北京北辰实业股份(00588) - 2025 - 中期财报

Cover Page Interim Report Highlights For the six months ended June 30, 2025, the company's revenue decreased by 11.97% year-on-year, operating loss and loss attributable to ordinary equity holders significantly increased, and loss per share expanded. The Board resolved not to declare an interim dividend Key Financial Data for H1 2025 (Unaudited) | Item | H1 2025 (RMB thousands) | Year-on-year Change | H1 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Revenue | 3,019,320 | -11.97% | 3,429,871 | | Operating Loss | (1,137,652) | Loss increased by 781,953 | (355,699) | | Loss Attributable to Ordinary Equity Holders | (1,647,124) | Loss increased by 877,544 | (769,580) | | Loss Per Share (RMB) | (0.4892) | Expanded | (0.2286) | - The company's core operating performance after tax (excluding fair value change losses) recorded a loss of RMB 1,475,877,000, an increase in loss of RMB 889,450,000 year-on-year[2] - Fair value change loss on investment properties (after tax) for the period was RMB 171,247,000[2] - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[2] Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Balance Sheet As of June 30, 2025, the company's total assets and total liabilities both decreased, with net assets and equity attributable to ordinary equity holders also declining, reflecting operating losses and asset disposals during the reporting period Key Consolidated Balance Sheet Data (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total Assets | 54,315,622 | 57,619,449 | | Total Liabilities | 37,080,146 | 39,268,837 | | Net Assets | 17,235,476 | 18,350,612 | | Equity Attributable to Ordinary Equity Holders of the Company | 14,636,281 | 16,283,405 | - The net book value of investment properties within non-current assets decreased to RMB 16,063,579 thousand at period-end from RMB 16,297,009 thousand at period-start[4] - The net book value of properties under development within current assets decreased to RMB 8,141,167 thousand at period-end from RMB 8,680,201 thousand at period-start[4] - Long-term borrowings within non-current liabilities increased to RMB 16,818,846 thousand at period-end from RMB 15,645,024 thousand at period-start[5] Interim Condensed Consolidated Income Statement During the reporting period, the company's revenue decreased year-on-year, increased cost of sales led to a gross loss, and operating loss and loss for the period significantly expanded, mainly due to higher cost of sales, impairment losses on financial assets, and fair value changes in investment properties Key Consolidated Income Statement Data (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 3,019,320 | 3,429,871 | | Cost of Sales | (3,327,281) | (2,941,989) | | Gross (Loss)/Profit | (307,961) | 487,882 | | Operating Loss | (1,137,652) | (355,699) | | Loss Before Income Tax | (1,609,845) | (706,872) | | Loss for the Period | (1,765,459) | (880,432) | | Loss Attributable to Ordinary Equity Holders of the Company | (1,647,124) | (769,580) | | Loss Per Share (RMB cents) | (48.92) | (22.86) | - Cost of sales increased year-on-year from RMB 2,941,989 thousand to RMB 3,327,281 thousand, resulting in a shift from gross profit to gross loss[8] - Net impairment losses on financial assets were RMB 60,932 thousand, a decrease from RMB 133,539 thousand in the prior period[8] - Net finance costs increased to RMB (473,734) thousand from RMB (350,972) thousand in the prior period[8] Interim Condensed Consolidated Statement of Comprehensive Income During the reporting period, the company's total comprehensive loss for the period significantly increased to RMB 1,765,459 thousand from RMB 880,432 thousand in the prior period, with no other comprehensive income Key Consolidated Statement of Comprehensive Income Data (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the Period | (1,765,459) | (880,432) | | Other Comprehensive Income | – | – | | Total Comprehensive Loss for the Period | (1,765,459) | (880,432) | | Attributable to Ordinary Equity Holders of the Company | (1,647,124) | (769,580) | Interim Condensed Consolidated Statement of Changes in Equity As of June 30, 2025, the company's total equity decreased due to the loss for the period, but non-controlling interests increased due to capital contributions from minority shareholders, partially offsetting the impact of the loss on total equity Key Consolidated Statement of Changes in Equity Data (RMB thousands) | Item | June 30, 2025 | January 1, 2025 | | :--- | :--- | :--- | | Share Capital | 3,367,020 | 3,367,020 | | Other Reserves | 4,830,304 | 4,830,304 | | Retained Earnings | 6,438,957 | 8,086,081 | | Equity Attributable to Ordinary Equity Holders of the Company | 14,636,281 | 16,283,405 | | Non-controlling Interests | 2,599,195 | 2,067,207 | | Total Equity | 17,235,476 | 18,350,612 | - Equity attributable to ordinary equity holders of the Company decreased from RMB 16,283,405 thousand at period-start to RMB 14,636,281 thousand at period-end, primarily due to a loss for the period of RMB 1,647,124 thousand[13] - Non-controlling interests increased by RMB 706,015 thousand, mainly from capital contributions by minority shareholders[13] Interim Condensed Consolidated Cash Flow Statement During the reporting period, the company's operating cash flow significantly improved from a net outflow, investment cash flow turned into a net outflow, and financing cash outflow decreased, leading to a narrower net decrease in cash and cash equivalents Key Consolidated Cash Flow Statement Data (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (65,230) | (456,580) | | Net Cash (Used in)/Generated from Investing Activities | (55,692) | 16,822 | | Net Cash Used in Financing Activities | (425,065) | (764,002) | | Net Decrease in Cash and Cash Equivalents | (545,987) | (1,203,760) | | Cash and Cash Equivalents at End of Period | 6,237,377 | 7,301,722 | - Cash generated from operating activities increased from RMB 289,286 thousand to RMB 1,129,058 thousand, but a significant increase in income tax paid resulted in net cash used in operating activities remaining negative[15] - Proceeds from borrowings and bond issuance were RMB 2,253,850 thousand, while repayment of borrowings and bonds was RMB 2,478,779 thousand, indicating that financing activities were primarily focused on repayments[15] Notes to the Interim Condensed Consolidated Financial Information 1. General Information Beijing North Star Company Limited was established in China in 1997 as part of the restructuring of state-owned North Star Group, and is listed