正荣地产(06158) - 2025 - 中期财报

Corporate Information This section provides an overview of the company's governance structure, including board and committee compositions, and essential operational details Board of Directors and Committees This section lists the composition of the company's board of directors, including changes in appointments and resignations of executive, non-executive, and independent non-executive directors, as well as the members and chairpersons of the Audit, Nomination, and Remuneration Committees - Board members changed, with Mr. Chen Jingde and Mr. Jin Mingjie appointed as executive directors on May 8, 2025, while Mr. Liu Weiliang and Mr. Li Yang resigned on the same day; Mr. Zhou Weicheng was appointed as a non-executive director on August 1, 2025, and Mr. Ou Guowei resigned on January 17, 2025[7][8] - The Audit Committee is chaired by Ms. Yang Yongyi, the Nomination Committee is chaired by Mr. Chen Jingde after Mr. Liu Weiliang's resignation, and the Remuneration Committee is chaired by Mr. Wang Chuanxu[7][9] Company Basic Information This section provides the company's basic operational details, including auditor, website, stock code, registered office, Hong Kong share registrar, China headquarters, and principal place of business in Hong Kong - The company's auditor is Zhonghui Anda Certified Public Accountants Limited, and its stock code is 6158[12][13] - The company's website is www.zhenrodc.com, and its China headquarters is located on the 3rd floor, Building 7, Hongqiao Zhenro Center, Lane 666, Shenhong Road, Minhang District, Shanghai[12][13] Land Bank Table This section provides a comprehensive overview of the Group's land bank, detailing properties developed by both its subsidiaries and joint ventures across various regions in China Properties Developed by the Group's Subsidiaries This section details residential and retail property projects developed by the Group's subsidiaries in major Chinese cities, including their attributable interests, site areas, land costs, and estimated completion dates Yangtze River Delta Region Subsidiary development projects in the Yangtze River Delta region are concentrated in Shanghai, Suzhou, Hangzhou, Nanjing, Chuzhou, Suqian, Xuzhou, and Hefei, covering residential and retail uses, with numerous projects in Nanjing - Projects such as Shanghai Hongqiao Zhenro Mansion, Shanghai Zhenro Guoling, and Shanghai Zhenro Yuelong Mansion are in Shanghai, while Suzhou Zhenro Hefeng Mingzhu and Zhangjiagang Tangsong Yunzhu are in Suzhou[15][21] - Nanjing has multiple projects, including Nanjing Zhenro Aoti Nanchen Zique, Nanjing Zhenro Runjincheng, and Nanjing Zhenro Binjiang Zique, with most planned for residential/retail use[15][21] Central China Region Subsidiary development projects in the Central China region are primarily located in Zhengzhou, Wuhan, and Changsha, mainly for residential and retail purposes, with a higher number of projects in Changsha - Projects such as Zhengzhou Chengnan Zhenro Mansion and Zhengzhou Zhenro Yushoufu Tianyue are in Zhengzhou, while Wuhan Panlong Zhenro Mansion and Wuhan Zhenro Yuelong Mansion are in Wuhan[26][31] - Changsha projects include Changsha Zhenro Fortune Center, Changsha Zhenro Binjiang Ziquetai, and Changsha Zhenro Meixi Ziquetai, with planned uses covering residential, retail, and S&O[26][31] Western China Region Subsidiary development projects in the Western China region are concentrated in Xi'an, Chengdu, and Chongqing, primarily for residential and retail uses - Projects such as Xi'an Beichen Tianyue North and Xi'an Zhenro Mansion are in Xi'an, while Chengdu Guihu Zhenro Mansion Phase II and Chengdu Dujiangyan Zhenro Yuelong Mansion are in Chengdu[26][31][33][38] - Chongqing Yuexi Zhenro Mansion and Chongqing Zhenro Langji Yuejiangwan are in Chongqing, with most planned for residential/retail use[33][38] Western Taiwan Straits Region Subsidiary development projects in the Western Taiwan Straits region are mainly distributed in Fuzhou, Xiamen, Putian, Quanzhou, Nanchang, Ji'an, and Yichun, primarily for residential and retail uses, with more projects in Fuzhou and Putian - Projects such as Fuzhou Guanlan Mansion, Fuzhou Runtang Mansion, and Fuzhou Zhenro Fortune Center are in Fuzhou, while Xiamen Lianfa Zhenro Tianzhu Runchen and Xiamen Xiang'an Zhenro Mansion are in Xiamen[33][38] - Putian Zhenro Fortune Center, Putian Zhenro Liyuan Huafu, and Putian Zhenro Times Square are in Putian, while Quanzhou Shishi Zhenro Mansion and Quanzhou Zhenro Baojia Jiangbin Mansion are in Quanzhou[33][38] - Nanchang Zhenro Zhongao Yuexitai and Nanchang Zhenro Dahu Zhidu are in Nanchang, while Ji'an Luling Mansion Phase I and Yichun Jintou Zhenro Mansion are in Ji'an and Yichun[40][46] Pearl River Delta Region Subsidiary development projects in the Pearl River Delta region are concentrated in Guangzhou and Foshan, primarily for residential and retail uses - Projects such as Guangzhou Nansha Plot, Guangzhou Zengcheng Plot, and Guangzhou Baiyun District Zhongluotan Plot are in Guangzhou, while Foshan Zhenro Jihua Zhenro Mansion and Foshan Jinmao Country Garden Zhenro Mansion are in Foshan[40][46] - The Group's subsidiaries hold significant land reserves in the Yangtze River Delta, Central China, Western China, Western Taiwan Straits, and Pearl River Delta regions, primarily for residential (R) and