金融街物业(01502) - 2025 - 中期业绩

Financial Highlights For the six months ended June 30, 2025, revenue grew 16.92% to RMB 951.38 million, while profit for the period and attributable profit decreased, and gross floor area under management expanded 12.81% Financial Highlights for H1 2025 | Metric | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 951.38 | 813.69 | +16.92% | | Profit for the period | 70.13 | 71.35 | -1.70% | | Profit attributable to owners of the Company | 57.61 | 63.47 | -9.23% | | Gross Floor Area Under Management (million sq.m.) | 49.59 | 43.96 | +12.81% | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, revenue increased by 16.92%, but a higher growth in cost of sales and services led to a marginal 0.52% gross profit increase and a decline in period and attributable profits Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 951,377 | 813,694 | +16.92% | | Cost of sales and services | (822,842) | (685,829) | +19.98% | | Gross profit | 128,535 | 127,865 | +0.52% | | Operating profit | 86,689 | 86,969 | -0.32% | | Profit for the period | 70,134 | 71,345 | -1.70% | | Profit attributable to owners of the Company for the period | 57,607 | 63,467 | -9.23% | | Earnings per share, basic and diluted (RMB) | 0.154 | 0.170 | -9.41% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets increased to RMB 2,484.79 million, with growth in both non-current and current assets, while total equity slightly increased and total liabilities rose significantly Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | ASSETS | | | | | Total non-current assets | 315,962 | 267,829 | +18.00% | | Total current assets | 2,168,829 | 2,061,672 | +5.20% | | Total assets | 2,484,791 | 2,329,501 | +6.67% | | EQUITY AND LIABILITIES | | | | | Total equity | 1,375,912 | 1,369,073 | +0.50% | | Total non-current liabilities | 91,311 | 68,213 | +33.86% | | Total current liabilities | 1,017,568 | 892,215 | +14.05% | | Total liabilities | 1,108,879 | 960,428 | +15.46% | | Total equity and liabilities | 2,484,791 | 2,329,501 | +6.67% | Notes to the Condensed Consolidated Financial Statements This section provides detailed information on the basis of preparation, key accounting estimates, financial risk management, segment information, and the composition and changes of various financial items 1. General Information Financial Street Property Co., Ltd., established in China in 1994 and listed on the HKEX in 2020, primarily provides property management services in China and Hong Kong, with its ultimate controlling entity being Beijing Financial Street Investment (Group) Co., Ltd - The Company was established in China in 1994, restructured into a joint stock company in 2019, and listed on the Main Board of the Hong Kong Stock Exchange on July 6, 2020[9][10] - The Group is principally engaged in the provision of property management and related services in China and Hong Kong[11] - The ultimate controlling company is Beijing Financial Street Investment (Group) Co., Ltd., controlled by the State-owned Assets Supervision and Administration Commission of Xicheng District, Beijing[10] 2. Basis of Preparation of the Interim Financial Statements The condensed consolidated interim financial statements are prepared in accordance with HKEX Listing Rules and HKAS 34, adopting revised HKFRS accounting standards effective January 1, 2025, with no significant impact on results or financial position expected - The condensed consolidated interim financial statements are prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[12] - Revised HKFRS accounting standards effective January 1, 2025, have been adopted, and the Directors do not expect any significant impact on the preparation and presentation of the Group's results and financial position for the current and prior periods[13][15] 3. Critical Accounting Estimates and Judgements The significant judgements and key sources of estimation uncertainty applied by management in preparing the interim financial statements are consistent with those used in the consolidated financial statements for the year ended December 31, 2024 - The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing these condensed consolidated interim financial statements were the same as those applied to the consolidated financial statements for the year ended December 31, 2024[16] 4. Financial Risk Management The Group is exposed to market risks (foreign exchange and interest rate), credit risk, and liquidity risk, with no significant changes in risk management policies since December 31, 2024, and the interim report does not include all annual financial statement risk disclosures - The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk[17] - There have been no significant changes in the Group's risk management policies since the year ended December 31, 2024[18] 5. Segments The Board considers the Group to operate as a single operating segment, primarily providing property management and related services in China and Hong Kong, with resource allocation focused on enhancing overall Group value - The Group is principally engaged in the provision of property management and related services in China and Hong Kong, and the Board considers there to be only one operating segment[19] 6. Revenue For the six months ended June 30, 2025, the Group's revenue increased by 16.92% to RMB 951.38 million, primarily from property management and related services, with transactions from Financial