Financial Performance - The Group's revenue for the six months ended June 30, 2022, was approximately RMB 23.1 million, a decrease of approximately 25.7% compared to RMB 31.1 million for the same period last year[10]. - Gross profit for the Group was approximately RMB 18.6 million, representing a decrease of approximately 28.8% compared to the same period last year[10]. - Loss attributable to the owners of the Company was approximately RMB 939.9 million, an increase of approximately 3 times compared to RMB 286.5 million for the same period last year[10]. - Basic loss per share was approximately RMB 0.500, compared to RMB 0.153 for the six months ended June 30, 2021[14]. - The Group recorded total revenue of approximately RMB 23.1 million, a decrease of approximately 25.7% from RMB 31.1 million in the same period last year[42]. - Property sales revenue was approximately RMB 2.9 million, representing an increase of approximately 20.8% compared to RMB 2.4 million for the same period last year[53]. - The average selling price for contracted sales was approximately RMB 3,257 per sq.m., a decrease of approximately 0.9% from RMB 3,288 per sq.m. in the corresponding period last year[42]. - The operating loss for the period was approximately RMB 970.9 million, a significant increase of about RMB 675.3 million or 2.3 times compared to the loss of RMB 295.6 million in the same period last year[68]. - The loss on changes in fair value of investment properties was approximately RMB 95.0 million, an increase in loss of about RMB 98.0 million compared to a gain of RMB 3.0 million in the previous year[69]. - Rental income decreased to approximately RMB 20.2 million, a decline of approximately 29.6% from RMB 28.7 million for the same period last year[55]. Assets and Liabilities - As of June 30, 2022, total assets amounted to approximately RMB 4,134.2 million, down from approximately RMB 5,223.7 million as of December 31, 2021[15]. - Total liabilities were approximately RMB 5,082.4 million, slightly down from approximately RMB 5,201.0 million as of December 31, 2021[15]. - The Group reported a total deficit of approximately RMB 948.2 million as of June 30, 2022, compared to total equity of approximately RMB 22.7 million as of December 31, 2021[15]. - The Group's cash and bank deposits totaled approximately RMB 14.6 million, a decrease of approximately RMB 5.6 million or 27.7% from RMB 20.2 million as of December 31, 2021[87]. - Net cash generated from operating activities was approximately RMB 7.6 million, down from approximately RMB 106.5 million for the same period in 2021[88]. - Trade receivables, prepayments, other receivables, and other assets totaled approximately RMB 181.0 million, an increase of approximately RMB 34.4 million from RMB 146.6 million as of December 31, 2021[89]. - Trade payables, contract liabilities, other payables, and accruals amounted to approximately RMB 2,322.5 million, an increase of approximately RMB 287.7 million from RMB 2,034.8 million as of December 31, 2021[90]. - Current liabilities increased to approximately RMB 4,776.1 million, up by approximately RMB 53.6 million from RMB 4,722.5 million as of December 31, 2021, accounting for approximately 94.0% of total liabilities[103]. - The Group's net current liabilities were approximately RMB 2,642.7 million, an increase of approximately RMB 79.1 million from RMB 2,563.6 million as of December 31, 2021[98]. - The current ratio as of June 30, 2022, was 0.45, slightly down from 0.46 as of December 31, 2021[104]. - The gearing ratio increased to 255.9% as of June 30, 2022, compared to 98.7% as of December 31, 2021[105]. Market Conditions - The Chinese government implemented strict COVID-19 prevention measures, impacting market conditions and leading to varied recovery rates across different city tiers[16]. - The overall performance of the real estate market remained sluggish, with most project prices flat or reduced despite a slight month-on-month increase in newly-built residence prices[29]. - From January to June 2022, nationwide real estate development investment reached RMB 6,831.4 billion, a decrease of 5.4% year-on-year, with residential investment amounting to RMB 5,180.4 billion, down 4.5%[22]. - The real estate market control has become more stringent, with ongoing impacts from the "three red lines" policy affecting the industry[30]. - The Central Government's deregulation measures are expected to promote residential project sales in the third quarter of 2022[36]. Strategic Initiatives - The Group plans to increase marketing efforts and promotional campaigns to accelerate cash inflows and de-stocking of remaining commercial properties in the second half of 2022[31]. - The Group aims to complete the fourth round of pre-sale activities for the Shandong Project, expecting to recognize revenue upon completion of legal registration and transfer of residential properties[32]. - The Company completed the third phase of pre-sale activities for the residential part of the Shandong Project, aiming to increase cash inflows[190]. - Majority of net proceeds from the Shandong Project will be used to repay outstanding borrowings[190]. - The Company is negotiating the sale of the entire Shanghai property development project, which may lead to positive cash inflow and reduced debts[190]. - The Company plans to sell commercial properties in Taizhou and/or Shanghai by the end of 2022 to improve working capital and financial leverage[190]. Employee and Corporate Governance - The Group had a total of 63 employees as of June 30, 2022, down from 88 employees a year earlier, primarily due to a cost efficiency campaign[128]. - The Company recognizes the importance of maintaining compliance with Listing Rules and applicable laws in its share schemes[174]. - The Company has adopted a Share Option Scheme effective for 10 years, allowing eligible participants to subscribe for shares, with a maximum of 10% of shares in issue on the Listing Date[163]. - The Company adopted a Share Award Scheme on 26 January 2016 to recognize contributions by eligible participants and attract suitable personnel for further development[174]. Legal and Financial Issues - A petition for winding up the Company was filed in June 2022, with a hearing adjourned to September 28, 2022, due to insolvency concerns[137]. - The Company is negotiating with financial institutions for the renewal or extension of repayment for outstanding borrowings[187]. - The Zhejiang Wenzhou Intermediate People's Court ordered the auction of a property at a price of RMB 282.41 million to repay part of the loans owed to a major lender[187]. - The management is taking measures to improve liquidity and financial position to address audit modifications from the 2021 annual report[186]. - The audit modification is expected to be removed if the Company successfully implements the action plan by the end of 2022[200].
新明中国(02699) - 2022 - 中期财报