中国华君(00377) - 2025 - 中期财报

Corporate Information Board of Directors The company's Board of Directors, comprising executive directors (including Chairman and CEO Mr. Yan Ruijie) and independent non-executive directors, is responsible for the Group's strategic guidance and oversight - Executive directors include Mr. Yan Ruijie (Chairman and CEO), Ms. Chen Yun, Dr. Li Dayi, and Ms. Wang Xiaomei[5] - Independent non-executive directors include Mr. Mo Yiguo, Mr. Ding Xingfu, and Ms. Zhu Fang[5] Committees The company has an Audit Committee, Remuneration Committee, and Nomination Committee to ensure effective and independent corporate governance, with independent non-executive directors chairing each committee - The Audit Committee is chaired by Mr. Mo Yiguo[5] - The Remuneration Committee is chaired by Mr. Ding Xingfu[5] - The Nomination Committee is chaired by Ms. Zhu Fang[5] Key Personnel and Advisors This section lists the company secretary, authorized representatives, legal advisors, and auditors, roles crucial for compliance and financial transparency - The company secretary is Mr. Tam Ka Lung[6] - The auditor is BDO Limited[7] Company Information This section provides the company's principal bankers, registered office, Hong Kong principal place of business, stock code, website, and investor relations contact for stakeholders to access basic information - Principal bankers include Bank of China (Hong Kong) Limited, Industrial and Commercial Bank of China Limited, Liaoshen Bank Co., Ltd., and Shengjing Bank Co., Ltd.[8] - The company's stock code is 377[9] Management Discussion and Analysis Business Review The Group primarily engages in three core businesses: printing, trading and logistics, and property development and investment; total revenue increased by 11.7% year-on-year, mainly from trading and logistics and printing segments, while property development and investment faced severe challenges - The Group's core businesses are printing, trading and logistics, and property development and investment[11] - Revenue by Business Segment (For the six months ended June 30, 2025) | Segment | 2025 Revenue (RMB million) | 2025 Revenue Share (%) | 2024 Revenue (RMB million) | 2024 Revenue Share (%) | | :--- | :--- | :--- | :--- | :--- | | Printing | 169.9 | 24.7 | 160.2 | 26.0 | | Trading and Logistics | 494.2 | 71.9 | 422.1 | 68.6 | | Property Development and Investment | 10.2 | 1.5 | 10.7 | 1.7 | | Others | 13.4 | 1.9 | 22.5 | 3.7 | | Total | 687.7 | 100.0 | 615.5 | 100.0 | - Revenue growth in the trading and logistics segment was primarily due to improved market prices for base oil and increased sales volume[13] - Revenue growth in the printing segment was mainly due to recovering orders from beauty and cosmetics clients[14] - The property development and investment business faces severe challenges, with a future focus on disposing of existing projects and discussing debt repayment with creditors to reduce debt and the gearing ratio[23][25] Financial Review During the reporting period, the Group's total revenue increased by 11.7% to RMB 687.7 million, but gross profit and gross profit margin decreased; administrative expenses and selling and distribution expenses decreased, while finance costs increased due to accumulated penalty interest; loss attributable to shareholders narrowed, but total shareholders' equity remained in deficit, and liquidity and gearing ratios indicated a tight financial position - Key Financial Indicators Comparison (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 687.7 | 615.5 | +11.7% | | Gross Profit | 42.7 | 44.2 | -3.4% | | Gross Profit Margin | 6.2% | 7.2% | -1.0 pp | | Selling and Distribution Expenses | 27.9 | 29.2 | -4.5% | | Administrative Expenses | 66.7 | 79.6 | -16.2% | | Finance Costs | 258.5 | 248.2 | +4.1% | | Loss from Fair Value Change of Investment Properties | 81.9 | 100.0 | -18.1% | | Loss Attributable to Company Shareholders | 383.9 | 408.0 | -5.9% | - The decrease in gross profit margin was primarily due to lower selling prices of property units in the property development and investment segment[32][36] - The decrease in administrative expenses was mainly due to reduced staff costs and legal and professional fees[34][38] - The increase in finance costs was primarily due to accumulated penalty interest on certain loan agreements[35][39] - Liquidity and Capital Structure (As at June 30, 2025) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Shareholders' Equity | (7,966.2) (Deficit) | (7,586.3) (Deficit) | | Current Assets | 2,065.4 | 2,035.2 | | Current Liabilities | 12,545.5 | 12,276.6 | | Current Ratio | 0.17 | 0.17 | | Interest-bearing Liabilities | 4,913.5 | 4,916.6 | | Gearing Ratio | 106.1% | 103.7% | | Cash and