Corporate Information The company's corporate information details its board, committees, auditors, legal advisers, registered and principal business offices, and other key administrative data Board of Directors The company's board comprises non-executive, executive, and independent non-executive directors - The Board of Directors includes a non-executive director (Chairman), an executive director, and independent non-executive directors3 Committees Audit, Nomination, and Remuneration Committees are chaired by specific directors to ensure effective corporate governance - The Audit Committee is chaired by Mr. Zhao Xianbo, the Nomination Committee by Mr. Zeng Juncai, and the Remuneration Committee by Ms. Wang Fen3 Auditor and Legal Advisers The company's auditor is CCTH CPA Limited, with legal advisers for Hong Kong and Cayman Islands law - The auditor is CCTH CPA Limited (中正天恆會計師有限公司)4 - The Hong Kong legal adviser is Paul Hastings (Hong Kong) LLP (普衡律師事務所(香港)有限法律責任合夥)5 - The Cayman Islands legal adviser is Walkers (Hong Kong)5 Registered and Business Offices The company's registered office is in the Cayman Islands, with main business operations in Nanjing and Hong Kong - The registered office is located in the Cayman Islands7 - The principal place of business and headquarters in China are located at 25th Floor, Hongyang Building, No. 9 Daqiao North Road, Nanjing, Jiangsu Province7 - The principal place of business in Hong Kong is located at Room 2612, 26th Floor, China Merchants Tower, Shun Tak Centre, Sheung Wan9 Other Corporate Information Details joint company secretaries, authorized representatives, principal bankers, and stock code - The joint company secretaries are Mr. Jia Hongbo and Ms. Chen Zhuoman9 - The authorized representatives are Mr. Zeng Juncai and Ms. Chen Zhuoman9 - The principal bankers are Agricultural Bank of China Nanjing Qiaobei Sub-branch and Industrial and Commercial Bank of China Nanjing Qiaobei Sub-branch10 - The stock code is HKEX: 197110 Financial Highlights The company experienced revenue growth but declines in gross profit and net profit for the six months ended June 30, 2025 2025 First Half Key Financial Indicators | Indicator | 2025 First Half (RMB million) | 2024 Same Period (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 510.4 | 465.3 | +9.7% | | Gross Profit | 113.4 | 127.5 | -11.1% | | Gross Profit Margin | 22.2% | 27.4% | -5.2 percentage points | | Profit for the Period | 28.5 | 40.1 | -29.1% | | Profit Attributable to Equity Holders | 24.4 | 36.6 | -33.2% | 2025 First Half Revenue by Business Segment | Business Segment | 2025 First Half Revenue (RMB million) | % of Total Revenue | 2024 Same Period Revenue (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 420.0 | 82.3% | 375.4 | +11.9% | | Non-Owner Value-Added Services | 11.0 | 2.2% | 20.3 | -45.8% | | Community Value-Added Services | 79.4 | 15.5% | 69.6 | +14.1% | - As of June 30, 2025, contracted GFA was approximately 49.9 million sq.m., a decrease of approximately 3.7% compared to the same period in 202413 - As of June 30, 2025, GFA under management was approximately 48.2 million sq.m., an increase of approximately 2.3% compared to the same period in 202413 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 202513 Management Discussion and Analysis This section reviews the first half of 2025, detailing business and financial performance, future outlook, significant transactions, and human resource policies Review for the First Half of 2025 The property management industry faced macroeconomic pressures, shifting from scale expansion to quality-driven growth and smart transformation - The property management industry's scale expansion logic has been reshaped, with leading enterprises focusing on core city clusters and a slowdown in GFA growth1418 - Service price structural differentiation is evident, regional development imbalances are prominent, and the industry is accelerating its transformation from scale-driven to quality-driven competition1418 - At the policy level, intelligent transformation has become a mandatory requirement, with enterprises failing to meet standards facing market elimination risks1519 - In the first half of the year, the Group adhered to its strategic layout of "penetrating Greater Jiangsu, deeply cultivating the Yangtze River Delta, and strengthening central cities," transitioning from scale expansion to quality and efficiency-driven development1619 - In the diversified property types sector, new school and data center property types were added, effectively offsetting cyclical industry risks, and the investment segment achieved considerable returns through precise layout around new property types1720 - The Group ranked 16th among the "2025 China Property Service Top 100 Enterprises" and