卓越商企服务(06989) - 2025 - 中期财报

Company Information This section details the company's board and committee structures, legal and audit advisors, and key contact information Board of Directors and Committees This section outlines the composition of the Board of Directors, including executive, non-executive, and independent non-executive directors, along with members of key committees - Executive Directors include Mr. Li Xiaoping (Chairman) and Mr. Yang Zhidong[6] - Independent Non-executive Directors include Professor Cui Haitao (Chairman), Mr. Gan Zhicheng, and Ms. Liu Xiaolan[6] - Joint Company Secretary Ms. Cheng Shuhua was appointed from August 26, 2025, with Mr. Zhang Qichang resigning on the same date[6] Legal Advisors and Auditor This section identifies the company's legal advisors in Hong Kong and China, along with its auditor, KPMG - The company's auditor is KPMG[7] - Hong Kong legal advisor is Dechert LLP[6] - China legal advisors include Guangdong Putian Ge Law Firm and Dentons (Shenzhen) Law Offices[6] Company Contact Information This section provides the company's key contact and registration details, including headquarters, principal place of business, stock code, website, and investor relations email - The company's stock code is 6989[10] - The company's website is http://www.excepm.com[10](index=10&type=chunk) - The investor relations email is ir@exceam.com[10] Management Discussion and Analysis This section provides a comprehensive review of the group's business performance, financial results, core competencies, and future outlook Business Review In the first half of 2025, the Group maintained steady operations and growth by optimizing its business structure, diversifying value-added services, and advancing digital transformation despite economic pressures - The Group adheres to a long-term development strategy, operating steadily, continuously optimizing its business structure, and reducing reliance on related businesses[12] - Embracing the concept of synergistic development of strategic three pillars and core capabilities, the Group focuses on commercial property services and diversifies value-added services[12] - The Group is committed to digital transformation, building core competitiveness, and exploring industry and company changes based on customer pain points and market demands[12] I. Business Overview As a leading commercial real estate service operator in China, the Group offers comprehensive asset maintenance and service solutions, encompassing basic property management and diversified value-added services - The Group's main businesses include basic property management services, value-added services, and other related businesses[13] - Basic property management services cover various business types, including commercial, public and industrial, and residential properties[13] - Key development areas for value-added services include asset services, Zhuopin commercial general administrative services, and M&E services[18] II. Performance Summary In the first half of 2025, the company achieved stable operating performance, met budget targets, saw robust third-party business growth, and optimized its value-added service structure - In the first half of 2025, the company's overall operating performance was stable and positive, meeting budget targets, and maintaining steady growth in third-party business and advantages in the commercial property sector[22] Revenue Contribution by Business Type (H1 2025) | Business Type | Contribution | | :--- | :--- | | Commercial Property | 61.1% | | Public and Industrial Property | 10.0% | | Residential Property | 18.3% | | Value-added Services | 9.7% | | Other Services | 0.9% | Business Scale Growth | Metric | 2025 (Thousand sq.m.) | 2024 (Thousand sq.m.) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Contracted GFA | 82,500 | 80,097 | 3.0% | | GFA Under Management | 74,284 | 68,120 | 9.0% | | Third-party GFA Under Management Contribution | 62.7% | - | - | Changes in GFA Under Management (Thousand sq.m.) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | At beginning of period | 72,200 | 64,066 | | Newly signed | 4,524 | 6,784 | | Terminated | (2,440) | (2,730) | | At end of period | 74,284 | 68,120 | - Strategic client contract retention rate was close to 100.0%, with strategic client revenue reaching RMB 507.7 million, a 30.2% year-on-year increase compared to the same period in 2024[34] GFA Under Management and Revenue Details (Six Months Ended June 30) | Business Type | 2025 GFA Under Management (Thousand sq.m.) | 2025 Revenue (RMB Thousand) | 2024 GFA Under Management (Thousand sq.m.) | 2024 Revenue (RMB Thousand) | | :--- | :--- | :--- | :--- | :--- | | Commercial Property | 32,195 | 1,229,380 | 27,335 | 1,110,517 | | －Excellence Group | 3,050 | 339,252 | 3,050 | 367,079 | | －Third-party Property Developers | 29,145 | 890,128 | 24,285 | 743,438 | | Public and Industrial Property | 14,290 | 201,016 | 14,737 | 275,294 | | Residential Property | 27,799 | 369,386 | 26,048 | 328,165 | | Total | 74,284 | 1,799,782 | 68,120 | 1,713,796 | Core Competency Analysis The Group's core competencies, including strong brand image, comprehensive service standards, strategic talent development, and ongoing digital transformation, reinforce its leading position in commercial property services - Awarded industry honors such as "2025 China Property Service Top 100 Enterprises (TOP11)" and "2025 China IFM Service Excellent Enterprises (TOP2)", and received a Wind ESG rating of "AA"[38] - Certified with multiple management systems including ISO9001, ISO14001, ISO45001, ISO50001, ISO41001, and is a BOMA Platinum Member, IFMA Gold Member, and RICS Member[39] - Established a comprehensive talent management system, cultivating talent through "New Wing Management Trainee," "Zhuo Jiang," and "Zhuo Yue Program," covering over 2,800 key positions for training in H1 2025[42] - Steadfastly advancing digital transformation, completing the initial 1.0 phase with core business systems deployed, achieving integrated business and finance management and refined operations[44] Future Outlook The Group aims to become China's leading commercial real estate service operator by integrating strategic pillars with digital transformation, focusing on growth and core capability building for sustainable value creation - The Group's vision is to be "China's leading commercial real estate service operator," with a strategic direction of "combining strategic three pillars and digital transformation"[45] - Foundations are solidified through "organizational building, business development, and capability building," supported by "value distribution and management culture" as driving forces[45] I. Strategic Planning The Group's strategic planning aims to establish it as China's leading commercial real estate service operator, integrating strategic pillars with digital transformation, supported by organizational, business, and capability building - The Group consistently pursues the vision of becoming "China's leading commercial real estate service operator," adhering to the strategic direction of "combining strategic three pillars and digital transformation"[45] - Foundations are solidified through "organizational building, business development, and capability building," supported by "value distribution and management culture" as driving forces[45] II. Business Development Strategy The company will pursue a long-term strategy for independent market development, focusing on strategic clients, diversified value-added services, new sector breakthroughs, and digital capability building to enhance efficiency - Adhering to a multi-engine business strategy, the Group deepens strategic client relationships, expands multi-channel resources, and increases market share[46] - In new business areas, the Group will build diversified business segments across public construction, new consumption, and commercial retail[47] - In value-added services, leveraging an integrated platform, the Group continuously optimizes service processes and provides customized service solutions[48] - Digital capability building is a key focus for the company's core capabilities, integrating internal systems, optimizing business processes, and building a digital platform[50][51] II. Financial Review In H1 2025, total revenue decreased by 3.2% to RMB 2,015.15 million, driven by a 43.7% decline in value-added services, while net profit and margin also fell, and loans receivable significantly reduced due to financial services divestment - For the six months ended June 30, 2025, the Group's revenue was RMB 2,015.15 million, a 3.2% decrease compared to the same period last year[52] Revenue Composition and Changes (Six Months Ended June 30) | Business Type | 2025 (RMB Thousand) | 2025 (%) | 2024 (RMB Thousand) | 2024 (%) | Change (RMB Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 1,799,782 | 89.4 | 1,713,976 | 82.3 | 85,806 | 5.0 | | Value-added Services | 196,401 | 9.7 | 349,147 | 16.8 | (152,746) | (43.7) | | Other Businesses | 18,962 | 0.9 | 19,355 | 0.9 | (393) | 2.0 | | Total Revenue | 2,015,145 | 100.0 | 2,082,478 | 100.0 | (67,333) | (3.2) | - Value-added service revenue decreased by 43.7%, primarily due to the reduction in M&E installation business and a decrease in leasing operation services provided[55][56] Gross Profit and Gross Profit Margin Details (Six Months Ended June 30) | Business Type | 2025 Gross Profit (RMB Thousand) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB Thousand) | 2024 Gross Profit Margin (%) | Gross Profit Margin Change (Percentage Points) | | :--- | :--- | :--- | :--- | :--- | :--- | | Basic Property Management Services | 314,775 | 17.5 | 317,516 | 18.5 | (1.0) | | Value-added