上实城市开发(00563) - 2025 - 中期财报

Company Information Overview of Company Information This chapter provides an overview of the company's board members, key personnel, corporate offices, auditor, and listing details - Board member changes: Mr. Li Zhonghui was appointed President and Executive Director on August 1, 2025, while Mr. Tang Jun resigned from the same positions on the same day[12] - Auditor: Deloitte Touche Tohmatsu[13] - Listing information: Ordinary shares on The Stock Exchange of Hong Kong Limited, stock code: 563[13] Financial Highlights Key Financial Data and Ratios This chapter reports key financial data and ratios for the six months ended June 30, 2025, showing significant revenue decline, expanded losses, and an increased net debt-to-equity ratio Key Financial Data (For the six months ended June 30) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 1,827,835 | 2,980,833 | -38.7% | | Loss attributable to owners of the Company | (492,139) | (231,564) | Loss widened | | Basic loss per share (HK cents) | (10.29) | (4.84) | Loss widened | | Proceeds received from pre-sales of properties | 719,348 | 1,106,886 | -35.0% | | Net debt to total equity ratio | 76.1% | 64.8% | Increased by 11.3 percentage points | | Current ratio | 1.3 | 1.2 | Increased by 0.1 | - Debt maturity structure: Debt is primarily concentrated in maturities of less than one year and one to two years, accounting for 39.1% and 25.6% respectively[15] Chairman's Report Macroeconomic and Real Estate Market Review The Chairman's report reviews the complex global macroeconomic and Chinese real estate market environment in H1 2025, highlighting the company's steady development strategy and achievements amid challenges - Global economic growth slowed with increasing divergence, constrained by trade frictions and policy uncertainties; China's economy showed strong resilience, with H1 GDP growing by 5.3% year-on-year[17] - Chinese real estate policies continued to strengthen, focusing on destocking, expanding demand, new models, and risk mitigation; core cities stabilized first, but the overall market still faces sales slowdown and inventory pressure[18] Company's H1 Operational Highlights and Honors The company maintained a steady development strategy, advancing quality projects and achieving stable operating indicators, while receiving multiple industry awards for its outstanding performance - Three high-quality, exquisitely furnished bungalows at Xi'an Shanghai Industrial Qiyuan were successfully delivered, reflecting Shanghai Industrial Urban Development's commitment from 'delivering houses' to 'delivering lifestyles'[18] - The Qianji brand gained recognition in the affordable rental housing market, with Qianji • Hui Community and Qianji • Xin Community both rated as 'Shanghai 5A Youth Centers'; 302 new units at Qianji • Chuang Community West District also launched in April, receiving positive market feedback[20] - Shanghai Chenkai (Group) Co., Ltd. successfully issued the first tranche of 2025 medium-term notes, with a principal of RMB 900 million over 3 years at an interest rate of 1.99%, setting a new low for comparable notes issued by Chinese real estate developers with the same credit rating and maturity[20] - Received the GA+ AWARDS 2024 Platinum Award for Residential Architecture Design, listed among the '2025 Top 500 Real Estate Development Enterprises' and '2025 Top Real Estate Listed Companies', with flagship project Shanghai Industrial Tinghai selected as one of the first 'Shanghai Good House Collection Cases'[21][22] H2 Outlook and Strategy For H2 2025, the company will align with national policies, optimize its core business, deepen structural adjustments, enhance operational efficiency, and strengthen cash flow management - The Chinese real estate market remains in a phase of adjustment and recovery, but with a series of favorable policy supports, it is expected to achieve stable and orderly development[22] - Shanghai Industrial Urban Development will respond to national policy guidance, focusing on its strategic positioning as a 'core urban industry-city integrated developer,' precisely grasp market dynamics, steadfastly optimize and expand its main business, deepen structural adjustments, and comprehensively enhance operational management efficiency and core competitive advantages[23] - The Group will focus on strengthening sales collection efficiency and cash flow management, driving asset revitalization, cost reduction, and efficiency improvement through dual efforts in debt structure optimization and revenue enhancement, continuously boosting capital operation capabilities and risk resilience to solidify a stable operating foundation[23] Management Discussion and Analysis Real Estate Market Environment In H1 2025, China's real estate market gradually stabilized with policy support, but regional differentiation persisted, with core cities showing resilience while lower-tier cities faced destocking pressure - The Chinese real estate market gradually stabilized under the dual effects of continuous policy efforts and market self-adjustment, but structural differentiation persists[25] - First-tier and core second-tier cities showed strong resilience, with some entering a virtuous development track, while third- and fourth-tier cities remain in an adjustment period with greater destocking pressure[25] H1 2025 China Real Estate Market Key Data (Y-o-Y) | Indicator | Y-o-Y Change | | :--- | :--- | | National real estate development investment | Decreased by 11.2% | | Sales of new commercial housing | Decreased by 5.5% | | Sales area of new commercial housing | Decreased by 3.5% | Business