retail (RE) development[15][25][26] Subtotal of Land Reserves Developed by the Group's Subsidiaries | Region | Site Area (square meters) | Land Cost (RMB 10k) | Land Bank (square meters) | | :--- | :--- | :--- | :--- | | Yangtze River Delta | 2,620,199 | 5,445,570 | 2,207,151 | | Central China | 878,636 | 876,601 | 1,393,769 | | Western China | 427,676 | 551,012 | 560,776 | | Western Taiwan Straits | 3,491,781 | 3,743,439 | 2,168,180 | | Pearl River Delta | 270,862 | 885,620 | 623,168 | | Total | 7,689,154 | 11,502,242 | 6,953,044 | Properties Developed by the Group's Joint Ventures and Associated Companies This section lists residential and retail property projects developed by the Group's joint ventures and associated companies in major Chinese cities, including their attributable interests, site areas, land costs, and estimated completion dates Yangtze River Delta Region Joint venture and associated company development projects in the Yangtze River Delta region are concentrated in Shanghai, Suzhou, Wuxi, Hangzhou, Nanjing, Chuzhou, Xuzhou, Hefei, Lu'an, and Fuyang, covering residential and retail uses - Projects such as Shanghai BU Center, Suzhou Xiangyue Siji Yayuan, and Wuxi Zhenro Xiyue are in Shanghai, Suzhou, and Wuxi[48][53] - Projects such as Hangzhou Sunac Zhenro Hangyao Zhicheng, Nanjing Zhenro Runqifu, and Chuzhou Hongyang • Shiguang Lantian are in Hangzhou, Nanjing, and Chuzhou[48][53] - Projects such as Xuzhou Wutong Mansion, Hefei Zhenro Yueduhui, Lu'an Country Garden Zhenro Fenghuangcheng Nanyuan, and Fuyang Yingzhou Zhenro Mansion are in Xuzhou, Hefei, Lu'an, and Fuyang[48][53] Central China Region Joint venture and associated company development projects in the Central China region are primarily located in Wuhan and Xuchang, mainly for residential and retail purposes - Wuhan Qingneng Zhenro Mansion is in Wuhan, and Xuchang Furong Yuefu is in Xuchang[48][53][55] Western China Region Joint venture and associated company development projects in the Western China region are concentrated in Chongqing, primarily for residential use - Chongqing Zhongyang Yunjing is in Chongqing, with a planned use for residential purposes[48][53][56] Bohai Rim Region Joint venture and associated company development projects in the Bohai Rim region are primarily distributed in Tianjin and Jinan, mainly for residential and retail purposes - Projects such as Tianjin Zhenro Zhengxing Ziquetai, Tianjin Zhongchu Zhenro Dongjing, and Tianjin Jiuhe Mansion are in Tianjin[58][63] - Projects such as Jinan Jingyue, Jinan Zhenro Yuetang Mansion, Jinan Jiulong Mansion, Jinan Fenghuang Shoufu, Jinan Tianchen, Jinan Jinyue Mansion, Jinan Park Xuefu, and Jinan Times Lingyu are in Jinan[58][63] Western Taiwan Straits Region Joint venture and associated company development projects in the Western Taiwan Straits region are primarily distributed in Xiamen, Putian, Nanchang, Ji'an, Ganzhou, and Fuzhou, mainly for residential and retail purposes - Xiamen Lianfa Zhenro Zhenhuafu is in Xiamen, and Putian Lianfa Zhenro Yuhu Tianjing is in Putian[58][63] - Projects such as Nanchang Dongtou Zhenro Mansion, Ji'an Zhenro Sunshine City Wenlan Mansion, and Ganzhou Zhenro Yuerong Mansion are in Nanchang, Ji'an, and Ganzhou[58][63] - Projects such as Mawei Country Garden Zhenro Yuejiangwan, Fuzhou Zhenro Shimao Tangyue Shannan, and Fuzhou Sunshine City Poly Yuanxili Mountain are in Fuzhou[58][63] Pearl River Delta Region Joint venture and associated company development projects in the Pearl River Delta region are concentrated in Foshan, primarily for residential and retail purposes - Foshan Zhenro Ligao Guanshan Mansion is in Foshan, with a planned use for residential/retail purposes[58][63][65] - The Group's joint ventures and associated companies hold land reserves in the Yangtze River Delta, Central China, Western China, Bohai Rim, Western Taiwan Straits, and Pearl River Delta regions, primarily for residential (R) and retail (RE) development[48][57] Subtotal of Land Reserves Developed by the Group's Joint Ventures and Associated Companies | Region | Site Area (square meters) | Land Cost (RMB 10k) | Land Bank (square meters) | | :--- | :--- | :--- | :--- | | Yangtze River Delta | 1,580,493 | 2,675,495 | 1,528,397 | | Central China | 177,494 | 123,532 | 364,024 | | Western China | 150,048 | 215,072 | 34,497 | | Bohai Rim | 574,312 | 1,914,242 | 273,870 | | Western Taiwan Straits | 461,953 | 842,250 | 452,244 | | Pearl River Delta | 51,714 | 103,700 | 99,068 | | Total | 2,996,014 | 5,874,291 | 2,752,100 | Total Land Bank As of June 30, 2025, the Group, together with its joint ventures and associated companies, held a total land bank with a gross floor area of 9.71 million square meters and a total land cost of RMB 17.377 billion Total Land Bank | Indicator | Amount | | :--- | :--- | | Total Site Area | 10,685,168 square meters | | Total Land Cost | 17,376,533 RMB 10k | | Total Land Bank | 9,705,144 square meters | Chairman's Statement This statement provides an overview of the Group's performance, market conditions, operational review, and future outlook for the reporting period Performance Overview The Group recorded revenue of approximately RMB 4,645.4 million and a loss of approximately RMB 6,657.6 million for the first half of 2025, with loss attributable to owners of the parent at RMB 6,463.1 million, and no interim