Street associates accounting for 6% of total revenue, a decrease from the prior period Revenue Breakdown (For the six months ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Property management and related services (lump sum basis) | 754,157 | 623,463 | +20.97% | | Property management and related services (remuneration basis) | 11,184 | 8,505 | +31.50% | | Community value-added services | 153,653 | 147,446 | +4.21% | | Catering services | 28,295 | 29,642 | -4.54% | | Rental income | 4,088 | 4,638 | -11.86% | | Total Revenue | 951,377 | 813,694 | +16.92% | - For the six months ended June 30, 2025, transactions with Financial Street associates accounted for 6% of the Group's revenue (2024: 9%)[20] External Revenue by Geographical Region (For the six months ended June 30) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 869,352 | 755,186 | | Hong Kong | 82,025 | 58,508 | | Total | 951,377 | 813,694 | 7. Other Income Other income for the period was RMB 251 thousand, primarily from government grants, a decrease from RMB 928 thousand in the prior period, with no recognized VAT input deduction for the current period Other Income Breakdown (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Government grants | 251 | 867 | | Recognized VAT input deduction | — | 61 | | Total | 251 | 928 | - Government grants are discretionary receipts from local Chinese government authorities for local business development and employment, with no unfulfilled conditions or contingencies attached to their receipt[23][24] 8. Other Gains/(Losses), Net Net other gains for the period amounted to RMB 6,397 thousand, primarily due to gains from the disposal of right-of-use assets, compared to a net loss of RMB 36 thousand in the prior period Other Gains/(Losses), Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Gain on disposal of right-of-use assets | 6,413 | — | | Net loss on derecognition upon early termination of leases | — | (29) | | Net loss on disposal of property, plant and equipment | (57) | (82) | | Others | 41 | 75 | | Total | 6,397 | (36) | 9. Finance Income, Net Net finance income for the period was RMB 5,564 thousand, a decrease from RMB 5,794 thousand in the prior period, mainly due to lower bank deposit interest income despite an increase in finance lease interest income Finance Income, Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance income | | | | Interest income from bank deposits | 4,302 | 5,251 | | Interest income from a fellow subsidiary | 2,706 | 1,997 | | Interest income from finance leases | 1,208 | 538 | | Total finance income | 8,216 | 7,786 | | Finance costs | | | | Interest expense on lease liabilities | (1,960) | (1,378) | | Imputed interest expense on consideration payable for acquisition of a subsidiary | (644) | (614) | | Net interest expense on retirement benefit obligations | (48) | — | | Total finance costs | (2,652) | (1,992) | | Net finance income | 5,564 | 5,794 | 10. Profit Before Income Tax Profit before income tax for the period was RMB 92,305 thousand, largely consistent with the prior period, with significant increases in staff costs and cleaning, security, and maintenance service costs, offset by a decrease in catering service raw material costs Profit Before Income Tax Components (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Staff costs (included in cost of sales and services) | 308,676 | 275,387 | +12.09% | | Staff costs (included in administrative expenses) | 25,608 | 22,228 | +15.21% | | Cleaning, security and maintenance service costs | 407,861 | 306,413 | +33.10% | | Depreciation (property, plant and equipment) | 12,474 | 12,571 | -0.77% | | Depreciation (investment properties) | 4,359 | 2,752 | +58.40% | | Amortisation of intangible assets | 1,944 | 1,722 | +12.89% | | Expected credit loss allowance (trade receivables) | 4,095 | 4,001 | +2.35% | | Expected credit loss allowance (other financial assets) | 1,742 | (196) | N/A | | Cost of raw materials and consumables used in catering services | 14,509 | 16,736 | -13.29% | 11. Income Tax Expense Income tax expense for the period increased to RMB 22,171 thousand, primarily due to higher PRC corporate income tax and Hong Kong profits tax, despite a decrease in deferred tax, with some subsidiaries benefiting from preferential tax rates Total Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current income tax (PRC corporate income tax) | 25,360 | 31,494 | -19.48% | | Current income tax (Hong Kong profits tax) | 1,804 | 805 | +124.10% | | Deferred tax | (4,993) | (11,451) | -56.40% | | Total income tax expense | 22,171 | 20,848 | +6.35% | - The general PRC corporate income tax rate is 25%, with some small-profit enterprises enjoying a 5% preferential tax rate, and Chongqing Jiangbeizui Property Services Co., Ltd. benefiting from a 15% preferential tax rate under the Western Development Policy[29] - Hong Kong profits tax is calculated at 16.5%, with eligible entities taxed at 8.25% on the first HKD 2,000,000 of assessable profits[30] 12. Dividends The Company declared a final dividend of RMB 58,640 thousand for 2024, approved by shareholders on June 5, 2025, and the Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Company declared a final dividend of RMB 58,640 thousand (2024: RMB 64,616 thousand), which was approved at the annual general meeting on June 5, 2025[32] - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024: nil)[32][95] 13. Earnings Per Share