Business Strategy and Development - China South City Holdings Limited reported a significant focus on urban renewal and logistics, with projects aimed at enhancing infrastructure in key areas like Shenzhen[15]. - The company is actively expanding its e-commerce and rental services, which are critical components of its business strategy[1]. - The management highlighted ongoing developments in financial services and property management, indicating a diversified approach to revenue generation[1]. - Future outlook includes continued investment in multi-purpose properties and trade centers, aiming for a robust growth trajectory[1]. - The company is exploring potential mergers and acquisitions to strengthen its market position and expand its operational footprint[1]. - New product and technology developments are underway, particularly in enhancing logistics capabilities to support e-commerce growth[1]. - The management provided guidance for the upcoming fiscal period, projecting a revenue increase of approximately 15% year-on-year[1]. - The company is committed to improving user data analytics to better understand market trends and customer preferences[1]. - Strategic partnerships with local governments are being pursued to facilitate urban development projects[1]. - The company aims to leverage its existing infrastructure to enhance service offerings and drive customer engagement[1]. Project and Infrastructure Details - CSC Shenzhen covers a site area of approximately 1.02 million sq.m. and a total planned GFA of 2.71 million sq.m.[19]. - CSC Nanning has a total planned net land area of approximately 1.83 million sq.m. and a total planned GFA of approximately 4.88 million sq.m.[26]. - The Metro Line 10 passing through CSC Shenzhen has been opened, enhancing business opportunities and visitor flow[17]. - CSC Nanning is strategically located to serve as a key hub for cross-border trade, benefiting from tariff waivers within the China-ASEAN Free Trade Area[22]. - CSC Shenzhen provides micro-credit services for on-site SMEs to assist in resolving financing difficulties[19]. - The commercial complex 1668 Square in CSC Nanning recorded great operating performance, enhancing regional brand recognition[25]. - CSC Shenzhen's cooperation with Zhongyi Han Fangguan aims to create two new development hubs in the park[19]. - The project in Nanchang is located 1.2 km from Nanchang West Railway Station, facilitating access for suppliers and merchants[28]. - CSC Nanning has been named as a "National AAA Class Tourist Attraction," enhancing its market appeal[23]. - The ongoing improvement of transportation around CSC Shenzhen is expected to drive passenger flow and stimulate project vitality[17]. - CSC Nanchang has established a 30,000 sq.m. influencer livestreaming base to support e-commerce startups and SMEs in business transformation and upgrade[29]. - The total planned land area for CSC Nanchang is approximately 2.61 million sq.m., with a total planned GFA of approximately 6.87 million sq.m.[32]. - CSC Xi'an has a total planned land area of approximately 10.00 million sq.m. and a total planned GFA of approximately 17.50 million sq.m.[38]. - CSC Harbin is positioned as a cross-border trade hub among Northeast Asian countries, leveraging its proximity to the China-Russia border[40]. - The infrastructure and teaching conditions around CSC Harbin have been improved, driving demand for living facilities in the area[41]. - In October 2023, CSC Nanchang launched the "2023 CSC Nanchang Building Materials and Home Furnishing Exhibition," attracting numerous well-known brands[30]. - CSC Nanchang is focusing on enhancing services and quality as part of its role as a National E-commerce Demonstration Base and National Entrepreneurship Incubation Demonstration Base[31]. - The Nanchang High Speed Rail CBD Project aims to create a comprehensive ecosystem economy, covering seven attributes in one city[31]. - The establishment of a Veteran Entrepreneurship Base in CSC Nanchang aims to assist merchants in developing e-commerce services and nurturing startups[30]. - CSC Harbin has a total planned land area of approximately 10.00 million sq.m. and a total planned GFA of approximately 12.00 million sq.m.[43]. - CSC Zhengzhou has a total planned net land area of approximately 7.00 million sq.m. and a total planned GFA of approximately 12.00 million sq.m.[52]. - CSC Hefei has a total planned net land area of approximately 10.00 million sq.m. with a total planned GFA of approximately 12.00 million sq.m.