dividend is recommended 2025 H1 Key Financial Data | Indicator | Amount (RMB million) | | :--- | :--- | | Revenue | 4,645.4 | | Loss | 6,657.6 | | Loss attributable to owners of the parent | 6,463.1 | | Interim dividend | Not recommended | Market and Business Review In the first half of 2025, the Chinese real estate market remained sluggish, posing significant operational pressure on the Group, which responded by advancing project construction, revitalizing existing assets, delivering new homes, and pursuing offshore debt restructuring - The Chinese real estate market continued to operate at a low level in the first half of 2025, with property developers facing immense operational pressure[70][73] - The Group delivered approximately 2,000 new homes on schedule and continued to ensure orderly progress in project construction[70][74] - The Group implemented liquidity management and cost-saving measures, including seeking extensions for domestic and overseas financing, improving the quality of new home sales, revitalizing existing assets, accelerating cash recovery, streamlining organizational structure, and reducing administrative expenses[70][75] - The Group actively collaborated with legal and financial advisors to advance the overall offshore debt restructuring to achieve a long-term sustainable capital structure[70][75] Outlook For the second half of 2025, the Group anticipates continued challenges in the Chinese real estate sector but plans to maintain operational stability, capitalize on policy opportunities, restart key projects, enhance asset operation, and strengthen financial risk management - The Chinese real estate industry is expected to continue facing difficulties in the second half of 2025[78][79] - The Group will seize policy opportunities for economic revitalization and stabilization of the real estate market, striving to restart key challenging projects and orderly advance the construction of ongoing projects[78][79] - The Group will focus on enhancing its operational capabilities for existing assets to further improve the effectiveness of asset value recovery[78][79] - The Group will continue to adhere to the "safe, healthy, and sustainable" operating principle, strengthen financial risk management, optimize asset structure, strictly control operating costs, and improve management efficiency and operational effectiveness[78][79] Management Discussion and Analysis This section provides a detailed analysis of the Group's operational and financial performance, including property development, investment, land bank, financial review, liquidity, and contingent liabilities Property Development The Group's property development business faced challenges in the first half of 2025, with significant declines in contracted sales and gross floor area, though the average selling price of recognized properties increased Contracted Sales In the first half of 2025, the Group, together with its joint ventures and associated companies, recorded contracted sales of RMB 2,365.2 million, a 31.0% year-on-year decrease, with total contracted sales GFA decreasing by 42.7% but average selling price increasing by 20.3% 2025 H1 Contracted Sales Data | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Contracted Sales Amount (RMB million) | 2,365.2 | 3,430.7 | -31.0% | | Total Contracted Sales GFA (square meters) | 142,620 | 248,690 | -42.7% | | Average Contracted Selling Price (RMB/square meter) | 16,584 | 13,781 | +20.3% | Revenue Recognized from Sales of Properties During the period, revenue recognized from sales of properties was RMB 4,598.1 million, an 81.3% year-on-year decrease due to reduced GFA delivered, while the average recognized selling price increased by 46.0% to RMB 23,236.1 per square meter due to higher-priced properties delivered 2025 H1 Revenue Recognized from Sales of Properties | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Recognized Revenue (RMB million) | 4,598.1 | 24,609.6 | -81.3% | | Average Recognized Selling Price (RMB/square meter) | 23,236.1 | 15,912.0 | +46.0% | - Properties delivered during the period include Nanjing Zhenro Aoti Nanchen Zique, Nanjing Zhenro Runtang Mansion, Guangzhou Yunyue Huating, Suzhou Yingxi Siji Garden, and Putian Jiuxi Zhenro Mansion[84][87] Completed Properties Held for Sale As of June 30, 2025, the Group's completed properties held for sale amounted to RMB 23,236.1 million, a 21.2% decrease from December 31, 2024, primarily due to fair value reductions from declining property market conditions Completed Properties Held for Sale Value | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Completed properties held for sale | 23,236.1 | 29,483.4 | -21.2% | - All completed properties held for sale have obtained completion certificates[85][89] Properties Under Development As of June 30, 2025, the Group's properties under development amounted to RMB 32,848.9 million, a 1.6% decrease from December 31, 2024, mainly due to a reduction in the number of development projects in the first half of 2025 Properties Under Development Value | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Properties under development | 32,848.9 | 33,373.4 | -1.6% | Property Investment The Group's property investment business saw an increase in rental income in the first half of 2025, driven by improved occupancy rates of investment properties, with 8 