合景悠活(03913) - 2025 - 中期财报

Company Information The company is a leading full-spectrum smart service operator in China, listed on HKEX in 2020, with core operations in GBA, YRD, and Central-Western regions, aiming for high-quality growth through market expansion and digital management Company Profile Kaisa Prosperity Holdings Limited, a leading full-spectrum smart service operator in China, was listed on HKEX in 2020, focusing on the Greater Bay Area, Yangtze River Delta, and Central-Western regions - The Group is a leading full-spectrum smart service operator in the People's Republic of China, with a history dating back to 2004, and was listed on the Main Board of the Hong Kong Stock Exchange on October 30, 2020[6] - The company's core regional layout includes the Greater Bay Area, Yangtze River Delta, and Central-Western regions, serving diverse segments such as residential, shopping malls, office buildings, hospitals, schools, government agencies, and urban services[6] - Future strategies include active developer collaborations, third-party market expansion, and M&A strategies, enhancing competitiveness through efficient post-investment management, refined operations, and digital management[6] Chairman's Report The Chairman's report highlights a challenging first half of 2025 with a 13.8% revenue decline and a net loss, alongside strategic efforts in regional deep cultivation, service quality, and talent development Performance Overview In H1 2025, the Group's revenue decreased by 13.8% to RMB 1,658.1 million, resulting in a net loss of RMB 276.6 million, a reversal from prior year's net profit, primarily due to macroeconomic and industry pressures 2025 H1 Key Financial Indicators | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,658.1 | 1,923.4 | -13.8% | | Net Profit/Loss | (276.6) | Net Profit | Reversal | - China's economy maintained fundamental resilience under policies of "stabilizing growth, promoting development, and adjusting structure," with the property management industry accelerating iteration and focusing on "quality improvement and efficiency enhancement"[8] 1. Dual Focus on Regional and Business Segment Deep Cultivation The Group maintains its strategy of focusing on four key regions and high-tier cities, with approximately 57% of projects in the Greater Bay Area and Yangtze River Delta, while actively expanding its large-scale enterprise facility management segment - The Group continued its development strategy of "focusing on four key regions and deeply cultivating high-tier cities," further intensifying its core regional layout[9] 2025 H1 Regional Layout | Indicator | Proportion | | :--- | :--- | | Number of projects under management in Greater Bay Area and Yangtze River Delta | Approx. 57% | | Number of projects under management in Tier 1, New Tier 1, and Tier 2 cities | Approx. 63% | - Actively deploying in the large-scale enterprise facility management (FM) segment, deepening professional capabilities in integrated facility operations and maintenance, and smart system control, successfully expanding multiple high-quality projects[9] 2. Capturing Consumption Trends, Focusing on Scenario Value In H1 2025, the Group's shopping centers saw a 5% increase in total foot traffic, with stable occupancy and collection rates, notably with Beijing Kaisa Mofang achieving significant growth through scenario-based renovations - In H1 2025, the Group's shopping centers saw a 5% year-on-year increase in total foot traffic, with overall occupancy and collection rates remaining stable[10] - Beijing Kaisa Mofang shopping center, through renovation, achieved a 34% year-on-year increase in foot traffic and a 54% year-on-year increase in sales, successfully attracting young people for experiences and consumption[10] 3. Upholding Service Quality, Enhancing Service Capabilities The Group prioritizes quality operations, implementing customized "one project, one strategy" services, upgrading from standardized to personalized offerings, and innovating supply chain models to balance quality and efficiency - The Group focuses on core customer needs, enhancing work order completion quality and customer satisfaction through "one project, one strategy" customized service solutions[11] - Promoting the upgrade of frontline service personnel from standardized execution to proactive, personalized services, dynamically adapting service solutions[11] - Optimizing