Services | 45,634 | 23.2 | 86,917 | 24.9 | (1.7) | | Other Businesses | 18,652 | 98.4 | 17,734 | 91.6 | 6.8 | | Total | 379,061 | 18.8 | 422,167 (1.5) | 20.3 | | - Net profit was RMB 162.31 million, a 11.7% decrease year-on-year; profit attributable to equity holders of the company was RMB 146.99 million, a 13.8% decrease[73] - Net profit margin was 8.1% (H1 2024: 8.8%)[74] - Loans receivable were approximately RMB zero, a decrease of approximately RMB 629.45 million from December 31, 2024, primarily due to the divestment of the financial services business segment[81] - As of June 30, 2025, the Group's cash and cash equivalents were RMB 689.34 million, a 26.3% decrease from December 31, 2024[91] Corporate Governance / Other Information This section details corporate governance practices, IPO proceeds utilization, significant investments, employee policies, share option schemes, and post-reporting period events Use of Proceeds from Listing The company utilized approximately RMB 2,333.8 million (84.5%) of its RMB 2,760.4 million net listing proceeds by June 30, 2025, primarily for business expansion, talent development, and IT system development - Total net proceeds from listing were approximately HKD 3,359.5 million (RMB 2,760.4 million)[94] - As of June 30, 2025, approximately RMB 2,333.8 million of net proceeds had been utilized, representing 84.5%, with RMB 426.6 million remaining unutilized[94] Planned and Actual Use of Listing Proceeds (As of June 30, 2025) | Main Category | Revised Planned Use Amount (RMB Million) | Actual Amount Utilized as of June 30, 2025 (RMB Million) | | :--- | :--- | :--- | | Business Expansion | 1,518.2 | 610.5 | | Development of Information Technology Systems | 82.8 | 6.7 | | Facility Upgrades for Properties Under Management | 110.4 | 28 | | Talent Acquisition and Cultivation | 496.9 | 244.8 | | General Corporate Purposes | 552.1 | 61.5 | - The estimated utilization period for the reallocated unutilized net proceeds is before December 31, 2026[99] Significant Investments Held, Major Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures During the reporting period, the Group divested its financial services business, with no other significant investments, acquisitions, or disposals, and entered a settlement agreement post-period - During the reporting period, the Group divested its financial services business[101] - On August 24, 2025, Shenzhen Excellence Property Management Co., Ltd. entered into a settlement agreement with Excellence Real Estate Group Co., Ltd[102] Employees and Remuneration Policy As of June 30, 2025, the Group employed 18,991 full-time staff in China and 88 in India, offering competitive remuneration packages including salaries, allowances, bonuses, and social benefits - As of June 30, 2025, the Group had a total of 18,991 and 88 full-time employees in China and India, respectively (December 31, 2024: 17,787 and 86 employees)[104] - The Group provides competitive remuneration packages to employees, including directors' fees, salaries, allowances and benefits in kind, bonuses, provident fund contributions, and social welfare[104] Share Option Schemes The company's 2020 share option scheme has not granted any options, and all pre-IPO options adopted in 2020 lapsed by June 30, 2025, due to unfulfilled vesting conditions - The company's share option scheme was approved and adopted on September 28, 2020, and no share options have been granted under the scheme from the adoption date up to the date of this report[105] - The remaining term of the share option scheme is approximately 4 years[106] - The pre-IPO share option scheme was approved and adopted on September 9, 2020, but as of June 30, 2025, all share options had lapsed due to unfulfilled vesting conditions[111] Interim Dividend The Board does not recommend an interim dividend for the six months ended June 30, 2025, prioritizing capital for business operations to ensure long-term stability and enhance shareholder value - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[116] - This decision aims to prioritize capital investment in business operations to maintain long-term stable operations and continuous enhancement of shareholder value[116] Corporate Governance Practices The Group maintains high corporate governance standards, complying with all applicable Listing Rules, and its Audit Committee has reviewed and approved accounting principles and interim results - The company has consistently complied with all applicable code provisions of the Corporate Governance Code[118] - The Audit Committee has reviewed and approved the accounting principles and practices adopted by the Group, and has reviewed the unaudited condensed consolidated interim results for the six months ended June 30, 2025[123] Directors' and Major Shareholders' Interests As of June 30, 2025, directors and major shareholders held