[57]. - In October 2023, CSC Harbin launched the "Autumn Agricultural Materials and New Energy Power Products Purchasing Festival," enhancing merchants' confidence and driving sales of related products[43]. - CSC Zhengzhou has successfully held the "Central Region (Spring/Autumn) Building Materials, Hardware and Home Furnishing Fairs" nine times over five consecutive years, establishing itself as an influential trade and logistics center in central China[50]. - CSC Zhengzhou was elected as a "Provincial Key Project" and has become a "Provincial E-commerce Demonstration Base" since 2016, promoting emerging industries, particularly in e-commerce[51]. - CSC Hefei aims to capture business opportunities arising from its advantageous geographical location and well-developed infrastructure, enhancing its role as a core integrated logistics and trade center in the region[57]. - The seed market of the Heilongjiang Academy of Agricultural Sciences at CSC Harbin operates well, contributing to the project's success in promoting rural revitalization[43]. - CSC Zhengzhou is strategically located near major transportation links, including being only 16 km from Zhengzhou Xinzheng International Airport, enhancing its accessibility[47]. - The metro south line 4 across CSC Hefei is expected to open in 2024, further improving connectivity and access to the trade center[54]. - CSC Chongqing has a total planned net land area of approximately 5.90 million sq.m. with a total GFA of approximately 13.10 million sq.m.[65]. - The "CSC Chongqing Furniture and Building Materials Exhibition" held in September 2023 attracted over 140 furniture manufacturers and 3,000+ attendees, marking the first large-scale exhibition post-epidemic[63]. Financial Performance - The Group's revenue decreased by 12.6% to HK$2,520 million during the Reporting Period[79]. - Net loss attributable to owners of the parent was HK$620 million, with a basic loss per share of HK5.43 cents[79]. - Huasheng Outlet's overall performance increased by more than 30% year-on-year and over 100% quarter-on-quarter, with a gross merchandise volume (GMV) increase of approximately 20%[77][78]. - The investment and development segment's overall performance was severely affected by the industry downturn, prompting the Group to focus on refined management and stable operations[74][75]. - The Group aims to strengthen asset deleveraging to reduce interest-bearing debts and achieve steady growth under a healthy financial structure[79]. - More than 20 metro stations are currently operational in CSC Parks across the country, enhancing regional transportation advantages[73]. - A lease contract of over 40,000 sq.m. was signed between CSC Shenzhen and Zhongyi Hanfangguan, which will establish new development highlands in the area[76]. - The Group continues to explore new growth potential by introducing new business models and enhancing merchant recruitment despite a challenging economic environment[74][75]. - The Group's management is committed to ensuring delivery and exploring opportunities arising from macro industrial policies for sustainable development[79]. - The opening of Huanancheng East Station of Zhengzhou Metro in September 2023 marks a significant transportation development for the Group[73]. - The Group aims to optimize its debt structure and enhance destocking efforts to maintain a safe and sound cash flow[80]. - The investment and development division has developed various types of commercial complexes in cities like Zhengzhou, Chongqing, Nanchang, and Shenzhen, focusing on local project demands[83]. - The Group's current land bank is primarily for residential and commercial purposes, with plans to retain certain logistics and warehousing facilities for stable recurring income[84]. - The business management division has entered into a cooperation agreement for the development of the Zhang Zhongjing Chinese Medical University and Traditional Chinese Medicine Science and Technology Industrial Park in Shenzhen[87]. - The Shenzhen-Hefei-Ziyun Automobile Industrial Park Project, covering over 1.6 million square meters, was officially launched to support the automotive aftermarket industry in Anhui Province[87]. - Huasheng Outlet's overall performance increased by more than 30% period-on-period and over 100% quarter-on-quarter during the reporting period[91]. - The Group's GMV achieved a year-on-year increase of approximately 20% during the reporting period[91]. - The Group is focusing on major national and local development strategies, including the "Guangdong-Hong Kong-Macao Greater Bay Area" and "Accelerated Push for Building a National Unified Market"[89]. - The Group plans to deepen cooperation with more state-owned enterprises to revitalize resources and introduce new business models[80]. - The business management division is actively upgrading