the balance between quality and efficiency by innovating supply chain models and reducing non-customer-sensitive cost expenditures[11] 4. Deepening Talent Development, Activating Organizational Efficiency The Group highly values talent system development, deepening organizational and talent reforms in H1 2025, establishing a dynamic talent mobility mechanism, and providing professional training through "Kaisa Business School" and "Butler Academy" to enhance employee engagement and team cohesion - Establishing a talent mobility mechanism that is "vertically integrated and horizontally linked," promoting dynamic allocation of talent across different business segments, projects, and functional lines, enhancing organizational flexibility and response efficiency[13] - The "Kaisa Business School" learning platform added and optimized multiple courses, with cumulative viewership exceeding 150,000 person-times; the "Butler Academy" covered 370 residential project butlers[13] Future Outlook For H2 2025, the Group plans to prioritize stability and quality, deepen its presence in core regions and advantageous segments, strengthen commercial asset operations, and enhance its service and talent systems for sustainable development - Adhering to the strategy of "prioritizing stability and winning by quality," deeply cultivating core regions and advantageous business segments, and enhancing market expansion effectiveness[14] - Strengthening commercial asset operation capabilities and seizing opportunities from consumption upgrades; continuously iterating the quality service system and deepening customer value binding[14] - Consolidating the talent and organizational foundation to support long-term sustainable development[14] Management Discussion and Analysis Management discusses a 13.8% revenue decrease and net loss in H1 2025, attributing it to macroeconomic pressures and asset impairments, while emphasizing cost control and enhanced business independence Business Review In H1 2025, the Group's total revenue was approximately RMB 1,658.1 million, a 13.8% year-on-year decrease, resulting in a net loss of approximately RMB 276.6 million, primarily due to slower-than-expected macroeconomic recovery and industry adjustments 2025 H1 Business Review | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 1,658.1 | 1,923.4 | -13.8% | | Net Loss | 276.6 | Net Profit | Reversal | - Revenue from residential property management services decreased by 7.0% year-on-year to approximately RMB 834.0 million, mainly due to a reduction in the number of property sales offices and weakened demand for value-added services[16] - Revenue from non-residential property management and commercial operation services decreased by 19.7% year-on-year to approximately RMB 824.2 million, primarily due to strategic contraction in urban services and adjustments in the management model of some commercial projects[17] Cost Reduction and Efficiency Improvement to Enhance Operations In H1 2025, the Group achieved an 8.8% year-on-year decrease in total operating costs and a 13.5% reduction in administrative expenses through refined management, organizational optimization, and digital technology adoption 2025 H1 Cost Control Achievements | Indicator | 2025 H1 (YoY Change) | | :--- | :--- | | Total Operating Costs | Decreased by 8.8% | | Labor Costs | Decreased by 5.8% | | Administrative Expenses | Decreased by 13.5% | - The Group improved operational efficiency by streamlining business processes, implementing personnel structure adjustments, and introducing smart inspection and remote monitoring technologies[18] - Implementing flat management to reduce intermediate layers and promoting digital upgrades of core business and financial systems effectively lowered communication costs[19] Impact of Certain Asset Impairments In H1 2025, the Group recorded significant impairments including RMB 237.2 million for trade receivables, RMB 132.5 million for deferred tax assets, RMB 84.5 million for goodwill, and RMB 28.8 million for property, plant, and equipment, which were primary drivers of the net loss 2025 H1 Asset Impairment Situation | Impairment Item | Amount (RMB million) | | :--- | :--- | | Impairment provision for trade receivables | 237.2 | | Reduction in deferred tax assets | 132.5 | | Goodwill impairment | 84.5 | | Impairment of property, plant and equipment | 28.8 | - Impairment of trade