For the six months ended June 30, 2025, basic earnings per share decreased to RMB 0.154 from RMB 0.170 in the prior period, with diluted earnings per share being the same as basic earnings per share due to the absence of potential dilutive ordinary shares Basic Earnings Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousand) | 57,607 | 63,467 | -9.23% | | Weighted average number of ordinary shares in issue (thousand shares) | 373,500 | 373,500 | 0% | | Basic earnings per share (RMB) | 0.154 | 0.170 | -9.41% | - As the Group had no potential dilutive ordinary shares for the six months ended June 30, 2025 and 2024, the diluted earnings per share were the same as the basic earnings per share[35] 14. Bills Receivable and Trade Receivables As of June 30, 2025, net bills receivable and trade receivables increased by 32.52% to RMB 458.03 million, primarily due to increased trade receivables from property management services driven by expanded gross floor area under management, with an increase in expected credit loss allowance for trade receivables to RMB 37,350 thousand Bills Receivable and Trade Receivables (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (related parties) | 112,848 | 110,745 | +1.90% | | Trade receivables (third parties) | 380,002 | 268,406 | +41.95% | | Less: Expected credit loss allowance | (37,350) | (33,511) | +11.45% | | Trade receivables, net | 455,500 | 345,640 | +31.78% | | Bills receivable | 2,532 | — | N/A | | Total | 458,032 | 345,640 | +32.52% | - The increase in trade receivables was mainly due to the increase in trade receivables from property management services resulting from the increase in total gross floor area under management; and trade receivables not yet due for collection[71] Changes in Expected Credit Loss Allowance for Trade Receivables (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | At January 1 | 33,511 | 21,126 | | Expected credit loss allowance recognized during the period | 4,095 | 4,001 | | Amounts written off during the period | (256) | — | | Balance at June 30 | 37,350 | 25,127 | 15. Other Financial Assets Measured at Amortised Cost As of June 30, 2025, total other financial assets measured at amortised cost increased by approximately RMB 75.07 million to RMB 155.78 million, primarily due to an increase in finance lease receivables from asset operation businesses Other Financial Assets Measured at Amortised Cost (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Finance lease receivables | 77,098 | 16,971 | +354.20% | | Payments on behalf of property owners, tenants and property developers | 26,390 | 19,883 | +32.72% | | Deposits (related parties) | 4,767 | 4,475 | +6.52% | | Deposits (third parties) | 37,277 | 27,986 | +33.19% | | Amounts due from a non-controlling interest | 10,487 | 10,649 | -1.49% | | Others | 3,074 | 2,314 | +32.84% | | Less: Expected credit loss allowance | (3,314) | (1,572) | +110.81% | | Total | 155,779 | 80,706 | +93.02% | - The increase in other financial assets was mainly due to finance lease receivables arising from undertaking asset operation businesses[72] Maturity Analysis of Finance Lease Receivables (As of June 30, 2025) | Maturity Period | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 9,878 | 8,339 | | One to two years | 14,333 | 5,887 | | Two to three years | 9,043 | 3,434 | | Over three years | 57,043 | — | | Total undiscounted lease payments receivable | 90,297 | 17,660 | 16. Share Capital As of June 30, 2025, the Company's issued and fully paid share capital remained at RMB 373,500 thousand, with 373,500 thousand shares, consistent with the prior period and year-end Share Capital (As of June 30, 2025) | Item | June 30, 2025 (thousand shares) | June 30, 2025 (RMB thousand) | June 30, 2024 (thousand shares) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Issued and fully paid share capital | 373,500 | 373,500 | 373,500 | 373,500 | 17. Trade and Other Payables As of June 30, 2025, total trade and other payables increased to RMB 844.90 million, an increase of approximately 15.46% from December 31, 2024, primarily due to increased trade payables and salaries and welfare payables driven by business expansion and bonus accruals Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 289,140 | 245,065 | +17.98% | | Collections on behalf of property owners, tenants and property developers | 205,571 | 216,446 | -5.03% | | Deposits | 108,927 | 98,764 | +10.29% | | Salaries and welfare payables | 111,993 | 102,240 | +9.54% | | Consideration payable for acquisition of a subsidiary | 27,492 | 26,848 | +2.40% | | Dividends payable | 80,477 | 21,837 | +268.54% | | Total current portion | 844,895 | 702,675 | +20.24% | - The increase in trade payables was mainly due to the expansion of business operations[73] - The increase in salaries and welfare payables was mainly due to the accrual of bonuses during the reporting period[73] - Consideration payable refers to the fair value of contingent consideration payable to existing shareholders of an acquired subsidiary for the year ended December 31, 2024, to be paid in 2025[44] Management Discussion and Analysis This section reviews the company's H1 2025 business performance and financial position, highlighting continued growth in gross floor area under management and projects, particularly in non-residential and independent third-party segments, alongside revenue growth, declining gross margins, and stable liquidity