received honors as "2025 China Property Service Top 100 Satisfaction Leading Enterprise" and "2025 China Red Property Service Excellent Enterprise"2528 - As of June 30, 2025, the Group provided services to 47 cities nationwide, with 340 contracted projects, a contracted GFA of approximately 49.9 million sq.m. (a 3.7% YoY decrease), and a total GFA under management of approximately 48.2 million sq.m. (a 2.3% YoY increase)2628 Business Review The group's strategy focuses on property management, non-owner value-added, and community value-added services, with residential and third-party projects dominating - The Group's business model revolves around a "customer-centric" service philosophy, deepening the Hongyang model, and providing property management services, non-owner value-added services, and community value-added services3032 - Property management services include security, cleaning, landscaping, facility management, customer service, and maintenance, covering residential, commercial, office buildings, industrial parks, and schools3132 - Non-owner value-added services include consulting for other property management companies, preliminary planning and design consulting for real estate developers, co-selling services, acceptance services, and property maintenance services3335 - Community value-added services include eight major categories: real estate agency, home beautification, community convenience, public area value-added, intelligent services, retail services, asset management services, and home decoration services3435 Total Revenue Breakdown by Business Line (For the six months ended June 30, 2025) | Business Line | Revenue (RMB thousand) | % of Total | | :--- | :--- | :--- | | Property Management Services | 420,018 | 82.3 | | Non-Owner Value-Added Services | 10,993 | 2.2 | | Community Value-Added Services | 79,360 | 15.5 | | Total | 510,371 | 100.0 | Property Management Services Revenue, GFA Under Management, and Project Count by Developer Type (As of June 30, 2025) | Developer Type | Revenue (RMB thousand) | Project Count | GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | | Hongyang Group | 166,735 | 98 | 17,624 | | Third-Party Real Estate Developers | 253,283 | 225 | 30,607 | | - Third-Party Developers | 168,934 | 170 | 22,017 | | - Joint Ventures and Associates of Hongyang Group | 84,349 | 55 | 8,590 | | Total | 420,018 | 323 | 48,231 | Property Management Services Revenue, GFA Under Management, and Project Count by Property Type (As of June 30, 2025) | Property Type | Revenue (RMB thousand) | Project Count | GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | | Residential Properties | 352,785 | 252 | 43,770 | | Non-Residential Properties | 67,233 | 71 | 4,461 | | Total | 420,018 | 323 | 48,231 | Property Management Services Revenue, GFA Under Management, and Project Count by Geographical Distribution (As of June 30, 2025) | City | Revenue (RMB thousand) | Project Count | GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | | Nanjing | 118,274 | 95 | 12,962 | | Jiangsu (excluding Nanjing) | 99,567 | 81 | 14,644 | | Shanghai | 4,466 | 1 | 601 | | Anhui | 47,021 | 35 | 7,269 | | Shandong | 773 | 1 | 100 | | Hunan | 9,067 | 9 | 1,111 | | Henan | 2,164 | 1 | 239 | | Zhejiang | 16,559 | 11 | 1,331 | | Hubei | 76,168 | 47 | 5,617 | | Chongqing | 16,278 | 8 | 1,101 | | Guangdong | 7,634 | 6 | 685 | | Jiangxi | 4,210 | 3 | 411 | | Sichuan | 16,217 | 17 | 1,743 | | Shaanxi | 1,620 | 8 | 417 | | Total | 420,018 | 323 | 48,231 | Financial Review Revenue increased due to property management and community services, but higher costs led to reduced gross profit and net profit, while the debt-to-asset ratio improved - Total revenue was RMB 510.4 million, a year-on-year increase of 9.7%, primarily due to increased revenue from property management services and community value-added services4752 - Revenue from property management services was RMB 420.0 million, a year-on-year increase of 11.9%, mainly due to an increase in property management projects4853 - Revenue from non-owner value-added services was RMB 11.0 million, a year-on-year decrease of 45.8%, primarily due to a reduction in on-site projects served4954 - Revenue from community value-added services was RMB 79.4 million, a year-on-year increase of 14.1%, mainly due to increased revenue from community retail services5055 - Cost of services was RMB 397.0 million, an increase of approximately 17.5% year-on-year, primarily due to increased staff costs and outsourcing costs for property management projects5156 - Gross profit was RMB 113.4 million, a year-on-year decrease of 11.1%, and the gross profit margin was 22.2%, a year-on-year decrease of 5.2 percentage points, mainly due to increased costs for property management services57586061 Gross Profit Margin