禹洲集团(01628) - 2025 - 中期业绩

Financial Highlights Yuzhou Group's H1 2025 unaudited results show a 14.21% decline in contracted sales to RMB 3.72851 billion and a 62.42% revenue drop to RMB 2.39652 billion, while loss attributable to owners of the parent narrowed by 9.97% to RMB 5.63206 billion 2025 H1 Key Financial Indicators Comparison | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Contracted Sales | 3,728,510 | 4,346,239 | -14.21 | | Revenue | 2,396,521 | 6,377,536 | -62.42 | | Loss attributable to owners of the parent | (5,632,062) | (6,255,983) | 9.97 (loss narrowed) | Condensed Consolidated Financial Statements This section presents Yuzhou Group's condensed consolidated income statement, statement of comprehensive income, and statement of financial position for the six months ended June 30, 2025, revealing significant revenue decline, continued losses, and increased net current liabilities and net liabilities, reflecting severe operational and financial pressures Condensed Consolidated Income Statement For H1 2025, Yuzhou Group's revenue decreased by 62.42% to RMB 2.39652 billion, gross profit significantly narrowed to RMB 22.55 million, and loss for the period was RMB 7.39153 billion, impacted by increased fair value losses on investment properties and administrative expenses Condensed Consolidated Income Statement Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,396,521 | 6,377,536 | -62.42 | | Cost of sales | (2,373,971) | (6,269,505) | -62.13 | | Gross profit | 22,550 | 108,031 | -79.13 | | Net fair value loss on investment properties | (727,389) | (346,271) | 110.07 | | Administrative expenses | (684,847) | (201,699) | 239.55 | | Write-down of properties held for sale and properties under development to net realisable value | (2,923,061) | (3,300,538) | -11.44 | | Loss before tax | (7,578,223) | (7,890,109) | 3.95 (loss narrowed) | | Loss for the period | (7,391,533) | (8,012,801) | 7.75 (loss narrowed) | | Loss attributable to owners of the parent | (5,632,062) | (6,255,983) | 9.97 (loss narrowed) | | Basic loss per share (RMB cents) | (88.28) | (97.79) | 9.72 (loss narrowed) | Condensed Consolidated Statement of Comprehensive Income For H1 2025, Yuzhou Group's total comprehensive loss narrowed to RMB 7.29357 billion from RMB 8.31998 billion in the prior year, primarily due to a positive shift in exchange differences from overseas operations Condensed Consolidated Statement of Comprehensive Income Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (7,391,533) | (8,012,801) | 7.75 (loss narrowed) | | Exchange differences on translation of overseas operations | 97,959 | (307,178) | 131.89 (from loss to gain) | | Total comprehensive loss for the period | (7,293,574) | (8,319,979) | 12.34 (loss narrowed) | | Total comprehensive loss attributable to owners of the parent | (5,534,103) | (6,563,161) | 15.68 (loss narrowed) | Condensed Consolidated Statement of Financial Position As of June 30, 2025, Yuzhou Group's total non-current and current assets declined, with net current liabilities and net liabilities worsening, and capital deficiency expanding to RMB 19.44661 billion, indicating severe liquidity and solvency pressures Condensed Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 19,592,612 | 20,891,513 | -6.22 | | Total current assets | 54,944,885 | 62,175,342 | -11.63 | | Properties under development | 13,526,029 | 18,112,748 | -25.32 | | Prepayments, other receivables and other assets | 22,452,918 | 24,856,097 | -9.67 | | Total current liabilities | 85,698,233 | 85,976,898 | -0.32 | | Net current liabilities | (30,753,348) | (23,801,556) | 29.21 (deterioration) | | Net liabilities | (19,446,614) | (11,735,686) | 65.71 (deterioration) | | Equity attributable to owners of the parent | (18,214,103) | (12,547,450) | 45.16 (deterioration) | | Capital deficiency | (19,446,614) | (11,735,686) | 65.71 (deterioration) | Notes This section details Yuzhou Group's financial statement preparation, accounting policies, revenue and expense components, segment information, and key financial liabilities, highlighting ongoing operational challenges, including senior note defaults, increased net current liabilities and net liabilities, and implemented debt restructuring and operational measures - The Group's condensed consolidated financial statements are prepared on a going concern basis, despite having defaulted on senior notes, with all senior notes reclassified as current liabilities[13] - As of June 30, 2025, the Group's total principal of interest-bearing bank and other borrowings, corporate bonds, and senior notes amounted to RMB 51.971635 billion, while cash and cash equivalents were only RMB 1.29684 billion[13] - The Group has formulated and implemented multiple measures to alleviate cash flow pressure, including an offshore debt restructuring plan (effective August 29, 2025), promoting sales to reduce inventory, ensuring project delivery, asset disposal, continuous cash flow monitoring, and implementing cost controls[13][17] Company and Group Information Yuzhou Group Holdings Company Limited, a Cayman Islands-incorporated entity listed on the HKEX, primarily engages in property development, investment, management, and hotel operations in mainland China and Hong Kong, with Mr. Lam Lung On and Ms. Kwok Ying Lan as controlling shareholders - Company's main businesses include property development, property investment, property management, and hotel operations, primarily in mainland China and Hong Kong[11] - Mr. Lam Lung On and Ms. Kwok Ying Lan are the controlling shareholders of the Company[12] Basis of Presentation and Preparation The Group's condensed consolidated financial statements are prepared on a going concern basis, despite senior note defaults and severe liquidity challenges, with an offshore debt restructuring plan implemented and