Review The company actively responded to market pressures by optimizing resource allocation, focusing on core cities, expanding investment properties, and adopting a prudent land acquisition strategy, despite a significant decline in contract sales Overview In H1 2025, the company actively optimized resource allocation, promoted project development, and enhanced investment and risk resistance capabilities, focusing on Shanghai and other core cities - Shanghai Industrial Urban Development actively responded to market challenges, focused on optimizing resource allocation, promoted multi-dimensional project development and business enhancement, pursued both revenue generation and cost reduction, continuously strengthened investment and risk resistance capabilities, and built a more resilient development model[26] - The Group will continue to strategically focus on Shanghai, steadily expand into other core first- and second-tier cities, actively optimize regional layout, deepen investment property business, flexibly increase quality land reserves, and focus on developing competitive high-end projects to further enhance comprehensive strength[26] Contract Sales For the six months ended June 30, 2025, the company's contract sales value and area for commercial and affordable housing significantly decreased year-on-year, primarily due to a higher proportion of sales in second-tier cities Contract Sales Data (For the six months ended June 30) | Indicator | 2025 | 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Contract sales value (RMB) | 689,140,000 | 2,283,730,000 | Decreased by 69.8% | | Total contract sales area (sqm) | 41,000 | 98,000 | Decreased by 58.2% | | Total average selling price (RMB per sqm) | Approx. 16,800 | Approx. 23,300 | Decreased by approx. 27.8% | - The higher proportion of sales in second-tier cities during the period was the main reason for the decrease in the total average selling price[27] - Shanghai Industrial Wanghai, Tianjin Industrial Yangshan, Yantai Industrial Yunlu, Shanghai Industrial Tinghai, Xi'an Nature, and Xi'an Industrial Qiyuan were key sales projects, accounting for approximately 39.9%, 20.8%, 12.6%, 10.1%, 8.1%, and 5.8% of total contract sales value during the period, respectively[27] Land Reserve As of June 30, 2025, the company held 27 projects in 10 key cities, with a future saleable GFA of approximately 3.29 million sqm, sufficient for 3-5 years of development, while maintaining a prudent land acquisition strategy - As of June 30, 2025, the Group's land reserve comprised 27 projects across 10 key mainland cities, with a future saleable GFA of approximately 3,293,000 sqm, sufficient for 3 to 5 years of development[28] - The Group maintained a prudent land acquisition strategy, strictly controlling the pace of land acquisition, adhering to 'quality first, efficiency-oriented,' strengthening the development and conversion of existing land reserves, and opportunely supplementing high-potential land reserves[28] Property Development For the six months ended June 30, 2025, the company had 6 projects under construction with a GFA of 906,000 sqm and delivered 57,000 sqm, with Shanghai Industrial Wanghai being the largest sales contributor - As of June 30, 2025, the Group had 6 projects under construction, with a GFA of 906,000 sqm, primarily including Xi'an Nature, Shanghai TODTOWN Tianhui, Shanghai Industrial Tinghai, Yantai Industrial Yunlu, and Xi'an Industrial Qiyuan[29] - Total delivered area was 57,000 sqm, mainly comprising Shanghai Industrial Wanghai, Tianjin Industrial Yangshan, Xi'an Industrial Qiyuan, Xi'an Nature, and Shanghai Industrial Yunduan[29] - Projects such as Shanghai Industrial Wanghai, Tianjin Industrial Yangshan, Yantai Industrial Yunlu, Shanghai Industrial Tinghai, Xi'an Nature, and Xi'an Industrial Qiyuan received widespread market acclaim and achieved ideal pre-sales results, with Shanghai Industrial Wanghai being the largest sales contributor[29] Investment Properties As of June 30, 2025, the company held approximately 1.254 million sqm of investment properties, with overall rental income decreasing by 4.3% year-on-year, while its Qianji brand maintained a high average occupancy rate of 86.5% in affordable rental housing - As of June 30, 2025, the Group had completed multiple commercial projects in 7 key cities including Shanghai, Beijing, Tianjin, Chongqing, Shenyang, Xi'an, and Shenzhen, holding a total investment property area of approximately 1,254,000 sqm[30] - During the period, the Group's overall rental income decreased by 4.3% year-on-year to HK$364,827,000 (H1 2024: HK$381,338,000)[30] - The Shanghai Qianji brand has established a competitive advantage in the affordable rental housing market, continuously enriching its product lines, with an average occupancy rate stably maintained at a high level of 86.5%[30] Financial Performance In H1 2025, the company faced financial challenges with significant year-on-year declines in revenue and gross profit, leading to an expanded loss for the period, despite reduced distribution, sales, and administrative expenses Revenue For the six months ended June 30, 2025, total revenue decreased by 38.7% year-on-year, primarily due to lower sales from project deliveries, though property sales remained the main source, with rental, property management, and hotel businesses providing stable contributions - For the six months ended June 30, 2025, the Group's revenue was HK$1,827,835,000, a year-on-year decrease of 38.7%, mainly due to lower sales from multiple project deliveries compared to the same period last year[31] Revenue Composition (For the six months ended June 