on the HKEX and SSE, primarily engaging in convention and exhibition (including hotel) and commercial property, and real estate development - The Company was established in China on April 2, 1997, as part of the restructuring of Beijing North Star Industrial Group Co, Ltd (North Star Group), a state-owned enterprise[17] - The principal activities of the Company and its subsidiaries (the Group) are convention and exhibition (including hotel) and commercial property, and real estate development in China[18] - This interim condensed consolidated financial information has been reviewed but not audited[19] 2. Basis of Preparation The interim financial information is prepared in accordance with HKAS 34 'Interim Financial Reporting' issued by the HKICPA and applicable listing rule disclosure requirements, and should be read in conjunction with the annual consolidated financial statements - The interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants and all applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[20] 3. Accounting Policies The accounting policies used to prepare the interim financial information are consistent with those in the 2024 annual consolidated financial statements, except for the adoption of amendments to HKAS 21 'Lack of Exchangeability', which had no significant impact on the interim financial information - The accounting policies adopted in the preparation of this interim financial information are consistent with those applied in the Group's consolidated financial statements for the year ended December 31, 2024, except for the adoption of amendments to Hong Kong Accounting Standard 21 'Lack of Exchangeability'[21][22] - The adoption of these amendments did not have a significant impact on the Group's interim financial information[23] 4. Estimates The preparation of interim financial information involves management's judgments, estimates, and assumptions regarding the application of accounting policies and the amounts of assets, liabilities, income, and expenses, with the primary sources of estimation uncertainty being the same as those in the 2024 annual consolidated financial statements - The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied in the Group's consolidated financial statements for the year ended December 31, 2024[24] 5. Financial Risk Management The Group is exposed to market, credit, and liquidity risks, with no changes in risk management policies since year-end, and liquidity risk analysis showing an increase in contractual cash flows for short-term borrowings and payables 5.1. Financial Risk Factors - The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash flow interest rate risk, and fair value interest rate risk), credit risk, and liquidity risk[25] - There have been no changes in the risk management policies since year-end[26] 5.2. Liquidity Risk Maturity Analysis of Contractual Cash Flows of Non-Derivative Financial Liabilities (RMB thousands) | Maturity Group | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Less than 1 year | 14,511,236 | 14,101,891 | | 1 to 2 years | 7,042,651 | 11,529,267 | | 2 to 5 years | 5,301,965 | 4,912,194 | | More than 5 years | 8,523,922 | 9,792,065 | | Total | 35,379,774 | 40,335,417 | - As of June 30, 2025, borrowings (including interest payable) due within 1 year were RMB 4,647,594 thousand, and trade and other payables and borrowings/amounts from other parties (including interest) were RMB 9,846,256 thousand[28] 5.3. Fair Value Estimation - As of June 30, 2025, and December 31, 2024, the Group had no assets measured at fair value other than investment properties[31] - There were no transfers between levels during the period, and no changes in valuation techniques[32][33] 6. Segment Information The company's main businesses are divided into convention and exhibition (including hotel) and commercial property, and real estate development. During the reporting period, revenue from convention and exhibition and commercial property increased, while real estate development revenue decreased. Segment loss primarily stemmed from real estate development - The Board assesses business from a product and service perspective, with main segments being convention and exhibition (including hotel) and commercial property, and real estate development[36] Revenue from External Customers (RMB thousands) | Segment | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Convention and Exhibition (including Hotel) and Commercial Property | 1,476,714 | 1,248,098 | | Real Estate Development | 1,461,344 | 2,079,049 | | Other Segments | 81,262 | 102,724 | | Total Revenue | 3,019,320 | 3,429,871 | Adjusted Profit/(Loss) Before Income Tax (RMB thousands) | Segment | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Convention and Exhibition (including Hotel) and Commercial Property | 201,526 | 198,372 | | Real Estate Development | (1,606,723) | (801,340) | | Other Segments | (26,631) | (34,567) | | Total | (1,431,828) | (637,535) | - As of June 30, 2025, total segment assets were RMB 40,283,161 thousand, and total segment liabilities were RMB 21,535,488 thousand[42] 7. Right-of-use Assets, Property, Plant and Equipment and Investment Properties During the reporting period, fair value losses on investment properties amounted to RMB 228,821 thousand, leading to a decrease in their net book value. The company's investment properties are valued by independent professional valuers using the income capitalization approach and discounted cash flow projections 7.1. Fair Value Hierarchy Fair Value Measurement of Investment Properties (Level 3, RMB thousands) | Type of Investment Property | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Office Buildings | 6,502,900 | 6,581,900 | | Apartments | 2,063,360 | 2,115,270 | | Convention Centers | 3,995,000 | 4,009,000 | | Shopping Malls | 3,496,200 | 3,578,600 | | Others | 6,119 | 12,239 | | Total | 16,063,579 | 16,297,009 | - There were no transfers between Level 1, 2, and 3 during the period[53] 7.2. Valuation Process - The Group's investment properties were valued by independent professional valuer, Rui Feng Appraisal Consulting Co, Ltd, as of June 30, 2025[54] - The Group's finance department has a team responsible for reviewing the valuations of independent valuers for financial reporting purposes, reporting directly to the Chief Financial Officer[54] 7.3. Valuation Techniques - Office buildings, apartments (excluding Block A), and shopping malls are valued using the income capitalization approach (term and reversion method), primarily employing unobservable inputs such