out of 11 properties currently leased Rental Income In the first half of 2025, the Group's rental income was approximately RMB 45.3 million, a 10.8% year-on-year increase, primarily due to improved occupancy rates of investment properties 2025 H1 Rental Income | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Rental income | 45.3 | 40.8 | +10.8% | Investment Properties As of June 30, 2025, the Group held 11 investment properties with a total GFA of 684,476 square meters, of which 8 properties with a total GFA of 429,429 square meters have commenced leasing - As of June 30, 2025, the Group held 11 investment properties, with a total gross floor area of 684,476 square meters[93][98] - Of these, 8 investment properties have commenced leasing, with a total gross floor area of 429,429 square meters[93][98] Land Bank During the period, the Group did not acquire any land, maintaining a total land bank of 9.71 million square meters as of June 30, 2025, including those held by joint ventures and associated companies - In the first half of 2025, the Group did not acquire any land[94][99] - As of June 30, 2025, the Group, together with its joint ventures and associated companies, held a total land bank with a gross floor area of 9.71 million square meters[94][99] Financial Review The Group faced severe financial challenges in the first half of 2025, with significant declines in revenue and gross profit, substantial increases in various expenses and impairment losses, leading to an expanded loss for the period Revenue The Group's revenue significantly decreased by 81.2% from RMB 24,658.4 million in the first half of 2024 to RMB 4,645.4 million in the first half of 2025, primarily due to a substantial decline in property sales revenue Revenue Composition and Changes | Revenue Source | H1 2025 (RMB thousand) | % of Total | H1 2024 (RMB thousand) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property sales | 4,598,119 | 99.0 | 24,609,579 | 99.7 | (81.3) | | Property leasing | 45,254 | 1.0 | 40,843 | 0.2 | 10.8 | | Management consulting services | 2,004 | 0.0 | 7,979 | 0.1 | (74.9) | | Total | 4,645,377 | 100.0 | 24,658,401 | 100.0 | (81.2) | Cost of Sales The Group's cost of sales significantly decreased by 80.7% from RMB 23,344.3 million in the first half of 2024 to RMB 4,513.7 million in the first half of 2025, mainly due to a substantial reduction in properties delivered during the period Cost of Sales Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 4,513.7 | 23,344.3 | (80.7) | Gross Profit and Gross Profit Margin The Group's gross profit decreased by 90.0% from RMB 1,314.1 million in the first half of 2024 to RMB 131.7 million in the first half of 2025, with the gross profit margin declining by 2.5 percentage points to 2.8% Gross Profit and Gross Profit Margin Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 131.7 | 1,314.1 | (90.0) | | Gross profit margin | 2.8% | 5.3% | -2.5 percentage points | Other Income and Gains Other income and gains increased by 37.2% from RMB 14.8 million in the first half of 2024 to RMB 20.3 million in the first half of 2025, primarily due to increased interest income, government grants, and forfeited deposits Other Income and Gains Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 20.3 | 14.8 | +37.2% | Selling and Distribution Expenses Selling and distribution expenses decreased by 17.7% from RMB 483.4 million in the first half of 2024 to RMB 397.7 million in the first half of 2025, consistent with the decline in contracted sales during the period Selling and Distribution Expenses Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 397.7 | 483.4 | (17.7) | Administrative Expenses Administrative expenses decreased by 23.2% from RMB 324.1 million in the first half of 2024 to RMB 248.9 million in the first half of 2025, mainly due to the Group's streamlined corporate structure and enhanced cost control measures Administrative Expenses Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 248.9 | 324.1 | (23.2) | Other Expenses Other expenses significantly increased by 97.7% from RMB 1,262.0 million in the first half of 2024 to RMB 2,495.2 million in the first half of 2025, primarily including impairment losses on properties under development and completed properties held for sale, and net exchange losses Other Expenses Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other expenses | 2,495.2 | 1,262.0 | +97.7% | | - Impairment losses on properties under development and completed properties | 1,971.5 | 1,198.5 | +64.5% | | - Net exchange losses | 336.6 | 33.8 | +895.8% | Impairment Losses on Financial Assets, Net Net impairment losses on financial assets increased by 1,027.2% from RMB 119.3 million in the first half of 2024 to RMB 1,344.7 million in the first half of 2025, due to a significant decline in the overall fair value of financial assets Net Impairment Losses on Financial Assets Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net impairment losses on financial assets | 1,344.7 | 119.3 | +1,027.2% | Fair Value Losses on Investment Properties During the period, the Group recorded fair value losses on investment properties of RMB 259.3 million, an increase from RMB 225.6 million in the first half of 2024, mainly due to reduced demand for commercial properties under unfavorable macroeconomic conditions Fair Value Losses on Investment