30) | Revenue Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | 2025 Share | 2024 Share | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Property sales | 1,336,687 | 2,453,892 | 73.1% | 82.3% | -45.5% | | Rental income | 364,827 | 381,338 | 20.0% | 12.8% | -4.3% | | Hotel operations | 119,528 | 138,461 | 6.5% | 4.7% | -13.7% | | Property management | 6,793 | 7,142 | 0.4% | 0.2% | -4.8% | - Shanghai Industrial Wanghai, Tianjin Industrial Yangshan, Xi'an Industrial Qiyuan, Xi'an Nature, and Shanghai Industrial Yunduan accounted for 32.1%, 31.2%, 18.3%, 10.2%, and 4.3% of property sales revenue, respectively[31] Gross Profit and Gross Profit Margin For the six months ended June 30, 2025, gross profit significantly decreased by 56.5% year-on-year, with the gross profit margin falling by 6.0 percentage points to 14.8%, mainly due to lower-margin projects and reduced selling prices - For the six months ended June 30, 2025, the Group's gross profit was HK$269,874,000, a 56.5% decrease compared to the same period in 2024[32] - The gross profit margin was 14.8%, a 6.0 percentage point decrease from the same period in 2024, mainly due to fewer high-margin projects delivered and a reduction in average selling prices due to market conditions[32] Revaluation of Investment Properties For the six months ended June 30, 2025, the company recorded a net impairment loss of approximately HK$151 million from investment property revaluation, primarily due to a slight decrease in the fair value of multiple properties - For the six months ended June 30, 2025, the Group recorded a net impairment loss from investment property revaluation of approximately HK$151,069,000 (H1 2024: impairment of HK$210,465,000), mainly due to a slight decrease in the fair value of multiple investment properties[33] Distribution and Selling Expenses For the six months ended June 30, 2025, distribution and selling expenses decreased by 5.1% year-on-year to HK$101.6 million, primarily due to a decline in commercial property deliveries - For the six months ended June 30, 2025, the Group's distribution and selling expenses decreased by 5.1% year-on-year to HK$101,616,000 (H1 2024: HK$107,098,000), mainly due to a year-on-year decrease in the delivery of the Group's commercial properties[34] General and Administrative Expenses For the six months ended June 30, 2025, general and administrative expenses decreased by 8.9% year-on-year to HK$197.5 million, primarily due to the continuous strict implementation of cost control measures - For the six months ended June 30, 2025, the Group's general and administrative expenses decreased by 8.9% year-on-year to HK$197,546,000 (H1 2024: HK$216,773,000), mainly due to the continuous strict implementation of cost control measures during the period, which yielded good results[35] Other Expenses, Income and Losses, Net For the six months ended June 30, 2025, the company recorded a net loss of approximately HK$63.5 million from other expenses, income, and losses, an increase from the prior year, mainly due to expected credit impairment losses from a joint venture and exchange losses - For the six months ended June 30, 2025, the Group recorded a net loss of approximately HK$63,501,000 from other expenses, income, and losses (H1 2024: net loss of HK$19,850,000), mainly due to expected credit impairment losses from a joint venture and exchange losses[36] Loss for the Period For the six months ended June 30, 2025, the company recorded a loss of HK$562.4 million for the period, significantly wider than the prior year, primarily due to reduced sales and lower gross margins from delivered properties, resulting in a basic loss per share of 10.29 HK cents - For the six months ended June 30, 2025, the Group recorded a loss of HK$562,427,000 (H1 2024: loss of HK$188,301,000), mainly due to reduced sales from multiple projects and lower gross margins from delivered commercial properties[37] - Loss attributable to shareholders was approximately HK$492,139,000 (H1 2024: loss of HK$231,564,000), with basic loss per share of 10.29 HK cents (H1 2024: loss of 4.84 HK cents)[37] Liquidity and Financial Resources As of June 30, 2025, bank balances and cash decreased, and the net debt-to-total equity ratio rose to 76.1%, but the current ratio remained at 1.3 times, with management confident in sufficient cash for operations and future development - As of June 30, 2025, the Group's bank balances and cash amounted to HK$3,588,286,000 (December 31, 2024: HK$5,342,774,000)[38] Financial Ratios (As of June 30, 2025) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Net debt to total equity ratio | 76.1% | 64.8% | Increased by 11.3 percentage points | | Current ratio | 1.3 times | 1.2 times | Increased by 0.1 times | - The Group continued to optimize HKD-denominated borrowings as per business needs, repaying offshore HKD borrowings with relatively low-interest loans[38] - The Group has sufficient cash, and management believes it has adequate funds and future earnings to meet current working capital and future development needs[39] Foreign Exchange Risk Most of the company's revenue and operating costs are RMB-denominated, limiting direct exposure to significant exchange rate fluctuations, and while no hedging arrangements are currently in place, future measures will be considered - During the period, most of the Group's revenue and operating costs were denominated in RMB, and apart from foreign currency-denominated bank deposits and loans, the Group's operating cash flow or liquidity was not significantly affected by other direct exchange rate fluctuations[40] - As of June 30, 2025, the Group had not