interests in the company's shares, with Mr. Li Xiaoping holding 9.68% via spouse's interest and Mr. Li Hua holding 59.20% via controlled corporation interest Directors' Interests in the Company's Shares (As of June 30, 2025) | Director's Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage | | :--- | :--- | :--- | :--- | | Mr. Li Xiaoping | Spouse's Interest | 118,120,000 | 9.68% | | | Beneficial Owner | 272,000 | 0.02% | | Ms. Guo Ying | Beneficial Owner | 75,000 | 0.01% | Major Shareholders' Interests in Shares (As of June 30, 2025) | Shareholder's Name/Entity | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage | | :--- | :--- | :--- | :--- | | Mr. Li Hua | Controlled Corporation Interest | 722,440,000 | 59.20% | | Dongrun Holdings Group Co., Ltd. | Controlled Corporation Interest | 722,440,000 | 59.20% | | Urban Hero Investments Limited | Beneficial Owner | 722,440,000 | 59.20% | | Ms. Xiao Xingping | Controlled Corporation Interest | 117,900,000 | 9.66% | | | Beneficial Owner | 220,000 | 0.02% | | | Spouse's Interest | 272,000 | 0.02% | | Ever Rainbow Holdings Limited | Beneficial Owner | 117,900,000 | 9.66% | | Mr. Li Yuan | Controlled Corporation Interest | 63,000,000 | 5.16% | | Autumn Riches Limited | Beneficial Owner | 63,000,000 | 5.16% | Events After Reporting Period Post-reporting period, the Group entered a settlement agreement for conditional asset acquisition and received a final court judgment confirming joint and several guarantee liability for a loan dispute - On August 24, 2025, Shenzhen Excellence Property Management Co., Ltd. entered into a settlement agreement with Excellence Real Estate Group Co., Ltd[131] - In August 2025, the Beijing High People's Court issued a final judgment on the Beijing Global dispute, ruling that the Group is jointly and severally liable for the loan principal and interest[131] Review Report to the Board of Directors of Excellence Commercial Property & Facilities Management Group Limited KPMG reviewed the interim financial report for the six months ended June 30, 2025, finding no material non-compliance with Hong Kong Accounting Standard 34 - KPMG has reviewed the interim financial report published on pages 34 to 60[133] - The scope of review is significantly smaller than an audit, thus it cannot guarantee that all material matters discoverable in an audit would be known, and therefore no audit opinion is expressed[134] - Based on the review, no matters were found to indicate that the interim financial report for the six months ended June 30, 2025, was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 – "Interim Financial Reporting"[135] Consolidated Statement of Profit or Loss This consolidated statement presents the financial performance for the six months ended June 30, 2025, with a profit of RMB 162.31 million and basic earnings per share of RMB 12.05 cents Key Data from Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 1,996,183 | 2,063,123 | | Cost of sales | (1,635,774) | (1,659,585) | | Gross profit | 360,409 | 403,538 | | Operating profit | 207,930 | 222,596 | | Profit before tax | 211,383 | 227,674 | | Income tax expense | (53,783) | (42,016) | | Profit for the period (continuing operations) | 157,600 | 185,658 | | Profit for the period (discontinued operations) | 4,706 | (1,859) | | Profit for the period | 162,306 | 183,799 | | Attributable to equity holders of the Company | 146,992 | 170,499 | | Non-controlling interests | 15,314 | 13,300 | | Basic earnings per share (RMB cents) | 12.05 | 13.97 | Consolidated Statement of Profit or Loss and Other Comprehensive Income This consolidated statement presents the total comprehensive income for the six months ended June 30, 2025, which was RMB 162.61 million, including profit for the period and exchange differences Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Profit for the period | 162,306 | 183,799 | | Other comprehensive income (Exchange differences) | 308 | 424 | | Total comprehensive income for the period | 162,614 | 184,223 | | Attributable to equity holders of the Company | 147,300 | 170,923 | | Non-controlling interests | 15,314 | 13,300 | Consolidated Statement of Financial Position This consolidated statement presents the financial position as of June 30, 2025, with total assets of RMB 5,346.26 million and total equity of RMB 3,887.81 million, noting a significant increase in trade and other receivables and zero loans receivable Key Data from Consolidated Statement of Financial Position (As of June 30) | Metric | 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 41,332 | 52,936 | | Right-of-use assets | 670,823 | 589,306 | | Intangible assets | 268,770 | 287,857 | | Goodwill | 225,287 | 225,287 | | Interests in associates | 51,546 | 52,861 | | Interests in joint ventures | 164,346 | 11,280 | | Deferred tax assets | 97,234 | 97,898 | | Total non-current assets | 1,519,338 | 1,317,425 | | Current assets | | | | Inventories | 416,991 | 295,338 | | Trade and other receivables | 2,428,282 | 1,808,575 | | Loans receivable | – | 629,449 | | Cash and cash equivalents | 689,337 | 935,434 | | Total current assets | 3,826,922 | 3,822,768 | | Current liabilities | | | | Contract liabilities | 168,830 | 145,758 | | Trade and other payables | 1,043,494 | 944,354 | | Financial guarantees issued | 72,433 | 72,433 | | Lease liabilities | 6,891 | 8,852 | | Current taxation | 99,074 | 97,686 | | Total current liabilities | 1,390,722 | 1,269,083 | | Non-current liabilities | | | | Lease liabilities | 3,668 | 5,681 | | Deferred tax liabilities | 64,064 | 67,916 | | Total non-current liabilities | 67,732 | 73,597 | | Total equity | 3,887,806 | 3,797,513 | Consolidated Statement of Changes in Equity This consolidated statement details equity changes for the six months ended June 30, 2025, with total equity increasing by 2.4% to RMB 3,887.81 million, primarily driven by profit for the period Key Data from Consolidated Statement of Changes in Equity (Six Months Ended June 30) | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Balance at beginning of period | 3,797,513 | 3,652,696 | | Profit for the period | 162,306 | 183,799 | | Other comprehensive income | 308 | 424 | | Total comprehensive income | 162,614 | 184,223 | | Dividends declared to non-controlling interests | (1,619) | (10,825) | | Final dividend declared for previous year | (70,744) | (75,569) | | Balance at end of period | 3,887,806 | 3,750,525 | Condensed Consolidated Statement of Cash Flows This condensed consolidated statement shows a net decrease of RMB 245.71 million in cash and cash equivalents for the six months ended June 30, 2025, mainly due to outflows from operating and investing activities Key Data from Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (9,623) | (594,100) | | Net cash used in investing activities | (229,698) | (464,132) | | Net cash used in financing activities | (6,389) | (19,436) | | Net decrease in cash and cash equivalents | (245,710) | (1,077,668) | | Cash and cash equivalents at January 1 | 935,434 | 2,156,703 | | Cash and cash equivalents at June 30 | 689,337 | 1,079,136 | Notes to the Unaudited Interim Financial Report This section provides detailed notes to the unaudited interim financial report, covering accounting policies, non-continuing operations, revenue, profit before tax, income tax, and financial instruments 1 Basis of Preparation This interim financial report is prepared in accordance with HKAS 34 and Listing Rules, and has been reviewed by KPMG, though it remains unaudited - This interim financial report has been prepared in accordance with the applicable disclosure provisions 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" issued by the Hong Kong Institute of Certified Public Accountants[150] - This interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[151] 2 Changes in Accounting Policies The Group applied HKAS 21 amendments regarding exchange rate changes, which had no significant impact on this interim report as no non-exchangeable foreign currency transactions occurred - The Group has applied the amendments to Hong Kong Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability" issued by the Hong Kong Institute of Certified Public Accountants to the interim financial report for the current accounting period[152] - As the Group has not entered into any foreign currency transactions where one foreign currency is not exchangeable into another, these amendments have no significant impact on this interim announcement[152] 3 Discontinued Operations The Group divested its financial services business for RMB 337.79 million in equity, commercial apartments, and cash, resulting in a post-tax profit of RMB 4.71 million - The Group entered into an equity agreement with Excellence Group to dispose of its entire equity interest in certain wholly-owned subsidiaries ("Disposal"), for a total consideration of RMB 337,789,000[154] - The consideration was settled by equity interest in Shenzhen Excellence Real Estate Investment Co., Ltd., certain commercial apartments, and cash[154] - Profit/(loss) for the period from discontinued operations, net of tax, was RMB 4,706 thousand (2024: (RMB 1,859) thousand)[155] - Impact of the Disposal on the Group's financial position: net cash inflow of RMB 52,970 thousand[157] 4 Revenue and Segment Reporting The Group's revenue primarily stems from basic property management services (RMB 1,799.78 million) and value-added services (RMB 184.28 million), with a decrease in revenue from Excellence Group and other related parties Revenue from Contracts with Customers by Major Category (Six Months Ended June 30) | Revenue Source | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Basic property management services | 1,799,782 | 