by Business Line (For the six months ended June 30, 2025) | Business Line | 2025 Gross Profit Margin (%) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | | Property Management Services | 20.0% | 26.4% | | Non-Owner Value-Added Services | 15.0% | 15.0% | | Community Value-Added Services | 35.1% | 36.6% | | Total | 22.2% | 27.4% | - Administrative expenses were RMB 41.4 million, an increase of approximately 34.9% year-on-year, mainly due to an increase in project management personnel6569 - Net impairment losses on financial assets were RMB 26.9 million, a decrease from RMB 40.9 million in the same period of 2024, primarily due to a decrease in impairment provisions for receivables from related companies7074 - Profit before tax was RMB 44.3 million, a year-on-year decrease of approximately 19.0%7175 - Income tax expense was RMB 15.8 million, a year-on-year increase of approximately 9.0%, mainly due to a decrease in deferred income tax expenses recognized in the current period7276 - As of June 30, 2025, current assets were RMB 1,307.3 million, a slight decrease from December 31, 20247377 - Cash and bank balances were RMB 478.0 million, a decrease of 14.7% from December 31, 20247377 - The debt-to-asset ratio was 40.6%, a decrease of 4.6 percentage points from 45.2% as of December 31, 20247377 - Total equity was RMB 937.5 million, an increase of 3.1% from December 31, 2024, primarily due to growth from operating profit7882 - Trade receivables were RMB 308.1 million, an increase of approximately 6.3% from December 31, 2024, mainly due to an increase in the number of projects under management8083 - Trade payables were RMB 120.9 million, a decrease of approximately 34.2% from December 31, 2024, mainly due to shorter payment terms with outsourcing suppliers8589 Outlook for the Second Half of 2025 The group aims for sustainable, quality growth by enhancing service innovation, resource focus, and operational efficiency through strategic initiatives and talent development - The Group will continue to expand into new sectors, deeply cultivate advantageous areas, balance the complementary relationship between business increments and existing assets, and promote comprehensive breakthroughs in new businesses and continuous optimization of existing businesses9496 - In the second half of the year, the focus will be on developing three core capabilities: "service innovation, resource focus, and efficient operations"9597 - In terms of service innovation, the Group will deepen customized standards for various property types, extend the residential community service chain vertically, expand non-residential space operation scenarios horizontally, and accelerate the implementation of intelligent platforms and IoT tools97 - Regarding resource focus, the Group will build a "headquarters coordination + regional linkage" mechanism, deeply cultivate core city clusters, expand into new scenarios such as urban services and public supporting facilities, and accelerate ecosystem expansion through strategic joint ventures and mergers and acquisitions99100 - For efficient operations, the Group will optimize its talent "selection, cultivation, utilization, and retention" mechanism, compile a comprehensive service manual for all property types, and promote a mobile management and control platform across all regions to achieve online and data-driven service processes99101 - Centered on investment-driven strategy, the Group will focus on standard construction, promote the implementation of multi-property type standardized operation guidelines, optimize investment mechanisms, and integrate investment and budget systems102105 - Organizational development will be strengthened, adhering to the talent allocation principle of "lean headquarters, strong regions, excellent projects," and systematically building four key talent teams: "Hong Elite," "Hong Butler," "Hong Master," and "Hong Guard"104107 - Upholding the core values of "business with integrity, sincerity leads to far-reaching success," the Group will foster cultural cohesion and activate team momentum through a culture of great love108111 Significant Investments, Acquisitions and Disposals The company entered agreements to acquire parking spaces and equity in three entities, with total consideration offset against receivables - On February 17, 2025, the Company entered into a framework agreement for the transfer of parking spaces with Hongyang Group, intending to acquire the ownership or usage rights of target parking spaces for approximately RMB 230.92 million110113 - On the same day, Nanjing Hongshenghuo Property Consulting Co., Ltd., an indirect wholly-owned subsidiary of the Company, entered into equity transfer agreements with subsidiaries of Hongyang Group to conditionally acquire 70% equity