receivables was primarily due to the continued downturn in China's real estate industry, leading to a slowdown in receivable recovery[20] - Impairment of goodwill and property, plant, and equipment was mainly due to intense market competition, non-renewal of contracts for some acquired subsidiaries, and failure to expand new customer groups as expected, resulting in decreased revenue and operating profit[20] Business Independence and Regional Layout The Group significantly enhanced business independence in H1 2025, with independent third-party revenue increasing to 91.5%, while the Greater Bay Area and Yangtze River Delta contributed 63.4% of total revenue, providing stable support Third-Party Revenue Proportion Change | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue from independent third parties | 91.5% | 85.2% | | YoY increase in residential segment third-party revenue | 1.8% | - | - The Greater Bay Area and Yangtze River Delta regions accounted for 63.4% of total revenue, becoming a stable support in the Group's revenue structure[24] - The Group continues to expand third-party projects in Tier 1 and strong Tier 2 cities and actively deploys in the high-potential "large-scale enterprise facility management (FM) segment"[24] Business Model The Group's revenue primarily stems from two segments: residential property management services, encompassing pre-sale, property, and community value-added services, and non-residential property management and commercial operation services, including pre-sale, commercial, public, urban, and other value-added services - The Group's revenue primarily comes from two business segments: residential property management services and non-residential property management and commercial operation services[25] - Residential property management services include pre-sale management, property management, and community value-added services[26] - Non-residential property management and commercial operation services cover pre-sale management, commercial property management, public property services, urban services, commercial operations, and other value-added services[27] Total Revenue Breakdown by Business Segment and Region In H1 2025, residential property management revenue decreased by 7.0% to RMB 834.0 million, and non-residential property management and commercial operation revenue decreased by 19.7% to RMB 824.2 million, with the Greater Bay Area and Yangtze River Delta being key revenue contributors 2025 H1 Total Revenue by Business Segment | Business Segment | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Residential Property Management Services | 833,961 | 50.3 | 897,173 | 46.6 | | Non-Residential Property Management and Commercial Operation Services | 824,176 | 49.7 | 1,026,198 | 53.4 | | Total | 1,658,137 | 100.0 | 1,923,371 | 100.0 | 2025 H1 Residential Property Management Services Revenue by Region | Region | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Greater Bay Area | 315,437 | 37.8 | 345,231 | 38.5 | | Yangtze River Delta Region | 158,170 | 19.0 | 171,524 | 19.1 | | Central-Western Region and Hainan | 318,157 | 38.1 | 332,926 | 37.1 | | Bohai Rim Economic Circle | 42,197 | 5.1 | 47,492 | 5.3 | | Total | 833,961 | 100.0 | 897,173 | 100.0 | 2025 H1 Non-Residential Property Management and Commercial Operation Services Revenue by Region | Region | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Greater Bay Area | 308,170 | 37.4 | 413,154 | 40.3 | | Yangtze River Delta Region | 270,102 | 32.8 | 328,768 | 32.0 | | Central-Western Region and Hainan | 111,412 | 13.5 | 137,633 | 13.4 | | Bohai Rim Economic Circle | 134,492 | 16.3 | 146,643 | 14.3 | | Total | 824,176 | 100.0 | 1,026,198 | 100.0 | Financial Review In H1 2025, the Group's total revenue was RMB 1,658.1 million, with gross profit declining 25.7% to RMB 418.8 million and gross margin falling to 25.3%, leading to a net loss of RMB 276.6 million due to increased other expenses and income tax 2025 H1 Key Financial Data | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,658,137 | 1,923,371 | -13.8% | | Cost of Sales | (1,239,313) | (1,359,398) | -8.8% | | Gross Profit | 418,824 | 563,973 | -25.7% | | Gross Margin | 25.3% | 29.3% | -4.0pp | | Other Income and Gains | 7,473 | 8,770 | -14.8% | | Administrative Expenses | (206,665) | (238,960) | -13.5% | | Other Expenses, Net | (370,291) | (220,402) | +68.0% | | Income Tax Expense | (112,439) | (28,741) | +291.6% | | Net (Loss)/Profit for the Period | (276,626) | 69,892 | Reversal | - In residential property management services, pre-sale management service revenue decreased by 21.1% to RMB 34.9 million, and community value-added service revenue decreased by 39.0% to RMB 73.1 million[42][44] - In non-residential property management and commercial operation services, property management service revenue decreased by 18.2% to RMB 748.7 million, and commercial operation service revenue decreased by 37.9% to RMB 25.2 million[47][48] Financial Position and Capital Structure As of June 30, 2025, the Group reported total assets of approximately RMB 5,999.5 million and total liabilities of RMB 3,154.6 million, with a current ratio of 1.72 and cash and cash equivalents slightly decreasing to RMB 1,140.9 million June 30, 2025 Financial Position | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 5,999.5 | 6,184.5 | -3.0% | | Total Liabilities | 3,154.6 | 3,042.4 | +3.7% | | Current Ratio | 1.72 | 1.84 | -0.12 | | Cash and Cash Equivalents | 1,140.9 | 1,145.6 | -0.4% | | Total Borrowings | 467.0 | 524.1 | -10.9% | | Trade Receivables | 2,845.2 | 2,783.6 | +2.2% | | Trade Payables | 663.2 | 609.0 | +8.9% | - The Group is in a net cash position, and the debt-to-equity ratio is not applicable[63] - The increase in trade payables was mainly due to negotiations with third-party suppliers for extended payment terms[62] Other Information This section covers directors' interests, share option and award schemes, major shareholders, interim dividend, corporate governance, employee remuneration, and updates on prior acquisitions Directors' and Chief Executives' Interests As of June 30, 2025, executive director Kong Jiannan and non-executive director Kong Jianmin held 52.86% and 52.90% of the company's issued voting shares, respectively, with key personnel changes noted Directors' and Chief Executives' Interests in Shares | Name | Total Number of Shares | Percentage of Issued Voting Shares | | :--- | :--- | :--- | | Kong Jianmin | 1,071,654,546 | 52.90% | | Kong Jiannan | 1,070,805,546 | 52.86% | | Yang Jingbo (Resigned) | 125,000 | 0.01% | | Wang Zhongqi (Resigned) | 10,000 | 0.0005% | - Ms. Yang Jingbo resigned as Executive Director and Chief Financial Officer on June 20, 2025, and Mr. Chen Wende was appointed as Executive Director[84] - Mr. Wang Zhongqi resigned as the Chief Executive Officer of the Company on September 15, 2025[84] Share Option Scheme and Share Award Scheme As of June 30, 2025, 270,000 share options remained unexercised under the Share Option Scheme, with no new grants during the period, and 99,985,011 award shares were available under the Share Award Scheme, with no activity in the period Share Option Scheme Overview (As of June 30, 2025) | Number of Share Options (shares) | Balance at Jan 1, 2025 | Granted during the period | Exercised during the period | Cancelled/Lapsed during the period | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | 270,000 | — | — | — | 270,000 | - The fair value of the share options was determined using a binomial model on the grant date, approximately RMB 1,968,000[73] - Under the Share Award Scheme, no award shares were granted, vested, lapsed, or issued for the six months ended June 30, 2025[75] Major Shareholders' and Other Persons' Interests As of June 30, 2025, major shareholders including Jin De, Ying Ming, and their associated parties collectively held 52.79% of the company's issued voting shares Major Shareholders' Interests in Shares (As of June 30, 2025) | Major Shareholder | Total Number of Shares | Percentage of Issued Voting Shares | | :--- | :--- | :--- | | Jin De | 1,069,354,546 | 52.79% | | Ying Ming | 1,069,354,546 | 52.79% | | He Kang | 1,069,354,546 | 52.79% | | Kong Jiantao | 1,069,354,546 | 52.79% | | Zheng Fu | 1,069,354,546 | 52.79% | | Zhuo Tao | 1,069,354,546 | 52.79% | | Fu Xun | 1,069,354,546 | 52.79% | - Jin De, Ying Ming, Zheng Fu, Zhuo Tao, Fu Xun, and He Kang entered into a shareholders' agreement, requiring each party to vote as instructed by the party holding the most shares, thus being deemed to have interests in the same total number of shares[79] Interim Dividend The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025[78] Corporate Governance and Employee Remuneration The Group maintains high corporate governance standards, complying with the Listing