1,713,976 | | Value-added services | 184,284 | 349,147 | | Car park sales | 12,117 | – | | Financial services income (discontinued operations) | 18,962 | 19,355 | | Total | 2,015,145 | 2,082,478 | - For the six months ended June 30, 2025, revenue from Excellence Real Estate Group Co., Ltd. and its subsidiaries and other related parties was RMB 162,451,000 (six months ended June 30, 2024: RMB 262,334,000)[160] - The Group manages its business through two reportable segments: property management services and financial services (disposed of in 2025)[163] 5 Profit Before Tax Profit before tax is reported after accounting for finance costs, depreciation, amortization, impairment losses, and subcontracting costs, with finance costs significantly decreasing due to reduced borrowings Finance Costs (Six Months Ended June 30) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest on bank loans | – | 615 | | Interest on lease liabilities | 233 | 364 | | Total | 233 | 979 | Depreciation and Amortization Expenses (Six Months Ended June 30) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Owned property, plant and equipment | 5,313 | 8,089 | | Right-of-use assets for property, plant and equipment | 5,462 | 7,360 | | Right-of-use assets for car parks | 9,413 | – | | Intangible assets | 20,301 | 25,092 | | Total | 40,489 | 40,541 | - Impairment losses on receivables and financial guarantees issued were RMB 31,084 thousand (2024: RMB 23,990 thousand)[169] - Subcontracting costs were RMB 328,421 thousand (2024: RMB 308,328 thousand)[169] 6 Income Tax Income tax expense for the six months ended June 30, 2025, increased to RMB 53.78 million, mainly due to deferred tax asset recognition in 2024, with Chinese subsidiaries subject to 25% or preferential 15% corporate income tax rates Income Tax Expense (Six Months Ended June 30) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current tax | 63,357 | 67,950 | | Deferred tax | (9,574) | (25,934) | | Total | 53,783 | 42,016 | - The increase in income tax expense was primarily due to the recognition of deferred tax assets in 2024 arising from unused tax losses expected to be utilized based on future business plans[71] - The Group's principal PRC subsidiaries are subject to Corporate Income Tax at a statutory rate of 25% on their respective assessable income, with some enjoying a preferential income tax rate of 15%[172] 7 Basic Earnings Per Share For the six months ended June 30, 2025, profit attributable to equity holders was RMB 146.99 million, resulting in basic earnings per share of RMB 12.05 cents, based on 1,220,348,000 weighted average ordinary shares - Basic earnings per share is calculated based on the profit attributable to equity holders of the Company of RMB 146,992,000 for the six months ended June 30, 2025, and the weighted average of 1,220,348,000 ordinary shares in issue[173] - For the six months ended June 30, 2025, and June 30, 2024, the Group had no potentially dilutive ordinary shares in issue[173] 8 Right-of-Use Assets and Other Property, Plant and Equipment For the six months ended June 30, 2025, the Group recognized an RMB 2.08 million increase in right-of-use assets for leased properties and acquired car park right-of-use assets for RMB 90.93 million from Excellence Group - For the six months ended June 30, 2025, the Group entered into several lease agreements for office space and dormitories, recognizing an increase in right-of-use assets for self-occupied leased properties of RMB 2,082,000[174] - The Group entered into multiple right-of-use transfer agreements to acquire right-of-use assets for car parks from Excellence Group for a consideration of RMB 90,930,000[174] 9 Interests in Joint Ventures For the six months ended June 30, 2025, the Group acquired a 50% equity interest in Shenzhen Excellence Real Estate Investment Co., Ltd. for RMB 151.48 million, as part of the non-monetary consideration for a subsidiary disposal - For the six months ended June 30, 2025, the Group acquired a 50% equity interest in Shenzhen Excellence Real Estate Investment Co., Ltd. for a total consideration of RMB 151,478,000[176] - This was part of the non-monetary consideration for the disposal of a subsidiary as described in Note 3[176] 10 Inventories As of June 30, 2025, total inventories were RMB 416.99 million, primarily properties held for sale, with the increase mainly attributed to commercial apartments from the financial services business disposal Inventories (As of June 30) | Item | 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Properties held for sale | 403,553 | 292,059 | | Others | 13,438 | 3,279 | | Total | 416,991 | 295,338 | - Properties held for sale include certain commercial apartments amounting to RMB 103,325,000, which was part of the non-monetary consideration for the disposal of a subsidiary as described in Note 3[178] 11 Trade and Other