measures taken to ensure sufficient working capital for at least the next 12 months Basis of Presentation The Group's condensed consolidated financial statements are prepared on a going concern basis, despite facing senior note defaults and significant increases in net current liabilities and net liabilities, with an offshore debt restructuring plan implemented and measures taken to ensure sufficient working capital for the next 12 months - The Group failed to pay principal and interest on certain senior notes when due and after the expiry of the relevant grace periods, resulting in default events, with all senior notes reclassified as current liabilities[13] 2025 June 30 Key Financial Position | Indicator | Amount (RMB thousand) | | :--- | :--- | | Total principal of interest-bearing bank and other borrowings, corporate bonds, and senior notes | 51,971,635 | | Cash and cash equivalents | 1,296,840 | | Loss attributable to owners of the parent | (5,632,062) | | Net current liabilities | (30,753,348) | | Net liabilities | (19,446,614) | - The Group has formulated and implemented multiple measures to alleviate cash flow pressure, including an offshore debt restructuring plan (effective August 29, 2025), which will replace original debts with short-term notes, cash consideration, medium-term notes, new equity, and long-term notes[13] Basis of Preparation The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and HKEX Listing Rules Appendix D2, using consistent accounting policies and methods as the 2024 annual financial statements, except for changes due to amendments to HKFRS accounting standards - The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and the applicable disclosure requirements of Appendix D2 of the HKEX Listing Rules[15] - Accounting policies remain consistent with the 2024 annual financial statements, except for changes due to amendments to HKFRS accounting standards[15] Application of Amendments to HKFRS Accounting Standards During this interim period, the Group first applied amendments to HKAS 21 "Lack of Exchangeability," which became effective on January 1, 2025, but these amendments did not significantly alter the Group's accounting policies, financial position, or performance presentation or disclosure - The Group first applied amendments to HKAS 21 "Lack of Exchangeability", effective January 1, 2025[16] - The amendments did not result in significant changes to the Group's accounting policies, financial position, and performance presentation and/or disclosure[16] Revenue, Other Income and Gains For H1 2025, Yuzhou Group's total revenue significantly decreased by 62.42% to RMB 2.39652 billion, primarily due to a 64.52% drop in property sales revenue, while other income and gains also declined by 38.09% due to reduced bank interest income Revenue, Other Income and Gains Analysis (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | | | | | Property sales | 2,174,382 | 6,128,391 | -64.52 | | Rental income from investment properties | 116,897 | 122,619 | -4.67 | | Property management fee income | 105,234 | 125,423 | -16.09 | | Hotel operation income | 8 | 1,103 | -99.27 | | Total Revenue | 2,396,521 | 6,377,536 | -62.42 | | Other income and gains | | | | | Bank interest income | 13,834 | 27,398 | -49.51 | | Others | 5,797 | 4,310 | 34.50 | | Total Other Income and Gains | 19,631 | 31,708 | -38.09 | Operating Segment Information Yuzhou Group's operating segments include property development, property investment, property management, hotel operations, and others; in H1 2025, property development and investment incurred significant losses, with only property management achieving profitability, and over 90% of external customer revenue and segment assets originating from mainland China - The Group is divided into five reportable operating segments: property development, property investment, property management, hotel operations, and others[19][20] Segment Revenue and Results (Six Months Ended June 30) | Segment | 2025 Segment Revenue (RMB thousand) | 2025 Segment Results (RMB thousand) | 2024 Segment Revenue (RMB thousand) | 2024 Segment Results (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Property development | 2,179,662 | (5,122,374) | 6,131,727 | (5,849,235) | | Property investment | 117,351 | (619,394) | 123,250 | (291,290) | | Property management | 105,287 | 33,945 | 125,440 | 117,917 | | Hotel operations | 8 | (162) | 1,103 | 954 | | Others | 10 | (9,860) | 326 | 2,331 | | Total | 2,402,318 | (5,717,845) | 6,381,846 | (6,019,323) | - Over 90% of the Group's external customer revenue and segment assets are from mainland China, thus no geographical information is presented[23] Finance Costs For H1 2025, Yuzhou Group's finance costs slightly decreased by 1.26% to RMB 1.87421 billion, primarily due to reduced total interest on interest-bearing bank and other borrowings, corporate bonds, and senior notes, alongside a decrease in capitalized interest Finance Costs Analysis (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on interest-bearing bank and other borrowings, corporate bonds and senior notes | 2,062,908 | 2,132,214 | -3.25 | | Less: Capitalized interest | (188,696) | (234,030) | -19.37 | | Total Finance Costs | 1,874,212 | 1,898,184 | -1.26 | Loss Before Tax For H1 2025, Yuzhou Group's loss before tax narrowed to RMB 7.57822 billion, primarily influenced by cost of properties sold, cost of services provided, depreciation, employee benefit expenses, and direct operating expenses from investment properties earning rental income Loss Before Tax Components (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of properties sold | 2,306,839 | 6,185,653 | -62.69 | | Cost of services provided | 67,132 | 79,071 | -15.09 | | Depreciation | 25,342 | 25,945 | -2.32 | | Employee benefit expenses (net) | 64,681 | 63,473 | 