as market rents and capitalization rates[58] - Convention centers and Block A of apartments are valued using the discounted cash flow projection method, determined by significant unobservable inputs such as future rental cash flows, discount rates, estimated vacancy rates, maintenance costs, capitalization rates, and terminal values[59] - There were no changes in valuation techniques during the period[59] 8. Properties Under Development As of June 30, 2025, the net book value of properties under development decreased, primarily due to an increase in accumulated impairment Key Properties Under Development Data (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Land Use Rights | 5,281,513 | 5,358,373 | | Development Costs and Capitalized Expenses | 2,610,002 | 2,673,900 | | Capitalized Finance Costs | 1,546,487 | 1,517,151 | | Less: Accumulated Impairment | (1,296,835) | (869,223) | | Total | 8,141,167 | 8,680,201 | - Accumulated impairment increased from RMB 869,223 thousand as of December 31, 2024, to RMB 1,296,835 thousand as of June 30, 2025[60] 9. Trade and Other Receivables and Prepayments As of June 30, 2025, total trade and other receivables decreased, mainly due to a significant reduction in other receivables in the non-current portion, coupled with an increase in allowance for doubtful debts for trade receivables 9.1. Trade and Other Receivables Key Trade and Other Receivables Data (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Receivables – Net | 228,218 | 197,017 | | Amounts Due from Other Related Parties | 300,360 | 830,703 | | Amounts Due from Non-controlling Interests | 655,589 | 693,975 | | Other Receivables – Net | 1,046,041 | 1,216,235 | | Total | 1,274,259 | 1,413,252 | - Amounts due from other related parties significantly decreased from RMB 830,703 thousand to RMB 300,360 thousand[63] - Allowance for doubtful debts for trade receivables increased from RMB 84,693 thousand to RMB 114,295 thousand[63] 9.2. Trade Receivables Aging Analysis of Trade Receivables (RMB thousands) | Aging | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 0 to 30 days | 65,143 | 125,889 | | 31 to 90 days | 39,516 | 29,836 | | Over 90 days | 237,854 | 125,985 | | Total | 342,513 | 281,710 | - Trade receivables over 90 days increased from RMB 125,985 thousand to RMB 237,854 thousand, indicating a deterioration in the aging structure[64] - As of June 30, 2025, non-controlling interests are no longer considered related parties[64] 10. Share Capital As of June 30, 2025, the company's registered, issued, and fully paid share capital remained unchanged at RMB 3,367,020 thousand Share Capital (RMB thousands) | Item | December 31, 2024 (Audited) | Changes During the Period | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | :--- | | Registered, Issued, and Fully Paid Share Capital | 3,367,020 | – | 3,367,020 | 11. Trade and Other Payables and Borrowings from Other Parties As of June 30, 2025, total trade and other payables decreased, but the current portion of borrowings from other parties significantly increased while the non-current portion substantially decreased, reflecting adjustments in debt structure 11.1. Trade and Other Payables Key Trade and Other Payables Data (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade Payables to Third Parties | 4,068,811 | 4,038,985 | | Trade Payables to Related Parties | 34,505 | 625,816 | | Other Payables | 982,762 | 1,002,941 | | Total | 5,361,130 | 5,992,601 | - Trade payables to related parties significantly decreased from RMB 625,816 thousand to RMB 34,505 thousand[68] - As of June 30, 2025, non-controlling interests are no longer considered related parties[68] 11.2. Borrowings from Other Parties Key Borrowings/Amounts from Other Parties Data (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Borrowings Due to Non-controlling Interests | 1,350,799 | 2,029,288 | | Amounts Due to North Star Group | 1,448,407 | 1,656,770 | | Asset-backed Special Plans Issued by the Company | 2,885,184 | 2,884,627 | | Total | 5,914,684 | 6,807,495 | - Borrowings due to non-controlling interests decreased from RMB 2,029,288 thousand to RMB 1,350,799 thousand[71] - The book value of asset-backed special plans issued by the Company was RMB 2,885,184 thousand, with an annual interest rate of 5%[70] Aging Analysis of Trade Payables to Third Parties and Related Parties (RMB thousands) | Aging | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 0 to 180 days | 803,263 | 1,499,404 | | 181 to 365 days | 515,678 | 578,138 | | Over 365 days | 2,784,375 | 2,587,259 | | Total | 4,103,316 | 4,664,801 | 12. Borrowings As of June 30, 2025, the company's total borrowings slightly decreased, with a reduction in long-term borrowings due within one year and an increase in long-term borrowings, reflecting adjustments in the debt structure. The company issued multiple corporate bonds and medium-term notes, with some investors exercising put options 12.1. Secured and Guaranteed Borrowings - As of June 30, 2025, long-term borrowings of RMB 13,336,081 thousand were secured by certain right-of-use assets, investment properties, hotel properties, properties under development, completed properties held for sale, and trade receivables[76] - Of the secured borrowings, RMB 3,223,239 thousand were also guaranteed by the Company[76] - As of June 30, 2025, the Company had no borrowings guaranteed and secured by subsidiaries (December 31, 2024: RMB 190,690 thousand)[77] 12.2. Corporate Bonds and Medium-Term Notes - The Company issued multiple five-year corporate bonds and medium-term notes in 2021, with annual coupon rates ranging from 3.46% to 3.50%, and some investors exercised put options at the end of the third year, leading to a reduction in coupon rates[79][80][81][82] - The three-year corporate bond issued on April 17, 2023, was fully sold back to the Company by investors on April 15, 2025, and has been repaid[82] - Three new bonds were issued in 2025: a three-year corporate bond (3.50%), a two-year corporate bond (2.50%), and a three-year medium-term note (2.40%)[83][84] 13. Operating Loss During the reporting period, the company's operating loss was primarily affected by a significant increase in fair value losses on investment properties and impairment losses on properties under development and completed properties held for sale Key Components of Operating Loss (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Fair Value Losses on Investment Properties Expensed in Profit or Loss | (228,821) | (245,672) | | Impairment Losses on Properties Under Development and