Receivables As of June 30, 2025, net trade and other receivables increased by RMB 619.70 million to RMB 2,428.28 million, driven by revenue growth and the disposal of financial services business - As of June 30, 2025, the Group's net trade and other receivables were approximately RMB 2,428.28 million, an increase of approximately RMB 619.70 million from December 31, 2024[80] - Net trade receivables increased by approximately RMB 251.03 million, and net other receivables increased by approximately RMB 369.54 million, due to the disposal of the financial services business[80] - Other receivables from related parties primarily include outstanding loans of RMB 300,000,000 and dividends receivable from a disposed subsidiary of RMB 27,059,000[180] Ageing Analysis of Trade Receivables (Net of Loss Allowance) (As of June 30) | Ageing | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 1 year | 1,380,463 | 1,155,913 | | 1 to 2 years | 286,914 | 278,443 | | 2 to 3 years | 49,201 | 31,194 | | Total | 1,716,578 | 1,465,550 | 12 Loans Receivable As of June 30, 2025, loans receivable decreased significantly to RMB zero from RMB 629.45 million at year-end 2024, due to the divestment of the financial services business - As of June 30, 2025, the Group's loans receivable were approximately RMB zero, a decrease from approximately RMB 629.45 million as of December 31, 2024[81] - This was primarily due to the Group's divestment of its financial services business segment during the reporting period, with all loans receivable sold as part of the disposal of a subsidiary[81][182] 13 Financial Assets Measured at Fair Value Through Profit or Loss As of June 30, 2025, financial assets measured at fair value through profit or loss increased to RMB 176.42 million, primarily comprising wealth management products and other investment products Financial Assets Measured at Fair Value Through Profit or Loss (As of June 30) | Item | 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Wealth management products | 140,214 | 30,195 | | Other investment products | 36,202 | – | | Total | 176,416 | 30,195 | - The fair value of wealth management products is determined based on the expected rates of return stipulated in the relevant contracts with counterparties[184] - Other investment products refer to investments in public money market funds, whose fair value is determined based on valuation reports provided by fund managers[185] 14 Restricted Deposits and Cash and Cash Equivalents As of June 30, 2025, restricted deposits totaled RMB 108.72 million, while cash and cash equivalents decreased by 26.3% to RMB 689.34 million, primarily due to investment product and right-of-use asset purchases Restricted Deposits (As of June 30) | Item | 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Cash collected on behalf of owners' committees | 25,738 | 24,572 | | Housing maintenance funds received | 24,882 | 21,023 | | Cash frozen due to litigation | 44,014 | 57,426 | | Other restricted deposits | 14,086 | 15,836 | | Total | 108,720 | 118,857 | Cash and Cash Equivalents (As of June 30) | Item | 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Cash on hand | 542 | 645 | | Deposits with banks and other financial institutions | 688,795 | 934,789 | | Total | 689,337 | 935,434 | - As of the end of the reporting period, cash and cash equivalents held in Mainland China amounted to RMB 671,527,000 (December 31, 2024: RMB 924,281,000)[188] 15 Trade and Other Payables As of June 30, 2025, total trade and other payables increased by RMB 99.14 million to RMB 1,043.49 million, primarily due to dividends payable to equity holders and funds collected for owners' committees Trade and Other Payables (As of June 30) | Item | 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade payables | 463,769 | 414,587 | | Other payables | 70,699 | 64,443 | | Consideration payable for business combinations | 15,437 | 15,437 | | Dividends payable to equity holders of the Company | 69,952 | – | | Dividends payable to non-controlling interests | 6,205 | 6,205 | | Cash collected on behalf of owners' committees | 25,738 | 24,572 | | Housing maintenance funds held on behalf of owners | 24,882 | 21,023 | | Financial liabilities measured at amortized cost | 676,682 | 546,267 | | Accrued salaries and other benefits | 200,922 | 233,197 | | Deposits | 133,738 | 129,877 | | Accrued expenses | 32,152 | 35,013 | | Total | 1,043,494 | 944,354 | - Trade payables primarily refer to amounts payable for subcontracting services such as cleaning, security, landscaping, engineering materials or facilities, and maintenance services provided by suppliers, as well as amounts related to facility or car park leases[190] Ageing Analysis of Trade Payables (As of June 30) | Ageing | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 1 month | 139,448 | 136,439 | | 1 to 3 months | 165,607 | 