1.90 | | Direct operating expenses from investment properties earning rental income | 7,387 | 6,016 | 22.79 | | Fair value loss on financial assets at fair value through profit or loss | – | 55,792 | -100.00 | | Impairment of goodwill | – | 65,963 | -100.00 | Income Tax For H1 2025, Yuzhou Group recorded an income tax credit of RMB 186.69 million, a shift from an income tax expense of RMB 122.69 million in the prior year, primarily due to a decrease in deferred tax liabilities and a reduction from over-provision in prior years Income Tax (Credit)/Expense Analysis (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Current: PRC corporate income tax | 108,375 | 103,346 | 5,029 | | Current: Over-provision in prior years | (80,774) | (78,718) | (2,056) | | Current: PRC land appreciation tax | 18,120 | 11,354 | 6,766 | | Deferred: For the period | (232,411) | 86,710 | (319,121) | | Total Tax (Credit)/Expense for the period | (186,690) | 122,692 | (309,382) | - No provision for Hong Kong profits tax was made due to no assessable profits for the period[29] Dividends The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, and 2024 - The Board does not recommend the payment of an interim dividend for H1 2025 and 2024[31] Loss Per Share Attributable to Ordinary Equity Holders of the Parent For H1 2025, Yuzhou Group's basic and diluted loss per share both narrowed to RMB 0.8828, from RMB 0.9779 in the prior year, calculated based on loss attributable to owners of the parent (adjusted for distributions on senior perpetual securities) and the weighted average number of ordinary shares outstanding Loss Per Share Calculation Data (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss attributable to owners of the parent for the period | (5,632,062) | (6,255,983) | | Distributions on senior perpetual securities | (135,503) | (133,044) | | Loss used in calculating basic and diluted loss per share | (5,767,565) | (6,389,027) | | Basic and diluted loss per share (RMB cents) | (88.28) | (97.79) | Number of Shares (Six Months Ended June 30) | Item | 2025 (Shares) | 2024 (Shares) | | :--- | :--- | :--- | | Weighted average number used in calculating basic loss per share | 6,533,584,996 | 6,533,584,996 | | Weighted average number used in calculating diluted loss per share | 6,533,584,996 | 6,533,584,996 | Trade Payables As of June 30, 2025, Yuzhou Group's total trade payables decreased to RMB 7.33214 billion from RMB 7.96000 billion at end-2024, with the largest portion due within 1 year, and all trade payables being non-interest-bearing and unsecured Trade Payables Ageing Analysis (As of June 30) | Ageing | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 4,116,582 | 4,784,145 | | 1 to 2 years | 3,215,562 | 3,175,858 | | Total | 7,332,144 | 7,960,003 | - Trade payables are non-interest-bearing and unsecured[35] Corporate Bonds As of June 30, 2025, Yuzhou Group's total corporate bonds amounted to RMB 2.839 billion, with RMB 269.75 million classified as current liabilities; the Group has adjusted coupon rates and extended maturity dates for multiple corporate bonds to alleviate repayment pressure and repaid part of the principal Corporate Bonds Balance and Classification (As of June 30) | Item | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Corporate bonds due in 2024 | 1,075,000 | 1,075,000 | | Corporate bonds due in 2025 | 1,764,000 | 1,800,000 | | Total | 2,839,000 | 2,875,000 | | Portion classified as current liabilities | (269,750) | (900,000) | | Non-current liabilities | 2,569,250 | 1,975,000 | - The 6.5% corporate bonds issued in 2019 have been approved for maturity extension, with principal to be settled in installments in April 2026, October 2026, and 2027[36] - The 6.5% corporate bonds Series Two and Three issued in 2020 have been approved for maturity extension, with principal to be settled in installments from July 2025 to 2028, and coupon rate adjusted to 4% per annum[36][37] Senior Notes As of June 30, 2025, Yuzhou Group's total senior notes amounted to RMB 38.61815 billion, all classified as current liabilities, due to unpaid interest and principal, which constituted an event of default under the senior note agreements Senior Notes Balance (As of June 30) | Item | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Total senior notes | 38,618,153 | 38,789,815 | | Portion classified as current liabilities | (38,618,153) | (38,789,815) | | Non-current portion | – | – | - As of June 30, 2025, the Group had unpaid senior note interest of US$227.328 million (approximately RMB 1.605742 billion) and unpaid senior note principal of US$886 million (approximately RMB 6.258315 billion)[39] - The related unpaid interest or overdue principal has constituted an event of default under the senior note agreements, with all senior notes classified as current liabilities[39] Management Discussion and Analysis This section analyzes Yuzhou Group's H1 2025 market environment, operating performance, and financial position, highlighting significant revenue and gross profit declines, continued losses amid a challenging real estate market, and the Group's proactive marketing adjustments, product optimization, debt restructuring, and cost control measures to address liquidity pressures, while emphasizing regional focus and talent development for long-term sustainability Market and Business Review In H1 2025, China's real estate market continued its downward trend, with TOP-100 developers' contracted sales declining by double digits despite supportive policies; market differentiation intensified, with first-tier and strong second-tier cities showing stronger recovery, while weaker second-tier and third/fourth-tier cities underperformed, and real estate investment decreased by 11.2% year-on-year - In H1 2025, the real estate market experienced a downward trend, with TOP-100 