Properties Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Fair value losses on investment properties | 259.3 | 225.6 | +15.0% | Finance Costs The Group's finance costs increased by 24.4% from RMB 1,564.7 million in the first half of 2024 to RMB 1,946.3 million in the first half of 2025, primarily due to reduced capitalization of borrowing interest for properties under construction during the period Finance Costs Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 1,946.3 | 1,564.7 | +24.4% | Share of Losses of Joint Ventures and Associated Companies The Group's share of losses from joint ventures decreased to RMB 0.6 million, while its share of losses from associated companies increased to RMB 228.8 million from a profit of RMB 21.9 million in the first half of 2024, mainly due to increased losses from projects delivered by associated companies Share of Losses of Joint Ventures and Associated Companies Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Share of losses of joint ventures | 0.6 | 17.3 | Loss decreased | | Share of profit/(losses) of associated companies | (228.8) | 21.9 (Profit) | Turned from profit to loss | | Total | (229.4) | 4.6 | Turned from profit to loss | Income Tax Credit The Group recorded an income tax credit of RMB 111.9 million for the period, a decrease from RMB 137.2 million in the first half of 2024, primarily due to the reversal of land appreciation tax during the period Income Tax Credit Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income tax credit | 111.9 | 137.2 | -18.4% | Loss for the Period Due to the combined impact of the aforementioned factors, the Group's loss for the period significantly expanded to RMB 6,657.6 million, compared to a loss of RMB 2,508.4 million in the first half of 2024 Loss for the Period Changes | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | 6,657.6 | 2,508.4 | +165.4% | Liquidity, Financial and Capital Resources The Group's liquidity remains tight, with reduced cash and bank balances, a slight decrease in total debt but a high proportion of current borrowings, significant asset pledges, and exposure to foreign exchange and interest rate risks Cash Positions As of June 30, 2025, the Group's cash and bank balances decreased to RMB 2,599.4 million from RMB 3,184.7 million on December 31, 2024, comprising RMB 467.6 million in cash and cash equivalents and RMB 2,076.7 million in restricted cash Cash and Bank Balances Changes | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and bank balances | 2,599.4 | 3,184.7 | -18.4% | | - Cash and cash equivalents | 467.6 | 1,215.3 | -61.5% | | - Pledged deposits | 55.1 | 63.9 | -13.8% | | - Restricted cash | 2,076.7 | 1,905.5 | +9.0% | Indebtedness As of June 30, 2025, the Group's total borrowings slightly decreased to RMB 57,193.2 million from RMB 58,853.8 million on December 31, 2024, with current borrowings accounting for the vast majority, indicating significant short-term repayment pressure Total Borrowings and Composition | Borrowing Type | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total current borrowings | 52,213,339 | 54,219,250 | | Total non-current borrowings | 4,979,825 | 4,634,529 | | Total | 57,193,164 | 58,853,779 | Borrowing Maturity Profile | Maturity Period | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Repayable within one year | 52,213,339 | 54,219,250 | | Repayable in the second year | 4,243,084 | 337,050 | | Repayable in three to five years | 736,741 | 4,297,479 | | Total | 57,193,164 | 58,853,779 | Charge on Assets As of June 30, 2025, the Group's property, plant and equipment, right-of-use assets, investment properties, properties under development, and completed properties held for sale were pledged as collateral for secured borrowings - As of June 30, 2025, Group assets pledged include property, plant and equipment (RMB 486.1 million), right-of-use assets (RMB 214.3 million), investment properties (RMB 7,174.4 million), properties under development (RMB 32,848.9 million), and completed properties held for sale (RMB 23,236.1 million)[153][154] Financial Risks The Group primarily faces foreign exchange rate risk and interest rate risk, with the ongoing downturn in the Chinese real estate market and difficult financing environment adversely impacting its funding capabilities - The Group primarily faces foreign exchange rate risk (RMB depreciation impacting dividend value) and interest rate risk (market interest rate changes affecting borrowings)[156][158] - The downturn in China's real estate market, characterized by declining pre-sales and financing difficulties, severely restricts the Group's funding capabilities and debt repayment resources[156][159] - The Group has implemented various liquidity management and cost-saving measures, including seeking financing extensions, asset disposals, accelerating sales and cash collection, streamlining corporate structure, and reducing administrative expenses[156][159] - The Company has initiated an offshore holistic debt management plan[156][159] Key Financial Ratios As of June 30, 2025, the Group's current ratio was 0.83, and its net debt to equity ratio was -648.3% Key Financial Ratios | Indicator | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Current ratio | 0.83 | 0.88 | | Net debt to equity ratio | -648.3% | -2,441.9% | Contingent Liabilities and Commitments The Group