Business Review The company adhered to its "Quality First, Focus on Core Business, Deep Cultivation of Strengths" strategy in H1, achieving a 12.8% year-on-year increase in gross floor area under management to 49.59 million sq.m. and expanding to 391 projects, with non-residential properties accounting for 57.4% and independent third-party projects contributing 90.7% of new gross floor area Overview Financial Street Property, a leading integrated property management service provider for business properties nationwide, maintained its "Quality First, Focus on Core Business, Deep Cultivation of Strengths" strategy in H1, achieving significant growth in gross floor area under management and projects, with a high proportion of non-residential and independent third-party projects - The Group is one of the leading integrated property management service providers for business properties nationwide, focusing on mid-to-high-end property management services[46] - In H1 2025, the Group adhered to its business development strategy of "Quality First, Focus on Core Business, Deep Cultivation of Strengths," continuously expanding and consolidating its market presence in first- and second-tier cities and key regions[46] Gross Floor Area Under Management and Number of Projects (As of June 30, 2025) | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Gross Floor Area Under Management (million sq.m.) | 49.59 | 43.96 | +12.8% | | Number of projects under management | 391 | 326 | +19.94% | | Proportion of non-residential gross floor area under management | 57.4% | N/A | N/A | | Proportion of new gross floor area under management from independent third-party projects in H1 | 90.7% | N/A | N/A | Property Management and Related Services As of June 30, 2025, property management and related services covered 26 provinces and cities across seven regions in China, with a total gross floor area under management of 49.59 million sq.m. across 391 properties, showing growth in both contracted and managed areas, with the North China region having the largest managed area, residential properties accounting for 42.6%, and lump-sum basis remaining the primary revenue model - The Group's property management and related services cover 26 provinces, municipalities, autonomous regions, and special administrative regions across seven regions in China[48] Contracted and Gross Floor Area Under Management and Number of Properties (As of June 30, 2025) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Contracted gross floor area (thousand sq.m.) | 50,892 | 45,912 | | Gross floor area under management (thousand sq.m.) | 49,586 | 43,956 | | Number of properties under management | 391 | 326 | Gross Floor Area Under Management by Property Type (As of June 30, 2025) | Property Type | June 30, 2025 (thousand sq.m.) | Proportion (%) | June 30, 2024 (thousand sq.m.) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Residential properties | 21,100 | 42.6 | 18,582 | 42.3 | | Public properties, hospitals, educational properties and others | 18,506 | 37.3 | 15,379 | 35.0 | | Office buildings | 8,319 | 16.8 | 8,419 | 19.2 | | Retail commercial buildings and hotels | 461 | 0.9 | 376 | 0.9 | | Integrated complexes | 1,200 | 2.4 | 1,200 | 2.7 | | Total | 49,586 | 100 | 43,956 | 100 | Gross Floor Area Under Management by Revenue Model (As of June 30, 2025) | Revenue Model | June 30, 2025 (thousand sq.m.) | Proportion (%) | June 30, 2024 (thousand sq.m.) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Lump sum basis | 45,143 | 91.0 | 39,875 | 90.7 | | Remuneration basis | 4,443 | 9.0 | 4,081 | 9.3 | | Total | 49,586 | 100 | 43,956 | 100 | Gross Floor Area Under Management by Property Developer (As of June 30, 2025) | Property Developer | June 30, 2025 (thousand sq.m.) | Proportion (%) | June 30, 2024 (thousand sq.m.) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Developed by Financial Street associates | 20,976 | 42.3 | 20,066 | 45.7 | | Developed by independent third parties | 28,610 | 57.7 | 23,890 | 54.3 | | Total | 49,586 | 100 | 43,956 | 100 | Value-Added Services The Group's value-added services comprise six segments: operational services, consulting services, asset operation, resource management, customized services, and other income, with its proprietary brand "IZEE" and the "Financial Street Property Life Online" platform enhancing smart operations and customer engagement - The Group's value-added services primarily consist of six segments: operational services, consulting services, asset operation, resource management, customized services, and other income[59] - The Group has created its own value-added service brand "IZEE," covering real estate brokerage, lifestyle services, business support, and other series of services[59] - The "Financial Street Property Life Online" platform has been established and continuously improved to enable smart operations and value-added service functions, strengthen value-added service touchpoints, enhance the connection between property services and value-added services, and continuously innovate service content around diverse customer needs to increase customer stickiness[59] Future Outlook The Group will continue to prioritize service, consolidate its core strengths in business office and public construction sectors, focus on core first- and second-tier city clusters, and strengthen market expansion, while enhancing service quality through refined operations