中国海外发展(00688) - 2025 - 中期财报

Company Business Structure The Group's core businesses encompass real estate development, commercial property operations, and other services across mainland China, Hong Kong, Macau, and London Overview of Company Business Structure The Group's main businesses include real estate development, commercial property operations, and other businesses, covering 85 major cities in mainland China, as well as Hong Kong, Macau, and London - The company's businesses are primarily divided into real estate development, commercial property operations, and other businesses[4] - Real estate development business covers 85 major cities in mainland China, including Beijing, Shanghai, Guangzhou, Shenzhen, as well as Hong Kong and Macau[4][5] - Commercial property operations and other businesses also operate in mainland China, Hong Kong, Macau, and London[4] Financial Highlights This section presents key financial performance indicators, including sales, profit, equity, and gearing ratio, for the first half of 2025 Key Financial Indicators As of the first half of 2025, the company's contracted property sales decreased year-on-year to RMB 120.15 billion, and profit attributable to shareholders fell to RMB 8.6 billion, yet equity attributable to shareholders continued to grow, and the net gearing ratio remained at a healthy level Key Financial Data 1H21-1H25 | Indicator | 1H21 (RMB billion) | 1H22 (RMB billion) | 1H23 (RMB billion) | 1H24 (RMB billion) | 1H25 (RMB billion) | | :--- | :--- | :--- | :--- | :--- | :--- | | Contracted Property Sales | 207.21 | 138.50 | 180.18 | 148.38 | 120.15 | | Equity Attributable to Company Shareholders | 328.05 | 352.81 | 363.89 | 378.54 | 386.62 | | Profit Attributable to Company Shareholders | 20.78 | 16.74 | 13.49 | 10.31 | 8.60 | | Net Gearing Ratio (%) | 32.5 | 39.0 | 35.8 | 38.7 | 28.4 | - Contracted property sales in the first half of 2025 were RMB 120.15 billion, a decrease from RMB 148.38 billion in the first half of 2024[8] - Profit attributable to company shareholders decreased from RMB 10.31 billion in the first half of 2024 to RMB 8.60 billion in the first half of 2025[12] - The net gearing ratio significantly decreased to 28.4% in the first half of 2025, better than 38.7% in the first half of 2024[14] Board of Directors and Committees This section details the composition of the Board of Directors and its various committees, ensuring effective corporate governance Board Members and Committee Composition The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, supported by Audit and Risk Management, Remuneration, Nomination, and Corporate Governance Committees to ensure effective corporate governance - Executive Directors include Yan Jianguo (Chairman), Zhang Zhichao (CEO), and Guo Guanghui (Vice President)[16] - Non-executive Directors include Zhuang Yong (Vice Chairman), Zhao Wenhai (resigned on January 22, 2025), and Ma Yao (appointed on January 22, 2025)[16] - Independent Non-executive Directors are Li Minbin, Chan Ka Keung, and Chan Ching Har, who also serve as chairpersons or members of the Audit and Risk Management, Remuneration, Nomination, and Corporate Governance Committees[16] Company Information This section provides essential corporate information, including company details, listing status, and key financial calendar dates Basic Company Information This section provides essential company details including registered office, contact information, company secretary, share registrar, investor relations, public relations contacts, independent auditor, and principal bankers - The registered office is located at 10th Floor, Three Pacific Place, 1 Queen's Road East, Hong Kong[18] - The Company Secretary is Lam Wai Chun, and the Share Registrar is Tricor Secretaries Limited[19] - The independent auditor is Ernst & Young, and principal bankers include Agricultural Bank of China, Bank of China, and Bank of Communications[20] Listing and Financial Calendar The company's shares are listed on the Hong Kong Stock Exchange, with the financial calendar disclosing the 2025 interim results announcement, ex-dividend date, share transfer book closure, and dividend record date - The company's shares are listed on The Stock Exchange of Hong Kong Limited, with stock code 00688[22][23] 2025 Financial Calendar | Event | Date | | :--- | :--- | | Interim Results Announcement | August 27, 2025 | | Ex-dividend Date | September 16, 2025 | | Book Closure for Share Transfers | September 18, 2025 | | Interim Dividend Record Date | September 18, 2025 | | Despatch of Dividend Warrants | October 3, 2025 | Chairman's Report The Chairman's report reviews the Group's operating performance, financial stability, investment strategies, and future outlook for the first half of 2025 Operating Review for 1H 2025 Despite a continued downturn in the real estate market, the Group achieved contracted property sales of RMB 120.15 billion in the first half of 2025, ranking second in the industry, with revenue of RMB 83.22 billion, profit attributable to shareholders of RMB 8.6 billion, and an announced interim dividend of HK 25 cents per share, while focusing on first-tier cities and launching the 'China Overseas Good House Living OS System' to enhance product competitiveness - In the first half of 2025, the Group's series of companies achieved contracted property sales of RMB 120.15 billion, ranking second in the industry by sales volume[26] Key Financial Data for 1H 2025 | Indicator | Amount (RMB) | | :--- | :--- | | Unaudited Revenue | 83.22 billion | | Profit Attributable to Company Shareholders | 8.6 billion | | Core Profit Attributable to Company Shareholders | 8.78 billion | | Interim Dividend | HK 25 cents per share | - The Group's strong focus on first-tier cities resulted in contracted sales of RMB 55.64 billion in Hong Kong and five cities (Beijing, Shanghai, Guangzhou, Shenzhen), accounting for 53.7%, with Beijing contributing RMB 30.45 billion[26] - Launched the 'China