Cash Equivalents | 49.1 | 36.3 | - Most borrowings are denominated in RMB, and approximately RMB 4,908.5 million of borrowings are secured by the Group's assets[52][57] - Capital expenditure primarily comprised additions to investment properties and property, plant and equipment of approximately RMB 1.7 million[53][58] - Multiple Group assets are pledged as collateral for bank and credit facilities, including property, plant and equipment, right-of-use assets, and investment properties[54][59] Foreign Exchange Risk Management The Group faces foreign exchange risk from foreign currency-denominated assets and liabilities, which the Board manages through spot foreign currency transactions and forward foreign exchange contracts to maintain net risk at an acceptable level - The Group is exposed to foreign exchange risk from listed debt instruments, financial instruments held for trading, bank balances and cash, trade and other receivables, trade and other payables, and borrowings[55][60] - The Board manages foreign exchange risk by spot buying and selling foreign currencies and entering into ordinary forward foreign exchange contracts[55][60] Contingent Liabilities Except for borrowing-related matters disclosed in Note 13 to the financial statements, the Group had no other significant contingent liabilities at the end of the reporting period - As at June 30, 2025, the Group had no significant contingent liabilities other than those disclosed in Note 13[56][61] Material Acquisition and Disposal of Subsidiaries During the reporting period, the Group did not undertake any material acquisition or disposal activities of subsidiaries - The Group had no material acquisitions or disposals of subsidiaries during the reporting period[62][65] Outlook Facing global economic uncertainty and challenges in mainland China's economy, the Group plans to strengthen corporate capabilities, reduce the gearing ratio, accelerate property asset disposals, implement cost-saving measures, and explore new financing options to improve its financial position and liquidity, while concentrating resources on profitable markets and businesses - The global economic outlook is uncertain, and the economic situation in mainland China is full of challenges[63][66] - The Group will strengthen corporate capabilities, reduce the gearing ratio, and accelerate the disposal and sale of property assets[63][66] - Cost-saving measures will be adopted, and alternative fundraising options will be explored to improve the financial position[63][66] - Resources should be more focused on profitable markets and businesses with potential[64][66] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss Performance For the six months ended June 30, 2025, the Group's total revenue was RMB 687.7 million, an 11.7% increase year-on-year; despite a slight decrease in gross profit, both loss before tax and loss for the period decreased due to a positive shift in net other gains and losses and a narrower loss from fair value change of investment properties - Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Revenue | 687,746 | 615,514 | | Cost of Sales and Services | (645,046) | (571,343) | | Gross Profit | 42,700 | 44,171 | | Other Gains and (Losses), Net | 7,426 | (50) | | Fair Value Change of Investment Properties | (81,862) | (100,035) | | Selling and Distribution Expenses | (27,888) | (29,243) | | Administrative Expenses | (66,694) | (79,581) | | Finance Costs | (258,461) | (248,247) | | Loss Before Tax | (383,199) | (408,403) | | Loss for the Period | (383,815) | (408,825) | Other Comprehensive Income and Total Comprehensive Expense During the reporting period, the Group recorded other comprehensive income, mainly from exchange differences on translating foreign operations, which led to a narrower total comprehensive expense for the period compared to the prior year - Other Comprehensive Income and Total Comprehensive Expense (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the Period | (383,815) | (408,825) | | Exchange Differences on Translating Foreign Operations | 3,876 | (1,113) | | Total Comprehensive Expense for the Period | (379,939) | (409,938) | | Loss Attributable to Company Shareholders | (383,916) | (408,022) | | Total Comprehensive Expense Attributable to Company Shareholders | (380,041) | (409,135) | - Basic and diluted loss per share attributable to company shareholders was RMB (6.24), an improvement from RMB (6.63) in the prior year[69] Condensed Consolidated Statement of Financial Position Assets As at June 30, 2025, the Group's total non-current assets amounted to RMB 2,656.1 million, and total current assets amounted to RMB 2,065.4 million; property, plant and equipment and investment properties were the