entered into any foreign exchange hedging arrangements to control its exchange rate fluctuation risk, but will take necessary measures in due course to mitigate the impact of exchange rate fluctuations[40] Human Resources and Remuneration Policy As of June 30, 2025, the company employed 706 staff, with remuneration policies based on performance and qualifications, and provided job-related training and team-building activities to enhance human resource quality and employee belonging - As of June 30, 2025, the Group employed 706 staff (including Hong Kong and China offices)[41] - The Group's employee remuneration policy is formulated based on employee performance, qualifications, experience, and capabilities; directors' remuneration is determined by the Remuneration Committee with reference to the Group's operating results, individual performance, and market comparison statistics[41] - The Group provides job-related training courses and regularly organizes team-building activities for employees to enhance the quality of its human resources and employee sense of belonging[41] Outlook For H2 2025, the company expects the Chinese real estate market to stabilize with policy support, and will continue to pursue steady operations, deepen core city development, diversify investment properties, and optimize capital structure to create long-term shareholder value - Looking ahead to H2 2025, the Chinese real estate market remains in a phase of adjustment and recovery, but with a series of favorable policy supports, it is expected to achieve stable and orderly development[42] - The Group will uphold a prudent operating philosophy, actively respond to national policies, leverage its professional advantages, continuously promote the development of high-quality projects, and strive to meet residents' growing housing demands[42] - The Group will flexibly seize policy opportunities and market trends, continue to focus on Shanghai, further deepen development in other core first- and second-tier cities, actively participate in high-quality urban development, strengthen resource integration and business innovation, actively explore diversified development paths for investment properties, continuously enhance project value and competitive advantages, and expand sustainable growth space[42] Project Information Land Reserve Overview As of June 30, 2025, the company held 27 projects in 10 cities, with a total future saleable land reserve of approximately 3.29 million sqm, covering various property types, and has adopted a prudent land acquisition strategy - The Group owns 27 projects in 10 cities, including mid-to-high-end residential units, serviced apartments, commercial properties, and offices; as of June 30, 2025, the total future saleable land reserve was approximately 3.29 million sqm[45] - The Group has reorganized its projects and will adopt a prudent strategy for future land acquisitions[45] Major Investment Properties This chapter lists the company's major investment properties across cities like Shanghai, Chongqing, and Beijing, encompassing commercial, office, exhibition, retail, and affordable rental housing, with a total GFA of approximately 1.254 million sqm Major Investment Properties (As of June 30, 2025) | Project | City | Property Type | Planned GFA (sqm) | | :--- | :--- | :--- | :--- | | Shanghai Youth City | Shanghai | Commercial | 17,665 | | Wanyuan Block A | Shanghai | Commercial, Office | 58,556 | | Shanghai Mart | Shanghai | Exhibition Hall, Shops & Trade Center, Office & Parking Spaces | 284,651 | | Chenkai International Tower | Shanghai | Office & Parking Spaces | 45,239 | | Chenkai YoYo | Shanghai | Commercial | 13,839 | | Qianji Hui Community | Shanghai | Commercial, Affordable Rental Housing | 44,927 | | Qianji Xin Community | Shanghai | Commercial, Affordable Rental Housing | 126,702 | | Qianji Chuang Community | Shanghai | Commercial, Affordable Rental Housing | 115,799 | | Chenkai Youxiang+ Xinhonghui | Shanghai | Commercial | 9,777 | | City on City | Chongqing | Commercial, Office, Parking Spaces | 317,405 | | China Phoenix Tower | Shenzhen | Office | 1,048 | | Youth Hub | Beijing | Commercial | 24,931 | | Nature | Xi'an | Commercial | 26,917 | | Shenyang Chenkai Center | Shenyang | Commercial, Office | 100,446 | | Others | Shanghai & Tianjin | Commercial, Office & Parking Spaces | 66,030 | | Total | | | 1,253,932 | Analysis of Future Saleable GFA As of June 30, 2025, the company's future saleable GFA was primarily concentrated in the Yangtze River Delta region (54.1%), followed by Xi'an (14.1%), Wuhan (12.4%), and Chongqing (10.7%), reflecting its strategic focus on core areas Regional Distribution of Future Saleable GFA (As of June 30, 2025) | Region | Share | | :--- | :--- | | Yangtze River Delta Region | 54.1% | | Xi'an | 14.1% | | Wuhan | 12.4% | | Chongqing | 10.7% | | Shenyang | 3.1% | | Yantai | 2.5% | | Tianjin | 1.8% | | Beijing | 1.3% | Introduction to Major Projects in China Shanghai Projects This chapter details the company's key projects in Shanghai, including residential, commercial, hotel, office, and affordable rental housing, strategically located with comprehensive amenities to create high-quality living and urban complexes - Wanyuan City project is located in Gumei, Minhang District, Shanghai, with a total GFA of approximately 1.3 million sqm, encompassing international apartments, detached villas, garden houses, large-flat luxury residences, modern commercial spaces, and green parks, integrating residential, commercial, cultural, educational, and business functions[52] - TODTOWN Tianhui is located at the south and north squares of Xinzhuang