Overseas Good House Living OS System', with initial projects achieving strong sales against market trends, delivering 42,000 units of high-quality homes in the first half, maintaining industry benchmark customer satisfaction[27] - In commercial property operations, four new commercial projects commenced operations, increasing total gross floor area by 150,000 square meters, generating commercial property revenue of RMB 3.54 billion[27] Stable Financial Position and Investment Strategy The Group maintained a stable financial position during market adjustments, with both asset-liability ratio and net gearing ratio at 'green-light' levels and financing costs in the industry's lowest range, while precisely investing in high-tier city quality assets, acquiring 17 land parcels with an attributable land acquisition amount of RMB 40.11 billion in the first half Financial Stability Indicators for 1H 2025 | Indicator | Value | | :--- | :--- | | Asset-Liability Ratio | 53.7% | | Net Gearing Ratio | 28.4% | | Interest-bearing Debt Reduced from Year-End | RMB 14.12 billion | | Bank Deposits and Cash Held | RMB 108.96 billion | | Average Financing Cost | 2.9% | | Selling and Administrative Expenses as % of Revenue | 3.8% | - The Group is the only mainland real estate listed company to receive an A- rating from two of the three major international rating agencies: S&P Global, Moody's, and Fitch[29] - In the first half, 17 land parcels were acquired in 10 mainland Chinese cities and Hong Kong, with a total land acquisition amount of RMB 40.37 billion and attributable land acquisition amount of RMB 40.11 billion, of which 52.1% was for first-tier cities and Hong Kong[29] Future Outlook and Growth Drivers Despite the ongoing real estate market downturn, marginal improvements in downward pressure are observed, with the Group anticipating 'policy drivers,' 'market drivers,' and 'internal stable high-quality development drivers' to collectively stabilize the market, while continuing to focus on first-tier cities, acquiring large integrated projects through urban renewal and open markets, and advancing commercial public REITs issuance to unlock commercial asset value - Three drivers are expected to stabilize the real estate market: policy drivers, market drivers, and the Group's continuous stable and high-quality development drivers[30] - Policy drivers: The State Council executive meeting emphasized surveying existing land supply and ongoing real estate projects, optimizing policies, stabilizing expectations, stimulating demand, optimizing supply, and mitigating risks[30] - Market drivers: China's GDP grew by 5.3% year-on-year in the first half, per capita disposable income increased by 5.3% year-on-year, and urban renewal and shantytown redevelopment will drive incremental demand[32] - Group drivers: healthy financials, abundant cash, excellent asset quality, strong focus on first-tier cities, acquiring large integrated projects through urban renewal and open markets, with projects like Beijing CITIC City and Shanghai Jianguo East Road achieving strong sales against market trends[33] - In the second half, the Group will launch multiple projects in first-tier cities, and the issuance of its first commercial public REITs is progressing orderly, expected to unlock commercial asset value[33] - The company will adhere to its core values of 'customer-centricity, quality assurance, value creation' and its business philosophy of 'good products, good services, good returns, good corporate citizen'[34] Management Discussion and Analysis This section provides a detailed analysis of the Group's overall performance, business segments, financial resources, and sustainability efforts for the first half of 2025 Overall Performance In the first half of 2025, the Group's revenue was RMB 83.22 billion, operating profit RMB 12.12 billion, and gross profit margin 17.4%, with profit attributable to company shareholders at RMB 8.6 billion, core profit attributable to company shareholders at RMB 8.78 billion, and basic earnings per share at RMB 0.79 Overall Financial Performance for 1H 2025 | Indicator | Amount (RMB) | | :--- | :--- | | Revenue | 83.22 billion | | Operating Profit | 12.12 billion | | Gross Profit Margin | 17.4% | | Selling and Administrative Expenses as % of Revenue | 3.8% | | Profit Attributable to Company Shareholders | 8.6 billion | | Core Profit Attributable to Company Shareholders | 8.78 billion | | Basic Earnings Per Share | 0.79 yuan | Real Estate Development Business In the first half of 2025, the Group's contracted property sales reached RMB 120.15 billion with a sales area of 5.12 million square meters, primarily driven by the Northern region, while real estate development revenue was RMB 77.96 billion, joint ventures and associates contributed RMB 1.26 billion in net profit, total completed gross floor area was 4.45 million square meters, and 17 new land parcels were acquired for a total land premium of RMB 40.37 billion Contracted Property Sales and Area by Region for 1H 2025 | Region | Contracted Property Sales (RMB billion) | Proportion (%) | Sales Area (million sq.m.) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Southern Region | 15.56 | 13.0 | 0.523 | 10.2 | | Eastern Region | 21.22 | 17.7 | 0.783 | 15.3 | | Central-Western Region | 10.15 | 8.4 | 0.605 | 11.8 | | Northern Region | 44.16 | 36.8 | 1.376 | 26.9 | | Hong Kong, Macau & Overseas Region | 1.83 | 1.5 | 0.017 | 0.3 | | Subtotal for Company and Subsidiaries | 92.92 | 77.4 | 3.304 | 64.5 | | Group's Joint Ventures and Associates (excluding COHL) | 10.62 | 8.8 | 0.344 | 6.7 | | China Overseas Grand Oceans Group Ltd. | 16.61 | 13.8 | 1.472 | 28.8 | | Total | 120.15 | 100 | 5.120 | 100 | - Real estate development business revenue for the first half of 2025 was RMB 77.96 billion[41] - Joint ventures and associates contributed RMB 1.26 billion in net profit[42] - Total completed gross floor area during the period was 4.45 million square meters, primarily concentrated in the Southern Region (1.614 million square meters) and Northern Region (1.151 million square meters)[42][43] - Acquired 17 new land parcels with a total gross floor area of 2.58 million square meters and attributable land premium of RMB 40.11 billion[45][46] - As of June 30, 2025, the Group's series of companies had a total land reserve gross floor area of 40.47 million square meters[48] Commercial Property Operations Business The Group's commercial property operations generated RMB 3.54 billion in revenue in the first half, with office income at RMB 1.7 billion and shopping mall income at RMB 1.17 billion, while office new leases covered 510,000 square meters with a 76.9% renewal rate, mature shopping centers achieved 96.2% occupancy and sales and footfall growth of 6.7% and 11.0% respectively, Beijing COLI Dajixiang Commercial Complex grandly opened with over 200,000 visits on its first day, and the company maintained its leading position in industry ratings Commercial Property Revenue Composition for 1H 2025 | Revenue Source | Amount (RMB billion) | | :--- | :--- | | Total Commercial Property Revenue | 3.54 | | Office Revenue | 1.70 | | Shopping Mall Revenue | 1.17 | | Long-term Apartment Revenue | 0.16 | | Hotel and Other Commercial Property Revenue | 0.51 | - Office business new signed leasing gross floor area was 510,000 square meters, with a renewal rate of 76.9%[49] - Mature shopping mall projects operating for over three years achieved an occupancy rate of 96.2%, with sales increasing by 6.7% and footfall by 11.0% year-on-year[50] - Beijing COLI Dajixiang Commercial Complex opened with an occupancy rate of 95.5% and over 200,000 visits on its first day[50] - Received industry recognition including Winshang.com's 'Annual Commercial Real Estate Leading Enterprise' and CRIC's 'China Real Estate Commercial Management Comprehensive Strength Top 10'[50] Other Businesses The Group's other businesses generated RMB 3.55 billion in internal and external revenue in the first half, with external revenue at RMB 1.71 billion, and external revenue from material procurement and supply chain management services increasing by 55.1% year-on-year to RMB 1.52 billion Other Business Revenue for 1H 2025 | Indicator | Amount (RMB billion) | | :--- | :--- | | Other Businesses Internal and External Revenue | 3.55 | | Other Businesses External Revenue | 1.71 | | External Revenue from Material Procurement and Supply Chain Management Services | 1.52 (up 55.1% YoY) | Liquidity, Financial Resources, and Debt Structure The Group maintained a prudent financial strategy, adhering to 'green-light' indicators, with net current assets of RMB 386.26 billion, a current ratio of 2.6 times, and a net gearing ratio of 28.4% as of June 30, 2025, holding RMB 108.96 billion in bank deposits and cash, an average financing cost of 2.9%, and total borrowings of RMB 227.45 billion with 7.6% due within one year, while securing RMB 26.54 billion in domestic and overseas financing and repaying RMB 39.94 billion in debt, increasing RMB borrowings to 84.8% Liquidity and Financial Indicators for 1H 2025 | Indicator | Value | | :--- | :--- | | Net Current Assets | RMB 386.26 billion | | Current Ratio | 2.6 times | | Net Gearing Ratio | 28.4% | | Bank Deposits and Cash | RMB 108.96 billion | | Average Financing Cost | 2.9% | | Total Borrowings | RMB 227.45 billion | | Proportion of Borrowings Due within One Year | 7.6% | | Proportion of RMB Borrowings | 84.8% (up 2.5 percentage points from end-2024) | - In the first half, domestic and overseas financing amounted to RMB 26.54 billion, while RMB 39.94 billion in debt was repaid early or at maturity, leading to a continuous decrease in overall interest-bearing debt[54] - Sales proceeds were RMB 89.26 billion, and total operating cash inflow was RMB 96.88 billion, maintaining net operating cash inflow[55] Maturity Profile of Interest-Bearing Debt as of June 30, 2025 (RMB billion) | Term | Bank and Other Borrowings | Guaranteed Notes and Corporate Bonds | | :--- | :--- | :--- | | Within one year | 13.90 | 3.50 | | One to two years | 17.79 | 8.32 | | Two to five years | 51.76 | 13.64 | | Five to ten years | 33.71 | 5.60 | | Over ten years | 66.72 | 12.51 | Distribution of Interest-Bearing Debt by Currency as of June 30, 2025 | Currency Type | Proportion (%) | | :--- | :--- | | RMB Bank and Other Borrowings | 65.3 | | RMB Guaranteed Notes and Corporate Bonds | 19.5 | | USD Guaranteed Notes | 10.8 | | HKD Bank Borrowings | 4.4 | Contingent Liabilities As of June 30, 2025, the Group provided guarantees of RMB 25.76 billion for property buyers' bank mortgage loans and counter-indemnity undertakings of RMB 2.25 billion for construction contract guarantees, in addition to credit facility guarantees for associates, joint ventures, and other entities - Guarantees for property buyers' bank mortgage repayments amounted to RMB 25.76 billion[62] - Counter-indemnity undertakings for guarantees on certain construction contracts amounted to RMB 2.25 billion[62] - Guarantees provided to banks for utilized credit facilities of associates, joint ventures, and other entities amounted to RMB 0.01 billion, RMB 8.32 billion, and RMB 0.27 billion, respectively[62] Pledged Assets As of June 30, 2025, the Group pledged certain assets with a carrying value of RMB 111.32 billion as collateral for its bank loans - As of June 30, 2025, the Group pledged assets with a carrying value of RMB 111.32 billion as collateral for bank loans[64] Sustainable Development In the first half of 2025, the Group continuously improved its sustainable development performance, achieving multiple international ESG rating upgrades, including an MSCI ESG rating of A, ranking first in mainland real estate in S&P Global Corporate Sustainability Assessment, and first globally in LSEG's ESG score, while publishing the industry's first 'Climate Change White Paper,' promoting low-carbon retrofits and sustainable supply chains, and leading