Rules, and as of June 30, 2025, had 14,391 employees with total employee benefit expenses of approximately RMB 613.1 million - The Company has applied good corporate governance principles and complied with the code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules, except that the Chairman, Mr. Kong Jianmin, was unable to attend the annual general meeting[81] Employee Data and Benefit Expenses | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 14,391 | 15,577 | | Employee Benefit Expenses (RMB million) | 613.1 | 652.1 (2024 H1) | Updates on Certain Acquisitions in Prior Years The Group is involved in disputes regarding performance guarantees for the acquisitions of Youhuo Zhilian and Guangdong Telijie, with litigation for Youhuo Zhilian and a provision of approximately RMB 96.5 million for compensation receivable from Guangdong Telijie's vendor - The Group is in litigation with the original vendor of Youhuo Zhilian regarding the audited net profit for 2022, with the main point of contention being the recoverability of trade receivables, which is expected to trigger the compensation mechanism under the relevant performance guarantee[89][90] - The 2024 audit report for Guangdong Telijie has not yet been issued, and due to disagreements over the recoverability of certain long-aged trade receivables, the Company has made a provision for compensation receivable from the vendor of approximately RMB 96.5 million based on unaudited management accounts[91] - The Company will continue to monitor the progress of legal proceedings and will publish further announcements when the audit report becomes available[90][92] Use of Net Proceeds from Listing The company's net proceeds from listing totaled approximately HKD 2,913.1 million, with HKD 0.2 million utilized for smart service system upgrades in H1 2025, leaving HKD 106.3 million unutilized and expected to be applied by December 31, 2025 Use of Net Proceeds from Listing (As of June 30, 2025) | Purpose | Revised Allocation (HKD million) | Unutilized at Jan 1, 2025 (HKD million) | Utilized during the period (HKD million) | Unutilized at June 30, 2025 (HKD million) | | :--- | :--- | :--- | :--- | :--- | | Seeking strategic acquisition and investment opportunities | 2,703.4 | — | — | — | | Upgrading smart service systems | 120.6 | 70.1 | 0.2 | 69.9 | | Diversifying value-added services | 36.4 | 36.4 | — | 36.4 | | General corporate purposes and working capital | 52.7 | — | — | — | | Total | 2,913.1 | 106.5 | 0.2 | 106.3 | - The unutilized or currently unplanned net proceeds are expected to be applied by December 31, 2025, in accordance with the disclosed purposes[95] Condensed Consolidated Interim Financial Information This section presents the condensed consolidated interim financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows for H1 2025 Condensed Consolidated Statement of Profit or Loss In H1 2025, the Group reported revenue of RMB 1,658.1 million and gross profit of RMB 418.8 million, but recorded a net loss of RMB 276.6 million due to significantly increased other expenses and income tax, resulting in a basic loss per share of RMB 13.23 cents Condensed Consolidated Statement of Profit or Loss Summary | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 1,658,137 | 1,923,371 | | Gross Profit | 418,824 | 563,973 | | (Loss)/Profit Before Tax | (164,187) | 98,633 | | Income Tax Expense | (112,439) | (28,741) | | (Loss)/Profit for the Period | (276,626) | 69,892 | | Basic (Loss)/Earnings Per Share Attributable to Owners of the Parent (RMB cents) | (13.23) | 2.85 | Condensed Consolidated Statement of Comprehensive Income In H1 2025, the Group's total comprehensive loss for the period was RMB 289.5 million, primarily influenced by the net loss and exchange differences on translation of overseas operations, partially offset by exchange differences on translation of the company Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | (Loss)/Profit for the Period | (276,626) | 69,892 | | Exchange differences on translation of overseas operations | (58,304) | (10,383) | | Exchange differences on translation of the Company | 45,424 | 16,834 | | Total Comprehensive (Loss)/Income for the Period | (289,506) | 76,343 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets were RMB 5,999.5 million, with current assets of RMB 4,689.3 million, total liabilities of RMB 3,154.6 million, and net assets of