developers' cumulative contracted sales declining by double digits year-on-year[43] - Market differentiation intensified, with first-tier and strong second-tier cities showing stronger recovery, while weaker second-tier and third/fourth-tier cities underperformed[43] H1 2025 Real Estate Investment Amount | Indicator | Amount (RMB) | Year-on-year Change (%) | | :--- | :--- | :--- | | Real estate investment amount | 4.67 trillion | -11.2 | Overall Performance In H1 2025, Yuzhou Group's revenue was RMB 2.39652 billion, with a loss for the period of RMB 7.39153 billion and a capital deficiency of RMB 19.44661 billion, reflecting severe financial challenges, with the Board not recommending an interim dividend 2025 H1 Overall Financial Performance | Indicator | Amount (RMB) | | :--- | :--- | | Revenue | 2.39652 billion | | Loss for the period | 7.39153 billion | | Capital deficiency | 19.44661 billion | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[44] Property Sales In H1 2025, Yuzhou Group's property sales revenue was RMB 2.17438 billion, a significant year-on-year decrease of 64.52%, accounting for 90.73% of total revenue, with approximately 278,399 square meters of properties delivered at an average selling price of RMB 7,810 per square meter, and the Central China region being the primary revenue contributor, as the Group continues to deepen its presence in key regions Property Sales Revenue and Area (H1 2025) | Indicator | H1 2025 | H1 2024 | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Property sales revenue (RMB thousand) | 2,174,382 | 6,128,391 | -64.52 | | Total GFA delivered (sqm) | 278,399 | 442,612 | -37.11 | | Average selling price (RMB/sqm) | 7,810 | 13,846 | -43.60 | - The decrease in property sales revenue was primarily due to a reduction in the area of properties delivered during the period[45] - The Central China, Bohai Rim, and Yangtze River Delta regions were the main contributors to recognized revenue[45] Contracted Sales In H1 2025, Yuzhou Group's cumulative contracted sales amounted to RMB 3.72851 billion, with a contracted sales area of 254,589 square meters and an average selling price of approximately RMB 14,645 per square meter; the Yangtze River Delta and Greater Bay Area were the primary contributors to contracted sales, as the Group actively responded to market downturns by adjusting marketing strategies and expanding customer acquisition channels through digital marketing Contracted Sales Amount and Area (H1 2025) | Indicator | H1 2025 | H1 2024 | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Contracted sales amount (RMB thousand) | 3,728,510 | 4,346,239 | -14.21 | | Contracted sales area (sqm) | 254,589 | 279,311 | -8.85 | | Average contracted selling price (RMB/sqm) | 14,645 | 15,561 | -5.90 | - The Yangtze River Delta region contributed the Group's overall contracted sales of 54.16%, and the Greater Bay Area contributed 25.31%[47] - The Group actively adjusted its marketing strategies, strengthened its "Yuzhou Star Power" streamer matrix, and expanded digital marketing customer acquisition channels through platforms such as WeChat, Weibo, Douyin, and Xiaohongshu[48] Property Investment Yuzhou Group's property investment segment includes "Yuyue" shopping centers and "Yuzhou Plaza" office buildings and commercial streets, with 39 projects across 9 cities, totaling over 1.53 million square meters of commercial area; in 2025, the Group launched its Minnan culture promotion strategy and provides comprehensive business platform services to tenants through its U-Square service system - The property investment segment has three product lines: "Yuyue" shopping centers and "Yuzhou Plaza" office buildings and commercial streets[51] - There are 32 operational projects and 7 projects under preparation, totaling 39 projects, creating over 1.53 million square meters of commercial area[51] - In 2025, the Minnan culture promotion strategy was launched, with "Super New Highlights" as the quarterly theme, hosting diverse cultural events that attracted nearly 10 million participants[52] - Through the U-Square service system, a comprehensive business platform centered on assurance services, warm services, and functional services is built, offering "Yuzhou Professional, Yuzhou Secure, Yuzhou Butler, Yuzhou Colorful, Yuzhou Space, Yuzhou Resources" six major service systems[53] Hotel Operations In H1 2025, Yuzhou Group's hotel business revenue was approximately RMB 8 thousand, a significant year-on-year decrease; the Group continues to optimize its operational management system, enhance service quality and consumer experience, with several hotels under construction, adhering to the service philosophy of "caring for you like family" Hotel Operations Revenue (H1 2025) | Indicator | H1 2025 (RMB ten thousand) | H1 2024 (RMB ten thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Hotel operations revenue | 0.8 | 110.3 | -99.27 | - The Group's hotels adopt diversified and innovative operational management models, focusing on service quality, consumer experience, and customer reputation enhancement[54] - Several hotels, including Xiamen Tong'an Jiamelun Hot Spring Hotel and Quanzhou Hui'an Jiamelun Business Hotel, are currently under construction[54] Quality and Safety and Product Line Design Yuzhou Group adheres to low-carbon and green development principles, with 145 projects totaling over 21 million square meters meeting green building standards as of June 30, 2025; the Group has refined its product system based on the "Yong," "Lang," and "Jia" residential product series, innovating and iterating the "Warm Space" series to provide high-quality, refined living experiences - The Group adheres to low-carbon and green development principles, responding to national "dual carbon" goals by creating green premium projects[55] - As of