faces various contingent liabilities, primarily including guarantees for customer mortgage loans and financial guarantees for associated companies and third parties, along with unprovided capital commitments, which the Board believes will not materially adversely affect the Group's financial position Mortgage Guarantees As of June 30, 2025, the Group provided guarantees for bank mortgage loans granted to customers amounting to RMB 21,564.5 million, an increase from December 31, 2024, with no significant buyer defaults encountered Mortgage Guarantees Amount | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Mortgage guarantees | 21,564.5 | 19,760.2 | - The Group has not encountered any buyer defaults that would have a material adverse effect on its financial position and operating results[162][168] Other Financial Guarantees As of June 30, 2025, the Group's guarantees to banks and other institutions for borrowings of associated companies and third parties amounted to RMB 2,538.0 million, a decrease from December 31, 2024 Other Financial Guarantees Amount | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Other financial guarantees | 2,538.0 | 2,760.5 | Legal Contingents The Group may be involved in litigation and other legal proceedings from time to time, but the directors believe that as of the date of this report, liabilities arising from such proceedings will not materially adversely affect the Group's business, financial position, or operating results - The Group is involved in litigation from time to time, but it is not expected to have a material adverse effect on its business, financial position, or operating results[170] Commitments As of June 30, 2025, the Group's contracted but unprovided capital commitments amounted to RMB 6,160.2 million, a decrease from RMB 7,955.2 million on December 31, 2024 Capital Commitments | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Contracted but unprovided capital commitments | 6,160.2 | 7,955.2 | Offshore Holistic Liability Management Solutions The Company has defaulted on principal, interest, and/or distributions for several senior notes and perpetual capital securities, constituting events of default, but has not received any acceleration notices and is actively pursuing offshore holistic debt restructuring - As of the date of this report, the Company has failed to pay the outstanding principal and/or payable distributions and/or payable interest for several senior notes and perpetual capital securities, constituting events of default[178][179][180][181][182][183] - Despite the events of default, as of June 30, 2025, and the date of this report, the Company has not received any acceleration notices due to non-payment[185][187] - The Company is committed to an offshore holistic debt management plan and will make further announcements on its progress in due course[190][193] Other Information The Group held no significant investments during the period and has no plans for future material investments, while employee numbers decreased, and the Group continues to offer competitive remuneration and training, with a non-executive director appointed post-period, and defaults on 2019 and 2020 loan facilities Significant Investments Held by the Group During the period, the Group held no significant investments - In the first half of 2025, the Group held no significant investments[191][194] Future Plan for Material Investments and Capital Assets The Group currently has no plans for any material investments or acquisitions of capital assets - The Group currently has no plans for any material investments or acquisitions of capital assets[196][199] Employees and Remuneration Policy As of June 30, 2025, the Group had 574 employees, a decrease from 709 on December 31, 2024, and is committed to providing competitive remuneration and systematic training programs Employee Count Changes | Indicator | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total employees | 574 | 709 | - The Group provides employees with competitive remuneration packages (basic salary, discretionary bonuses, performance-based pay) and systematic training programs[197][201][202] - The Group participates in social insurance contribution schemes and the Hong Kong Mandatory Provident Fund Scheme[197][203] Subsequent Events Other than events disclosed under the offshore holistic liability management solutions, the Group has not undertaken any significant events from June 30, 2025, up to the date of this report - No significant events occurred after the reporting period, except for matters related to the offshore holistic debt management plan[198][204] Continuing Disclosure Obligations Pursuant to the Listing Rules As of June 30, 2025, and the date of this report, the Company has defaulted on the outstanding principal and/or interest of its 2019 and 2020 loan facilities, constituting events of default, and is actively pursuing offshore holistic debt management solutions - The 2019 financing agreement stipulates that if there is a change in the collective shareholding, largest shareholder status, and management control of Mr. Ou Zongrong, Mr. Ou Guoqiang, and Mr. Ou Guowei, the loan commitment may be revoked and all outstanding amounts become immediately due[207][210] - The 2020 financing agreement contains similar clauses regarding the shareholding and management control of