services to enhance tenant satisfaction and stimulate local consumption through brand expositions[88]. Financial Challenges and Management - The Group's capital pressure remains significant despite gradual opening of domestic financing channels, with market sales described as very weak[68]. - The Group has successfully delivered projects in Zhengzhou, Nanchang, Hefei, and Harbin, with other projects also progressing rapidly[70]. - The Group is focusing on industrial upgrading, logistics, cold chain, property management, and smart park initiatives to explore new business growth points[70]. - The Group has streamlined its management team and achieved positive results in cost reduction and efficiency improvement[72]. - The Group's strategic location in Banan District connects key national trade corridors, enhancing its development potential[59]. - The Group is actively introducing emerging industries and new business forms aligned with future development trends, such as the pharmaceutical and healthcare industry[72]. - The Group aims to stabilize cash flow and ensure delivery, laying a solid foundation for long-term development[68]. - The Group's revenue decreased by 12.6% to HK$2,516.2 million during the Reporting Period[79]. - Net loss attributable to owners of the parent was HK$621.2 million, a significant decline from a profit of HK$256.8 million in the previous year[109]. - As of 30 September 2023, total interest-bearing debts were HK$31,915.8 million, with a gearing ratio of 77.9%[108]. - Cash and bank balances decreased to HK$1,306.2 million from HK$2,525.1 million as of 31 March 2023[108]. - The Group plans to retain commercial properties for long-term leasing to generate stable recurring income[104]. - The total gross land bank area held by the Group is 34,924,400 sq.m, with attributable interests of 32,698,400 sq.m[106]. - The Group's financial management focuses on sustainable growth while maintaining a strong capital base[107]. - Increased financing costs and selling expenses contributed to the net loss and loss per share of HK5.43 cents[109]. - The Group actively manages its financing structure through various channels to achieve an optimal capital structure[108]. - Revenue for the reporting period decreased by 12.6% to HK$2,516.2 million compared to HK$2,877.6 million in the same period last year[111]. - Sale of properties revenue increased by 9.7% to HK$1,809.4 million, driven by the delivery of properties with completed contract sales from previous periods[114]. - Recurring income decreased by 42.4% to HK$706.8 million, primarily due to a decline in property leasing income[113]. - Property leasing income decreased by 24.4% to HK$421.2 million, attributed to a depressed macro market environment and reduced demand for leasing[116]. - Other recurring revenue decreased by 57.4% to HK$285.6 million, with logistics and warehousing services revenue down 28.0% to HK$113.5 million[118]. - The group recorded a net loss attributable to equity holders of HK$621.2 million, compared to a profit of HK$256.8 million in the same period last year[112]. - Basic loss per share was HK$0.0543, compared to earnings of HK$0.0242 per share in the previous year[112]. - As of September 30, 2023, total interest-bearing debt was HK$31.9158 billion, down from HK$32.8308 billion as of March 31, 2023[110]. - Cash and bank deposits amounted to HK$1.3062 billion, a decrease from HK$2.5251 billion as of March 31, 2023[110]. - The capital debt ratio increased to 77.9% from 71.0% as of March 31, 2023[110]. - The Group's cost of sales increased by 4.1% to HK$2,069.3 million, driven by an increase in delivered projects and rental expenses[120]. - Gross profit decreased by 49.8% to HK$446.9 million, with a gross profit margin dropping to 17.8% due to rising construction costs and decreased rental income[120]. - Other income decreased by 85.9% to HK$7.1 million, primarily due to a reduction in interest income and government grants[120]. - Fair value losses on investment properties amounted to HK$144.8 million, reflecting a continued downward trend in the real estate market[120]. - Selling and distribution expenses rose by 57.0% to HK$100.2 million, attributed to increased promotion and advertising costs[121]. - Finance costs increased by 30.7% to HK$360.2 million, influenced by a decrease in capitalized interest[121]. - The Group recorded share of profits from associates of HK$57.3 million, primarily due to the addition of a new associate during the period[121]. Shareholder and Corporate Governance - The company issued a total of 3,350,000,000 new shares at a subscription price of HK$0.57 per share, raising a total of HK$1,909.5 million[162]. - As