Completed Properties Held for Sale | (1,077,353) | (478,572) | | Net Impairment Losses on Financial Assets | (60,932) | (133,539) | | Government Grants | 3,763 | 1,075 | | Investment Income | 8,350 | 26,738 | - Impairment losses on properties under development and completed properties held for sale significantly increased from RMB 478,572 thousand to RMB 1,077,353 thousand[86] - Investment income decreased from RMB 26,738 thousand to RMB 8,350 thousand[86] 14. Finance Income and Costs During the reporting period, the company's net finance costs significantly increased, mainly due to higher interest expenses and reduced capitalized amounts, coupled with a substantial decrease in interest income Finance Income and Costs (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Interest Expense | (532,611) | (626,436) | | Less: Amount Capitalized in Properties Under Development | 43,320 | 206,150 | | Finance Costs | (493,708) | (423,279) | | Finance Income – Interest Income | 19,974 | 72,307 | | Net Finance Costs | (473,734) | (350,972) | - The amount capitalized in properties under development significantly decreased from RMB 206,150 thousand to RMB 43,320 thousand[89] - Interest income decreased from RMB 72,307 thousand to RMB 19,974 thousand[89] 15. Income Tax Expense During the reporting period, the company's income tax expense decreased, mainly due to a reduction in China corporate income tax and a shift from positive to negative land value-added tax, with deferred income tax turning from negative to positive - The China income tax rate is 25%, with some high-tech enterprise subsidiaries enjoying a preferential tax rate of 15%[90] Components of Income Tax Expense (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | China Corporate Income Tax | 92,946 | 175,727 | | China Land Appreciation Tax | (25,559) | 78,128 | | Deferred Income Tax | 88,227 | (80,295) | | Total | 155,614 | 173,560 | - China Land Appreciation Tax shifted from RMB 78,128 thousand in H1 2024 to RMB (25,559) thousand in H1 2025[91] 16. Loss Per Share During the reporting period, the company's basic and diluted loss per share both significantly expanded, reflecting the increased loss attributable to ordinary equity holders Loss Per Share Data | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Loss Attributable to Ordinary Equity Holders of the Company (RMB thousands) | (1,647,124) | (769,580) | | Number of Ordinary Shares Issued (thousands) | 3,367,020 | 3,367,020 | | Loss Per Share (RMB cents per share) | (48.92) | (22.86) | - The Company had no potential dilutive ordinary shares for the six months ended June 30, 2025, and 2024, thus diluted loss per share was equal to basic loss per share[92] 17. Dividends The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[95] - The annual general meeting held in May 2025 resolved not to declare a final dividend for the year ended December 31, 2024[95] 18. Pledged Assets As of June 30, 2025, the company pledged various assets as collateral for RMB 13,319,822 thousand in borrowings, with the total value of pledged assets slightly decreasing - As of June 30, 2025, the Group pledged certain investment properties with a fair value of RMB 9,854,000 thousand, right-of-use assets with a net book value of RMB 369,619 thousand, property, plant and equipment of RMB 1,430,977 thousand, properties under development of RMB 2,442,350 thousand, and trade receivables of RMB 14,725 thousand as collateral for borrowings of RMB 13,319,822 thousand[96] - Total pledged borrowings slightly decreased from RMB 13,400,494 thousand as of December 31, 2024, to RMB 13,319,822 thousand[96] 19. Financial Guarantees The Group provides stage-based joint and several liability guarantees for bank mortgage loans to property purchasers, with outstanding guarantee amounts of RMB 4,074,213 thousand, and the company's directors believe the likelihood of significant loss is remote - The Group provides stage-based joint and several liability guarantees for bank mortgage loans granted to property purchasers[97] - As of June 30, 2025, the outstanding guarantee amount was RMB 4,074,213 thousand (December 31, 2024: RMB 4,175,446 thousand)[97] - The Group has not recognized any liabilities related to the above financial guarantee contracts, as the Company's directors believe that the possibility of the Group incurring any significant loss on these financial guarantee contracts is remote[97] 20. Commitments As of June 30, 2025, the company's total capital commitments for properties under development and investment properties decreased, but total future rental receivables increased Capital Commitments for Development Costs of Properties Under Development and Investment Properties (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Properties Under Development | 2,786,885 | 3,066,893 | | Investment Properties | 27,108 | 19,645 | | Total | 2,813,993 | 3,086,538 | Rental Receivables from Investment Properties (RMB thousands) | Period | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within 1 year | 705,098 | 541,523 | | 2 to 5 years | 1,041,972 | 1,028,693 | | After 5 years | 371,984 | 433,149 | | Total | 2,119,054 | 2,003,365 | 21. Significant Non-Cash Investing or Financing Activities During the reporting period, the company engaged in several non-cash investing and financing activities, including the recognition of right-of-use assets and lease liabilities, conversion of non-controlling interest borrowings into equity, conversion of associate borrowings into equity, and offsetting completed properties held for sale against borrowings due to non-controlling interests - The recognition of right-of-use assets and lease liabilities for property and equipment is considered a non-cash investing and financing activity[103] - Borrowings of RMB 701,115 thousand from non-controlling interests to subsidiary Guangzhou Chenxu Real Estate Co, Ltd were converted into equity attributable to non-controlling shareholders under a shareholder loan-to-equity arrangement[103] - Borrowings of RMB 91,447 thousand from the Group to associate Guangzhou Guangyue Real Estate Co, Ltd were converted into an investment accounted for using the equity method under a shareholder loan-to-equity arrangement[103] - Completed properties held for sale of RMB 9,588 thousand were offset against borrowings due to non-controlling interests[103] 22. Related Party Transactions The Group has various related party transactions with North Star Group and its controlled entities, including borrowings, and provision and receipt of services. During the reporting