June 30, 2025, 145 projects totaling over 21 million square meters of properties met green building standards, with approximately 5.55 million square meters achieving Green Building Two-Star rating or above[55] - Based on the "Yong," "Lang," and "Jia" three major residential product series, the product system has been refined, top-level design clarified, and the "Warm Space" series innovated and iterated, built around "1 core, 3 spaces, 5 product propositions, and 6 product values"[56] Land Bank As of June 30, 2025, Yuzhou Group's total land bank had a saleable GFA of approximately 10.35 million square meters, distributed across 161 projects in 38 cities within six major metropolitan areas, with an average floor area cost of approximately RMB 5,943 per square meter, which the Group believes is sufficient for the next two to three years of development needs Land Bank Overview (As of June 30, 2025) | Indicator | Data | | :--- | :--- | | Total saleable GFA | Approximately 10.35 million sqm | | Number of projects | 161 | | Cities covered | 38 | | Average floor area cost | Approximately RMB 5,943/sqm | - The land bank is primarily distributed across six major metropolitan areas: the West Strait Economic Zone, Yangtze River Delta Region, Bohai Rim Region, Central China Region, Greater Bay Area, and Southwest Region[57][58][59] - The Group believes its existing land bank is sufficient for the next two to three years of development needs[57] Financial Performance Analysis This section details the changes in Yuzhou Group's financial indicators for H1 2025, showing significant declines in revenue and gross profit due to reduced property deliveries, a substantial increase in fair value losses on investment properties, and a surge in administrative expenses due to exchange losses, though sales and distribution costs, other expenses, and finance costs decreased, with the Group's loss for the period primarily impacted by impairment provisions, fair value losses, and reduced revenue Revenue In H1 2025, Yuzhou Group's total revenue was RMB 2.39652 billion, a year-on-year decrease of 62.42%, primarily due to reduced recognized property sales revenue from fewer delivered properties; property sales revenue accounted for 90.73% of total revenue, decreasing by 64.52% year-on-year Revenue Composition and Change (H1 2025) | Revenue Source | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Property sales | 2,174,382 | 6,128,391 | -64.52 | | Property management fee income | 105,234 | 125,423 | -16.10 | | Rental income from investment properties | 116,900 | 122,619 | -4.67 | | Hotel operation income | 8 | 1,103 | -99.27 | | Total Revenue | 2,396,521 | 6,377,536 | -62.42 | Cost of Sales In H1 2025, Yuzhou Group's cost of sales was RMB 2.37397 billion, a year-on-year decrease of 62.13%, primarily due to a reduction in the gross floor area of properties delivered during the period; cost of sales mainly included land costs, construction costs, capitalized interest, and fair value adjustments of properties Cost of Sales Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 2,373,971 | 6,269,505 | -62.13 | - The decrease in cost of sales was primarily due to a reduction in the gross floor area of properties delivered during the period[61] Gross Profit and Gross Profit Margin In H1 2025, Yuzhou Group's gross profit was RMB 22.55 million, with a gross profit margin of 0.94%, both significantly declining primarily due to a reduction in the gross floor area of properties delivered during the period Gross Profit and Gross Profit Margin Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 22,550 | 108,031 | -79.13 | | Gross profit margin | 0.94% | 1.70% | -44.71 (decrease) | - The decrease in gross profit was primarily due to a reduction in the gross floor area of properties delivered during the period[62] Fair Value Loss on Investment Properties In H1 2025, Yuzhou Group recorded a fair value loss on investment properties of RMB 727.39 million, a significant increase of 110.07% from RMB 346.27 million in the prior year, primarily from investment properties located in Xiamen, Hefei, and Shenzhen Fair Value Loss on Investment Properties Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Fair value loss on investment properties | (727,389) | (346,271) | 110.07 (loss widened) | - The loss was primarily due to fair value losses on investment properties located in Xiamen, Hefei, and Shenzhen[63] Other Income and Gains In H1 2025, Yuzhou Group's other income and gains amounted to RMB 19.63 million, a year-on-year decrease of 38.09%, primarily due to reduced bank interest income Other Income and Gains Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 19,631 | 31,708 | -38.09 | - The decrease was primarily due to reduced bank interest income[64] Selling and Distribution Costs In H1 2025, Yuzhou Group's selling and distribution costs were RMB 73.08 million, a year-on-year decrease of 46.17%, primarily attributable to effective cost control measures and reduced marketing and promotion expenses Selling and Distribution Costs Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution costs | 73,083 | 135,754 | -46.17 | - The decrease was primarily due to effective cost control measures and marketing and promotion expenses reduction[65] Administrative Expenses In H1 2025, Yuzhou Group's administrative expenses were RMB 684.85 million, a significant year-on-year increase of 239.55%, primarily due to increased exchange losses during the period Administrative Expenses Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 684,847 | 201,699 | 239.55 | - The increase was primarily due to increased exchange losses during the period[66] Other Expenses In H1 2025, Yuzhou Group's other expenses were RMB 26.64 million, a significant year-on-year decrease of 85.72%, primarily due to reduced impairment of goodwill