relevant parties, as well as the identity of the Company's chairman[214][216] - As of June 30, 2025, the Company failed to pay the outstanding principal and/or interest due for the 2019 and 2020 loan facilities, constituting events of default[218][219] Interim Condensed Consolidated Statement of Profit or Loss This statement presents the Group's financial performance for the period, highlighting revenue, costs, expenses, and the resulting net loss Statement of Profit or Loss The Group recorded revenue of RMB 4,645.4 million in the first half of 2025, an 81.2% year-on-year decrease, with gross profit at RMB 131.7 million, down 90.0%, and a widened loss for the period of RMB 6,657.6 million due to increased impairment losses, other expenses, fair value losses on investment properties, and finance costs Interim Condensed Consolidated Statement of Profit or Loss Summary | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 4,645,377 | 24,658,401 | | Cost of sales | (4,513,712) | (23,344,275) | | Gross profit | 131,665 | 1,314,126 | | Other income and gains | 20,262 | 14,817 | | Selling and distribution expenses | (397,698) | (483,394) | | Administrative expenses | (248,866) | (324,085) | | Impairment losses on financial assets, net | (1,344,660) | (119,340) | | Other expenses | (2,495,201) | (1,262,005) | | Fair value losses on investment properties | (259,300) | (225,600) | | Finance costs | (1,946,317) | (1,564,696) | | Share of losses of joint ventures and associated companies | (229,393) | 4,580 | | Loss before tax | (6,769,508) | (2,645,597) | | Income tax credit | 111,930 | 137,227 | | Loss for the period | (6,657,578) | (2,508,370) | | Loss attributable to owners of the parent | (6,463,094) | (2,343,441) | | Loss attributable to non-controlling interests | (194,484) | (164,929) | | Basic and diluted loss per share (RMB) | (1.48) | (0.54) | Interim Condensed Consolidated Statement of Comprehensive Income This statement details the Group's total comprehensive income for the period, including net loss and other comprehensive income items Statement of Comprehensive Income The Group recorded a loss for the period of RMB 6,657.6 million in the first half of 2025, with other comprehensive income primarily from exchange differences on translating overseas operations of RMB 537.5 million, resulting in a net total comprehensive expense of RMB 6,120.1 million Interim Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the period | (6,657,578) | (2,508,370) | | Exchange differences on translating overseas operations | 537,497 | (182,126) | | Total comprehensive expense for the period, net of tax | (6,120,081) | (2,690,496) | | Attributable to owners of the parent | (5,925,597) | (2,525,567) | | Attributable to non-controlling interests | (194,484) | (164,929) | Interim Condensed Consolidated Statement of Financial Position This statement presents the Group's assets, liabilities, and equity as of the reporting date, reflecting its financial health and solvency Statement of Financial Position As of June 30, 2025, the Group's total non-current assets were RMB 15,788.3 million, total current assets were RMB 85,907.1 million, and total current liabilities were RMB 103,824.3 million, resulting in a net current liability of RMB 17,917.2 million and a total equity deficit of RMB 8,421.0 million Interim Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total non-current assets | 15,788,274 | 16,811,768 | | Total current assets | 85,907,105 | 96,570,399 | | Total current liabilities | 103,824,342 | 109,438,139 | | Net current liabilities | (17,917,237) | (12,867,740) | | Total assets less current liabilities | (2,128,963) | 3,944,028 | | Total non-current liabilities | 6,292,001 | 6,223,813 | | Net liabilities | (8,420,964) | (2,279,785) | | Total equity | (8,420,964) | (2,279,785) | Interim Condensed Consolidated Statement of Changes in Equity This statement illustrates the changes in the Group's equity components over the reporting period, including net loss, other comprehensive income, and transactions with owners Statement of Changes in Equity The Group's equity further deteriorated from a deficit of RMB 2,279.8 million on December 31, 2024, to a deficit of RMB 8,421.0 million in the first half of 2025, primarily due to the significant loss for the period and changes in exchange fluctuation reserves and subsidiary ownership Interim Condensed Consolidated Statement of Changes in Equity Summary | Indicator | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total equity at beginning of period | (2,279,785) | 6,151,529 | | Loss for the period | (6,657,578) | (2,508,370) | | Other comprehensive income/(expense) for the period | 537,497 | (182,126) | | Changes in ownership interests in subsidiaries | (57,962) | (200) | | Capital injection from non-controlling interests of subsidiaries | 4,752 | - | | Capital reduction from non-controlling interests of subsidiaries | (25,850) | (331,048) | | Dividends paid to non-controlling shareholders of subsidiaries | - | (63,381) | | Total equity at end of period | (8,420,964) | (2,279,785) | Interim Condensed Consolidated Statement of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities, providing insights into the Group's liquidity generation and utilization Statement of Cash Flows In the first half of 2025, the Group generated net cash inflow of RMB 