main components of non-current assets, while properties held for sale and trade and other receivables were the main components of current assets - Asset Composition (As at June 30, 2025) | Asset Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 1,028,009 | 1,058,511 | | Investment Properties | 1,282,761 | 1,385,836 | | Right-of-Use Assets | 296,443 | 305,800 | | Current Assets | | | | Properties Held for Sale | 672,537 | 672,576 | | Trade and Other Receivables, Deposits and Prepayments | 1,059,502 | 1,031,713 | | Bank Balances and Cash | 49,085 | 36,292 | | Assets Classified as Held for Sale | 106,901 | 106,901 | | Total Assets | 4,721,542 | 4,834,511 | Liabilities and Equity As at June 30, 2025, the Group's net current liabilities amounted to RMB 10,480.1 million, and total liabilities amounted to RMB 12,687.7 million; trade and other payables and borrowings were the main components of current liabilities; the Group recorded a net liability of RMB 7,966.2 million, with total shareholders' equity in deficit - Liabilities and Equity Composition (As at June 30, 2025) | Liability/Equity Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Liabilities | | | | Trade and Other Payables and Other Liabilities | 6,857,068 | 6,562,575 | | Borrowings | 4,913,540 | 4,916,585 | | Contract Liabilities | 270,138 | 294,645 | | Corporate Bonds | 98,237 | 97,753 | | Non-current Liabilities | | | | Deferred Income | 130,535 | 130,852 | | Deferred Tax Liabilities | 11,724 | 11,973 | | Net Liabilities | (7,966,206) | (7,586,267) | | Loss Attributable to Company Shareholders | (8,087,058) | (7,621,857) | | Non-controlling Interests | 120,852 | 35,590 | - Net current liabilities amounted to RMB 10,480.1 million, indicating liquidity pressure[72] - Total shareholders' equity recorded a deficit of approximately RMB 7,966.2 million, further widening from the RMB 7,586.3 million deficit at the end of 2024[43][49] Condensed Consolidated Statement of Changes in Equity Equity Movements For the six months ended June 30, 2025, the loss attributable to company shareholders was RMB 383.9 million, leading to a further increase in accumulated losses; despite positive changes in exchange reserves, overall shareholders' equity continued to show an expanding deficit - Shareholders' Equity Movements (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Balance at Beginning of Period (Attributable to Company Shareholders) | (7,621,857) | (6,350,809) | | Loss for the Period (Attributable to Company Shareholders) | (383,916) | (408,022) | | Other Comprehensive Income (Expense) | 3,875 | (1,113) | | Deemed Acquisition of Additional Interests from Non-controlling Interests | (85,160) | - | | Balance at End of Period (Attributable to Company Shareholders) | (8,087,058) | (6,759,944) | | Total Loss at End of Period | (7,966,206) | (6,724,171) | - As at June 30, 2025, accumulated losses attributable to company shareholders amounted to RMB 11,911.4 million[74] Condensed Consolidated Statement of Cash Flows Cash Flow Activities For the six months ended June 30, 2025, the Group's net cash generated from operating activities significantly decreased, net cash from investing activities turned into an inflow, and net cash used in financing activities significantly decreased, resulting in an increase in cash and cash equivalents at period-end - Cash Flow Statement Key Data (For the six months ended June 30) | Cash Flow Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 6,252 | 109,793 | | Net Cash Generated from (Used in) Investing Activities | 9,952 | (128) | | Net Cash Used in Financing Activities | (3,524) | (117,203) | | Net Increase (Decrease) in Cash and Cash Equivalents | 12,680 | (7,538) | | Cash and Cash Equivalents at End of Period | 49,085 | 57,254 | - Net cash generated from operating activities significantly decreased from RMB 109.8 million in the prior year to RMB 6.3 million[76] - Net cash from investing activities turned from an outflow to an inflow compared to the prior year, mainly due to proceeds from the disposal of right-of-use assets[76] - Net cash used in financing activities significantly decreased, primarily due to reduced repayment of borrowings and interest paid[78] Notes to the Condensed Consolidated Financial Statements Basis of Preparation The condensed consolidated financial statements are prepared in accordance with HKAS 34 and presented in RMB; the Group faces significant uncertainties, including net liabilities, borrowing defaults, and insufficient cash resources, which may cast significant doubt on its ability to continue as a going concern; the Board is addressing these challenges through property business restructuring, fundraising, cost reduction, and debt restructuring measures - As