period, some non-controlling interests, Jinyu Real Estate, China Construction, and CSCEC Jiuhua are no longer considered related parties 22.1. Acceptance/Provision of Services and Leases from Related Parties Revenue from Services and Leases Provided to Related Parties (RMB thousands) | Related Party | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Beijing North Star Convention and Exhibition Investment Co, Ltd | 12,500 | 1,925 | | Nanjing North Star Yangtze River Convention and Exhibition Co, Ltd | 1,499 | 2,877 | | Beijing North Star Asian Games Village Automobile Exchange Market Co, Ltd | 788 | 858 | Expenses for Services and Leases Received from Related Parties (RMB thousands) | Related Party | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | North Star Group (Trademark License Fees) | 5 | 5 | | North Star Convention and Exhibition Investment (Lease Fees and Convention and Exhibition Services) | 34,226 | – | | China Construction (Construction Services Received) | – | 398,651 | - For the six months ended June 30, 2025, China Construction is no longer considered a related party[106] 22.2. Borrowings from North Star Group Changes in Borrowings from North Star Group (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Beginning of Period | 1,656,770 | 2,902,871 | | Repayment of Borrowings | (208,000) | (2,250,000) | | End of Period | 1,448,407 | 1,601,733 | - As of June 30, 2025, the Company repaid RMB 208,000 thousand of borrowings from North Star Group, with remaining borrowings of RMB 1,447,000 thousand, all unsecured, unpledged, or unguaranteed, and an annual interest rate of LPR for over five years minus 10 basis points/year[109][110] 22.3. Borrowings from CSCEC Jiuhua Changes in Borrowings from CSCEC Jiuhua (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Beginning of Period | – | 444,948 | | Proceeds from Borrowings | – | 1,664 | | End of Period | – | 454,745 | - For the six months ended June 30, 2025, CSCEC Jiuhua is no longer considered a related party[111] 22.4. Project Cooperation Development Funds Provided to Associates and Joint Ventures Project Cooperation Development Funds Provided to Associates and Joint Ventures (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | January 1, 2024 (Unaudited) | | :--- | :--- | :--- | | Wuhan Jinchen Yingchuang | 300,355 | 287,942 | | Guangzhou Guangyue | – | 585,235 | | Total | 300,355 | 873,177 | - As of June 30, 2025, the amounts provided by the Group to Guangzhou Guangyue were converted into an investment accounted for using the equity method under a shareholder loan-to-equity arrangement[115] - The Group's allowance for doubtful debts for amounts due from Wuhan Jinchen Yingchuang was RMB 139,517 thousand[115] 22.5. Funds Obtained from Related Parties End-of-Period Balances of Funds Obtained from Related Parties (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | January 1, 2024 (Unaudited) | | :--- | :--- | :--- | | Wuhan Dangdai | 42,000 | 42,000 | | Beijing Chenxuan | 96,220 | 96,220 | | Wuxi Chenwan | 22,050 | 22,050 | | Guangzhou Guangyue | 21,760 | – | | Total | 182,040 | 321,416 | - Funds obtained from related parties are unsecured, unguaranteed, interest-free, and have no fixed repayment dates[120] - As of June 30, 2025, Jinyu Real Estate is no longer considered a related party[118] 22.6. Funds Provided to Jinyu Real Estate Changes in Funds Provided to Jinyu Real Estate (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Beginning of Period | – | 416,500 | | End of Period | – | 416,500 | - For the six months ended June 30, 2025, Jinyu Real Estate is no longer considered a related party[122] - Funds provided to Jinyu Real Estate are unsecured, unpledged, interest-free, and have no fixed repayment terms[123] 22.7. Advances for Related Parties Changes in Advances for Related Parties (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | January 1, 2024 (Unaudited) | | :--- | :--- | :--- | | Chenxing Company | – | – | | Wuhan Dangdai | – | – | | Yuanchenxin Property | – | – | | North Star Asian Games Village | – | – | | Total | – | – | - Advances of RMB 388 thousand were made during the period and have been fully repaid[124] - Amounts provided to related parties are unsecured, unpledged, interest-free, and have no fixed repayment terms[124] 22.8. Balances of Purchases of Goods and Services, Advances and Amounts Amounts Due from Related Parties (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Guangzhou Guangyue | – | 538,995 | | Wuhan Jinchen Yingchuang | 300,355 | 291,708 | | Jinyu Real Estate | – | 416,500 | | Total | 312,870 | 1,258,085 | Amounts Due to Related Parties (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Kangchen Aoyun | 1,375 | 1,853 | | China Construction | – | 623,022 | | North Star Convention and Exhibition Investment | 33,232 | – | | Total | 35,309 | 626,182 | Borrowings/Amounts from Related Parties (RMB thousands) | Related Party | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | North Star Group | 1,448,407 | 1,656,770 | | CSCEC Jiuhua | – | 463,043 | | Guangzhou Guangyue | 21,760 | 11,760 | | Total | 1,630,437 | 2,308,359 | - As of June 30, 2025, the Group recognized a loss allowance of RMB 140,066 thousand for amounts due from related parties based on the expected credit loss model[128] - For the six months ended June 30, 2025, Jinyu Real Estate, China Construction, and CSCEC Jiuhua are no longer considered related parties[130] 22.9. Key Management Personnel Remuneration Key Management Personnel Remuneration (RMB thousands) | Item | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Salaries and Other Short-term Employee Benefits | 9,656 | 6,485 | | Post-employment Benefits | 1,155 | 1,092 | | Total | 10,811 | 7,577 | 22.10. Lease Liabilities Lease Liabilities (RMB thousands) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | North Star Group (Lease Liabilities for Land) | 16,695 | 16,339 | - The Group entered into an asset transfer agreement with North Star Group to acquire land, and prior to the approval of the final transfer price, the Group recognized a right-of-use asset and a lease liability[131][132] 22.11. Dividends Received/Receivable - For the six months ended June 30, 2025, the Group had no dividends received/receivable[133] - For the six months ended June 30, 2024, the Group's joint venture, Hangzhou Jinhu, distributed dividends of RMB 42,730 thousand to the Group[134] Supplementary Information Consolidated Interim Financial Information Reconciliation Table The Group provides a reconciliation table of financial information prepared under China Accounting