in Chengdu Hongsheng Heding Real Estate Development Co., Ltd. (approximately RMB 142.4 million), 20% equity in Suqian Tongjin Hongzhiye Co., Ltd. (approximately RMB 73.95 million), and 19% equity in Jurong Jinjiarun Real Estate Development Co., Ltd. (approximately RMB 41.34 million)114118 - The total consideration for these equity interests will be offset against outstanding receivables on an equivalent basis, with no cash payment involved114118 - As of June 30, 2025, and the approval date of the condensed consolidated financial information, the transaction had not yet been completed116119 Employment and Remuneration Policies The group employs 2,799 staff, implementing competitive remuneration and multi-tiered talent development programs - As of June 30, 2025, the Group had a total of 2,799 employees, with 2,326 engaged in residential property management and 473 in non-residential property management121125 - Employee remuneration is primarily determined based on responsibilities, job performance, and market levels, complemented by competitive compensation, talent development strategies, internal promotion systems, and corporate culture122125 - The Group has designed a three-tiered talent development program, including the "General Plan," "Hong Elite Plan," and "Hongyao Plan," conducted through "offline intensive training + on-site delivery to the front line" methods123125 Events after the Reporting Period No significant post-reporting period events occurred after June 30, 2025 - The Company did not undertake any significant events after June 30, 2025127129 Exposure to Foreign Exchange Risk Operating primarily in China, the group's transactions are mainly denominated and settled in RMB, with ongoing monitoring of foreign exchange activities - The Group primarily operates in China, with most transactions denominated and settled in RMB128130 - The Group will continue to monitor foreign exchange activities and make its best efforts to safeguard cash value128130 Corporate Governance/Other Information This section outlines the company's adherence to corporate governance standards, director and shareholder interests, public float, audit committee activities, and securities transactions Corporate Governance The group adheres to high corporate governance standards, complying with the HKEX Corporate Governance Code - The Group has adopted the HKEX Corporate Governance Code as its corporate governance standard132136 - During the reporting period, the Company complied with all applicable code provisions in Part 2 of the Corporate Governance Code132136 Compliance with Model Code for Securities Transactions by Directors The company's directors confirmed compliance with the HKEX Model Code for Securities Transactions by Directors - The Company has adopted the HKEX Model Code for Securities Transactions by Directors of Listed Issuers134138 - The directors confirmed that they have complied with the required standards set out in the Model Code throughout the reporting period134139 Changes in Information of Directors and Chief Executive Officer No changes in information of directors and the chief executive officer required disclosure during the reporting period - During the reporting period, there were no changes in the information of directors and the Company's chief executive officer required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules135140 Directors' and Chief Executive's Interests As of June 30, 2025, no directors or chief executive held disclosable interests in the company's shares or debentures - As of June 30, 2025, no directors or the Company's chief executive held any disclosable interests or short positions in the shares, underlying shares, and debentures of the Company or its associated corporations141142 Substantial Shareholders' Interests Redsun Services Group (Holdings) and its affiliates hold a 72.77% equity interest, with various noteholders having security interests in the company's shares Interests and Short Positions of Substantial Shareholders in the Company's Shares and Underlying Shares (As of June 30, 2025) | Name of Substantial Shareholder | Nature of Interest | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Redsun Services Group (Holdings) | Beneficial owner | 301,994,000 | 72.77% | | Hong Yang Group Company | Interest in controlled corporation | 301,994,000 | 72.77% | | Hong Yang International | Interest in controlled corporation | 301,994,000 | 72.77% | | Hong Yang Group (Holdings) | Interest in controlled corporation | 301,994,000 | 72.77% | | Mr. Zeng Huansha | Interest in controlled corporation | 301,994,000 | 72.77% | | Ms. Chen Sihong | Spouse's interest | 301,994,000 | 72.77% | | Serica Agency Limited | Person with a security interest in shares | 301,994,000 | 72.77% | | Ares Holdings