high-quality development through the 'China Overseas Good House Living OS System,' alongside optimizing human resource management and supporting rural revitalization - MSCI ESG rating upgraded from BBB to A, ranked first in mainland real estate in S&P Global Corporate Sustainability Assessment, and first-time inclusion in the 'S&P Global 2025 Sustainability Yearbook'[67] - Ranked first globally with a score of 88 in the London Stock Exchange Group (LSEG) ESG assessment[67] - First-time recipient of Extel's (formerly Institutional Investor) 'Most Honored Company' award in the Asian real estate sector for the 2025 Best Management Team rankings[67] - Published the industry's first 'Climate Change White Paper' and was the first to obtain third-party certification ISO 14064–1 for greenhouse gas emissions[68] - Promoted low-carbon retrofits for investment properties, built a sustainable supply chain, and launched the 'China Overseas Good House Living OS System'[68] - As of June 30, 2025, there were 690 green projects with a total certified area exceeding 110 million square meters[68] - Formulated an executive compensation plan linked to ESG performance and prepared to conduct human rights due diligence[69] - Supported rural revitalization in three counties in Gansu, with cumulative consumption assistance investment and sales driven amounting to RMB 30 million[69] - Customer satisfaction score of 90 in the first half of 2025, with 42,000 units of high-quality residential properties delivered, achieving a perfect delivery rate of 40%[74] - Revenue from green building or high-energy efficiency certified projects in the first half of 2025 was approximately RMB 74.9 billion and RMB 0.273 billion respectively, with 17 new green building certified projects added, totaling 690[74] - Affordable housing under construction covered 136,000 square meters, newly completed area was 62,000 square meters, and cumulative completed affordable housing area reached 14.37 million square meters[74] - Employed 3,232 staff, with an average of 45 training hours per employee, maintaining 100% coverage for employee health checks and supplementary medical insurance plans[76] Condensed Consolidated Statement of Profit or Loss This statement presents the Group's revenue, profit, and earnings per share for the six months ended June 30, 2025, highlighting key financial changes Condensed Consolidated Profit or Loss for 1H 2025 For the six months ended June 30, 2025, the Group's revenue was RMB 83.22 billion, a year-on-year decrease of 4.27%, operating profit was RMB 12.12 billion, down 24.51% year-on-year, profit attributable to company shareholders was RMB 8.6 billion, a 16.62% year-on-year decrease, and basic earnings per share was RMB 0.79, down 15.96% year-on-year Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 83,219,084 | 86,935,427 | -4.27 | | Cost of Sales | (68,759,238) | (67,757,556) | 1.48 | | Gross Profit | 14,459,846 | 19,177,871 | -24.50 | | Operating Profit | 12,123,904 | 16,058,509 | -24.51 | | Profit Before Tax | 12,998,405 | 16,183,761 | -19.68 | | Profit for the Period | 9,529,612 | 11,526,806 | -17.33 | | Profit Attributable to Company Shareholders | 8,599,034 | 10,313,630 | -16.62 | | Basic Earnings Per Share (RMB) | 0.79 | 0.94 | -15.96 | - Net fair value change of investment properties increased from RMB 12.33 million in 2024 to RMB 66.12 million in 2025[77] - Share of profits and losses of associates and joint ventures increased from RMB 618.39 million in 2024 to RMB 1.257 billion in 2025, a growth of 103.25%[77] Condensed Consolidated Statement of Comprehensive Income This statement outlines the Group's comprehensive income for the six months ended June 30, 2025, including profit and other comprehensive income components Condensed Consolidated Comprehensive Income for 1H 2025 For the six months ended June 30, 2025, the Group's total comprehensive income was RMB 9.93 billion, a year-on-year decrease of 10.45%, with exchange differences on translation of financial statements of subsidiaries and associates turning from negative to positive, positively impacting comprehensive income Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 9,529,612 | 11,526,806 | -17.33 | | Exchange differences on translation of financial statements of subsidiaries | 271,570 | (343,407) | Turned positive | | Exchange differences on translation of financial statements of associates | 128,997 | (94,984) | Turned positive | | Other comprehensive income for the period | 400,567 | (438,391) | Turned positive | | Total comprehensive income for the period | 9,930,179 | 11,088,415 | -10.45 | | Total comprehensive income attributable to company shareholders | 8,996,178 | 9,870,592 | -8.86 | | Total comprehensive income attributable to non-controlling interests | 934,001 | 1,217,823 | -23.29 | - Exchange differences on translation of financial statements of subsidiaries turned from a negative RMB 343.41 million in the first half of 2024 to a positive RMB 271.57 million in the first half of 2025[79] - Exchange differences on translation of financial statements of associates turned from a negative RMB 94.98 million in the first half of 2024 to a positive RMB 129.00 million in the first half of 2025[79] Condensed Consolidated Statement of Financial Position This statement details the Group's assets, liabilities, and equity as of June 30, 2025, reflecting its financial position Condensed Consolidated Financial Position for 1H 2025 As of June 30, 2025, the Group's total assets less current liabilities were RMB 656.447 billion, a 2.03% increase from end-2024, with equity attributable to company shareholders rising to RMB 386.619 billion, and net current assets growing to RMB 386.255 billion, though bank balances and cash decreased Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 270,191,923 | 269,450,426 | 0.27 | | Current assets | 631,364,967 | 639,183,955 | -1.22 | | Current liabilities | 245,109,517 | 265,231,620 | -7.59 | | Net current