Standards and Hong Kong Financial Reporting Standards, with key differences in depreciation, impairment provisions, and fair value adjustments for investment properties Reconciliation Table of China Accounting Standards and Hong Kong Financial Reporting Standards (RMB thousands) | Item | Loss Attributable to Owners of the Company for H1 2025 | Loss Attributable to Owners of the Company for H1 2024 | Equity Attributable to Owners of the Company as of June 30, 2025 | Equity Attributable to Owners of the Company as of December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Under China Accounting Standards | (1,585,414) | (738,317) | 8,113,729 | 9,699,143 | | Reversal of Depreciation and Impairment Provisions for Investment Properties under China Accounting Standards | 109,537 | 151,890 | 2,995,689 | 2,886,152 | | Fair Value Adjustments for Investment Properties under Hong Kong Financial Reporting Standards | (171,247) | (183,153) | 3,526,863 | 3,698,110 | | Under Hong Kong Financial Reporting Standards | (1,647,124) | (769,580) | 14,636,281 | 16,283,405 | Management Discussion and Analysis I. Company's Industry and Main Business Operations in the Reporting Period The company's main businesses include convention and exhibition (including hotel) and commercial property, and real estate development. In H1, China's economy showed steady improvement, the MICE industry developed rapidly, the hotel industry moderately recovered, and the office market stabilized. The real estate market continued its recovery, but transaction volume slightly decreased I.1. Company Business Overview I.1.a. Convention and Exhibition (including Hotel) Business - The company's convention and exhibition (including hotel) business, relying on Capital Exhibition (Group) Co, Ltd, actively promotes a full industry chain layout for conventions and exhibitions, becoming a professional operator for the China International Fair for Trade in Services (CIFTIS) and a service provider for high-end state and government events[138] I.1.b. Commercial Property Business - The company's commercial property business, relying on Beijing North Star Commercial Management Co, Ltd, provides professional asset operation and property service management for the company's multi-format assets, including office buildings, apartments, and integrated commercial properties[142] I.1.c. Real Estate Development Business - The company's real estate development business has formed a multi-regional, multi-level national scaled development layout, involving diversified and multi-grade property development and operation, including residential, apartment, villa, office building, and commercial properties[143] - As of the end of the reporting period, the company's development projects and land reserves are distributed across 15 core cities, including Beijing-Tianjin-Hebei, the Yangtze River Economic Belt, the Chengdu-Chongqing urban agglomeration, Hainan Free Trade Port, and the Guangdong-Hong Kong-Macao Greater Bay Area[143] I.2. Industry Development Situation I.2.a. Convention and Exhibition (including Hotel) and Commercial Property - In H1 2025, China's convention and exhibition industry developed rapidly, with expanding market scale, accelerated digital transformation, and significantly enhanced internationalization[147] - The hotel industry saw a moderate recovery in occupancy rates due to the resurgence of domestic business demand and a rebound in the tourism market, but average room rates remained under pressure[147] - The Beijing office market experienced continued tightening on the supply side and a rebound in demand, with vacancy rates declining, rental decreases narrowing, and the market showing signs of bottoming out and stabilizing[147] I.2.b. Real Estate Development - In H1 2025, China's real estate market continued its recovery, with further optimization of supply-demand dynamics, and sustained policy support from central and local governments[148] - In H1, national commercial residential sales area decreased by 3.7% year-on-year, and sales value decreased by 5.2% year-on-year[148] - In H1, land auction activity was mainly concentrated in core cities, with a significant increase in residential land transfer fees but a decrease in transaction area, and central state-owned enterprises remained the main force in land acquisition[148] II. Analysis of Core Competencies in the Reporting Period The company's core competencies lie in its leading domestic convention and exhibition brand influence and integrated real estate development and operation capabilities, driving synergistic development across segments through a 'convention and exhibition-led' strategy and maintaining a low financing cost advantage through a 'headquarters financing' model - The company's core competencies are primarily reflected in its comprehensive influence as a convention and exhibition brand and its integrated real estate development and operation capabilities[150] - In the convention and exhibition sector, the company is the official professional operator of CIFTIS, one of the main organizers of China Refrigeration Expo, and maintains the top position nationwide in terms of convention and exhibition venue management scale[153] - In the real estate sector, the company possesses integrated real estate development and operation capabilities, covering multi-format projects, and actively innovates development models, promoting the linkage of 'convention and exhibition + real estate' projects[155] - The company utilizes a 'headquarters financing' model, maintaining a low financing cost advantage and enhancing risk resistance capabilities through its strong credit standing and risk management abilities[155] III. Discussion and Analysis of Operating Conditions In H1 2025, the company focused on 'synergistic development and reform innovation' to actively address industry challenges. Operating revenue decreased by 11.97% year-on-year, and loss before tax and loss attributable to ordinary equity holders both significantly increased. The convention and exhibition and commercial property segment saw revenue growth and increased profit, while the real estate development segment experienced revenue decline and expanded losses III.1. Company Operating Review III.1.a. Convention and Exhibition (including Hotel) and Commercial Property III.1.a.i. Convention and Exhibition (including Hotel) The convention and exhibition (including hotel) segment achieved steady and positive operations by refining service guarantees for state and government events, enhancing the quality of event