L.P. | Person with a security interest in shares | 75,649,496 | 18.23% | | BFAM Partners (Cayman) Limited | Person with a security interest in shares | 65,895,091 | 15.88% | | Investment Opportunities V Pte. Limited | Person with a security interest in shares | 43,366,338 | 10.45% | | Ares SSG Capital Partners VI GP, Ltd. | Person with a security interest in shares | 32,283,158 | 7.78% | | Ares SSG Capital Partners VI, L.P. | Person with a security interest in shares | 32,283,158 | 7.78% | | CP6 Hold Co 2 Limited | Person with a security interest in shares | 32,283,158 | 7.78% | | Union Lead Capital Limited | Person with a security interest in shares | 32,283,158 | 7.78% | - Redsun Services Group (Holdings) granted a security interest over 100% of its shares in the Company (representing approximately 72.77% of the total issued share capital) to Serica Agency Limited as beneficiary, providing credit support for senior secured notes issued by Hongsheng Limited, a wholly-owned subsidiary of Hongyang Group147 Sufficiency of Public Float The company maintained the required public float as stipulated by the Listing Rules - The Company has maintained a sufficient public float as required by the Listing Rules151155 Audit Committee The Audit Committee, chaired by Mr. Zhao Xianbo, reviewed the unaudited interim results and confirmed compliance with accounting standards - The Audit Committee comprises four directors, including three independent non-executive directors (Mr. Zhao Xianbo, Ms. Wang Fen, Mr. Li Xiaohang) and one non-executive director (Mr. Zeng Juncai)153156 - The Audit Committee is chaired by Mr. Zhao Xianbo, who possesses professional accounting and relevant financial management expertise153156 - The Committee has reviewed the Company's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and confirmed compliance with all applicable accounting principles, standards, and disclosure requirements, with adequate disclosures made153156 Interim Dividend The Board does not recommend paying any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024 same period: nil)154157 Purchase, Sale or Redemption of Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities159 - As of the end of the reporting period, the Company did not hold any treasury shares159 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company reported RMB 510.4 million in revenue, RMB 113.4 million in gross profit, and RMB 28.5 million in profit for the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 510,371 | 465,332 | | Cost of services | (396,971) | (337,795) | | Gross profit | 113,400 | 127,537 | | Other income and gains | 1,671 | 1,515 | | Selling and distribution expenses | (1,020) | (636) | | Administrative expenses | (41,387) | (30,727) | | Net impairment losses on financial assets | (26,858) | (40,852) | | Other expenses | (1,003) | (1,329) | | Finance costs | (545) | (862) | | Profit before tax | 44,258 | 54,646 | | Income tax expense | (15,788) | (14,515) | | Profit for the period | 28,470 | 40,131 | | Profit attributable to owners of the parent | 24,444 | 36,602 | | Profit attributable to non-controlling interests | 4,026 | 3,529 | | Basic and diluted earnings per share | RMB 0.06 | RMB 0.09 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets less current liabilities were RMB 958.9 million, with net assets at RMB 937.5 million, and cash and bank balances at RMB 478.0 million Condensed Consolidated Statement of Financial Position Summary (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 22,076 | 25,333 | | Goodwill | 175,050 | 175,050 | | Other intangible assets | 49,502 | 57,725 | | Deferred tax assets | 25,530 | 25,013 | | Total non-current assets | 272,158 | 283,121 | | Current assets | | | | Inventories | 4,875 | 268 | | Trade receivables | 308,103 | 289,936 | | Prepayments, other receivables and other assets | 120,143 | 133,010 | | Amounts due from related companies | 396,173 | 391,412 | | Cash and bank balances | 478,039 | 560,574 | | Total current assets | 1,307,333 | 1,375,200 | | Current liabilities | | | | Trade payables | 120,924 | 183,776 | | Other payables and accruals | 143,083 | 177,671 | | Contract liabilities | 258,013 | 258,594 | | Interest-bearing bank borrowings | 13,861 | 13,831 | | Tax payable | 84,654 | 85,136 | | Total current liabilities | 620,535 | 719,008 | | Net current assets | 686,798 | 656,192 | | Total assets less current liabilities | 958,956 | 939,313 | | Non-current liabilities | | | | Interest-bearing bank borrowings | 10,341 | 17,235 | | Deferred tax liabilities | 11,067 | 13,000 | | Total non-current liabilities | 21,408 | 30,235 | | Net assets | 937,548 | 909,078 | | Total equity | 937,548 | 909,078 | Condensed Consolidated Statement of Changes in Equity Equity attributable to owners of the