Station in Shanghai's sub-center, with a total GFA of 605,000 sqm, an 'aerial city' integrating residential, commercial, and leisure functions, including offices, shopping malls, hotels, residences, serviced apartments, and public facilities[55] - Qianji Xin Community, jointly developed by Shanghai Industrial Urban Development and Xinzhuang Town, Minhang District, is one of Minhang District's first certified talent apartments, with a total GFA of approximately 186,000 sqm, a rental community integrating apartments, green spaces, and commercial facilities[57] - Qianji Hui Community is one of Shanghai's first large-scale R4 affordable rental housing projects and a key supporting project for Xuhui District's 'talent highland strategy,' aiming to provide exquisite, comfortable, and quality ideal living spaces for dream chasers[61] - Qianji Chuang Community project is located in the 'Dalinghaowan' area of Wujing Town, Minhang District, with a total GFA of approximately 170,000 sqm, creating a low-carbon, environmentally friendly, and green leisure lifestyle, supporting the Dalinghaowan construction[64] - Shanghai Industrial Tinghai project is located in the Main City 103 International Innovation Collaboration Zone of Lingang Modern Service Industry Open Zone, Pudong New Area, Shanghai, an international community for world-class technology institutions and high-end talents, with a total land area of approximately 120,000 sqm and a total GFA of approximately 440,000 sqm[86] Yantai Projects This chapter introduces the 'Shanghai Industrial Yunlu' project in Yantai, located in the core of Zhifu District's Xingfu New City, with a total GFA of approximately 159,000 sqm, offering residential, commercial, and public service facilities, positioned as an upgraded residential product - The Shanghai Industrial Yunlu project is located in the core area of Yantai Xingfu New City, adjacent to the new city's business axis, with the coastline within 1.5 km to the north; total GFA is approximately 159,000 sqm, including residential, commercial, and some public service facilities[89] - The project is positioned as an upgraded residential product, with three- and four-bedroom units as main layouts, delivered with refined decoration; it aims to create a quality living environment integrating luxury, ecology, and technology, with butler-style property services, natural-themed community landscapes, and intelligent community management[89] Wuhan Projects This chapter introduces the 'Xiang Kai Chang Long Garden' project in Wuhan, located in the core of Yangtze River New Area's Yangluo Heart, with a total planned GFA of approximately 450,000 sqm, encompassing residential and commercial properties, positioned as a high-end residential product with a self-owned prestigious school as a core advantage - The Xiang Kai Chang Long Garden project plot is located in the core area of Yangluo Heart, Yangtze River New Area, with a total planned GFA of approximately 450,000 sqm, including residential and commercial properties[91] - The project is positioned as a high-end residential product, leveraging a self-owned prestigious school as a core advantage, with forward-looking product planning and a highlight of ultra-high usable area ratio, creating a high-end, quality living environment[91] Beijing Projects This chapter introduces the 'Xidiaoyutai • Yuxi' project in Beijing, located on West Third Ring Road, near Kunyu River and Yuyuantan Park, offering rare riverside views; the project primarily features luxury riverside residences targeting high-end affluent individuals, with its third phase nearly sold out - The Xidiaoyutai • Yuxi project is located on West Third Ring Road, bordered by Kunyu River to the west and south, and the 137-hectare Yuyuantan Park to the east, enjoying the capital's largest 67-hectare water area and rare riverside views[93] - The project primarily features luxury riverside residences as its core product, targeting high-end affluent individuals; developed in three phases, the first and second phases are completed and sold out, and the third phase is nearly sold out[93] Tianjin Projects This chapter introduces the 'Shanghai Industrial Yangshan' project in Tianjin's Hedong District, with a total GFA of approximately 175,000 sqm, including residential, commercial, and public service facilities; it is positioned as a high-end aesthetic community, aiming to create a quality living environment integrating ecology and technology - The Shanghai Industrial Yangshan project is located in Hedong District, Tianjin, with a total GFA of approximately 175,000 sqm, including residential, commercial, and some public service facilities[96] - The project pioneers a high-end aesthetic community for regional, product, and lifestyle revitalization, creating ultimate innovative residential products; it aims to achieve a quality living environment integrating ecology and technology, becoming a significant driving force for Hedong District's development in Tianjin[96] Shenyang Projects This chapter introduces the 'Shenyang Chenkai Center' project, a landmark mixed-use complex in Shenyang's Taiyuan Street commercial district, with a total GFA of 230,000 sqm, encompassing high-end offices, SOHO, serviced apartments, and open commercial streets - The Shenyang Chenkai Center project is located in Taiyuan Street, the most prosperous commercial district in downtown Shenyang, with a total GFA of 230,000 sqm[100] - It encompasses four integrated business formats: high-end offices, SOHO, exquisitely furnished apartments, and open commercial streets, integrating cultural and creative, dining, leisure, entertainment, office, and