Core Viewpoint - The company, *ST Nanzhi, is responding to inquiries regarding its major asset sale and related transactions, addressing concerns about delisting risks, sustainable operations, and future development plans [1] Financial Performance - As of April 2025, the net assets attributable to the parent company shareholders are projected to be 538 million yuan, indicating a turnaround from negative to positive [1] - The company has achieved a revenue of 820 million yuan for the first half of 2025, suggesting that the financial data for 2025 will not trigger delisting risks after the transaction [1] - The balance of other payables is 13.488 billion yuan, and the transaction is expected to significantly reduce the company's debt pressure, improving profitability and risk resistance [1] Future Development Plans - The company aims to focus on light asset operations, particularly in urban operations and commercial management, transitioning towards a comprehensive urban operation service provider [1][2] - The strategic plan includes expanding into the Beijing market while deepening existing operations in cities like Wuhan, Chengdu, Shanghai, Guangzhou, and Hangzhou [2] - By 2027, the company targets to exceed 2 million square meters in commercial operations, manage 12,000 rental apartments, and achieve 200 million yuan in property management revenue [2] Strategic Transformation - The strategic transformation is a proactive adjustment to industry trends and a commitment to high-quality development paths [3] - The company is expected to unlock broader development opportunities in urban operations as its transformation initiatives are implemented [3]

Core Insights - The company is undergoing a significant asset sale and related party transaction, transferring real estate development and leasing business assets and liabilities to a wholly-owned subsidiary for a nominal price of 1 yuan [1][2] - The real estate industry has faced ongoing adjustments since 2024, leading to continuous losses for the company since 2021, with net profits of -867 million yuan, -1.693 billion yuan, and -2.238 billion yuan from 2022 to 2024 [1][2] - The transaction aims to divest the struggling real estate assets and focus on light asset businesses such as commercial and industrial operations, facilitating a strategic transformation [1][2] Financial Summary - The net asset value of the parent company's balance sheet is reported at 2.386 billion yuan, while the consolidated net assets stand at -3.011 billion yuan, with an assessment result of -2.934 billion yuan, indicating a devaluation rate of -223.00% and a slight increase of 2.55% on a consolidated basis [2] - The accounting treatment will result in a significant reduction in total assets and liabilities, leading to a positive net asset position for the company post-transaction [2] Future Strategy - The company plans to expand its urban operation business, develop a distinctive commercial management brand, and enhance property management services with a nationwide presence [2] - The controlling shareholder, Electric Power Construction Real Estate, and the actual controller, Electric Power Construction Group, will support the company's development and may inject synergistic assets in the future [2] - Measures to enhance profitability and operational stability have been outlined, while potential risks related to business transformation, market competition, operational talent, and regulatory compliance have been acknowledged [2]

Core Viewpoint - Far East Horizon reported a decline in revenue for the first half of 2025, but a growth in net profit, indicating a mixed performance in its financial results [1][2]. Group 1: Financial Performance - In 1H25, the company achieved operating revenue of 17.336 billion yuan, a year-on-year decrease of 3.9%, while net profit attributable to shareholders was 2.164 billion yuan, an increase of 3.8% [1]. - The average return on equity for the first half of 2025 was 8.66%, up by 0.17 percentage points year-on-year [1]. Group 2: Business Segments - The financial and consulting business remains a key pillar, generating revenue of 11.090 billion yuan (up 2.1% year-on-year), while equipment operation and industrial operation revenues were 4.350 billion yuan (down 10.7%) and 1.797 billion yuan (down 15.5%), respectively [2]. - The gross margins for these segments were 57.5%, 21.6%, and 18.0%, reflecting changes of +1.7, -10.4, and -3.9 percentage points year-on-year [2]. Group 3: Asset Management - The company maintained a stable interest-earning asset scale of 266.626 billion yuan, with a quarter-on-quarter increase of 2.3% [2]. - The average yield on interest-earning assets rose to 8.08%, while the cost of interest-bearing liabilities decreased to 4.02%, leading to a net interest margin increase to 4.51% [2]. Group 4: Inclusive Finance - The inclusive finance business saw significant growth, with interest-earning assets reaching 22.192 billion yuan, a quarter-on-quarter increase of 28.7%, and revenue of 1.451 billion yuan, a year-on-year increase of 124.1% [3]. - The yield for this business segment was 14.72%, notably higher than the overall financial business yield of 8.1% [3]. Group 5: Asset Quality - The non-performing loan ratio and attention ratio were 1.05% and 5.51%, respectively, both showing a decline from the previous year [3]. - The provision coverage ratio remained stable at 227.33%, indicating good asset quality [3]. Group 6: Dividend and Future Outlook - The company has a high cash dividend payout ratio of 56% for 2024 and 50% for 1H25, with potential for stability and further increases [3]. - Projected net profits for 2025 to 2027 are 4.01 billion yuan, 4.23 billion yuan, and 4.48 billion yuan, reflecting year-on-year growth rates of 3.8%, 5.5%, and 5.9% respectively [3].

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company reported a 3.9% year-on-year decline in revenue for the first half of 2025, totaling 17.336 billion yuan, while net profit attributable to shareholders increased by 3.8% to 2.164 billion yuan [1]. - The financial and consulting business remains a key revenue driver, with a revenue increase of 2.1% year-on-year, while equipment and industrial operations saw declines of 10.7% and 15.5%, respectively [1][17]. - The company has focused on the development of inclusive finance, achieving a 28.7% growth in the asset scale of this business, with revenue soaring by 124.1% year-on-year [3][38]. Summary by Sections Financial Performance - In the first half of 2025, the average return on equity was 8.66%, an increase of 0.17 percentage points year-on-year [1]. - The company’s interest-earning assets stood at 266.626 billion yuan, reflecting a 2.3% increase from the end of the previous year [2]. - The average yield on interest-earning assets rose to 8.08%, while the cost of interest-bearing liabilities decreased to 4.02%, leading to a net interest margin of 4.51% [2][25]. Business Segments - The financial and consulting segment generated 110.90 billion yuan in revenue, accounting for 64.0% of total revenue, with a gross margin of 57.5% [1][19]. - The inclusive finance business achieved a revenue of 14.51 billion yuan, significantly contributing to overall growth [3][38]. Asset Quality - The company reported a non-performing loan ratio of 1.05% and a watchlist ratio of 5.51%, both showing a decline from the previous year [3][36]. - The provision coverage ratio remained stable at 227.33%, indicating solid asset quality [3]. Future Outlook - The company is expected to maintain a high cash dividend payout ratio, with projections for net profit attributable to shareholders of 4.01 billion yuan, 4.23 billion yuan, and 4.48 billion yuan for 2025, 2026, and 2027, respectively [4][5].