141,990 | | 3 to 6 months | 58,996 | 37,466 | | 6 to 12 months | 42,453 | 25,223 | | Over 12 months | 57,265 | 73,469 | | Total | 463,769 | 414,587 | 16 Financial Guarantees Issued As of June 30, 2025, financial guarantees issued remained at RMB 72.43 million, primarily for a seller's loan, with a final court judgment in August 2025 confirming the Group's joint and several liability for the loan - Financial guarantees issued amounted to RMB 72,433 thousand (December 31, 2024: RMB 72,433 thousand)[192] - Beijing Global provided a guarantee for a seller's loan with a principal of RMB 183,433,000[192] - In August 2025, the Beijing High People's Court issued a final judgment, ruling that the Group is jointly and severally liable for the principal and interest of the aforementioned loan[192] 17 Capital and Dividends The company's issued and paid-up share capital remained unchanged, with no interim dividend recommended for H1 2025, though a final dividend of HKD 6.28 cents (RMB 5.80 cents) per ordinary share was approved for the prior year - Issued and fully paid share capital consists of 1,220,348,000 ordinary shares of HKD 0.01 each[194] - Interim dividend declared after the interim period was zero HK cents (2024: HKD 7.66 cents per ordinary share)[195] - A final dividend for the previous financial year of HKD 6.28 cents (equivalent to RMB 5.80 cents) per ordinary share, totaling RMB 70,744 thousand, was approved during the period[195] 18 Fair Value Measurement of Financial Instruments The Group's financial instruments are primarily classified as Level 2 for fair value measurement, encompassing wealth management and other investment products, with no transfers between levels during the six months ended June 30, 2025 - The Group's financial instruments are classified as Level 2 for fair value measurement, including wealth management products and other investment products[199] - For the six months ended June 30, 2025, there were no transfers between Level 1 and Level 2, nor any transfers into or out of Level 3[199] - The fair value of wealth management products is the estimated amount the Group would receive upon selling the products at the end of the reporting period, taking into account current interest rates[200] 19 Commitments Total unfulfilled commitments not yet provided for in the interim financial report amounted to RMB 12.73 million, mainly for authorized but uncontracted acquisitions of property, plant, equipment, and intangible assets Commitments (As of June 30) | Item | 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Authorized but not contracted – acquisition of property, plant and equipment | 1,782 | 11,132 | | Authorized but not contracted – acquisition of intangible assets | 10,944 | 13,867 | | Total | 12,726 | 24,999 | 20 Contingent Liabilities The Group faces a contingent liability from an arbitration notice concerning a 40% equity acquisition, for which no provision has been recognized due to an unreliable outcome estimate - Shenzhen Excellence Property Management Co., Ltd., an indirect wholly-owned subsidiary of the Company, received an arbitration notice from the Shanghai Arbitration Commission regarding a dispute over the acquisition of a 40% equity interest in a project company[204] - The applicant claimed RMB 20.8 million in liquidated damages and other fees from the disposed subsidiary and Excellence Property Management[205] - As the outcome of the arbitration cannot be reliably estimated, no provision has been recognized for the arbitration[204] 21 Significant Related Party Transactions The Group engaged in significant related party transactions with Excellence Group, including providing property management and value-added services, procuring maintenance, leasing properties, and acquiring IT system support - For the six months ended June 30, 2025, the Group provided property management services and value-added services to Excellence Group and other related parties, with revenues of RMB 109,380,000 and RMB 53,071,000, respectively[209] - The Group purchased IT system support services from Excellence Group for RMB 9,405,000[209] - The Group entered into lease agreements for certain leased properties from its related parties, with rent payable amounting to RMB 11,952,000[209] 22 Non-Adjusting Events After Reporting Period Post-reporting period, the Group entered a settlement agreement for conditional asset acquisition and received a civil judgment confirming joint and several guarantee liability for a loan dispute - On August 24, 2025, Shenzhen Excellence Property Management Co., Ltd. entered into a settlement agreement with Excellence Real Estate Group Co., Ltd. for the conditional acquisition of offsetting assets[209] - In August 2025, the Group received a civil judgment from the court regarding the Beijing Global dispute, confirming joint and several guarantee liability[209]