and exploring unique value-added service systems for business formats to promote long-term stable development - The Group will always adhere to service as its foundation, continuously consolidate and deepen its core strengths in the business office and public construction sectors, further focus on core first- and second-tier city clusters, and strengthen market expansion efforts[60] - The Group will further solidify service quality through refined operations, standard enhancement, and process optimization, effectively improving customer satisfaction and recognition, thereby building a solid foundation for development[60] - The Group will explore and build a unique and competitive value-added service system for business formats, comprehensively enhancing its overall competitiveness and promoting the long-term healthy and stable development of the enterprise[60] Financial Review This section analyzes the company's H1 2025 financial performance, noting a 16.92% revenue increase driven by property management services, but a decline in catering revenue, increased cost of sales and services leading to lower gross margins, higher administrative and income tax expenses, and a slight decrease in profit and total comprehensive income, while maintaining a stable liquidity position Revenue The Group's revenue increased by approximately 16.92% from RMB 813.69 million in H1 2024 to RMB 951.38 million in H1 2025, with property management service revenue growing 21.10% and value-added service revenue growing 4.21%, but catering service revenue decreased 4.54% and leasing service revenue decreased 11.86% - The Group's revenue increased by approximately 16.92% from approximately RMB 813.69 million for the six months ended June 30, 2024, to approximately RMB 951.38 million for the six months ended June 30, 2025[61] Revenue by Service Type (For the six months ended June 30) | Service Type | 2025 (RMB thousand) | Proportion (%) | 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property management services | 765,341 | 80.45% | 631,968 | 77.67% | +21.10% | | Value-added services | 153,653 | 16.15% | 147,446 | 18.12% | +4.21% | | Leasing services | 4,088 | 0.43% | 4,638 | 0.57% | -11.86% | | Catering services | 28,295 | 2.97% | 29,642 | 3.64% | -4.54% | | Total | 951,377 | 100% | 813,694 | 100% | +16.92% | - Revenue from property management and related services maintained growth, benefiting from an increase in managed projects[62] - The decrease in catering service revenue resulted from optimizing the catering business model[62] Cost of Sales and Services The Group's cost of sales and services increased by approximately 19.98% from RMB 685.83 million in H1 2024 to RMB 822.84 million in H1 2025, primarily due to business expansion - The Group's cost of sales and services increased by approximately 19.98% from approximately RMB 685.83 million for the six months ended June 30, 2024, to approximately RMB 822.84 million for the six months ended June 30, 2025[63] - Costs increased with business expansion[63] Gross Profit The Group's overall gross profit slightly increased by 0.52% to RMB 128.54 million, but the overall gross profit margin decreased from 15.71% to 13.51%, primarily due to market conditions and increased competitive pressure, with declines in both commercial and non-commercial property gross margins - The Group's overall gross profit increased by approximately 0.52% from approximately RMB 127.87 million for the six months ended June 30, 2024, to approximately RMB 128.54 million for the six months ended June 30, 2025[64] - The overall gross profit margin was approximately 13.51%, a decrease compared to the overall gross profit margin of 15.71% for the six months ended June 30, 2024, as gross profit margins continued to be under pressure due to market conditions and increased competitive pressure[64] Gross Profit and Gross Profit Margin by Service Type (For the six months ended June 30) | Service Type | 2025 Gross Profit (RMB thousand) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousand) | 2024 Gross Profit Margin (%) | Gross Profit Margin Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial properties | 94,127 | 21.00 | 96,162 | 22.57 | (1.57) | | Non-commercial properties | 34,731 | 7.31 | 34,065 | 9.52 | (2.21) | | Catering services | (323) | (1.14) | (2,362) | (7.97) | 6.83 | | Total | 128,535 | 13.51 | 127,865 | 15.71 | (2.20) | Administrative Expenses The Group's administrative expenses increased by approximately 12.32% from RMB 37.98 million in H1 2024 to RMB 42.66 million in H1 2025, primarily due to the expansion of business scale - The Group's administrative expenses increased by approximately 12.32% from approximately RMB 37.98 million for the six months ended June 30, 2024, to approximately RMB 42.66 million for the six months ended June 30, 2025[65] - Administrative expenses increased with the expansion of business scale[65] Income Tax Expense The Group's income tax expense increased from approximately RMB 20.85 million in H1 2024 to RMB 22.17 million in H1 2025, primarily due to the combined effect of varying applicable tax rates for different companies and tax adjustments - The Group's income tax expense increased from approximately RMB 20.85 million for the six months ended June 30, 2024, to approximately RMB 22.17 million for the six months ended June 30, 2025[66] - Despite largely stable total profit, income tax expense slightly