and fair value losses on financial assets at fair value through profit or loss Other Expenses Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Other expenses | 26,643 | 186,430 | -85.72 | - The decrease was primarily due to reduced impairment of goodwill and fair value losses on financial assets at fair value through profit or loss[67] Finance Costs In H1 2025, Yuzhou Group's finance costs were RMB 1.87421 billion, a year-on-year decrease of 1.26%, primarily due to a reduction in domestic loan amounts Finance Costs Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 1,874,212 | 1,898,184 | -1.26 | - The decrease was primarily due to a reduction in domestic loan amounts[68] Share of Profits and Losses of Joint Ventures In H1 2025, Yuzhou Group's share of losses of joint ventures was RMB 285.27 million, a shift from a share of profits of RMB 45.07 million in the prior year; joint ventures' total revenue was RMB 282.25 million, with a gross profit margin of -5.47% Share of Profits and Losses of Joint Ventures Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Share of profits and losses of joint ventures | (285,266) | 45,070 | (330,336) (from profit to loss) | - Joint ventures' total revenue was RMB 282.25 million, with a gross profit margin of -5.47%[69] Share of Profits and Losses of Associates In H1 2025, Yuzhou Group's share of losses of associates expanded to RMB 254.50 million, from RMB 155.33 million in the prior year; associates' total revenue was RMB 1.34125 billion, with a gross profit margin of -12.06% Share of Profits and Losses of Associates Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Share of profits and losses of associates | (254,504) | (155,334) | (99,170) (loss widened) | - Associates' total revenue was RMB 1.34125 billion, with a gross profit margin of -12.06%[70] Income Tax In H1 2025, Yuzhou Group recorded an income tax credit of RMB 186.69 million, a shift from an income tax expense of RMB 122.69 million in the prior year, primarily due to a decrease in deferred tax liabilities Income Tax (Credit)/Expense Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Income tax (credit)/expense | (186,690) | 122,692 | (309,382) (from expense to credit) | - The decrease in income tax expense was primarily due to a decrease in deferred tax liabilities during the period[71] Loss for the Period In H1 2025, Yuzhou Group's loss for the period was RMB 7.39153 billion, narrowing from RMB 8.01280 billion in the prior year, primarily due to impairment loss provisions, fair value losses on investment properties, and reduced revenue Loss for the Period Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (7,391,533) | (8,012,801) | 7.75 (loss narrowed) | - The loss was primarily due to impairment loss provisions, fair value losses on investment properties, and reduced revenue during the period[72] Loss Attributable to Non-controlling Interests In H1 2025, Yuzhou Group's loss attributable to non-controlling interests was RMB 1.75947 billion, largely consistent with RMB 1.75682 billion in the prior year, primarily due to impairment of properties under development, fair value losses on investment properties, and losses from certain non-wholly owned projects Loss Attributable to Non-controlling Interests Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Loss attributable to non-controlling interests | (1,759,471) | (1,756,818) | 0.15 (loss slightly increased) | - The loss was primarily due to impairment of properties under development, fair value losses on investment properties, and losses from certain non-wholly owned projects[73] Basic Loss Per Share For the period ended June 30, 2025, Yuzhou Group's basic loss per share was RMB 0.88 Basic Loss Per Share (H1 2025) | Indicator | 2025 H1 (RMB) | | :--- | :--- | | Basic loss per share | 0.88 | Liquidity and Financial Resources Yuzhou Group actively managed its debt, with cash and cash equivalents and restricted cash totaling approximately RMB 2.80824 billion as of June 30, 2025; total borrowings were RMB 51.97164 billion, a 1.23% decrease from end-2024, with a weighted average interest rate of 7.91%, while the asset-liability ratio excluding pre-receipts rose to 127.83% and net gearing ratio was -252.81%, indicating severe liquidity pressure, with the Group providing various guarantees and most borrowings denominated in HKD and USD, posing currency risk Cash Position As of June 30, 2025, Yuzhou Group's cash and cash equivalents and restricted cash totaled approximately RMB 2.80824 billion Cash and Cash Equivalents and Restricted Cash (As of June 30, 2025) | Indicator | Amount (RMB thousand) | | :--- | :--- | | Cash and cash equivalents and restricted cash | 2,808,240 | Borrowings As of June 30, 2025, Yuzhou Group's interest-bearing bank and other borrowings, corporate bonds, and senior notes totaled RMB 51.97164 billion, a 1.23% decrease from end-2024; the weighted average interest rate was 7.91%, a 0.16 percentage point decrease from end-2024, while the asset-liability ratio excluding pre-receipts was 127.83%, an increase of 12.73 percentage points from end-2024 Borrowings Overview (As of June 30, 2025) | Indicator | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Balance of interest-bearing bank and other borrowings, corporate bonds and senior notes | 51,971,640 | 52,620,220 | -1.23 | | Weighted average interest rate | 7.91% | 8.07% | -0.16 percentage points | | Asset-liability ratio excluding pre-receipts | 127.83% | 115.10% | 12.73 percentage points (increase) | - The decrease in borrowings was due to the repayment of bank and other borrowings during the period[77] Net Gearing Ratio As of June 30, 2025, Yuzhou Group's net gearing ratio was -252.81%, reflecting negative equity and extremely high financial leverage Net Gearing Ratio (As of June 30, 2025) | Indicator | Ratio | | :--- | :--- | | Net