organization, steadily expanding venue and hotel operation management scale, strengthening research and consulting capabilities, and improving digitalization - During the reporting period, the convention and exhibition (including hotel) and commercial property segment achieved operating revenue of RMB 1,476,714 thousand, a year-on-year increase of 18.32%; profit before tax was RMB 201,526 thousand, a year-on-year increase of 1.59%[158] - Successfully completed service guarantee tasks for several major state and government events, including the 4th Ministerial Meeting of the China-CELAC Forum and the 10th Annual Meeting of the Asian Infrastructure Investment Bank in 2025[160] - Successfully hosted exhibitions such as the 29th World Gas Conference and the 2025 China Refrigeration Expo, with the World Gas Conference exhibition area exceeding 50,000 square meters and the China Refrigeration Expo total exhibition area reaching 115,000 square meters, both setting new historical highs[161] - Self-owned venues and hotels hosted 1,071 various exhibition events, a year-on-year increase of approximately 58.9%. Newly signed 3 entrusted management projects for venues and hotels and 3 consulting projects, with management output business now in 33 cities nationwide[164] - Phase II of the National Convention Center and Capital International Exhibition Center officially commenced operations, forming a world-class convention and exhibition complex, and successfully undertaking large-scale technology exhibitions and automotive brand launch events[166] III.1.a.ii. Commercial Property The commercial property segment steadily improved its operational quality and efficiency by promoting the normalized operation of the Asian Olympic Business District New Consumption Innovation Alliance, solidifying asset operations with an industrial mindset, activating consumption potential in apartment formats, actively attracting investment for the Chaoyang Data Industrial Park, and fully advancing property management business expansion - Promoted the normalized operation of the Asian Olympic Business District New Consumption Innovation Alliance, continuously expanding alliance members to 24, organizing activities such as 'Convention and Exhibition Market' and developing 'Asian Olympic Consumption Pass' to foster integrated development of 'convention and exhibition, business, culture, tourism, and sports'[173] - Established a 'full-spectrum' office building product system, implementing precise marketing for the Asian Games and Olympic regional markets to enhance customer loyalty[173] - Actively carried out investment promotion for Chaoyang Data Industrial Park, successfully signing 14 industrial enterprises and entering into a co-construction agreement with the Chaoyang Park Management Committee[176] - North Star Yue Property successfully took over high-end property services for North Star Center, North Star Hui, Olympic Tower, and other properties, establishing a new benchmark for commercial property asset management in Beijing's Asian Olympic Business District[176] Operating and Rental Income from Major Leased Properties During the Reporting Period (RMB thousands) | No | Project | Operating Format | Gross Floor Area (square meters) | Rental Income | | :--- | :--- | :--- | :--- | :--- | | 1 | National Convention Center | Convention, Exhibition | 270,800 | 200,110 | | 6 | North Star Century Center | Office Building | 149,800 | 95,030 | | 13 | North Star Huiyuan Hotel Apartment | Apartment | 184,300 | 125,180 | | 15 | Changsha North Star Delta Joy City | Commercial | 100,000 | 64,820 | III.1.b. Real Estate Development The real estate development segment coordinated inventory reduction, ensured delivery, prevented risks, and sought transformation amidst market adjustments. During the reporting period, operating revenue for the real estate development segment decreased by 29.71% year-on-year, and loss before tax expanded, mainly due to reduced settlement area and lower gross profit margin - During the reporting period, the real estate development segment achieved operating revenue of RMB 1,461,344 thousand (including parking spaces), a year-on-year decrease of 29.71%[181] - Loss before tax was RMB 1,606,723 thousand, an increase in loss of RMB 805,383 thousand compared to the prior period[181] - The company achieved contracted sales of RMB 2.282 billion (including parking spaces) and a sales area of 174,900 square meters[181] - Achieved a commencement and resumption of construction area of 1,093,900 square meters and a completed area of 27,400 square meters[185] - Efficiently promoted the exit of tail-end projects and revitalized idle assets through strategies of 'liquidation and deregistration, absorption and merger, and equity transfer'[186] Real Estate Sales and Revenue Recognition During the Reporting Period (RMB thousands) | No | Project | Operating Format | Area Sold (including pre-sold) (square meters) | Revenue Recognized | | :--- | :--- | :--- | :--- | :--- | | 6 | Beijing North Star Red Oak Villa | Villa | 16,069 | 145,020 | | 8 | Beijing Jinchen Mansion | Residential | 2,996 | 141,530 | | 10 | Changsha North Star Delta | Residential, Commercial, Office Building, etc | 14,059 | 72,640 | | 38 | Chongqing Yuelai No. 1 | Residential, Commercial | 35,602 | 327,720 | | Total | - | - | 174,933 | 1,461,344 | - Area pending revenue recognition at the end of the reporting period was 198,287 square meters[196] III.1.c. Digital Construction The company leverages its digital marketing platform to integrate digital marketing capabilities across its convention and exhibition, commercial property, and real estate segments, forming a unified external digital marketing channel, and has completed the construction of an integrated asset-business-finance digital platform to enhance resource utilization efficiency and market competitiveness - The company relies on its digital marketing platform to integrate the digital marketing capabilities of its three major business segments—convention and exhibition, commercial property, and real estate—achieving 'unified brand promotion, unified channel expansion, and unified resource allocation'[198] - Completed the construction of an integrated asset-business-finance digital platform, promoting integrated management and control of asset management, business operations management, and financial management, enhancing resource allocation efficiency, and fostering product and service innovation[198] III.1.d. Financing Work The company strengthened capital planning and debt management, with total financing