RMB 2,844.9 million Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-Current Assets | 1,310,266 | 1,497,843 | | Total Current Assets | 4,689,254 | 4,686,681 | | Total Current Liabilities | 2,724,747 | 2,548,523 | | Total Non-Current Liabilities | 429,894 | 493,890 | | Net Assets | 2,844,879 | 3,142,111 | | Equity Attributable to Owners of the Parent | 2,558,010 | 2,838,416 | Condensed Consolidated Statement of Changes in Equity In H1 2025, equity attributable to owners of the parent decreased from RMB 2,838.4 million to RMB 2,558.0 million, primarily due to a net loss of RMB 268.1 million and changes in exchange reserves Condensed Consolidated Statement of Changes in Equity Summary | Equity Item | As of Jan 1, 2025 (RMB thousand) | Loss for the Period (RMB thousand) | Exchange Differences (RMB thousand) | As of June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Parent | 2,838,416 | (268,121) | (12,880) | 2,558,010 | | Non-Controlling Interests | 303,695 | (8,505) | — | 286,869 | | Total Equity | 3,142,111 | (276,626) | (12,880) | 2,844,879 | Condensed Consolidated Statement of Cash Flows In H1 2025, net cash generated from operating activities was RMB 96.9 million, while net cash used in investing activities was RMB 20.4 million and in financing activities was RMB 81.2 million, resulting in a slight decrease in period-end cash and cash equivalents Condensed Consolidated Statement of Cash Flows Summary | Cash Flow Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Generated From/(Used In) Operating Activities | 96,920 | (100,979) | | Net Cash Used In Investing Activities | (20,368) | (7,034) | | Net Cash Used In Financing Activities | (81,240) | (66,348) | | Net Decrease in Cash and Cash Equivalents | (4,688) | (174,361) | | Cash and Cash Equivalents at End of Period | 1,140,923 | 1,268,529 | Notes to the Condensed Consolidated Interim Financial Information These notes provide detailed explanations and disclosures for the condensed consolidated interim financial information, covering company details, accounting policies, segment information, and financial instrument fair values 1. Company and Group Information Kaisa Prosperity Holdings Limited, incorporated in the Cayman Islands, primarily operates in China providing residential and non-residential property management and commercial operation services, with Jin De Consulting Limited as its ultimate holding company - The Company was incorporated in the Cayman Islands and is principally engaged in residential property management services and non-residential property management and commercial operation services in China[110] - The Company's direct and ultimate holding company is Jin De Consulting Limited, incorporated in the British Virgin Islands[111] 2.1 Basis of Presentation The condensed interim financial information for the six months ended June 30, 2025, has been prepared in accordance with HKAS 34 and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024 - The condensed interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[112] 2.2 Adoption of Amendments to Hong Kong Financial Reporting Standards The financial information for this period adopted amendments to HKAS 21 "Lack of Exchangeability" for the first time, but it had no significant financial impact on the condensed consolidated interim financial information as the Group's transactional and functional currencies are convertible - The financial information for this period adopted amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" for the first time, but it had no significant financial impact on the condensed consolidated interim financial information[114][115] 3. Operating Segment Information The Group is managed across two reportable operating segments: residential property management services and non-residential property management and commercial operation services, with all revenue and non-current assets derived from mainland China - The Group is organized into two reportable operating segments: residential property management services and non-residential property management and commercial operation services[116][120] 2025 H1 Revenue and Results by Operating Segment | Segment | Revenue (RMB thousand) | Results (RMB thousand) | | :--- | :--- | :--- | | Residential Property Management Services | 833,961 | 167,143 | | Non-Residential Property Management and Commercial Operation Services | 824,176 | 101,795 | | Total | 1,658,137 | 268,938 | - The Group's revenue from customers is derived solely from its operations and services provided in mainland China, and non-current assets are primarily located in mainland China[122] - For the six months ended June 30, 2025, revenue from Kaisa Group Holdings Ltd. and its subsidiaries, joint ventures, and associates was approximately RMB 135,765,000[123] 4. Revenue, Other Income and Gains, and Contract Liabilities In H1 2025, total revenue from customer contracts was RMB 1,658.1 million, with RMB 1,590.2 million recognized over time, and contract liabilities stood at RMB 285.6 million, while other income and gains totaled RMB 7.5 million 2025 H1 Disaggregation of Revenue from Contracts with Customers | Service Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Residential Property Management Services | 833,961 | 897,173 | | Non-Residential Property Management and Commercial Operation Services | 824,176 | 1,026,198 | | Total Revenue from Contracts with Customers | 1,658,137 | 1,923,371 | 2025 H1 Timing of Revenue Recognition | Timing of Recognition | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Recognized over time | 1,590,221 | 1,825,684 | | Recognized at a point in time | 67,916 | 97,687 | Contract Liabilities and Other Income and Gains | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contract Liabilities | 285,568 | 269,120 (Dec 31, 2024) | | Other Income and Gains | 7,473 | 8,770 | 5. (Loss)/Profit Before Tax In H1 2025, the Group reported a pre-tax loss of RMB 164.2 million, primarily due to the combined impact of cost of services provided, depreciation, amortization, employee benefit expenses, and various impairment losses on property, plant, equipment, goodwill, and financial assets 2025 H1 Components of (Loss)/Profit Before Tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of services provided | 1,239,313 | 1,359,398 | | Depreciation of property, plant and equipment | 14,479 | 12,102 | | Amortization of other intangible assets | 38,239 | 60,274 | | Employee benefit expenses | 613,085 | 652,136 | | Impairment loss on property, plant and equipment | 28,775 | — | | Impairment loss on goodwill | 84,450 | 55,442 | | Net impairment losses on financial assets recognized | 251,785 | 128,727 | 6. Finance Costs In H1 2025, the Group's total finance costs decreased to RMB 11.1 million from RMB 17.5 million in the prior year, mainly comprising interest on bank and other borrowings and lease liabilities 2025 H1 Finance Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 10,789 | 17,311 | | Interest on lease liabilities | 293 | 144 | | Total | 11,082 | 17,455 | 7. Income Tax In H1 2025, the Group's income tax expense significantly increased by 291.6% to RMB 112.4 million, primarily due to a RMB 132.5 million reduction in deferred tax assets, with Chinese subsidiaries generally subject to a 25% tax rate, some enjoying a 15% preferential rate 2025 H1 Income Tax Expense | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current | 59,571 | 89,268 | | Deferred | 52,868 | (60,527) | | Total | 112,439 | 28,741 | - The increase in income tax expense was mainly due to a decrease in deferred tax assets of approximately RMB 132.5 million, as it is not probable that sufficient taxable profits will be available in future periods to utilize the benefits of these deferred tax assets[56] - Income tax provision for the Group's subsidiaries established in China is calculated at a tax rate of 25%, with certain subsidiaries subject to a preferential corporate income tax rate of 15%[131] 9. (Loss)/Earnings Per Share Attributable to Owners of the Parent In H1 2025, the loss attributable to ordinary equity holders of the parent was approximately RMB 268.1 million, resulting in both basic and diluted loss per share of RMB 13.23 cents (Loss)/Earnings Per Share | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Ordinary Equity Holders of the Parent (RMB thousand) | (268,121) | 57,838 | | Weighted Average Number of Shares in Issue | 2,025,858,916 | 2,025,858,916 | | Basic (Loss)/Earnings Per Share (RMB cents) | (13.23) | 2.85 | | Diluted (Loss)/Earnings Per Share (RMB cents) | (13.23) | 2.85 | 10. Goodwill As of June 30, 2025, the Group's net carrying amount of goodwill was RMB 629.4 million, with an impairment loss of approximately RMB 84.5 million recognized during the period, and goodwill impairment tests are conducted