gearing ratio | -252.81% | Guarantees As of June 30, 2025, Yuzhou Group provided mortgage loan guarantees to banks totaling RMB 12.81392 billion, and financing guarantees to joint ventures and associates of RMB 52.92 million and RMB 1.17004 billion respectively, in addition to financing guarantees for certain contractors and independent third parties Guarantee Amounts (As of June 30, 2025) | Guaranteed Party | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Mortgage loans for property buyers | 12,813,920 | 11,450,960 | | Financing for joint ventures | 52,920 | 52,920 | | Financing for associates | 1,170,040 | 888,940 | | Financing for contractors | 10,020 | 6,760 | | Financing for independent third parties | 4,774,860 | 4,798,420 | Currency Risk As of June 30, 2025, approximately 83.62% of Yuzhou Group's total borrowings were denominated in HKD and USD, with RMB accounting for 16.38%; the Group will regularly monitor exchange rate risk but currently deems no foreign exchange hedging necessary Borrowings and Cash Balance by Currency (As of June 30, 2025) | Currency | Borrowings Balance (RMB thousand) | Cash Balance (RMB thousand) | | :--- | :--- | :--- | | HKD | 608,057 | 36,574 | | RMB | 8,510,643 | 2,653,331 | | USD | 42,852,935 | 118,335 | | Total | 51,971,635 | 2,808,240 | - Approximately 83.62% of borrowings are denominated in HKD and USD, posing exchange rate risk[80] - The Group will regularly monitor exchange rate risk but currently deems no foreign exchange hedging arrangements necessary[81] Employees and Remuneration Policy As of June 30, 2025, Yuzhou Group had 981 employees; the Group adheres to its core values of "Responsibility, Pragmatism, Synergy, Win-win," focusing on the annual theme "Acting with Integrity" to continuously enhance organizational efficiency, invigorate teams, integrate cultural assessment into talent selection and retention, and prioritize employee well-being and professional development through various care activities Employee Numbers and Corporate Culture As of June 30, 2025, Yuzhou Group had 981 employees; the Group upholds the spirit of "Yu's Flood Control, Deserts into Oases," with core values of "Responsibility, Pragmatism, Synergy, Win-win," focusing on the annual theme "Acting with Integrity" to select and motivate talent through cultural assessment, and conduct employee care activities Employee Numbers (As of June 30, 2025) | Indicator | Quantity | | :--- | :--- | | Total employees | 981 | - The Group's core values are "Responsibility, Pragmatism, Synergy, Win-win," with the annual theme "Acting with Integrity"[82] - Cultural assessment is integrated into talent selection and retention to develop responsible and pragmatic talent, and continuously motivate employees[82] Employment and Remuneration Policy Yuzhou Group's employee remuneration is primarily determined by market salary levels, individual performance, and work experience, with bonuses distributed based on performance - Employee remuneration is determined by market salary levels, individual performance, and work experience[84] - The Group distributes bonuses based on employee performance[84] Events After Reporting Period After the reporting period, Yuzhou Group completed a rights issue, raising approximately HKD 92.2 million net proceeds for restructuring fees and general working capital; the offshore debt restructuring plan became effective on August 29, 2025, resolving approximately US$6.68 billion in debt in exchange for cash, new shares, and new notes, significantly improving the Group's capital structure and liquidity, with short-term note terms also revised to match future cash flow projections - The rights issue has been completed, with 2,690,960,456 rights shares allotted and issued, raising net proceeds of approximately HKD 92.2 million for restructuring support agreement fees, creditor fees, and general working capital[42][85] - The offshore debt restructuring plan became effective on August 29, 2025, with approximately US$6.68 billion of debt (together with related accrued interest) fully discharged and released in exchange for cash, new shares, and new notes[42][87] - After the restructuring effective date, a total of 5,645,000,000 new shares (representing approximately 37.9% of the total issued shares immediately after the allotment of new equity) were issued to scheme creditors[42] - The terms of the short-term notes have been revised, including capitalization of accrued interest, right to pay interest in kind, removal of mandatory redemption dates, and reduction of minimum principal amount, to enhance the Group's financial stability after the restructuring effective date[86] Other Information This section covers other important information for Yuzhou Group, including no interim dividend recommendation, no significant acquisitions or disposals during the reporting period, details of financial assistance to affiliated companies, sufficient public float, no material business changes, no trading in listed securities, directors' compliance with the standard code for securities transactions, corporate governance status, updates on share option and share award schemes, and the review of accounts and publication of results announcements Interim Dividend The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[89] Significant Acquisitions and Disposals of Subsidiaries, Joint Ventures and Associates During the reporting period, the Company did not undertake any significant acquisitions or disposals - During the period, the Company did not undertake any significant acquisitions or disposals[90] Financial Assistance to Affiliated Companies As of June 30, 2025, Yuzhou Group provided total financial assistance of RMB 8.18949 billion to affiliated companies, including advances and financing guarantees; these advances are unsecured, interest-free, and