high-end apartments, making it a landmark mixed-use complex in the city[100] Wuxi Projects This chapter introduces the 'Shanghai Central Chenkai International' project in Wuxi, a landmark urban commercial complex in the core of Liyuan Economic Development Zone, comprising an international five-star hotel, serviced apartments, Grade A offices, and a commercial center - The Shanghai Central Chenkai International project is located in the core of Liyuan Economic Development Zone, Wuxi's new urban axis, a landmark building in the Lihu area, only 5 kilometers from Wuxi city center, close to Lihu Scenic Area, Lihu Central Park, Bogong Island, and other attractions[103] - The project is an urban commercial complex composed of an international five-star hotel, serviced apartments, Grade A offices, and a commercial center[103] Xi'an Projects This chapter introduces two projects in Xi'an: 'Nature,' a premier ecological development in Chanba Ecological Zone, and 'Shanghai Industrial Qiyuan,' a low-density high-end residential project in a core development area, emphasizing ecological resources and modern design - The Nature project is located in the core of Xi'an Chanba Ecological Zone, at the confluence of Chan and Ba rivers, a premier ecological development in Northwest China covering approximately 2 million sqm; the area has comprehensive planning, rapid development, a complete road network, extensive public bus coverage, and Metro Line 3 is soon to open[104] - The Shanghai Industrial Qiyuan project is located at the intersection of Qiyuan 1st Road and Shangchun North Road, occupying a core position in Xi'an's planned development; total land area is approximately 51,000 sqm, GFA approximately 102,000 sqm, with a total plan of 15 residential buildings (8 high-rises, 7 bungalows), comprising 594 units[107] - The Shanghai Industrial Qiyuan project features a public-building-style facade combining metal aluminum panels, real stone paint, and LOW-E glass, creating a fashionable, light-luxury aesthetic, while leveraging excellent ecological resources to create a comfortable and beautiful lifestyle[107] Other Information Interim Dividend The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Company's Board of Directors ('Board') does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[110] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[111] Pre-emptive Rights There are no provisions for pre-emptive rights in the company's bye-laws or Bermuda law that would require the company to offer new shares proportionally to existing shareholders - There are no provisions for pre-emptive rights in the Company's bye-laws or Bermuda law that would require the Company to offer new shares proportionally to its existing shareholders ('Shareholders')[112] Corporate Governance For the six months ended June 30, 2025, the company consistently complied with the Code Provisions of the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules - During the six months ended June 30, 2025, the Company consistently complied with the Code Provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities ('Listing Rules') on The Stock Exchange of Hong Kong Limited ('Stock Exchange')[113] Standard Code for Securities Transactions by Directors The company adopted a code of conduct no less stringent than the Listing Rules' Standard Code for directors' securities transactions, with all directors confirming compliance during the reporting period, and no non-compliance issues found among relevant employees - The Company has adopted a customized code of conduct ('Relevant Employee Securities Dealing Guidelines') for securities transactions by directors and relevant employees (who may possess inside information about the Company or its securities), with terms no less stringent than the Model Code for Securities Transactions by Directors of Listed Issuers ('Model Code') set out in Appendix C3 of the Listing Rules[114] - Following specific inquiries by the Company, all directors confirmed their compliance with the required standards set out in the Model Code and the customized code of conduct for directors' securities transactions during the six months ended June 30, 2025[114] - To the Company's knowledge, no relevant employees of the Group failed to comply with the Relevant Employee Securities Dealing Guidelines during the six months ended June 30, 2025[114] Loan Agreements with Specific Performance Covenants from Controlling Shareholder The company's loan agreements include covenants requiring controlling shareholder Shanghai Industrial Holdings to maintain at least 51% ownership and control over the company; as of June 30, 2025, Shanghai Industrial Holdings and Shanghai Industrial Group beneficially owned approximately 44.16% and 70.44% of the issued share capital, respectively - The loan agreements stipulate that during the term of the facilities, Shanghai Industrial Group, as the controlling shareholder of the Company and Shanghai Industrial Holdings (the Company's controlling and major shareholder), must directly or indirectly maintain not less than 51% of the Company's total issued share capital and retain actual control and management rights over the Company[115] Controlling Shareholder's Equity (As of June 30, 2025) | Shareholder | Shareholding Percentage | | :--- | :--- | | Shanghai Industrial Holdings | Approx. 44.16% | | Shanghai Industrial Group | Approx. 