parent increased from RMB 898.1 million to RMB 922.5 million for the six months ended June 30, 2025, driven by comprehensive income Condensed Consolidated Statement of Changes in Equity Summary (For the six months ended June 30, 2025) | Item | Share Capital (RMB thousand) | Share Premium (RMB thousand) | Merger Reserve (RMB thousand) | Statutory Surplus Reserve (RMB thousand) | Retained Profits (RMB thousand) | Total Attributable to Owners of the Parent (RMB thousand) | Non-controlling Interests (RMB thousand) | Total Equity (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | At January 1, 2025 (audited) | 3,764 | 387,262 | 87,849 | 71,377 | 347,806 | 898,058 | 11,020 | 909,078 | | Total comprehensive income for the period | – | – | – | – | 24,444 | 24,444 | 4,026 | 28,470 | | At June 30, 2025 (unaudited) | 3,764 | 387,262 | 87,849 | 71,377 | 372,250 | 922,502 | 15,046 | 937,548 | | At January 1, 2024 (audited) | 3,764 | 387,262 | 87,849 | 66,450 | 338,347 | 883,672 | 14,900 | 898,572 | | Total comprehensive income for the period | – | – | – | – | 36,602 | 36,602 | 3,529 | 40,131 | | At June 30, 2024 (unaudited) | 3,764 | 387,262 | 87,849 | 66,450 | 374,949 | 920,274 | 18,429 | 938,703 | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash used in operating, investing, and financing activities resulted in a net decrease of RMB 87.1 million in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30, 2025) | Cash Flow Activity | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows used in operating activities | (78,103) | (142,697) | | Net cash flows used in investing activities | (1,545) | (3,935) | | Net cash flows used in financing activities | (7,409) | (8,409) | | Net decrease in cash and cash equivalents | (87,057) | (155,041) | | Cash and cash equivalents at beginning of period | 560,574 | 637,775 | | Effect of foreign exchange rate changes, net | 73 | 132 | | Cash and cash equivalents at end of period | 473,590 | 482,866 | Notes to Condensed Consolidated Financial Information This section provides detailed notes on the company's information, basis of preparation, accounting policies, segment data, revenue, profit before tax, and other financial disclosures Corporate and Group Information Hong Yang Services Group Company Limited, incorporated in the Cayman Islands, is listed on HKEX and primarily provides property management and value-added services - The Company was incorporated in the Cayman Islands on December 12, 2019, and its shares have been listed on the Main Board of the Stock Exchange of Hong Kong since July 7, 2020173176 - During the reporting period, the Group was principally engaged in providing property management services, non-owner value-added services, and community value-added services174176 - The Company's controlling company is Hong Yang Services Group (Holdings) Limited, incorporated in the British Virgin Islands174177 Basis of Preparation The condensed consolidated financial information is prepared in accordance with IAS 34 and should be read with the annual financial statements - The condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"175178 - The condensed consolidated financial information should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024175178 Changes in Accounting Policies and Disclosures Accounting policies remain consistent with 2024, with no significant impact from the initial adoption of IAS 21 amendments - Accounting policies are consistent with the 2024 annual consolidated financial statements, except for the initial adoption of "Amendments to IAS 21: Lack of Exchangeability"179180181 - As the Group's transaction currency and functional currency are both convertible, this amendment has no significant impact on the condensed consolidated financial statements180181 Operating Segment Information Management monitors operating results by project location, but all locations are aggregated into one reportable segment due to similar economic characteristics - Management monitors operating results by project location, but all locations are aggregated into one reportable operating segment183185 - The Group's revenue from external customers is derived solely from its operations in mainland China, and no non-current assets are located outside mainland China184186 - For the six months ended June 30, 2025, no single customer contributed more than 10% to total revenue188 Revenue Analysis For the six months ended June 30, 2025, total revenue was RMB 510.4 million, primarily from property management services, with most revenue recognized over time Revenue Analysis (For the six months ended June 30, 2025) | Business Line | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Property Management Services | 420,018 | 375,410 | | Non-Owner Value-Added Services | 10,993 | 