approximately RMB 11.6 million for the six months ended June 30, 2025, mainly due to the reduction in interest on senior notes as a result of the debt restructuring[67] Income Tax The Group recorded an income tax expense of RMB 177.2 million, a reversal from a tax credit in the prior period - The Group's income tax expense for the six months ended June 30, 2025 was approximately RMB 177.2 million, whereas the income tax credit for the six months ended June 30, 2024 was RMB 23.5 million[68] - The increase in income tax expense was mainly due to the derecognition of deferred tax assets arising from differences in land appreciation tax[68] Loss for the Period The Group's net loss narrowed to RMB 215.8 million, primarily impacted by fair value losses on investment properties - The Group incurred a net loss of approximately RMB 215.8 million for the six months ended June 30, 2025 (H1 2024: net loss of approximately RMB 507.7 million)[69] - This was mainly due to the challenging business environment in the real estate industry, which resulted in a fair value loss on investment properties of approximately RMB 68.5 million[69] Liquidity, Financial, and Capital Resources The Group faced liquidity challenges with reduced cash balances and significant debt defaults, though debt restructuring is underway Cash Position The Group's cash and bank balances decreased to RMB 117.0 million due to reduced proceeds from property sales Cash and Bank Balances (As of June 30) | Item (RMB million) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and bank balances | 117.0 | 135.6 | | Restricted bank deposits | 30.1 | 37.8 | - The decrease in cash and bank balances was mainly due to the reduction in proceeds from property sales resulting from a significant decrease in contracted sales during the six months ended June 30, 2025[70] Breach of Loan Covenants and Cross-defaults under Certain Loan Facilities The Group experienced cross-defaults on bank loans and default events on senior notes, which are subject to restructuring - As of June 30, 2025, bank loans under current liabilities included cross-defaulted bank loans with a total carrying amount of approximately RMB 319,214,000[71] - The failure to repay cumulative interest of US$91,907,000 (approximately RMB 652,110,000) and redeem the outstanding principal amount of senior notes totaling approximately US$466,663,000 (approximately RMB 3,340,650,000) upon maturity resulted in events of default[72] - These senior notes, along with financial guarantee contracts related to other defaulted bank loans of approximately RMB 4,306,612,000, are subject to a mutually agreed debt restructuring of the Group[72] Cost of Borrowing The Group's average cost of borrowing decreased to 7.5% in H1 2025 Average Cost of Borrowing (For the six months ended June 30) | Period | Average Cost of Borrowing | | :--- | :--- | | H1 2025 | 7.5% | | H1 2024 | 9.3% | Gearing Ratio The net gearing ratio was not applicable due to negative total equity, while the liability-to-asset ratio increased - As of June 30, 2025, the Group's net gearing ratio was not applicable as total equity was negative (December 31, 2024: 2,069.3%)[74] - The Group's liability-to-asset ratio (total debt less contract liabilities divided by total assets) was approximately 97.7% as of June 30, 2025, compared to approximately 95.4% as of December 31, 2024[74] Foreign Exchange Rate Risk The Group faces foreign exchange risk from its HKD and USD-denominated borrowings and deposits - The Group primarily operates its business in China, and most of the Group's bank deposits and bank and other borrowings are denominated in RMB[75] - Certain bank deposits, bank borrowings, and senior notes are denominated in Hong Kong dollars or US dollars, and fluctuations in foreign exchange rates have affected and will continue to affect the Group's business, financial condition, and results of operations[75] - The Group currently does not have any foreign currency hedging policy, but management closely monitors foreign exchange risk and will consider hedging significant foreign currency exposure when necessary[75] Contingent Liabilities The Group provides guarantees for customer mortgage loans, with minimal fair value impact due to low default rates - The Group generally provides guarantees to banks in respect of mortgage loans granted to its customers to finance their purchases of the Group's properties[76] - As of June 30, 2025, the Group's mortgage loan guarantees to banks for its customers amounted to approximately RMB 19.2 million (December 31, 2024: RMB 19.2 million)[77] - The Directors consider that the fair value of the guarantees at initial recognition is not significant due to the low default rate[77] Employees and Remuneration Policy The Group's remuneration policy is performance-based and aligned with industry practices - As of June 30, 2025, the Group employed a total of approximately 506 (December 31, 2024: 578) full-time employees in Hong Kong and Mainland China[78] - The remuneration of the Group's employees includes basic salary, allowances, pensions, performance bonuses, and share options[78] - Remuneration is determined with reference to employee performance, skills, qualifications, and experience, as well as prevailing industry practices[78] Sufficient Public Float The Company has maintained the required public float as stipulated by the Stock Exchange Listing Rules - During the review period, the Company has maintained the public float as required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[79] Corporate Governance Practices The Board is committed to maintaining high standards of corporate governance in compliance with the Corporate Governance Code - The Board and management of the Company are committed to maintaining high standards of corporate governance and have complied