assets | 386,255,450 | 373,952,335 | 3.29 | | Total assets less current liabilities | 656,447,373 | 643,402,761 | 2.03 | | Equity attributable to company shareholders | 386,619,202 | 380,610,977 | 1.58 | | Total equity | 417,744,826 | 401,829,998 | 3.96 | | Non-current liabilities | 238,702,547 | 241,572,763 | -1.19 | - Investment properties increased from RMB 208.40 billion at end-2024 to RMB 210.31 billion as of June 30, 2025[80] - Bank balances and cash decreased from RMB 124.17 billion at end-2024 to RMB 108.96 billion as of June 30, 2025[80] - Pre-sale proceeds remained stable at approximately RMB 132.44 billion[83] - Bank and other borrowings due within one year decreased from RMB 16.63 billion at end-2024 to RMB 13.90 billion as of June 30, 2025[83] Condensed Consolidated Statement of Changes in Equity This statement illustrates the changes in the Group's equity attributable to shareholders and non-controlling interests for the six months ended June 30, 2025 Condensed Consolidated Changes in Equity for 1H 2025 For the six months ended June 30, 2025, total equity attributable to company shareholders increased to RMB 386.619 billion, with profit for the period at RMB 8.599 billion and non-controlling shareholders' capital contributions of RMB 9.65 billion significantly increasing non-controlling interests Key Data from Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total attributable to company shareholders at beginning of period | 380,610,977 | 373,017,828 | | Profit for the period | 8,599,034 | 10,313,630 | | Total comprehensive income for the period | 8,996,178 | 9,870,592 | | Final dividend for 2024 | (2,987,953) | (4,536,107) | | Capital contributions from non-controlling shareholders | 9,650,000 | 2,462,336 | | Total attributable to company shareholders at end of period | 386,619,202 | 378,539,943 | | Non-controlling interests at end of period | 31,125,624 | 22,550,364 | | Total equity at end of period | 417,744,826 | 401,090,307 | - Capital contributions from non-controlling shareholders significantly increased from RMB 2.462 billion in the first half of 2024 to RMB 9.65 billion in the first half of 2025[86] - Exchange differences on translation of financial statements of subsidiaries and associates were both positive in the first half of 2025, positively impacting equity[86] Condensed Consolidated Statement of Cash Flows This statement presents the Group's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 Condensed Consolidated Cash Flows for 1H 2025 For the six months ended June 30, 2025, net cash flow from operating activities was RMB 1.065 billion, a significant year-on-year decrease, net cash flow used in investing activities was RMB 1.779 billion, and net cash flow used in financing activities was RMB 14.294 billion, resulting in a net decrease in cash and cash equivalents of RMB 15.009 billion at period-end Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Activity Type | 2025 (RMB thousand) | 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net cash flow from operating activities | 1,064,890 | 3,451,509 | -69.15 | | Net cash flow used in investing activities | (1,779,460) | (3,356,943) | -47.00 | | Net cash flow used in financing activities | (14,294,402) | (5,482,522) | 160.72 | | Net decrease in cash and cash equivalents | (15,008,972) | (5,387,956) | 178.57 | | Cash and cash equivalents at end of period | 108,774,461 | 100,017,486 | 8.76 | - Net cash flow from operating activities decreased from RMB 3.452 billion in the first half of 2024 to RMB 1.065 billion in the first half of 2025, primarily due to an increase in properties and other inventories[87] - Net cash flow used in financing activities significantly increased, mainly due to higher repayments of bank and other borrowings, and redemption of guaranteed notes and corporate bonds[89] - Bank balances and cash at period-end were RMB 108.957 billion, including RMB 24.37 billion from regulated property pre-sale proceeds[89][55] Notes to the Condensed Consolidated Financial Statements This section provides detailed notes to the condensed consolidated financial statements, covering general information, accounting policies, risk management, and specific financial items 1. General Information The Company is a Hong Kong-registered listed company, with China State Construction Engineering Corporation Limited as its ultimate holding company, primarily engaged in real estate development, commercial property operations, and other businesses across Hong Kong, Macau, and various major cities in mainland China - The Company is a public listed company incorporated in Hong Kong, with its shares listed on The Stock Exchange of Hong Kong Limited[90] - The ultimate holding company is China State Construction Engineering Corporation Limited, whose principal shareholder is the Chinese government[90] - The Group is principally engaged in real estate development, commercial property operations, and other businesses in locations including Hong Kong, Macau, Beijing, Shanghai, Guangzhou, and Shenzhen[90] 2. Basis of Preparation These condensed consolidated financial statements are prepared in accordance with Appendix D2 of the Hong Kong Listing Rules and Hong Kong Accounting Standard 34 'Interim Financial Reporting,' presented on a historical cost basis, except for investment properties and financial assets at fair value through profit or loss, with RMB as the presentation currency - These condensed consolidated financial statements are prepared in accordance with Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 'Interim Financial Reporting'[91] - The statements are prepared on a historical cost basis, except for investment properties and financial assets at fair value through profit or loss, which are measured at fair value[91] - The presentation currency is Renminbi, which is also the functional currency of the Company[91] 3. Application of New and Revised Hong Kong Financial Reporting Standards During the period, the Group