70.44% | - The maturity date of the revolving loan facility was extended to October 31, 2025[116] Audit Committee and Review of Interim Results The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited interim financial statements for the six months ended June 30, 2025, and external auditor Deloitte Touche Tohmatsu also reviewed the condensed consolidated financial statements in accordance with HKSRS 2410 - The Company's Audit Committee ('Audit Committee') currently comprises three independent non-executive directors: Mr. Li Kah Fai, M.H. (Chairman of the Committee), Mr. To Wai Kai, B.B.S., J.P., and Dr. Fan Ren Da[117] - The Audit Committee is primarily responsible for reviewing the Group's adopted accounting principles and practices; reviewing the Group's financial reporting procedures, risk management, and internal control systems; and reviewing the independence and objectivity of the external auditor, the scope of audit services, and the audit fees paid to the external auditor[117] - The Group's external auditor, Deloitte Touche Tohmatsu, has reviewed the Company's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity,' issued by the Hong Kong Institute of Certified Public Accountants[117] Directors' and Chief Executive's Interests in Shares and Underlying Shares of the Company and its Associated Corporations As of June 30, 2025, the company's directors and chief executive held long positions in the company's shares and underlying shares, with Mr. Tang Jun holding 178,000 ordinary shares (0.00% of issued share capital) in the company and 65,000 ordinary shares in Shanghai Industrial Holdings Directors' Long Positions in the Company's Shares (As of June 30, 2025) | Director's Name | Capacity | Number of Ordinary Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Tang Jun | Beneficial owner | 178,000 | 0.00% | Directors' Long Positions in Shares of Associated Corporation (Shanghai Industrial Holdings) (As of June 30, 2025) | Director's Name | Capacity | Number of Issued Ordinary Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Tang Jun | Beneficial owner | 65,000 | 0.00% | - Mr. Tang Jun resigned as President and Executive Director of the Company and ceased to be a member of the Company's Investment Appraisal Committee, effective August 1, 2025[118][119] Share Option Scheme As of June 30, 2025, the company had no share option scheme or outstanding share options, and no discloseable share options were granted during the reporting period - As of June 30, 2025, following the expiry of its previous share option scheme on May 21, 2023, the Company had no share option scheme, nor any share options available for grant under any scheme mandate[120] - During the six months ended June 30, 2025, no share options were granted to any person that are required to be disclosed under Rule 17.07 of the Listing Rules, and the Company had no outstanding share options as of June 30, 2025[120] Interests of Substantial Shareholders and Other Persons in Shares and Underlying Shares As of June 30, 2025, substantial shareholders Shanghai Industrial Holdings and Shanghai Industrial Group held long positions of 44.16% and 70.44% respectively in the company's shares, with Shanghai Industrial Holdings holding shares through its wholly-owned subsidiaries and Shanghai Industrial Group controlling Shanghai Industrial Holdings Substantial Shareholders' Long Positions in the Company's Shares (As of June 30, 2025) | Name of Substantial Shareholder | Capacity | Number of Shares in the Company Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Shanghai Industrial Holdings | Held by controlled corporations | 2,111,229,080(L) | 44.16% | | Shanghai Industrial Group | Held by controlled corporations | 3,367,223,977(L) | 70.44% | - Shanghai Industrial Holdings' interests include 2,061,229,080 shares held by Shanghai Industrial Yingcai Co., Ltd. and 50,000,000 shares deemed to be held by Yingjia Co., Ltd. under pledge[121] - Shanghai Industrial Group holds approximately 55.13% of Shanghai Industrial Holdings' shares through Shanghai Investment Holdings Co., Ltd. (a subsidiary of Shanghai Industrial Group); additionally, Shanghai Industrial Group is deemed or taken to have an interest in 1,255,994,897 shares held by its subsidiaries[121] Changes in Directors' Information This chapter discloses changes in directors' information for the six months ended June 30, 2025, including changes in roles for Ms. Zhou Yadong, Dr. Fan Renda, and Mr. Li Kah Fai, as well as the resignation of Mr. Tang Jun and the appointment of Mr. Li Zhonghui as President, Executive Director, and Investment Appraisal Committee member - Ms. Zhou Yadong ceased to be a Director and General Manager of Shanghai Industrial Group Finance Co., Ltd., effective April 7, 2025; she was appointed Vice President and Chief Financial Officer of Shanghai Pharmaceuticals Holding Co., Ltd., effective April 8, 2025[125] - Dr. Fan Renda ceased to be an independent non-executive director and a member of several committees of Tongfang Technovator International Limited and Tongfang Joyview Holdings Limited[125] - Mr. Tang Jun resigned as President and Executive Director of the Company and ceased to be a member of the Company's Investment Appraisal Committee, effective August 1, 2025; Mr. Li Zhonghui was appointed President, Executive Director, and member of the Investment Appraisal Committee, effective August 1, 2025[125] Acknowledgement The Chairman extends sincere gratitude to the Board, management, all employees for their hard work, and to clients, suppliers, business partners, and shareholders for their continuous support - I extend my sincere gratitude to the Board, our management, and all employees for their tireless efforts; and to our clients, suppliers, business partners, and shareholders for their continued strong support of the Group[124] Review Report on Condensed Consolidated Financial