without fixed repayment terms, and the affiliated companies' consolidated net assets were RMB 25.02238 billion Total Financial Assistance to Affiliated Companies (As of June 30, 2025) | Item | Amount (RMB thousand) | | :--- | :--- | | Advances to affiliated companies | 6,966,534 | | Financing guarantees to affiliated companies | 1,222,959 | | Total | 8,189,493 | - Advances are unsecured, interest-free, and without fixed repayment terms[93] Consolidated Financial Position of Affiliated Companies and Group's Share of Equity (As of June 30, 2025) | Indicator | Consolidated Financial Position (RMB thousand) | Group's Share of Equity (RMB thousand) | | :--- | :--- | :--- | | Net assets | 25,022,376 | 8,392,503 | Sufficient Public Float As of the date of this announcement, the Company has maintained a sufficient public float as required by the Listing Rules - The Company has maintained a sufficient public float as required by the Listing Rules[94] No Material Changes There have been no material changes in the Company's business since the publication of its most recent annual report for the year ended December 31, 2024 - There have been no material changes in the Company's business since the publication of the 2024 annual report[95] Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares at the end of the reporting period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[96] - At the end of the reporting period, the Company held no treasury shares[96] Standard Code for Securities Transactions by Directors The Company has adopted a code for securities transactions by directors no less stringent than the standard set out in Appendix C3 of the Listing Rules, and directors have confirmed compliance with its provisions throughout the period - The Company has adopted a stringent code for securities transactions by directors, and directors have confirmed compliance with its provisions throughout the period[97] Corporate Governance Yuzhou Group is committed to maintaining good corporate governance practices, complying with Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period, though the roles of Chairman and CEO are combined in Ms. Kwok Ying Lan, a deviation from code provision C.2.1, which the Board believes has sufficient balance of power and safeguards and will be regularly reviewed - The Group has consistently adopted, applied, and complied with the Corporate Governance Code in Appendix C1 of the Listing Rules[98] - The roles of Chairman and Chief Executive Officer are combined in Ms. Kwok Ying Lan, deviating from code provision C.2.1[99] - The Board believes there is sufficient balance of power and safeguards in place and will regularly review and monitor it[99] Share Option Scheme No share options were granted by the Company during the six months ended June 30, 2025 - No share options were granted by the Company during the six months ended June 30, 2025[100] Share Award Scheme Under the Share Award Scheme, the Board may at its discretion select employees to participate and grant awarded shares; as of June 30, 2025, the total number of shares available for award was 10,324,504, representing approximately 0.16% of issued shares, with the maximum number of shares that may be awarded to a selected employee not exceeding 1% of the Company's issued share capital from time to time - The Board may at its sole discretion select employees to participate in the Share Award Scheme and grant awarded shares[101] Total Shares in Share Award Scheme (As of June 30, 2025) | Indicator | Quantity | | :--- | :--- | | Total shares available for award | 10,324,504 shares | | Percentage of issued shares | Approximately 0.16% | - The maximum number of shares that may be awarded to a selected employee shall not exceed 1% of the Company's issued share capital from time to time[103] Review of Accounts The Company's Audit Committee has reviewed the Group's adopted accounting policies and the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, with no disagreements between the Board and the Audit Committee - The Audit Committee has reviewed the Group's accounting policies and interim financial statements[105] - There were no disagreements between the Board and the Audit Committee[105] Publication of Results Announcement and Interim Report This announcement has been published on the Company's website and the HKEX website; the Company's 2025 interim report will be dispatched to shareholders and published on the aforementioned websites in due course - This announcement has been published on the Company's website (http://yuzhou-group.com/) and the HKEX website (www.hkexnews.hk)[106](index=106&type=chunk) - The 2025 interim report will be dispatched to shareholders and published on the aforementioned websites in due course[106] Outlook Yuzhou Group anticipates a bottoming-out and recovery trend in the real estate market in H2 2025, with continued loose national policies to stimulate demand; facing deep industry adjustments, the Group will adhere to principles of "Strategic Clarity, Innovative Breakthroughs, All-Staff Progress," focusing on sales and capital management, accelerating the revitalization of existing assets, optimizing its talent system, and enhancing service quality to ensure healthy and sustainable corporate development - The real estate market is expected to show a bottoming-out and recovery trend in H2 2025, with national policies remaining loose to stimulate demand[107] - The Group will address industry challenges with three core principles: "Strategic Clarity, Innovative Breakthroughs, All-Staff Progress"[108] - The Group will continue to promote sales and capital management, drive marketing innovation, strictly manage capital meticulously, accelerate the revitalization of existing assets, optimize its talent management system, and enhance service quality[108]