first applied HKAS 21 (Amendment) 'Lack of Exchangeability,' which had no significant impact on operating results or financial position, and has begun assessing the impact of other issued but not yet effective HKFRSs and amendments, which are not expected to have a material effect - First-time application of HKAS 21 (Amendment) 'Lack of Exchangeability' during the period had no significant impact[92] - Assessment of other issued but not yet effective HKFRSs and amendments has commenced, and they are not expected to have a material impact on operating results and financial position[93] 4. Financial Risk Management The Group is exposed to financial risks from interest rates, foreign currency, credit, liquidity, and fair value, with no significant changes in risk management departments, policies, and procedures since year-end, and guaranteed notes and corporate bonds measured at market prices are classified as Level 1 - The Group is exposed to financial risks arising from interest rates, foreign currency, credit, liquidity, and fair value[95] - There have been no significant changes in the risk management department, policies, and procedures since the end of last year[96] - The fair value of guaranteed notes and corporate bonds is measured at market prices and classified as Level 1 within the three-level fair value hierarchy[100] 5. Estimates In preparing the condensed consolidated financial statements, management makes judgments, estimates, and assumptions regarding the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses, with the primary sources of estimation uncertainty remaining consistent with the 2024 annual consolidated financial statements - Management makes judgments, estimates, and assumptions in preparing the financial statements, and actual results may differ[101] - The key sources of significant judgments and estimation uncertainty are the same as those in the 2024 annual consolidated financial statements[101] 6. Revenue and Results The Group's reportable segments are real estate development, commercial property operations, and other businesses, with real estate development revenue of RMB 77.96 billion, commercial property operations revenue of RMB 3.54 billion, and other businesses external revenue of RMB 1.71 billion in the first half of 2025, contributing to a total segment profit of RMB 12.705 billion - The Group's reportable segments include real estate development (property development and sales), commercial property operations (property leasing, hotel, and other commercial property operations), and other businesses (material procurement and supply chain management services, construction and planning design consulting services, and others)[102] Segment Revenue and Results for 1H 2025 | Segment | Segment Revenue from External Customers (RMB thousand) | Segment Profit (RMB thousand) | | :--- | :--- | :--- | | Real Estate Development Business | 77,962,227 | 10,667,202 | | Commercial Property Operations Business | 3,542,076 | 1,982,643 | | Other Businesses | 1,714,781 | 54,987 | | Total | 83,219,084 | 12,704,832 | - Reported segment profit for the first half of 2025 was RMB 12.705 billion, with consolidated profit before tax at RMB 12.998 billion[106] 7. Net Other Income, Gains and Losses For the six months ended June 30, 2025, the Group's net other income, gains, and losses significantly increased to RMB 0.794 billion from RMB 0.253 billion in the prior-year period, primarily driven by bank deposit interest income, net foreign exchange gains, and gains from disposal of subsidiaries Net Other Income, Gains and Losses (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total interest income | 626,777 | 881,361 | | Net foreign exchange gains/(losses) | 135,764 | (353,710) | | Impairment provision for properties held for sale | (305,733) | (456,259) | | Gain on disposal of a subsidiary | 261,641 | – | | Others | 75,364 | 181,720 | | Total | 793,813 | 253,112 | - Net foreign exchange gains turned from a loss of RMB 353.71 million in the first half of 2024 to a gain of RMB 135.76 million in the first half of 2025[107] - A gain on disposal of a subsidiary of RMB 261.64 million was recognized in the first half of 2025[107] 8. Finance Costs For the six months ended June 30, 2025, the Group's finance costs decreased to RMB 0.382 billion from RMB 0.493 billion in the prior-year period, with total finance costs at RMB 3.658 billion, of which RMB 3.275 billion was capitalized Finance Costs (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank and other borrowings, guaranteed notes and corporate bonds | 3,546,080 | 4,723,007 | | Interest on amounts payable to joint ventures and non-controlling shareholders | 17,938 | 49,496 | | Interest on lease liabilities and other finance costs | 93,616 | 97,847 | | Total finance costs | 3,657,634 | 4,870,350 | | Less: Amount capitalized | (3,275,259) | (4,377,217) | | Net finance costs | 382,375 | 493,133 | - Interest expense on bank and other borrowings, guaranteed notes, and corporate bonds decreased by approximately 24.89% year-on-year[108] - The proportion of capitalized amount to total finance costs was approximately 89.55% in the first half of 2025, indicating that most interest expenses were capitalized[108] 9. Income Tax Expense For the six months ended June 30, 2025, the Group's income tax expense decreased to RMB 3.469 billion from RMB 4.657 billion in the prior-year period, with major taxes including PRC corporate income tax, PRC land appreciation tax, PRC withholding income tax, Hong Kong profits tax, and Macau income tax, and the Group has applied the mandatory exemption for deferred tax assets and liabilities related to Pillar Two income tax, expecting no significant impact Income Tax Expense (For the six months ended June 30) | Tax Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | PRC corporate income tax | 2,793,990 | 3,002,672 | | PRC land appreciation tax | 260,677 | 893,831 | | PRC withholding income tax | 56,465 | 31,758 | | Hong