annually or when impairment indicators arise Goodwill Carrying Amount and Impairment | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Carrying Amount, Net | 629,446 | 713,896 | | Impairment during the period | (84,450) | (630,008) (Annual) | - Goodwill impairment tests are performed annually, or whenever management believes events and changes in circumstances indicate that an impairment of goodwill may have occurred[136] 12. Trade Receivables As of June 30, 2025, the Group's total trade receivables were RMB 4,104.0 million, with a net amount of RMB 2,845.2 million after impairment provisions, including RMB 2,285.2 million from related parties, and a significant portion aged within one year Trade Receivables Details and Aging | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables from related parties | 2,285,155 | 2,231,188 | | Trade receivables from third parties | 1,818,874 | 1,574,347 | | Total Trade Receivables | 4,104,029 | 3,805,535 | | Less: Impairment provision | (1,258,835) | (1,021,895) | | Net Amount | 2,845,194 | 2,783,640 | | Aging Analysis (Net Amount): | | | | Within 1 year | 978,105 | 1,166,275 | | 1 to 2 years | 734,026 | 734,231 | | 2 to 3 years | 1,001,811 | 812,115 | | Over 3 years | 131,252 | 71,019 | 13. Trade Payables As of June 30, 2025, the Group's total trade payables increased by 8.9% to RMB 663.2 million from December 31, 2024, with RMB 541.8 million aged within one year Trade Payables Details and Aging | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables to related parties | 4,751 | 3,695 | | Trade payables to third parties | 658,492 | 605,337 | | Total | 663,243 | 609,032 | | Aging Analysis: | | | | Within 1 year | 541,780 | 492,248 | | 1 to 2 years | 88,509 | 88,853 | | 2 to 3 years | 19,610 | 18,057 | | Over 3 years | 13,344 | 9,874 | 14. Interest-Bearing Bank and Other Borrowings As of June 30, 2025, the Group's total borrowings were approximately RMB 467.0 million, with RMB 132.3 million current and RMB 334.7 million non-current, secured by service contract revenue and subsidiary equity, and guaranteed by an associated company, with interest rates ranging from 2.8% to 8.7% Interest-Bearing Bank and Other Borrowings | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Portion | 132,327 | 126,293 | | Non-Current Portion | 334,695 | 397,832 | | Total | 467,022 | 524,125 | - Certain borrowings are secured by revenue from certain service contracts of the Group and equity interests in certain subsidiaries of the Group, and guaranteed by an associated company[142][143] - Bank and other borrowings bear interest at prevailing market rates, with annual interest rates ranging from 2.8% to 8.7%[143] 17. Related Party Transactions In H1 2025, the Group generated RMB 64.4 million from residential property management and RMB 76.1 million from non-residential property management and commercial operation services with related parties, with outstanding trade receivables of RMB 2,285.2 million and payables of RMB 4.8 million 2025 H1 Related Party Transaction Revenue | Service Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Residential Property Management Services Revenue | 64,355 | 141,465 | | Non-Residential Property Management and Commercial Operation Services Revenue | 76,095 | 143,452 | Related Party Outstanding Balances (As of June 30, 2025) | Item | Amount (RMB thousand) | | :--- | :--- | | Trade receivables from related parties | 2,285,155 | | Trade payables to related parties | 4,751 | | Key management personnel compensation | 2,911 | 18. Fair Value and Fair Value Hierarchy of Financial Instruments The carrying amounts of the Group's financial instruments approximate their fair values, with interest-bearing bank and other borrowings measured using discounted expected future cash flows and classified as Level 2 in the fair value hierarchy Fair Value of Financial Liabilities | Item | Carrying Amount (June 30, 2025, RMB thousand) | Fair Value (June 30, 2025, RMB thousand) | | :--- | :--- | :--- | | Interest-bearing bank and other borrowings | 467,022 | 470,861 | - The fair value of interest-bearing bank and other borrowings is calculated by discounting expected future cash flows using current interest rates for instruments with similar terms, credit risk, and remaining maturities[154] - The fair value measurement of interest-bearing bank and other borrowings uses significant observable inputs (Level 2)[155]