of March 31, 2023, the proceeds were fully utilized for repayment of the Group's borrowings and accrued interest amounting to HK$1,799.11 million, and for general working capital of HK$94.69 million[164]. - The total professional advisory fees and share issuance costs amounted to HK$15.70 million[164]. - As of September 30, 2023, Cheng Chung Hing held 2,306,553,791 ordinary shares, representing approximately 20.16% of the company's total issued shares[166]. - Geng Mei held share options totaling 30,000,000, which is approximately 0.26% of the company's total issued shares[166]. - Cheng Ka Man Carman held share options totaling 7,800,000, representing approximately 0.07% of the company's total issued shares[166]. - The company has a total of 1,000,000 share options held by several directors, each representing approximately 0.01% of the company's total issued shares[166]. - The company’s financial activities and shareholdings are in compliance with the Securities and Futures Ordinance[168]. - The company’s general working capital utilization reflects a strategic focus on maintaining liquidity and financial stability[165]. - The company’s ongoing commitment to transparency is evident in the detailed disclosures regarding shareholdings and financial utilization[165]. - As of September 30, 2023, the total number of issued shares is 11,441,892,848[176]. - Mr. Cheng Chung Hing holds 100% interest in Accurate Gain Developments Limited, which owns 2,306,553,791 shares, representing 20.16% of the total issued shares[176]. - SZCDG and its subsidiaries collectively hold a deemed interest in 3,350,000,000 shares, accounting for 29.28% of the total issued shares[176]. - Tencent Holdings Limited has a deemed interest in 955,936,666 shares, which is 8.35% of the total issued shares[176]. - Proficient Success Limited, owned by Mr. Cheng Tai Po, holds 588,984,145 shares, representing 5.15% of the total issued shares[176]. - The 2009 Share Option Scheme expired on September 29, 2019, and no further options can be granted under this scheme[180]. - There are 3,000,000 outstanding share options from the 2009 Share Option Scheme, which represent approximately 0.026% of the total issued shares[181]. - The 2019 Share Option Scheme was adopted on September 13, 2019, following the expiration of the previous scheme[180]. - The percentage shareholding calculations are based on the total issued shares as of September 30, 2023[174]. - No other persons, apart from the disclosed individuals, had interests or short positions in the shares as of September 30, 2023[179]. - The Share Option Scheme allows for a maximum of 3,000,000 shares to be issued upon exercise of all share options, representing approximately 0.026% of the total issued shares as of the report date[185]. - The total number of shares that can be issued under the Share Option Scheme must not exceed 30% of the shares in issue at any time[186]. - Each grantee must pay HK$1 for each grant of options[187]. - The exercise price for each share option is determined by the Directors and cannot be less than the highest of the official closing price on the date of grant, the average closing price for the five business days prior, or the nominal value of the shares[188]. - The total number of shares issued upon the exercise of share options to each grantee in any 12-month period cannot exceed 1% of the issued share capital at the date of grant[189]. - As of September 30, 2023, a total of 48,000,000 share options were granted, with 45,000,000 cancelled, leaving 3,000,000 options available[190]. - The Share Option Scheme limit was refreshed at the annual general meeting held on August 21, 2013[185]. - The exercise period for share options is determined by the Directors but cannot exceed 10 years after the grant[187]. - The Company aims to attract high-calibre employees through the Share Option Scheme[184]. - Mr. Fung Sing Hong Stephen was appointed as Non-Executive Director and resigned as Senior Advisor effective August 25, 2023[191]. - The total number of shares available for issue upon exercise of all share options under the 2019 Share Option Scheme is 730,422,884 shares, representing approximately 6.38% of the total number of issued shares of the Company as of the report date[192]. - The maximum number of shares that may be issued to each grantee in any 12-month period shall not exceed 1% of the number of shares in issue at the date of grant[192]. - The exercise price for each share option will be determined by the Directors and must be at least the highest of the closing price on the date of grant or the average closing price for the five business days preceding the grant[
华南城(01668) - 2024 - 中期财报