Kong profits tax | 14,597 | 18,453 | | Macau income tax | 2,521 | 2,406 | | Others | 12,176 | 14,504 | | Total current tax | 3,140,426 | 3,963,624 | | Deferred tax | 328,367 | 693,331 | | Total | 3,468,793 | 4,656,955 | - PRC land appreciation tax expense significantly decreased by approximately 70.84% year-on-year[109] - The Group has applied the mandatory exemption for deferred tax assets and liabilities related to Pillar Two income tax and does not expect to face significant Pillar Two income tax impacts[113] 10. Profit for the Period For the six months ended June 30, 2025, profit for the period was after deducting depreciation of property, plant, and equipment of RMB 0.229 billion, cost of properties and other inventories recognized as expense of RMB 66.527 billion, and staff costs of RMB 1.022 billion Items Deducted from Profit for the Period (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 229,280 | 240,777 | | Cost of properties and other inventories recognized as expense | 66,527,440 | 65,743,213 | | Staff costs (including directors' benefits and interests) | 1,021,805 | 1,245,554 | - Staff costs decreased by approximately 18.09% year-on-year[114] 11. Earnings Per Share For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 0.79, a decrease from RMB 0.94 in the prior-year period, calculated based on profit attributable to company shareholders of RMB 8.599 billion and a weighted average of 10.945 billion ordinary shares outstanding Earnings Per Share (For the six months ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic and diluted earnings per share | 0.79 | 0.94 | - Basic and diluted earnings per share are calculated based on profit attributable to company shareholders of RMB 8.599 billion (2024: RMB 10.314 billion)[115] - The weighted average number of ordinary shares outstanding during the period was 10.945 billion shares, consistent with the prior-year period[115] 12. Dividends The Board of Directors declared an interim dividend of HK 25 cents per share for the six months ended June 30, 2025, amounting to approximately RMB 2.517 billion, while the 2024 final dividend of HK 30 cents per share was recognized during the period Dividends Recognized During the Period (For the six months ended June 30) | Dividend Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final dividend for 2024 (HK 30 cents per share) | 2,987,953 | – | | Final dividend for 2023 (HK 45 cents per share) | – | 4,536,107 | - The Board of Directors declared an interim dividend of HK 25 cents per share (2024: HK 30 cents per share) for the six months ended June 30, 2025, amounting to approximately RMB 2.517 billion[116] 13. Investment Properties For the six months ended June 30, 2025, the Group added RMB 0.885 billion in investment properties, with a net fair value change of RMB 66.12 million, while total carrying value of investment properties sold and derecognized was RMB 2.005 billion, and RMB 2.789 billion of properties held for sale were transferred to investment properties Movements in Investment Properties (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Additions to investment properties | 885,472 | 1,381,262 | | Net fair value change of investment properties | 66,120 | 12,330 | | Total carrying value of investment properties sold to third parties | 830,677 | 460,601 | | Total carrying value of investment properties derecognized due to disposal of a subsidiary | 1,274,724 | – | | Total carrying value of properties held for sale transferred to investment properties | 2,788,772 | – | - Net fair value change of investment properties significantly increased by approximately 436.25% year-on-year[117] - The fair value measurements for the Group's investment properties are all classified as Level 3 within the three-level fair value hierarchy[119] 14. Trade and Other Receivables As of June 30, 2025, the Group's total trade and other receivables significantly increased to RMB 7.825 billion from RMB 3.406 billion at end-2024, with a notable rise in receivables aged 0-30 days, and management considers the expected credit risk of receivables to be very low Ageing Analysis of Trade Receivables (As of reporting period end) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 – 30 days | 3,884,021 | 424,195 | | 31 – 90 days | 140,524 | 262,063 | | Over 90 days | 1,702,660 | 903,910 | | Total trade receivables | 5,727,205 | 1,590,168 | | Other receivables – current portion | 2,097,376 | 1,815,902 | | Total | 7,824,581 | 3,406,070 | - Trade receivables aged 0-30 days increased from RMB 0.424 billion at end-2024 to RMB 3.884 billion as of June 30, 2025[121] - Management considers the expected credit risk of trade receivables to be very low, with limited concentration of credit risk[122] 15. Trade and Other Payables As of June 30, 2025, the Group's total trade and other payables decreased to RMB 52.374 billion from RMB 55.601 billion at end-2024, with a decrease in total trade payables but an increase in other payables Ageing Analysis of Trade Payables (As of reporting period end) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 – 30 days | 11,298,797 | 12,341,117 | | 31 – 90 days | 3,101,895 | 3,715,087 | | Over 90 days | 23,791,709 | 25,790,833 | | Total trade payables | 38,192,401 | 41,847,037 | | Other payables | 8,819,024 | 7,657,954 | | Retention money payable | 5,362,181 | 6,095,740 | | Total | 52,373,606 | 55,600,731 | - Total trade payables decreased from RMB 41.847 billion at end-2024 to RMB 38.192 billion as of June 30, 2025[123] - Other payables increased from RMB 7.658 billion at end-2024 to RMB 8.819 billion as of June 30, 2025[123] 16. Guaranteed Notes and Corporate Bonds For the six months ended June 30, 2025, the Group issued low-interest guaranteed notes and corporate bonds with a total principal of RMB 3.5 billion at annual interest rates ranging from 1.80% to 2.38%, while fully redeeming guaranteed notes and corporate bonds with a total redemption value of approximately RMB 9.464 