at June 30, 2025, the Group recorded a net loss of RMB 383.8 million and net liabilities of approximately RMB 7,966.2 million[81][82][84][85] - Approximately RMB 4,908.5 million of borrowing principal was in default, entitling lenders to demand immediate repayment[82][85] - The Group is exploring property business restructuring, fundraising (including new share issuance), implementing cost reduction measures, and undertaking offshore debt restructuring to improve its financial position[88][89][90][91][92][93][94][95] - The offshore debt restructuring plan was approved by the High Court of Hong Kong on April 3, 2025, and became effective on June 26, 2025[91][95] Principal Accounting Policies The condensed consolidated financial statements are prepared under the historical cost convention, with certain properties and financial instruments measured at revalued amounts or fair value; newly adopted and revised HKFRS accounting standards had no significant impact on the interim condensed consolidated financial statements for the current period - The financial statements are prepared under the historical cost convention, with certain properties and financial instruments measured at revalued amounts or fair value[97][102] - Newly adopted HKFRS accounting standards (such as amendments to HKAS 21) had no significant impact on the financial statements for the current period[98][99][103] Segment Information The Group manages its operations based on three main reportable segments: printing, trading and logistics, and property development and investment; during the reporting period, the trading and logistics segment contributed the largest revenue, but the property development and investment segment recorded the largest loss; all assets and liabilities (except at the corporate level) are allocated to operating segments - The Group's principal reportable segments are printing, trading and logistics, and property development and investment[100][104][112] - Revenue and Results by Reportable Segment (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousand) | 2025 Segment Results (RMB thousand) | 2024 Revenue (RMB thousand) | 2024 Segment Results (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Printing | 169,926 | (2,966) | 160,164 | (21,287) | | Trading and Logistics | 494,243 | 6,852 | 422,079 | (2,455) | | Property Development and Investment | 10,166 | (89,531) | 10,674 | (104,540) | | All Other Segments | 13,411 | (34,075) | 22,597 | (24,289) | | Total Reportable Segments | 674,335 | (85,645) | 592,917 | (128,282) | | Group Loss Before Tax | | (383,199) | | (408,403) | - Assets and Liabilities by Reportable Segment (As at June 30, 2025) | Segment | 2025 Assets (RMB thousand) | 2025 Liabilities (RMB thousand) | | :--- | :--- | :--- | | Printing | 471,077 | 815,075 | | Trading and Logistics | 747,998 | 352,559 | | Property Development and Investment | 2,614,819 | 9,153,867 | | All Other Segments | 760,574 | 1,814,709 | | Unallocated Assets/Liabilities | 127,074 | 551,538 | | Total | 4,721,542 | 12,687,748 | Other Gains and (Losses), Net During the reporting period, the Group recorded net other gains and losses of RMB 7.4 million, primarily from gains on disposal of right-of-use assets and exchange gains, contrasting with a net loss in the prior year - Other Gains and (Losses), Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Gain on Disposal of Right-of-Use Assets | 6,827 | – | | Net Exchange Gains (Losses) | 502 | 12 | | Fair Value Change of Financial Assets at Fair Value Through Profit or Loss | 97 | (62) | | Total | 7,426 | (50) | Income Tax Expenses During the reporting period, the Group's total income tax expense was RMB 616 thousand, mainly comprising China corporate income tax and adjustments for under-provision in prior periods; Hong Kong profits tax is calculated at 16.5%, and Chinese subsidiaries are subject to a 25% tax rate - Income Tax Expenses (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax: China Corporate Income Tax | 369 | 60 | | Current Tax: Other Jurisdictions | 24 | 31 | | Under-provision in Prior Periods: China Corporate Income Tax | 543 | 635 | | Under-provision in Prior Periods: Other Jurisdictions | 13 | – | | Deferred Tax | (333) | (304) | | Total Income Tax Expense Recognized in Profit or Loss | 616 | 422 | - Hong Kong profits tax provision is calculated at 16.5% of estimated assessable profits[121][122] - Chinese subsidiaries are subject to a China corporate income tax rate of 25%[123] Loss for the Period The loss for the period is net of various expenses, with finance costs being the largest single expense, primarily from interest on bank and financial institution borrowings; depreciation expenses and cost of inventories also constitute