remaining stable at the end of the reporting period, and the overall average financing cost further decreasing, providing financial assurance for operational development - Total financing at the end of the reporting period was RMB 23.69 billion, providing stable financial assurance for the company's operational development[199] - The overall average financing cost further decreased to 3.66%[199] Company Financial Financing During the Reporting Period (RMB thousands) | Total Financing at Period-End | Overall Average Financing Cost (%) | Amount of Interest Capitalized | | :--- | :--- | :--- | | 23,687,450 | 3.66 | 43,320 | IV. Company Development Strategy The company will focus on 'synergistic development and reform innovation,' promoting a full industry chain layout for conventions and exhibitions, accelerating real estate business transformation, enhancing commercial property operational efficiency, and leveraging digital construction to form a new industrial pattern where convention and exhibition, real estate, and commercial management mutually support, complement each other, and develop synergistically IV.1. Convention and Exhibition (including Hotel) and Commercial Property - The goal of the convention and exhibition business segment is to build an international first-class, domestic leading convention and exhibition brand, strengthening the two core functions of 'service guarantee' and 'driving promotion,' with 'internationalization, digitalization, greening, branding, industrialization, and ecologicalization' as the main lines, to reinforce the full industry chain layout of conventions and exhibitions[203] - The goal of the commercial property segment is to build a leading domestic brand for public building and park-type asset operation and management, focusing on office buildings, apartments, and commercial park businesses, enhancing professional levels, and promoting business optimization and upgrading[205] - Deeply promote the innovative development of the Asian Olympic Business District New Consumption Alliance, exploring the creation of integrated innovative consumption scenarios such as 'culture + commerce,' 'tourism + sports,' and 'food + events'[205] IV.2. Real Estate Development - The goal of real estate development is to build a unique high-quality life service provider and integrated urban development operator, focusing on the 'one core, two wings' strategy, driving the transformation of the development model with 'North Star Services' and 'convention and exhibition + real estate'[206] - Accelerate the disposal of existing projects, with an estimated commencement and resumption of construction area of 1,066,500 square meters and a completed area of 195,600 square meters in H2 2025, striving to achieve a sales area of 288,200 square meters and contracted sales of RMB 3.228 billion[206] - Promote deep synergy of 'convention and exhibition + real estate + commercial management,' relying on Changsha North Star Delta to develop the 'North Star Riverside Business District,' and explore the 'convention center + residential' project development model[206] IV.3. Digital Construction - The company will actively cultivate new digital businesses, systematically promoting digital transformation around the upstream and downstream service ecosystem of the convention and exhibition industry, the urban consumption center business district ecosystem of Asian Olympic, and the company's various business formats[207] IV.4. Financing Work and Capital Expenditure - The company will strengthen capital planning, fully utilize the 'headquarters financing' model, innovate financing methods, broaden financing channels, strengthen debt management, and improve capital utilization efficiency[208] - In H2 2025, the company expects fixed asset investment of RMB 40 million, with funding arranged from its own capital[208] V. Risks the Company May Face The company faces market risks and talent reserve risks. The ongoing adjustment in the real estate market may affect sales collection efficiency, while the advancement of convention and exhibition and commercial property businesses significantly increases the demand for specialized and senior management talent V.1. Market Risk - The current real estate market remains in an adjustment period, with buyer confidence not yet significantly restored and market wait-and-see sentiment not yet reversed, which may lead to sustained low levels of sales volume and price, directly impacting sales collection efficiency[210] - The company will closely monitor market development trends, select cities and regions with relatively mature markets, good investment environments, net population inflow, and reasonable housing price-to-income ratios, and strengthen professional management to improve cash recovery rates[210] V.2. Talent Reserve Risk - With the steady advancement of the company's convention and exhibition and commercial property businesses, the demand for various types of talent, especially specialized and senior management talent, has significantly increased, posing a risk of talent shortage[211] - The company actively builds a 'grand talent' work framework, attracting and gathering talent through various channels such as 'excellent cultivation programs,' school-enterprise cooperation, and market-oriented selection of professional managers, and strengthening the reserve and training of young cadres and talent[211] VI. Discussion and Analysis of Financial Performance As of June 30, 2025, equity attributable to ordinary equity holders decreased by 10.12%, primarily due to the loss for the period. The company maintains good liquidity, stable asset-liability ratio and capital-to-debt ratio, with no significant foreign exchange fluctuation risks - Equity attributable to ordinary equity holders of the Company as of June 30, 2025, decreased by 10.12% compared to December 31, 2024, primarily due to the loss attributable to ordinary equity holders of the Company of RMB 1,647,124 thousand incurred during the period[212] - The Group's current assets amounted to RMB 34,195,564 thousand, while current liabilities amounted to RMB 16,580,383 thousand[213] - As of June 30, 2025, the balance of bank deposits and cash was RMB 6,237,377 thousand, with no risk of default on issued bonds[213] - At the end of the reporting period, the Group's asset-liability ratio, calculated as total liabilities divided by total assets, was 68% (December 31, 2024: 68%); the capital-to-debt ratio, calculated as total debt divided by total equity, was 111.5% (December 31, 2024: 107.4%)[213] [VII.