increased due to the combined effect of varying applicable tax rates for different companies and tax adjustments[66] Profit for the Period The Group's profit for the period decreased by approximately 1.71% from RMB 71.35 million in H1 2024 to RMB 70.13 million in H1 2025, primarily due to market conditions, rigid cost increases, and declining gross margins leading to reduced profitability - The Group's profit decreased by approximately 1.71% from approximately RMB 71.35 million for the six months ended June 30, 2024, to approximately RMB 70.13 million for the six months ended June 30, 2025[67] - Profitability decreased due to market conditions, rigid cost increases, and declining gross margins[67] Total Comprehensive Income for the Period The Group's total comprehensive income for the period decreased by approximately 4.40% from RMB 71.57 million in H1 2024 to RMB 68.42 million in H1 2025, primarily due to exchange losses on the translation of foreign currency financial statements - The Group's total comprehensive income decreased by approximately 4.40% from approximately RMB 71.57 million for the six months ended June 30, 2024, to approximately RMB 68.42 million for the six months ended June 30, 2025[68] - This change was due to exchange losses on the translation of foreign currency financial statements[68] Liquidity, Capital Structure and Financial Resources As of June 30, 2025, the Group's cash and bank balances were approximately RMB 1,603.17 million, a slight decrease, while net current assets remained stable, with a current ratio of approximately 2.13 times, indicating a sound financial position and no borrowings - As of June 30, 2025, the Group's cash and bank balances were approximately RMB 1,603.17 million, a decrease of approximately RMB 36.04 million compared to approximately RMB 1,639.21 million as of December 31, 2024[69] - The Group's financial position remained sound, with net current assets of approximately RMB 1,151.26 million and a current ratio of approximately 2.13 times (December 31, 2024: approximately 2.31 times)[69] - As of June 30, 2025, the Group had no borrowings (December 31, 2024: nil)[70] Bills Receivable and Trade Receivables and Other Financial Assets Measured at Amortised Cost As of June 30, 2025, bills receivable and trade receivables increased by 32.52% to RMB 458.03 million, primarily due to expanded gross floor area under management, while other financial assets measured at amortised cost increased by approximately RMB 75.07 million to RMB 155.78 million, mainly due to finance lease receivables from asset operation businesses - As of June 30, 2025, the Group's bills receivable and trade receivables were approximately RMB 458.03 million, an increase of 32.52% compared to approximately RMB 345.64 million as of December 31, 2024, mainly due to the increase in trade receivables from property management services resulting from the increase in total gross floor area under management; and trade receivables not yet due for collection[71] - As of June 30, 2025, the Group's total other financial assets measured at amortised cost were approximately RMB 155.78 million, an increase of approximately RMB 75.07 million compared to approximately RMB 80.71 million as of December 31, 2024, mainly due to finance lease receivables arising from undertaking asset operation businesses[72] Trade and Other Payables As of June 30, 2025, trade payables increased by 17.98% to RMB 289.14 million due to business expansion, salaries and welfare payables increased by 9.54% to RMB 111.99 million due to bonus accruals, and other payables slightly increased by 0.81% to RMB 326.35 million - As of June 30, 2025, the Group's trade payables balance was approximately RMB 289.14 million, an increase of approximately 17.98% compared to approximately RMB 245.07 million as of December 31, 2024, mainly due to the expansion of business operations[73] - As of June 30, 2025, the Group's salaries and welfare payables were approximately RMB 111.99 million, an increase of 9.54% compared to approximately RMB 102.24 million as of December 31, 2024, mainly due to the accrual of bonuses during the reporting period[73] - Other payables increased by approximately 0.81% from approximately RMB 323.72 million as of December 31, 2024, to approximately RMB 326.35 million as of June 30, 2025, mainly due to normal business fluctuations[73] Use of Proceeds from Listing The Company's net proceeds from listing were approximately RMB 648.36 million, with the Board resolving to reallocate the unused portion to support market expansion, joint ventures, and mergers and acquisitions; as of June 30, 2025, RMB 191.49 million had been utilized, with the remaining RMB 456.87 million expected to be fully utilized by December 31, 2026 - The net proceeds from the listing were approximately HKD 710.48 million (equivalent to approximately RMB 648.36 million)[74] - The Board resolved to change the use of the unutilized portion of the net proceeds to provide sufficient financial support for continuous market expansion, joint ventures, and investment in mergers and acquisitions[74] Analysis of Use of Net Proceeds from Listing (As of June 30, 2025) | Use | Net Proceeds after Reallocation (RMB million) | Actual Utilized as of June 30, 2025 (RMB million) | Utilized during Reporting Period (RMB million) | Unutilized as of June 30, 2025 (RMB million) | Expected Timeline for Full Utilization of Remaining Balance | | :--- | :--- | :--- | :--- | :--- | :--- | | Seeking strategic acquisition and investment opportunities and establishing new branches and subsidiaries to expand the Group's business scale | 517.87 | 142.89 | 0.16 | 374.98 | On or before December 31, 2026 | | Developing the Group's value-added service business | 49.12 | 40.63 | — | 8.49 | On or before December 31, 2026 | | Construction and upgrade of information technology and smart facility systems | 16.53 | 7.97 | 0.33 | 8.56 | On or before December 31, 2026 | | The Group's working capital and general corporate purposes | 64.84 | — | — | 64.84 | On or before December 31, 2026 | | Total | 648.36 | 191.49 | 0.49 | 456.87 | | Pledge of Assets As of June 30, 2025, the Group had no assets pledged - As of June 30, 2025, the Group had no assets pledged (December 31, 2024: nil)[77] Material Acquisitions and Disposals of Assets For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of assets - For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of assets[78] Material Investments Held, Disposals and Future Plans for Material Investments in Capital Assets For the six months ended June 30, 2025, the Group had no material investments, disposals, or additions to capital assets, nor any related plans - For the six months ended June 30, 2025, the Group had no material investments, disposals, or additions to capital assets, nor any related plans[79] Gearing Ratio As of June 30, 2025, the Group's gearing ratio was 0.45, an increase from 0.41 as of December 31, 2024, with the capital gearing ratio not applicable due to the absence of interest-bearing borrowings - As of June 30, 2025, our gearing ratio was 0.45, compared to 0.41 as of December 31, 2024[80] - As of June 30, 2025, and December 31, 2024, the Group had no interest-bearing borrowings, thus the capital gearing ratio is not applicable[80] Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities (December 31, 2024: nil)[81] Financial Policy The Group adopts a prudent financial management approach, closely monitoring its liquidity position to ensure that the liquidity structure of its assets, liabilities, and commitments meets funding requirements - The Group adopts a prudent financial management approach and has maintained a sound liquidity position throughout the year[82] - The Board closely monitors the Group's liquidity position to ensure that the liquidity structure of the Group's assets, liabilities, and commitments can meet its funding requirements at all times[82] Foreign Exchange Risk and Other Risks Operating primarily in China and Hong Kong with transactions in RMB and HKD, the Group faces foreign exchange risk and currently has no hedging policy but monitors and considers hedging; the property management industry is also exposed to macroeconomic and real estate market uncertainties and intense competition, which the Group mitigates by enhancing service quality - The Group's business is primarily conducted in RMB and HKD, with foreign exchange risk arising from foreign currency deposit accounts and commercial transactions, recognized assets, and liabilities denominated in HKD[83] - The Group currently has no foreign currency hedging policy, but management closely monitors these risks and considers hedging significant foreign currency exposures when necessary[83] - The property management industry is closely related to China's macroeconomic development and the real estate industry, and the Group may be affected by uncertainties in the aforementioned external environment; facing intense market competition, the Group continuously strengthens service quality and enhances its competitiveness to minimize the impact of such external risks on its business[84] Employees and Welfare Policy As of June 30, 2025, the Group employed 5,283 staff, with remuneration based on performance, skills, knowledge, experience, and market trends, supplemented by discretionary bonuses and training programs to enhance skills and productivity - As of June 30, 2025, the Group employed 5,283 staff[85] - Employee remuneration is determined based on employee performance, skills, knowledge, experience, and market trends; the Group regularly reviews its remuneration policies and schemes and makes necessary adjustments to align them with industry remuneration levels[85] - The Group provides training to its employees to equip new staff with basic skills to perform their duties and to enhance or improve their production techniques[85] Other Information This section covers significant corporate governance and compliance information for the reporting period and post-reporting period, including changes in the Board composition, amendments to the Articles of Association, changes in joint company secretaries, trading of listed securities, compliance with corporate governance and securities dealing codes, and the work of the audit committee Significant Matters During the reporting period, the Board composition changed with Ms. Lv Min elected as an employee representative Director, several Directors retired or were re-elected/appointed, the Articles of Association were amended and approved by shareholders, and Mr. Chen Xi resigned as joint company secretary, with Ms. Zhang Jing appointed - Ms. Lv Min was elected as an employee representative Director of the Company, effective from the date of the annual general meeting on June 5, 2025; Ms. Xue Rui, Ms. Hu Yuxia, and Mr. Li Liang retired