significant expenses - Finance Costs (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings and Borrowings from Financial Institutions | 256,112 | 244,507 | | Interest on Lease Liabilities | 53 | 136 | | Effective Interest Expense on Corporate Bonds | 2,296 | 3,604 | | Total | 258,461 | 248,247 | - Other Major Expenses (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of Right-of-Use Assets | 5,319 | 6,541 | | Depreciation of Property, Plant and Equipment | 26,857 | 34,926 | | Cost of Inventories Recognized as Expense | 543,864 | 475,375 | | Cost of Properties Recognized as Expense | 1,887 | 2,228 | | Interest Income | (44) | (316) | Loss per Share For the six months ended June 30, 2025, basic and diluted loss per share attributable to company shareholders was RMB (6.24), an improvement from RMB (6.63) in the prior year; diluted loss per share calculation did not assume the exercise of share options as the exercise price was higher than the average market price of shares - Loss per Share (For the six months ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic Loss per Share | (6.24) | (6.63) | | Diluted Loss per Share | (6.24) | (6.63) | | Number of Shares Used for Calculating Basic and Diluted Loss per Share | 61,543,075 | 61,543,075 | - The calculation of diluted loss per share did not assume the exercise of share options because the exercise price of the share options was higher than the average market price of the shares[130] Dividend The Board of Directors resolved not to recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[130] Property, Plant and Equipment, Right-of-Use Assets and Investment Properties During the reporting period, the Group acquired property, plant and equipment and investment properties, and disposed of some plant and equipment and right-of-use assets, with the disposal of right-of-use assets generating a gain; investment properties were revalued using the same valuation method as at the end of the prior year - Asset Acquisition and Disposal (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Acquisition of Property, Plant and Equipment | 1,586 | 2,271 | | Acquisition of Right-of-Use Assets | – | 1,185 | | Acquisition of Investment Properties | 88 | 35 | | Proceeds from Disposal of Plant and Equipment | 501 | – | | Proceeds from Disposal of Right-of-Use Assets | 10,866 | – | | Gain on Disposal of Right-of-Use Assets | 6,827 | – | - Investment properties were revalued as at June 30, 2025, by the Group using the same valuation method as at December 31, 2024[133][135] Properties Held for Sale As at June 30, 2025, the Group's total properties held for sale amounted to RMB 672.5 million, primarily comprising completed properties and properties under development for sale, with the amount remaining largely consistent with the prior year-end - Properties Held for Sale Composition (As at June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Completed Properties Held for Sale | 567,573 | 567,676 | | Properties Under Development for Sale | 104,964 | 104,900 | | Total | 672,537 | 672,576 | Trade and Other Receivables, and Prepayments As at June 30, 2025, total trade receivables amounted to RMB 119.7 million, an increase from the prior year-end; the Group grants credit periods based on customer business relationships and creditworthiness, with most receivables due within 90 days - Ageing Analysis of Trade Receivables (As at June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 – 30 days | 69,238 | 64,654 | | 31 – 90 days | 42,421 | 23,254 | | 91 – 180 days | 1,268 | 9,745 | | Over 180 days | 6,743 | 7,442 | | Total | 119,670 | 105,095 | - The ageing analysis of trade receivables shows that most receivables are due within 30 days[136] Trade and Other Payables, and Other Liabilities As at June 30, 2025, total trade payables and construction payables amounted to RMB 225.5 million, an increase from the prior year-end; the average credit period ranges from 30 to 180 days - Ageing Analysis of Trade and Construction Payables (As at June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 – 30 days | 60,351 | 28,537 | | 31 – 90 days | 18,070 | 13,868 | | 91 – 365 days | 11,851 | 15,519 | | Over 365 days | 135,265 | 134,341 | | Total | 225,537 | 192,265 | - The average credit period for purchases and construction costs ranges from 30 to 180 days[138] Borrowings As at June 30, 2025, the Group's total interest-bearing bank and other borrowings amounted to approximately RMB 4,913.5 million, with most being secured and in default; the report details specific significant defaulted borrowings, including legal proceedings, asset auctions, and accumulated penalty interest, which exert significant pressure on the Group's financial position - Borrowings