Economic Conditions - The general economic conditions in China improved slightly in the first half of 2023, but the real estate market continues to face significant challenges, with property sales slowing dramatically and prices falling [21]. - The management expects supportive policies from local governments to positively impact overall market conditions in the real estate industry [22]. - The management anticipates that recent supportive policies from local governments will positively influence the overall market conditions [24]. - The management expects continued monetary easing and increased financial support to create a synergistic effect for the real estate sector [24]. - The company faced significant risks due to ongoing government austerity measures in the property sector, which have restricted demand and lending, impacting cash flow [170]. Financial Difficulties - The company has encountered financial difficulties since late June 2022, leading to the appointment of provisional liquidators for debt restructuring purposes approved by the Bermuda Court on 15 August 2022 [23]. - The company has been unable to meet its liabilities due to difficulties in raising funds through traditional capital market channels, creating liquidity pressure [21]. - The Group's financial difficulties began in June 2022 due to the inability to repay certain maturing loans and notes, leading to a restructuring plan approved by the Bermuda court [25]. - The hearing for the Group's restructuring application has been postponed to October 6, 2023, by the Bermuda Supreme Court [25]. - The company is actively negotiating a debt restructuring plan with creditors, following the appointment of joint provisional liquidators [145]. - The company plans to enhance liquidity by improving net cash from operating activities and restructuring debt [142]. Sales and Revenue - In the first half of 2023, the Group achieved contracted sales totaling RMB 653 million, a decline of 46% compared to RMB 1.2 billion in the same period of 2022 [27][29]. - For the six months ended June 30, 2023, property sales net of direct taxes recorded RMB972.3 million, an increase from RMB700.2 million in the same period of 2022 [121]. - The Group delivered a total GFA of approximately 129,000 sq.m. across seven projects, with an average selling price of RMB8,200 per sq.m., down from RMB11,400 per sq.m. in the previous year [121]. - The gross deficit on property sales for the period was 34.4%, significantly higher than the 15.3% gross deficit recorded in the same period of 2022 [122]. - Revenue from leasing properties amounted to RMB9.4 million, a decrease from RMB13.0 million in the same period of 2022 [123]. Project Development - The Group delivered an aggregate GFA of 129,000 sq.m., an increase of 93% from 66,920 sq.m. in the first half of 2022, and recorded property sale revenue before direct taxes of RMB 1,059 million, up 39% from RMB 762 million year-on-year [28][29]. - As of June 30, 2023, the Group's project portfolio and potential land reserves totaled 33.0 million sq.m., providing a solid capacity for sustainable growth [34][36]. - The Group held 17 real estate development projects in mainland China, with 6 completed and the rest under construction or for imminent development, totaling approximately 9.9 million sq.m. of GFA [35][36]. - The total estimated saleable GFA for the Group's projects is 10,284,000 sq.m., with 7,317,000 sq.m. accumulated delivered as of June 30, 2023 [42]. - The total accumulated delivered saleable GFA across all projects is 3,838,000 sq.m. [42]. Financial Performance - The net loss for the period was approximately RMB1,025.8 million, a reduction of 37.1% from RMB1,631.1 million for the same period in 2022 [135]. - The total comprehensive loss for the period was RMB 1,101,885,000, down from RMB 1,708,285,000 in the same period of 2022 [176]. - The company incurred a loss of RMB 991,869,000 for the period, which is a significant decrease from the loss of RMB 1,622,300,000 reported in the same period of the previous year [185]. - The company reported accumulated losses of RMB 2,135,154, compared to RMB 1,143,285 in the previous period, indicating a significant increase in losses [179]. - The company recorded a foreign exchange loss on financing activities due to the depreciation of RMB against HK$ and US$ [130]. Cost Management - Administrative and other expenses decreased by 47.1% to RMB95.5 million, down from RMB180.6 million in the same period of 2022, due to cost control measures [128]. - Total staff costs amounted to RMB74.3 million, a reduction from RMB119.7 million in the previous year, reflecting a 37.8% decrease in staff numbers to 686 [129]. - Sales and marketing expenses increased by 24.9% to RMB70.1 million compared to RMB56.1 million in the previous year [127]. Asset Management - Total assets decreased by 10.7% to RMB23,193.9 million from RMB25,965.2 million at the end of 2022, with properties under development constituting 50.2% of total assets [141]. - The estimated fair value of pledged assets was approximately RMB17.7 billion as of June 30, 2023 [159]. - The Group's investment properties consist of five properties with an aggregate GFA of approximately 328,000 sq.m. and a total fair value of RMB 2,905.1 million as of June 30, 2023 [102]. - The Group's total GFA from projects jointly developed or managed is approximately 300,000 sq.m. as of June 30, 2023 [91]. Market Outlook - The Group remains cautious about the real estate market in the second half of 2023 due to ongoing difficulties and sluggish demand [116]. - The company is exploring natural hedging methods, such as investing in regions where USD and HKD are functional currencies, to mitigate the impact of RMB depreciation [168].
天誉置业(00059) - 2023 - 中期财报