billion, including both USD and RMB denominated bonds Guaranteed Notes and Corporate Bonds Issued During the Period | Issue Date | Principal (thousand) | Annual Interest Rate | Maturity Date | Carrying Value (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | April 14, 2025 | RMB 500,000 | 1.90% | April 14, 2030 | 500,000 | | April 14, 2025 | RMB 1,500,000 | 2.38% | April 14, 2035 | 1,500,000 | | April 29, 2025 | RMB 1,000,000 | 1.80% | April 29, 2030 | 1,000,000 | | April 29, 2025 | RMB 500,000 | 2.37% | April 29, 2035 | 500,000 | Guaranteed Notes and Corporate Bonds Fully Redeemed During the Period | Issue Date | Principal (thousand) | Annual Interest Rate | Redemption Date | Redemption Value (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | March 2, 2020 | USD 300,000 | 2.375% | March 2, 2025 | 2,163,583 | | January 14, 2022 | RMB 1,800,000 | 2.88% | January 14, 2025 | 1,800,000 | | April 7, 2022 | RMB 2,000,000 | 3.05% | April 7, 2025 | 2,000,000 | | May 10, 2022 | RMB 1,500,000 | 2.75% | May 12, 2025 | 1,500,000 | | May 27, 2022 | RMB 2,000,000 | 2.63% | May 27, 2025 | 2,000,000 | - The lower interest rates of bonds issued during the period help optimize financing costs[124] 17. Share Capital As of June 30, 2025, the Company's issued and fully paid share capital was RMB 74.035 billion, with 10.945 billion shares outstanding, consistent with end-2024, and while the Company has a share option scheme, no outstanding share options existed under the scheme as of June 30, 2025 Issued and Fully Paid Share Capital (As of reporting period end) | Indicator | June 30, 2025 | January 1, 2024 | | :--- | :--- | :--- | | Number of shares (thousand shares) | 10,944,884 | 10,944,884 | | Share capital (RMB thousand) | 74,035,443 | 74,035,443 | - The Company has a share option scheme designed to attract and retain high-caliber employees and promote the Group's long-term financial success[127] - As of January 1, 2025, and June 30, 2025, there were no outstanding share options under the Company's share option scheme[131] 18. Gain on Disposal of a Subsidiary On February 21, 2025, the Group disposed of its 100% interest in Great Fortune Property Limited to a third party for a total consideration of GBP 175 million (equivalent to RMB 1.602 billion), recognizing a gain on disposal of RMB 0.262 billion - On February 21, 2025, the Group disposed of its 100% interest in Great Fortune Property Limited for a total consideration of GBP 175 million (equivalent to RMB 1.602 billion)[134] - A gain on disposal of a subsidiary of RMB 261.64 million was recognized in the condensed consolidated statement of profit or loss[134] 19. Capital Commitments As of June 30, 2025, the Group's capital expenditure for investment properties not yet provided for in the condensed consolidated financial statements was RMB 6.286 billion, a slight decrease from end-2024 Capital Expenditure for Investment Properties (As of reporting period end) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for | 6,286,399 | 6,574,067 | 20. Financial Guarantees As of June 30, 2025, the Group provided guarantees of RMB 25.761 billion for property buyers' bank mortgage repayments, a significant decrease from end-2024, in addition to counter-indemnity undertakings of RMB 2.251 billion for construction contract guarantees and credit facility guarantees for associates, joint ventures, and other entities Financial Guarantees (As of reporting period end) | Guaranteed Party | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Associates (utilized amount) | 14,599 | 31,145 | | Joint ventures (utilized amount) | 8,317,391 | 10,695,801 | | Other entities (utilized amount) | 273,833 | 264,737 | | Counter-indemnity undertakings for construction contracts | 2,251,203 | 1,716,493 | | Guarantees for property buyers' bank mortgage loans | 25,760,864 | 45,042,822 | - Guarantees for property buyers' bank mortgage repayments decreased from RMB 45.043 billion at end-2024 to RMB 25.761 billion as of June 30, 2025[138] - Counter-indemnity undertakings for construction contract guarantees increased[138] 21. Pledged Assets As of June 30, 2025, the Group pledged assets with a carrying value of RMB 111.324 billion as collateral for its bank borrowings, a decrease from RMB 138.662 billion at end-2024 Carrying Value of Pledged Assets (As of reporting period end) | Asset Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Investment properties and property, plant and equipment | 108,638,463 | 100,847,606 | | Properties held for sale | 2,685,802 | 37,813,991 | | Total | 111,324,265 | 138,661,597 | - The carrying value of properties held for sale pledged as assets significantly decreased from RMB 37.814 billion at end-2024 to RMB 2.686 billion as of June 30, 2025[139] 22. Related Party Disclosures During the period, the Group engaged in several significant related party transactions with fellow subsidiaries, associates, and joint ventures, including engineering fees for property development projects, rental income, material procurement service income, and interest income/expenses, with total remuneration for the Company's directors and other key management personnel amounting to RMB 12.129 million Significant Related Party Transactions (For the six months ended June 30) | Transaction Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Engineering fees for property development projects with fellow subsidiaries | 1,607,648 | 1,483,573 | | Material procurement and supply chain management service income from fellow subsidiaries | 366,287 | 141,260 | | Trademark usage license fee income from associates | 145,435 | 183,200 | | Material procurement service income from associates | 349,546 | 267,563 | | Interest income from joint ventures | 32,468 | 58,885 | - Material procurement and supply chain management service income from fellow subsidiaries significantly increased by approximately 159.29% year-on-year[140] Remuneration of Directors and Key Management Personnel (For the six months ended