Composition (As at June 30, 2025) | Borrowing Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Borrowings | 4,856,194 | 4,858,178 | | Other Borrowings | 57,346 | 58,407 | | Total | 4,913,540 | 4,916,585 | | Secured | 4,908,540 | 4,911,585 | | Unsecured | 5,000 | 5,000 | | Carrying Amount Payable Within One Year | 4,913,540 | 4,916,585 | - As at June 30, 2025, approximately RMB 4,908.5 million of borrowing principal was in default, entitling lenders to demand immediate repayment[140] - Multiple significant borrowings are in default, involving China Great Wall Asset Management, Zheshang Bank, Liaoshen Bank, Jiangsu Jiangnan Rural Commercial Bank, among others, leading to various legal proceedings and asset auctions[141][150][155][158][163][168][172][175][179][182] - Proceeds from some judicial auctions have been used to repay borrowings, but a substantial amount of outstanding principal, interest, and penalty interest is still recognized in other payables[148][149][151][156][157][158][162][163][166][167][169][171][173][174][176][178][180][181] Contract Liabilities As at June 30, 2025, contract liabilities primarily comprised prepayments for pre-sold properties and prepayments from customers, totaling RMB 270.1 million, which will be recognized as revenue when control of products or services is transferred - Contract Liabilities Composition (As at June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments for Pre-sold Properties | 166,739 | 163,273 | | Prepayments from Customers | 103,399 | 131,372 | | Total | 270,138 | 294,645 | Corporate Bonds As at June 30, 2025, all corporate bonds were overdue, totaling RMB 98.2 million; these bonds are denominated in HKD, with annual interest rates ranging from 5% to 6.5% and effective annual interest rates from 7.6% to 10.9% - Corporate Bonds (As at June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within One Year | 98,237 | 97,753 | | Total | 98,237 | 97,753 | - Corporate bonds have annual interest rates ranging from 5% to 6.5%, with effective annual interest rates from 7.6% to 10.9%[185][186] - As at June 30, 2025, all corporate bonds were overdue[187] Share Capital As at June 30, 2025, the company's authorized share capital was HKD 400,000 thousand, and issued and fully paid share capital was 61,543 thousand shares, equivalent to RMB 55,983 thousand, consistent with the prior year-end - Share Capital Information (As at June 30, 2025) | Item | June 30, 2025 (thousand shares) | December 31, 2024 (thousand shares) | | :--- | :--- | :--- | | Number of Authorized Shares | 400,000 | 400,000 | | Number of Issued and Fully Paid Shares | 61,543 | 61,543 | | Issued and Fully Paid Share Capital (RMB thousand) | 55,983 | 55,983 | Share-Based Transactions The company adopted the 2017 Share Option Scheme to incentivize employees and directors; as at June 30, 2025, the number of share options granted but unexercised under the scheme was zero, primarily due to the lapse of share options held by Director Mr. Shen Ruolei - The company adopted a new share option scheme on October 25, 2017, valid until October 24, 2027[190][191] - The exercise price of share options shall be at least the highest of the closing price on the offer date, the average closing price for the five business days immediately preceding the offer date, and the nominal value of the shares[247][251] - Share Option Movements (For the six months ended June 30) | Grantee | Unexercised at Beginning of Period (thousand units) | Lapsed During Period (thousand units) | Unexercised at End of Period (thousand units) | | :--- | :--- | :--- | :--- | | Director – Shen Ruolei | 38,735 | (38,735) | – | | Total | 38,735 | (38,735) | – | - As at June 30, 2025, the number of share options granted but unexercised was zero[247] Capital Commitments As at June 30, 2025, the Group's total capital commitments contracted but not provided for in the condensed consolidated financial statements amounted to RMB 672.5 million, primarily for property development projects and acquisition of plant and equipment - Capital Commitments (As at June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Capital Expenditure for Property Development Projects | 465,697 | 467,381 | | Capital Expenditure for Acquisition of Plant and Equipment | 206,817 | 206,817 | | Total | 672,514 | 674,198 | Pledge of Assets As at June 30, 2025, multiple Group assets were pledged to secure bills payable and borrowings, including property, plant and equipment, right-of-use assets, investment properties, and properties held for sale, with the total carrying amount decreasing from the prior year-end - Carrying Amount of Pledged Assets (As at June 30, 2025) | Asset Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 