Statements Conclusion of Review Report Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements in accordance with HKSRS 2410, concluding that no material matters were found indicating non-compliance with HKAS 34, though the review scope is less than an audit - Our auditor has conducted a review in accordance with Hong Kong Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity,' issued by the Hong Kong Institute of Certified Public Accountants[127] - The scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, we do not guarantee that we will become aware of all significant matters that might be identified in an audit; accordingly, we do not express an audit opinion[127] - Based on our review, we have not found any matters that cause us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[128] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Overview of Profit or Loss and Comprehensive Income For the six months ended June 30, 2025, total revenue decreased by 38.7% to HK$1.828 billion, gross profit fell by 56.5%, and the loss for the period expanded to HK$562.4 million, with basic loss per share of 10.29 HK cents, while other comprehensive income was mainly driven by exchange differences from functional currency translation Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total revenue | 1,827,835 | 2,980,833 | -38.7% | | Gross profit | 269,874 | 620,521 | -56.5% | | Net fair value loss on investment properties | (151,069) | (210,465) | Impairment decreased | | Distribution and selling expenses | (101,616) | (107,098) | -5.1% | | General and administrative expenses | (197,546) | (216,773) | -8.9% | | Finance costs | (284,560) | (282,266) | +0.8% | | Loss for the period | (562,427) | (188,301) | Loss widened | | Loss for the period attributable to owners of the Company | (492,139) | (231,564) | Loss widened | | Basic loss per share (HK cents) | (10.29) | (4.84) | Loss widened | - Total other comprehensive income for the period was HK$527,092 thousand, mainly contributed by exchange differences on translation of functional currency to presentation currency of HK$525,644 thousand[131] Condensed Consolidated Statement of Financial Position Overview of Assets and Liabilities As of June 30, 2025, total assets were HK$47.439 billion, with non-current assets at HK$28.157 billion and current assets at HK$19.283 billion; current liabilities were HK$14.664 billion, non-current liabilities HK$13.709 billion, and equity attributable to owners of the Company HK$12.956 billion Key Data from Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current assets: | | | | | Investment properties | 21,106,618 | 20,645,374 | Increased | | Properties under development for sale and properties held for sale | 13,957,346 | 14,578,442 | Decreased | | Current assets: | | | | | Bank balances and cash | 3,588,286 | 5,342,774 | Decreased | | Current liabilities: | | | | | Bank and other borrowings (current) | 7,129,016 | 8,487,763 | Decreased | | Proceeds received from pre-sales of properties | 719,348 | 1,106,886 | Decreased | | Non-current liabilities: | | | | | Bank and other borrowings (non-current) | 11,099,875 | 9,315,464 | Increased | | Equity: | | | | | Equity attributable to owners of the Company | 12,956,044 | 13,028,386 | Decreased | | Non-controlling interests | 6,111,410 | 6,081,618 | Increased | | Total equity | 19,067,454 | 19,110,004 | Decreased | - Net current assets increased to HK$4,619,483 thousand (December 31, 2024: HK$3,491,285 thousand)[134] Condensed Consolidated Statement of Changes in Equity Overview of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from HK$13.028 billion to HK$12.956 billion, primarily due to a loss for the period of HK$492.1 million, partially offset by exchange differences of HK$418.9 million - Total equity attributable to owners of the Company decreased from HK$13,028,386 thousand as of January 1, 2025 (audited) to HK$12,956,044 thousand as of June 30, 2025 (unaudited)[137] - Key contributing factors included a loss for the period of HK$(492,139) thousand and exchange differences on translation from functional currency to presentation currency of HK$418,943 thousand[137] - Non-controlling interests increased from HK$6,081,618 thousand at the beginning of the year to HK$6,111,410 thousand[137] Condensed Consolidated Statement of Cash Flows Overview of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities was HK$1.382 billion, in investing activities HK$42.27 million, and in financing activities HK$412.17 million, resulting in a net decrease in cash and cash equivalents of HK$1.837 billion, with an ending balance of HK$3.588 billion Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Type | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (1,382,425) | (165,868) | Cash outflow widened | | Net cash used in investing activities | (42,269) | (374,511) | Cash outflow decreased | | Net cash used in financing activities | (412,172) | 63,036 | Turned from inflow to outflow | | Net decrease in cash and cash equivalents | (1,836,866) | (477,343) | Net decrease widened | | Cash and cash equivalents at end of period | 3,588,286 | 5,362,707 | Decreased | - Net cash used in operating activities significantly increased, mainly due to expanded loss before tax, decreased trade and other payables, and increased income tax paid[141] - Financing activities shifted from net cash inflow to net outflow; despite increased proceeds from new bank and other borrowings, expenditures such as repayment of bank and other borrowings, dividends paid to non-controlling interests, and interest paid also increased[142] Notes to the Condensed Consolidated Financial Statements