with the code provisions and most of the recommended best practices set out in the Corporate Governance Code contained in Appendix C1 to the Listing Rules[80] Audit Committee The Audit Committee oversees financial reporting, risk management, and internal controls - The Audit Committee currently comprises three independent non-executive Directors: Mr Li Sze Kuen (Chairman), Mr Chan Chi Wai and Ms Wong Lai Ling[81] - The primary duties of the Audit Committee include reviewing and supervising the Company's financial reporting process, half-year and annual results, risk management and internal control systems, the effectiveness of the internal audit function performed by the Group's internal audit department, and the implementation of anti-corruption and whistleblowing policies[82] - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[82] Remuneration Committee The Remuneration Committee advises on the remuneration policies for directors and senior management - The Remuneration Committee currently comprises two independent non-executive Directors and one executive Director, namely Mr Chan Chi Wai (Chairman), an independent non-executive Director, Mr Wong Kam Fai, an executive Director, and Ms Wong Lai Ling, an independent non-executive Director[83] - The primary duties of the Remuneration Committee include making recommendations on the remuneration policy and structure for all Directors and senior management of the Company; assessing the performance of each executive Director; making recommendations to the Board on the specific remuneration package for each executive Director and senior management; and reviewing and approving matters related to share schemes[84] Nomination Committee The Nomination Committee is responsible for reviewing the Board's structure and making recommendations on director appointments - The Nomination Committee currently comprises two independent non-executive Directors and one executive Director, namely Mr Wong Yam Yin (Chairman), an executive Director, Mr Li Sze Kuen, an independent non-executive Director, and Ms Wong Lai Ling, an independent non-executive Director[85] - The primary duties of the Nomination Committee include regularly reviewing the structure, size and composition of the Board; identifying and selecting candidates for directorship; assessing the independence of independent non-executive Directors; and making recommendations to the Board on the appointment or re-appointment of Directors and succession planning for Directors[86] Model Code for Securities Transactions by Directors The Company has adopted the Model Code, and all directors have confirmed compliance during the review period - The Company has adopted the Model Code set out in Appendix C3 to the Listing Rules as the code of conduct for securities transactions by Directors[87] - The Company has made specific enquiries of all Directors, and all Directors have confirmed that they have complied with the required standards set out in the Model Code during the review period[87] Purchase, Sale or Redemption of the Company's Listed Securities No purchase, sale, or redemption of the Company's listed securities was made by the Group during the period - 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[88] Interim Dividend The Board 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[89] Share Consolidation The Company implemented a share consolidation, converting every ten ordinary shares into one consolidated share - The Board proposed on May 20, 2025 to implement a share consolidation, whereby every ten (10) ordinary shares of US$0.01 each in the share capital of the Company would be consolidated into one (1) consolidated share of US$0.1 each[90] - The share consolidation was approved by the shareholders on May 16, 2025 and became effective on May 20, 2025[90] - Accordingly, the total number of issued ordinary shares of the Company was consolidated from 1,799,020,000 shares to 179,902,000 shares on May 20, 2025[90] Issue of New Shares under Specific Mandate The Company will issue 30,519,600 new shares to scheme creditors to settle accrued interest upon restructuring - Upon the occurrence of the restructuring effective date, the Company will issue 30,519,600 new shares of the Company to the scheme creditors[91] - The allocation of the new shares is based on the accrued interest on the existing debt instruments held by the scheme creditors and is intended to offset all accrued interest[91] - The Company will not receive any proceeds from the issue of the new shares[91] Subsequent Events after the Reporting Period No significant subsequent events affecting the Group occurred after the reporting period - After the six months ended June 30, 2025 and up to the date of this announcement, no significant subsequent events have occurred that may affect the Group[93] Publication of Interim Results and Interim Report The interim results and report are available on the websites of the Stock Exchange and the Company - This interim results announcement is published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company's website (www.gwtd.com.hk)[94](index=94&type=chunk) - The interim report of the Group for the six months ended June 30, 2025 containing all the information required by the Listing Rules will be despatched to the shareholders of the Company and published on the above websites in due course[94] Board of Directors This section lists the members of the Company's Board of Directors as of the announcement date - As at the date of this announcement, the Board of Directors of the Company comprises Mr Wong Yam Yin, Mr Wong Kam Fai, Mr Wong Kam Keung and Mr Tjie Tjin Fung as executive Directors; Mr Suwita Janata and Mr Gunawan Kiky as non-executive Directors; and Mr Chan Chi Wai, Mr Li Sze Kuen and Ms Wong Lai Ling as independent non-executive Directors[95]