171,484 | 192,472 | | Right-of-Use Assets | 190,913 | 197,213 | | Investment Properties | 1,153,626 | 1,256,702 | | Properties Held for Sale | 487,963 | 487,963 | | Pledged Bank Deposits | 920 | 930 | | Restricted Bank Balances | 13,571 | 14,205 | Related Party Transactions During the reporting period, total key management personnel remuneration amounted to RMB 1.8 million; the direct controlling company, Huajun Group Company Limited, provided a RMB 7,000 million credit facility to the Group, most of which remains unutilized - Key Management Personnel Remuneration (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term Benefits | 1,742 | 1,925 | | Post-employment Benefits | 105 | 89 | | Total | 1,847 | 2,014 | - The direct controlling company, Huajun Group Company Limited, provided a RMB 7,000 million credit facility to the Group, of which approximately RMB 6,776.5 million remains unutilized[202][204] Contingent Liabilities (Note 21) Except for borrowing-related matters disclosed in Note 13, as at June 30, 2025, the Group was involved in multiple legal proceedings in China with construction contractors, customers, and suppliers, but the Board believes these lawsuits will not have a significant financial impact on the Group - Except for those disclosed in Note 13, the Group is involved in several unresolved legal proceedings initiated by construction contractors, customers, and suppliers in China[203][205] - The Directors believe that all other legal proceedings will not have a significant financial impact on the Group, as the claims are not material or are unlikely to result in a significant financial impact[203][205] Other Information Results and Appropriations The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025[207][210] Compliance with Corporate Governance Code The company has complied with the Corporate Governance Code, but the roles of Chairman and Chief Executive Officer are combined in Mr. Yan Ruijie, constituting a deviation from Code Provision C.2.1; the Board believes this arrangement benefits Group management and business development, with sufficient safeguards to ensure a balance of power - The company has complied with the Corporate Governance Code, except for Code Provision C.2.1 (separation of Chairman and Chief Executive Officer roles)[208][211] - Mr. Yan Ruijie has served as both Chairman and Chief Executive Officer since June 28, 2023, an arrangement the Board believes benefits Group management and business development[209][211] - The Board comprises seven directors, including three independent non-executive directors, providing independent perspectives and ensuring a balance of power[209][211] Compliance with the Model Code for Securities Transactions by Directors All Directors have confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - All Directors have confirmed compliance with the Model Code for the six months ended June 30, 2025[214][218] Change of Directors' and Senior Management's Information To enhance corporate governance and meet gender diversity requirements, Ms. Chen Yun was appointed as a member of the Nomination Committee, and Mr. Yan Ruijie ceased to be a member; Mr. Shen Ruolei retired as an independent non-executive director, while Dr. Li Dayi and Ms. Wang Xiaomei were elected as executive directors, and Ms. Zhu Fang was elected as an independent non-executive director and appointed as Chairman of the Nomination Committee - Ms. Chen Yun was appointed as a member of the Nomination Committee, and Mr. Yan Ruijie ceased to be a member, effective March 31, 2025[215][219] - Mr. Shen Ruolei retired as an independent non-executive director on June 27, 2025[216][219] - Dr. Li Dayi and Ms. Wang Xiaomei were elected as executive directors, and Ms. Zhu Fang was elected as an independent non-executive director and appointed as Chairman of the Nomination Committee[220][224] Purchase, Sale or Redemption of Listed Shares of the Company For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed shares, and the company held no treasury shares - Neither the company nor its subsidiaries purchased, sold, or redeemed any listed shares during the reporting period[222][225] - As at June 30, 2025, the company held no treasury shares[222][225] Interests and/or Short Positions of the Directors and Chief Executive of the Company in the Shares, Underlying Shares and Debentures of the Company or Any Associated Corporation As at June 30, 2025, except for Ms. Chen Yun holding 880 shares, no other directors or chief executives had any disclosable interests or short positions in the shares, underlying shares, and debentures of the company or any associated corporation - Directors' Interests in Shares (As at June 30, 2025) | Director | Nature of Interest | Number of Shares (L) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Ms. Chen Yun | Beneficial Owner | 880 | 0.01% | - Except as disclosed above, no other directors or chief executives had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or any associated corporation[228][230] Interests and/or Short Positions Discloseable Under the SFO and the Substantial Shareholders As at June 30, 2025, substantial shareholders included Huajun Group Company Limited (beneficially owned by Mr. Meng Guangbao) and his spouse Ms. Bao Le, as well as Oak Group Company Limited (indirectly beneficially owned by Mr. Dong Yuanxi); Oak Group became a core connected person due to an increase in shareholding, but the company's public float percentage has not fallen below 15% - Substantial Shareholders' Interests (As at June 30, 2025) | Shareholder | Nature of Interest | Number of Shares (L) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Huajun Group Company Limited | Beneficial Owner | 44,450,619 | 72.22% | | Mr. Meng Guangbao | Beneficial Owner and Interest in Controlled Corporation | 868,520 + 44,450,619 | 1.41% + 72.22% | | Ms. Bao Le | Interest Held by Spouse | 45,319,139 | 73.63% | | Oak Group Company Limited | Beneficial Owner | 6,582,326 | 10.69% | | Mr. Dong Yuanxi | Interest in Controlled Corporation | 6,582,326 | 10.69% | - Oak Group Company Limited became a core connected person due to its shareholding increasing to approximately 10.69%[233][239] - The company's public float percentage has never fallen below 15% since April 26, 2021[233][239] Directors' Interests in Significant Contracts Except as stated in Note 20 to the condensed consolidated financial statements, no significant contracts in which a director had a material interest were entered into by the company, its holding company, or any of its subsidiaries or fellow subsidiaries during the reporting period - Except as stated in Note 20 to the condensed consolidated financial statements, no significant contracts in which a director had a material interest were entered into during the reporting period[236][238] Share Option Scheme The company adopted a new share option scheme in 2017 to incentivize and retain talent; share options can be exercised within a period not exceeding 10 years, with the exercise price determined by the Board; as at June 30, 2025, the number of share options granted but unexercised was zero - The company adopted the 2017 Share Option Scheme on October 25, 2017, valid until October 24, 2027[241] - Share options can be exercised within a period not exceeding 10 years, and the exercise price shall be at least the highest of the closing price on the offer date, the average closing price for the five business days immediately preceding the offer date, and the nominal value of the shares[242][251] - As at June 30, 2025, the number of share options granted but unexercised was zero[247] Arrangement for Directors to Acquire Shares or Debentures Except for the disclosed share option scheme, neither the company nor any of its subsidiaries participated in any arrangements during the reporting period that would enable directors to acquire benefits through subscribing for shares or debentures - Except for the share option scheme, no other arrangements were in place during the reporting period that would enable directors to acquire benefits through subscribing for shares or debentures[253][257] Events After the Reporting Period No significant events occurred after the reporting period for the Group - The Group had no significant events after the reporting period[254][258] Staff As at June 30, 2025, the Group had 1,347 employees, a slight decrease from the prior year-end; the Group provides various employee benefits and training programs - Employee Count | Date | Employee Count | | :--- | :--- | | June 30, 2025 | 1,347 | | December 31, 2024 | 1,367 | - The Group provides employee insurance, retirement schemes, discretionary bonuses, and offers internal and external training[255][259] Audit Committee The Audit Committee, composed of three independent non-executive directors, has reviewed the Group's accounting principles, internal controls, and financial reporting matters, and believes the unaudited condensed consolidated financial statements comply with applicable accounting standards, Listing Rules, and legal requirements - The Audit Committee is composed of three independent non-executive directors[256][260] - The Committee has reviewed the Group's accounting principles, internal controls, and financial reporting matters[256][260] - The Committee believes the unaudited condensed consolidated financial statements comply with applicable accounting standards, Listing Rules, and all legal requirements[256][260]