130.7 million from operating activities and RMB 0.5 million from investing activities, but experienced a net cash outflow of RMB 467.3 million from financing activities, resulting in a net decrease in cash and cash equivalents of RMB 336.1 million, with an ending balance of RMB 467.6 million Interim Condensed Consolidated Statement of Cash Flows Summary | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | 130,695 | (150,263) | | Net cash flows from investing activities | 528 | 1,153 | | Net cash flows used in financing activities | (467,332) | (332,246) | | Net decrease in cash and cash equivalents | (336,109) | (481,356) | | Cash and cash equivalents at beginning of period | 1,215,294 | 1,716,960 | | Effect of exchange rate changes, net | (411,570) | 239 | | Cash and cash equivalents at end of period | 467,615 | 1,235,843 | Analysis of Cash and Cash Equivalents Balance | Indicator | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and bank balances | 2,599,417 | 3,869,673 | | Less: Restricted cash | (2,076,721) | (2,542,565) | | Less: Pledged deposits | (55,081) | (91,265) | | Cash and cash equivalents | 467,615 | 1,235,843 | Notes to Interim Condensed Consolidated Financial Information This section provides detailed explanations and disclosures supporting the interim condensed consolidated financial statements, including accounting policies, segment information, and specific financial item breakdowns Basis of Preparation This interim condensed consolidated financial information is prepared in accordance with IAS 34 and should be read in conjunction with the annual consolidated financial statements, with significant going concern uncertainties due to substantial losses, net current liabilities, and widespread debt defaults Going Concern Basis As of June 30, 2025, the Group reported a net loss of RMB 6,657.6 million, net current liabilities of RMB 17,917.2 million, and significant debt defaults, raising substantial doubt about its ability to continue as a going concern despite management's liquidity improvement plans - As of June 30, 2025, the Group reported a net loss of RMB 6,657,578,000[307][309] - Current liabilities exceeded current assets by RMB 17,917,237,000[307][309] - Total borrowings amounted to RMB 59,551,166,000, of which RMB 53,559,327,000 are due within the next 12 months or repayable on demand, while cash and cash equivalents were only RMB 467,615,000[307][309] - Multiple senior notes, interest-bearing bank borrowings, corporate bonds, perpetual capital securities, and asset-backed securities have defaulted or failed to be repaid on time, totaling RMB 25,514,182,000 in principal and interest for senior notes, RMB 20,619,286,000 in principal for interest-bearing bank and other borrowings, RMB 2,532,335,000 in principal and interest for corporate bonds, RMB 1,799,698,000 in principal and interest for perpetual capital securities, and RMB 1,120,284,000 in principal and interest for asset-backed securities[307][309] - The Group successfully extended the maturity dates of approximately RMB 1.95 billion in borrowings by one to six years, with annual interest cost reductions ranging from 0.4% to 7.4%[311][312] - Management is considering a revised restructuring plan and will continue to explore new offshore restructuring solutions[311][312] Changes in Accounting Policies and Disclosures The revised IAS 21 "Lack of Exchangeability" adopted for the first time in this period has no impact on the interim condensed consolidated financial information, as the Group's transaction and functional currencies are exchangeable - The revised IAS 21 "Lack of Exchangeability", adopted for the first time in this period, has no impact on the interim condensed consolidated financial information[322][323] - The currencies of the Group's transactions and the functional currencies used by Group entities to translate into the Group's presentation currency are all exchangeable[322][323] Operating Segment Information Management monitors the Group's business by project location, but all locations are aggregated into a single reportable operating segment due to similar economic characteristics and no single segment exceeding 10% of consolidated totals - The Group's business is monitored by project location, but all locations are aggregated into a single reportable operating segment due to similar economic characteristics[325][328] - The Group's revenue from external customers is solely derived from operations in Mainland China, and no significant non-current assets are located outside Mainland China[326][329] - Sales to a single customer or a group of customers under common control did not account for 10% or more of the Group's revenue[327][330] Revenue The Group's total revenue for the first half of 2025 was RMB 4,645.4 million, with property sales accounting for 99.0% and property leasing for 1.0%, showing an 81.3% year-on-year decrease in property sales revenue and a 10.8% increase in property leasing revenue Revenue Analysis | Revenue Source | H1 2025 (RMB thousand) | % of Total | H1 2024 (RMB thousand) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property sales | 4,598,119 | 99.0 | 24,609,579 | 99.7 | (81.3) | | Property leasing | 45,254 | 1.0 | 40,843 | 0.2 | 10.8 | | Management consulting services | 2,004 | 0.0 | 7,979 | 0.1 | (74.9) | | Total | 4,645,377 | 100.0 | 24,658,401 | **100