Financial Performance - Revenue for the six months ended June 30, 2021, was HK18.771 million in the same period in 2020[15] - Gross profit for the period was HK17.687 million in 2020[15] - Operating profit for the period was HK1.112 million in 2020[15] - Loss for the period was HK15.787 million loss in 2020[15] - Basic and diluted loss per share was HK0.28 in 2020[15] - Total comprehensive loss before tax for the six months ended June 30, 2021, was HKD 7,534 thousand, an improvement from HKD 15,787 thousand in the same period in 2020[47] - The company recorded revenue of approximately HKD 90,464,000 and a post-tax loss of approximately HKD 7,534,000 for the six months ended June 30, 2021[127] - The company's revenue for the review period was approximately HKD 90.464 million, with a net loss of HKD 7.534 million, compared to HKD 18.771 million in revenue and a net loss of HKD 15.787 million in the first half of 2020[139] Assets and Liabilities - Total assets as of June 30, 2021, were HK1,854.551 million at the end of 2020[29] - Non-current assets increased to HK1,042.713 million at the end of 2020[27] - Current assets rose to HK889.869 million at the end of 2020[27] - Net current assets were HK811.838 million at the end of 2020[29] - Total equity as of June 30, 2021, was HK792.037 million at the end of 2020[32] - Total equity as of June 30, 2021, was HKD 786,118 thousand, a decrease from HKD 792,037 thousand at the beginning of the year[34] - Total assets as of June 30, 2021, were HKD 2,190,017 thousand, compared to HKD 1,932,582 thousand as of December 31, 2020[47] - Total liabilities as of June 30, 2021, were HKD 1,403,899 thousand, with borrowings accounting for HKD 815,516 thousand[48] - The company's total assets as of June 30, 2021, were approximately HKD 2.19 billion, with total liabilities of HKD 1.404 billion, and a current ratio of 6.19[141] - The company's capital-to-debt ratio as of June 30, 2021, was 0.60, compared to 0.53 as of December 31, 2020[143] Cash Flow - Net cash used in operating activities for the six months ended June 30, 2021, was HKD 214,561 thousand, compared to a net cash inflow of HKD 1,497 thousand in the same period last year[36] - Net cash used in investing activities for the six months ended June 30, 2021, was HKD 54,918 thousand, primarily due to the purchase of property, machinery, and equipment[36] - Net cash from financing activities for the six months ended June 30, 2021, was HKD 271,463 thousand, mainly from bank credit of HKD 286,770 thousand[36] - Cash and cash equivalents as of June 30, 2021, were HKD 42,852 thousand, a decrease from HKD 43,458 thousand at the beginning of the year[36] Segment Performance - The company operates in three reportable segments: property development and investment, supermarket retail, and bus sales in China[42] - Revenue from external customers for the property development and investment segment was HKD 29,410 thousand, while the retail and related segment contributed HKD 61,054 thousand, totaling HKD 90,464 thousand for the six months ended June 30, 2021[44] - Segment profit for property development and investment was HKD 39,055 thousand, and for retail and related, it was HKD 6,000 thousand, resulting in a total segment profit of HKD 45,055 thousand for the same period[44] - Total segment assets as of June 30, 2021, were HKD 1,365,443 thousand, with property development and investment accounting for HKD 1,298,638 thousand[44] - Total segment liabilities as of June 30, 2021, were HKD 37,206 thousand, with retail and related liabilities at HKD 19,047 thousand[44] - Revenue from rental income and related management services was HKD 43,364 thousand, while sales revenue from goods was HKD 47,100 thousand, totaling HKD 90,464 thousand for the six months ended June 30, 2021[52] Investment Properties - The carrying value of investment properties in Guangzhou increased from HKD 774,735,000 as of December 31, 2020, to HKD 778,891,000 as of June 30, 2021[71] - The total carrying value of investment properties in Guangzhou, Luoyang, and Zhuhai was HKD 853,073,000 as of June 30, 2021, up from HKD 848,373,000 as of December 31, 2020[67] - The fair value of Guangzhou investment property was determined using the income approach, with estimated rental income ranging from RMB 55 to RMB 80 per square meter per month and a discount rate of 4.5%[74] - The Luoyang investment property, with a carrying value of approximately HKD 70,228,000, remains under construction, and its construction plan has not yet been approved by the Luoyang Planning Bureau[77][80] - The company's investment properties in Guangzhou are pledged as collateral for bank borrowings[71] - The book value of Luoyang property as of June 30, 2021, was approximately HKD 74,182,000, which was mortgaged for bank loans[81] - The book value of Zhuhai property, including land use rights and direct attributable costs, was approximately RMB 301,117,000 (equivalent to HKD 330,084,000) as of June 30, 2021[81] - Prepayments for Zhuhai property construction amounted to approximately RMB 361,519,846 (equivalent to HKD 434,076,879) as of June 30, 2021[84] Financing and Borrowings - The company's total interest-bearing bank and other borrowings amounted to HKD 815,516,000 as of June 30, 2021, with varying interest rates and maturity dates[102] - The company's debt repayment schedule includes HKD 15,009,000 due within one year, HKD 620,402,000 due between the second and fifth