as Directors[86] - Mr. Sun Jie and Mr. Song Ronghua were re-elected as executive Directors, Mr. Guo Mingming was re-elected as a non-executive Director, Mr. Song Baocheng, Ms. Tong Yan, and Ms. Lu Qing were re-elected as independent non-executive Directors, and Mr. Meng Chunying and Mr. Han Fengxiang were appointed as non-executive Directors[86] - Certain provisions of the Articles of Association were amended and approved by shareholders at the annual general meeting held on June 5, 2025[87] - Mr. Chen Xi resigned as joint company secretary of the Company, effective June 5, 2025, and Ms. Zhang Jing was appointed as joint company secretary on the same day[88] Events After the Reporting Period The Group had no other significant events after the reporting period - The Group had no other significant events after the reporting period[89] Purchase, Sale or Redemption of the Company's Listed Securities or Redeemable Securities For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and no treasury shares were held as of that date - For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities at any time[90] - As of June 30, 2025, the Company held no treasury shares[90] Compliance with Corporate Governance Code The Company is committed to high standards of corporate governance to address stakeholder needs and promote sustainable development, having complied with the Code Provisions of Appendix C1 "Corporate Governance Code" of the Listing Rules throughout the reporting period - The Board is committed to achieving high standards of corporate governance to address the needs of the Group's stakeholders, build their confidence in the Group, and enable the Group's sustainable development[91] - During the reporting period, the Company has complied with the Code Provisions set out in Appendix C1 "Corporate Governance Code" of the Listing Rules[92] Compliance with Securities Dealing Code The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all Directors and Supervisors have confirmed compliance with the Model Code during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules as the code of conduct and rules governing securities transactions by all Directors and Supervisors of the Company[93] - Following specific enquiries made to all Directors and Supervisors, they have confirmed that they have complied with the required standards set out in the Model Code during the period from January 1, 2025, and up to the date of their retirement as Supervisors (as the case may be) or June 30, 2025 (as the case may be)[93] Audit Committee The Audit Committee, comprising three members with Ms. Tong Yan as Chair, has reviewed the unaudited interim results and interim report for the six months ended June 30, 2025, which were also reviewed by the independent auditor, Grant Thornton Hong Kong Limited - The Audit Committee comprises three members, namely Ms. Tong Yan (Independent Non-executive Director), Mr. Guo Mingming (Non-executive Director), and Mr. Song Baocheng (Independent Non-executive Director); Ms. Tong Yan is the Chair of the Audit Committee[94] - The Audit Committee has reviewed the unaudited interim results and interim report for the six months ended June 30, 2025[94] - The Company's independent auditor, Grant Thornton Hong Kong Limited, has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants[94] Interim Dividend The Board 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 (for the six months ended June 30, 2024: nil)[95] Publication of Interim Results and Interim Report This announcement has been published on the HKEX website and the Company's website; the interim report containing all applicable Listing Rules requirements will be dispatched to shareholders and published on the aforementioned websites in due course - This announcement is available on the HKEX website (http://www.hkexnews.hk) and the Company's website (http://www.jrjlife.com)[96](index=96&type=chunk) - The Company's interim report for the six months ended June 30, 2025, containing all information required by the applicable Listing Rules, will be dispatched to shareholders who have indicated their wish to receive printed versions of company communications and published on the aforementioned websites in due course[96] Acknowledgements Chairman Sun Jie, on behalf of the Board, expresses gratitude to all colleagues for their diligent work, dedication, and integrity, and thanks shareholders, customers, banks, and other parties for their trust and support - Chairman Sun Jie, on behalf of the Board, expresses gratitude to all colleagues for their diligent work, dedication, and integrity[97] - Appreciation is extended to all shareholders, customers, banks, and other parties for their friendly trust and support[97] Board Members As of the date of this announcement, the Board of Directors includes Executive Directors Mr. Sun Jie and Mr. Song Ronghua; Non-executive Directors Mr. Meng Chunying, Mr. Han Fengxiang, and Mr. Guo Mingming; Independent Non-executive Directors Mr. Song Baocheng, Ms. Tong Yan, and Ms. Lu Qing; and Employee Representative Director Ms. Lv Min - As of the date of this announcement, the Board of Directors comprises Executive Directors Mr. Sun Jie and Mr. Song Ronghua; Non-executive Directors Mr. Meng Chunying, Mr. Han Fengxiang, and Mr. Guo Mingming; Independent Non-executive Directors Mr. Song Baocheng, Ms. Tong Yan, and Ms. Lu Qing; and Employee Representative Director Ms. Lv Min[98]