20,321 | | Community Value-Added Services | 79,360 | 69,601 | | Total | 510,371 | 465,332 | Revenue from Customers by Timing of Recognition (For the six months ended June 30, 2025) | Revenue Recognition Method | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from customers recognized over time | 427,937 | 391,626 | | Revenue from customers recognized at a point in time | 82,434 | 73,706 | | Total | 510,371 | 465,332 | Profit Before Tax Details Profit before tax is presented after deducting service costs, depreciation, amortization, and impairment losses, and including net foreign exchange gains Items Deducted/(Credited) from Profit Before Tax (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of services provided | 396,971 | 337,795 | | Depreciation of property, plant and equipment | 4,636 | 3,530 | | Depreciation of right-of-use assets | – | 629 | | Amortisation of other intangible assets | 7,999 | 8,133 | | Net foreign exchange gains | (73) | (132) | | Impairment losses on amounts due from related companies | 19,831 | 26,064 | | Impairment losses on trade receivables | 2,086 | 13,984 | | Impairment losses on financial assets included in prepayments, other receivables and other assets | 4,941 | 804 | | Loss on disposal of property, plant and equipment | 166 | 120 | Income Tax Expense Group subsidiaries in mainland China are generally subject to a 25% corporate income tax rate, with some enjoying preferential rates - Subsidiaries operating in mainland China are generally subject to a corporate income tax rate of 25%197198 - Some subsidiaries located in western China or qualifying as small and micro enterprises may enjoy preferential tax rates of 15%, 2.5%, or 5%197198 Income Tax Expense Analysis (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax: Corporate income tax | 18,237 | 22,024 | | Deferred tax | (2,449) | (7,509) | | Total tax expense for the period | 15,788 | 14,515 | Dividends The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024 same period: nil)201204 Earnings Per Share Basic and diluted earnings per share attributable to owners of the parent for the six months ended June 30, 2025, was RMB 0.06 - The amount of basic earnings per share attributable to ordinary equity holders of the parent is calculated based on the profit for the period of RMB 24,444 thousand and the weighted average number of ordinary shares outstanding of 415,000,000 shares202205207 - For the six months ended June 30, 2025, basic and diluted earnings per share was RMB 0.06161 - There were no potentially dilutive ordinary shares outstanding during the period, so no dilution-related adjustments were made to the basic earnings per share amount203205 Property, Plant and Equipment For the six months ended June 30, 2025, the group acquired assets at a cost of RMB 1.795 million and disposed of assets resulting in a net loss of RMB 0.166 million - For the six months ended June 30, 2025, the Group acquired assets at a cost of RMB 1.795 million208209 - The Group disposed of assets with a net book value of RMB 0.545 million, resulting in a net loss on disposal of RMB 0.166 million208209 Trade Receivables As of June 30, 2025, total trade receivables were RMB 308.1 million, with the majority due within one year, and expected credit losses measured using a provision matrix Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 221,541 | 186,521 | | 1 to 2 years | 62,408 | 71,535 | | 2 to 3 years | 17,931 | 25,855 | | Over 3 years | 6,223 | 6,025 | | Total | 308,103 | 289,936 | Credit Risk Information for Trade Receivables (As of June 30, 2025) | Ageing | Expected Credit Loss Rate (%) | Gross Carrying Amount (RMB thousand) | Expected Credit Loss (RMB thousand) | | :--- | :--- | :--- | :--- | | Current | 3.61% | 229,844 | 8,303 | | 1 to 2 years | 6.50% | 66,748 | 4,340 | | 2 to 3 years | 16.48% | 21,469 | 3,538 | | Over 3 years | 47.83% | 11,928 | 5,705 | | Total | 6.63% | 329,989 | 21,886 | Cash and Cash Equivalents As of June 30, 2025, cash and bank balances totaled RMB 478.0 million, with cash and cash equivalents at RMB 473.6 million after restricted cash Cash and Cash Equivalents Analysis (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and bank balances | 478,039 | 560,574 | | Less: Restricted cash | (4,449) | (1,504) | | Cash and cash equivalents | 473,590 | 559,070 | - As of June 30, 2025, cash and bank balances denominated in RMB amounted to RMB 476,111 thousand219222 - Cash and bank balances are deposited with reputable banks that have no recent history of default and are rated as performing well in terms of credit risk220221222 Trade Payables As of June 30, 2025, total trade payables were RMB 120.9 million, with the vast majority due within one year Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 118,556 | 179,903 | | Over 1 year | 2,368 | 3,873 | | Total | 120,924 | 183,776 | Other Payables and Accruals As of June 30, 2025, other payables and accruals totaled RMB 143.1 million, primarily comprising deposits received, wages, and utility collections Other Payables and Accruals Analysis (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Collections on behalf of community residents for utilities | 23,920 | 49,849 | | Deposits received | 60,861 | 65,979 | | Other taxes payable | 31,514 | 27,795 | | Wages and welfare payable | 22,669 | 22,138 | | Others | 4,119 | 11,910 | | Total | 143,083 | 177,671 | Share Capital As of June 30, 2025, issued and fully paid share capital consisted of 415,000,000 ordinary shares at HK$0.01 par value each, amounting to RMB 3.764 million Share Capital Analysis (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Issued and fully paid: 415,000,000 ordinary shares of HK$0.01 each | 3,764 | 3,764 | Contingent Liabilities As of June 30, 2025, the group had no significant contingent liabilities or guarantees - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees230231 Commitments As of the reporting period end, the group had contracted but unprovided commitments for other intangible assets totaling RMB 5.86 million Contractual Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for: Other intangible assets | 5,860 | 4,794 | | Total | 5,860 | 4,794 | Related Party Transactions The group engaged in property management, non-owner value-added, and community value-added services with fellow subsidiaries and joint ventures, including asset acquisitions offset by receivables Transactions with Related Parties (For the six months ended June 30, 2025) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fellow subsidiaries: Property management service income | 20,928 | 31,993 | | Fellow subsidiaries: Non-owner value-added service income | 6,874 | 20,271 | | Fellow subsidiaries: Community value-added service income | – | 453 | | Joint ventures and associates of fellow subsidiaries: Property management service income | 6,279 | 9,900 | | Joint ventures and associates of fellow subsidiaries: Non-owner value-added service income | 2,207 | 14,305 | - During the period, the Group entered into a one-year lease agreement with a fellow subsidiary, with an annual rent of RMB 808 thousand246 - As of June 30, 2025, the balance of agent deposits receivable from fellow subsidiaries was RMB 299,746 thousand246 - The Company entered into a parking space transfer framework agreement and equity transfer agreements with fellow subsidiaries to conditionally acquire parking space rights and equity in three entities, with the total consideration to be offset against outstanding receivables on an equivalent basis246 Unpaid Balances of Amounts Due from Related Companies (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade-related: Fellow subsidiaries | 365,971 | 361,506 | | Trade-related: Joint ventures and associates of fellow subsidiaries | 30,202 | 29,906 | | Total | 396,173 | 391,412 | | Gross amount | 586,280 | 561,688 | | Impairment | (190,107) | (170,276) | | Net book value | 396,173 | 391,412 | Movement in Impairment Provision for Amounts Due from Related Companies (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | At beginning of year | 170,276 | 110,865 | | Impairment losses recognised | 19,831 | 59,411 | | At end of year | 190,107 | 170,276 | Key Management Personnel Compensation (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 1,233 | 2,065 | | Contributions to pension schemes and social welfare | 151 | 280 | | Total compensation paid to key management personnel | 1,384 | 2,345 | Fair Value and Fair Value Hierarchy of Financial Instruments Management assesses that the fair values of various financial instruments approximate their carrying amounts due to short maturity periods - Management has assessed that the fair values of various financial instruments approximate their carrying amounts, primarily due to the short maturity periods of these instruments259261 - The Group's finance department is responsible for determining policies and procedures for fair value measurement of financial instruments, which are reviewed and approved by the Chief Financial Officer260261 Events After the Reporting Period No significant post-reporting period events occurred after June 30, 2025 - The Company did not undertake any significant events after June 30, 2025263266 Approval of the Condensed Consolidated Financial Information The condensed consolidated financial information was approved and authorized for issue by the Board of Directors on August 26, 2025 - The condensed consolidated financial information was approved and authorized for issue by the Company's Board of Directors on August 26, 2025264267
弘阳服务(01971) - 2025 - 中期财报