years, and HKD 180,105,000 due after five years[103] - The company signed a loan agreement with Guangzhou Bank for a total of RMB 240,000,000 (approximately HKD 288,168,000), with RMB 80,000,000 (approximately HKD 96,056,000) disbursed on February 20, 2021, and RMB 160,000,000 (approximately HKD 192,112,000) disbursed on May 20, 2021, at an interest rate of 7.0332% to 7.153% per annum[106] - The company issued 712,328,767 new shares at a subscription price of HKD 0.073 per share, raising approximately HKD 52,000,000[110] - The net proceeds from the subscription of new shares amounted to approximately HKD 51.5 million, with HKD 29.2 million used for general working capital and HKD 15.25 million for potential acquisitions and investments[134][137] Legal and Regulatory Matters - The company is required to repay a total of RMB 14,530,000 (approximately HKD 17,318,000) to Shanghai Fudan, including accrued interest from July 1, 2002, to the payment date, as per the court ruling[92] - The company agreed to a settlement with Shanghai Fudan for a total of RMB 27,000,000 (approximately HKD 32,181,000), with RMB 3,000,000 to be paid immediately and the remaining RMB 24,000,000 in quarterly installments[95] - The company faces potential penalties of 0.1% of the land use right cost (approximately RMB 31,270,000 or HKD 37,545,889) per day for delays in the construction of the Luoyang property, with a risk of land use right forfeiture if delays exceed 60 days[120] Corporate Governance and Ownership - The company's registered office is in the Cayman Islands, with its principal place of business in Hong Kong[38] - The company's financial statements are prepared in accordance with Hong Kong Accounting Standards and are reported in HKD, rounded to the nearest thousand[39] - The company's financial statements for the six months ended June 30, 2021, were reviewed by the audit committee and approved by the board of directors on August 30, 2021[38] - The audit committee consists of three independent non-executive directors who reviewed the company's accounting principles, internal controls, and financial statements for the six months ended June 30, 2021[163] - Mr. Han Junran holds a 43.60% equity stake in the company through controlled corporate interests, and a 9.04% stake as a beneficial owner[156][159] - Qilu International Funds holds a 52.64% equity stake in the company through pledged interests[159] Operational Highlights - The company acquired property, plant, and equipment worth approximately HKD 51,796,000 in the first half of 2021, compared to none in the same period of 2020[65] - The company paid a deposit of HKD 5,980,000 to Yuxun Products Limited for exclusive development of cultural business projects[85] - A refundable deposit of HKD 49,520,000 was held by an independent contractor for the Guangzhou property renovation project as of June 30, 2021[88] - The company transferred HKD 51,500,000 to a selected contractor for the renovation and optimization of the supply chain equipment for the "Everyday Project"[88] - The total prepayments, deposits, and other receivables as of June 30, 2021, amounted to HKD 616,611,000, with a provision for bad debts of HKD 27,729,000[83] - The company recognized HKD 4,000,000 as commercial activities and advertising expenses for the "Everyday Project" brand promotion[85] - The company's receivable from Beijing Zhongzheng amounted to HKD 65,326,000 as of June 30, 2021[83] - The company entered into a subscription agreement with Mr. Zhu Yayong, involving the issuance of 136,060,042 shares at HKD 0.247 per share to settle a debt of HKD 33,606,830[93] - The company's stock investments in Taiwan had a fair value of HKD 31,657,000 as of June 30, 2021, based on market prices from the Taiwan Stock Exchange[100] - The company has not made any significant investments, acquisitions, or disposals during the six months ended June 30, 2021[147] - The company has not purchased, sold, or redeemed any of its listed securities during the six months ended June 30, 2021[148] - The company employs approximately 74 employees in Hong Kong and China as of June 30, 2021[155] Market and Industry Impact - The company's supermarket business in China has been severely impacted by the COVID-19 pandemic, leading to a decision to extend the initial intangible asset licensing arrangement from 10 to 20 years starting from 2021[129] - The company acquired a 70% stake in China Goal, Inc. in 2019, which licenses property management intellectual property to Chinese entities, and is optimistic about the future development of the property management market[130] - The company's property development project in Zhuhai, part of the Greater Bay Area commercial real estate development plan, has been delayed due to COVID-19, but the company expects a recovery in the real estate market in 2021[133] - The company's rental income from its subsidiary Guangdong Changliu Investment Co., Ltd. is expected to remain stable in the coming year, despite a slight decrease compared to the same period last year[128] - The company paid HKD 777,000 in rental expenses to related parties during the six months ended June 30, 2021[125] Accounting and Reporting Standards - The company adopted new and revised Hong Kong Financial Reporting Standards effective from January 1, 2021[41] - The company's financial statements are prepared in accordance with Hong Kong Accounting Standards and are reported in HKD, rounded to the nearest thousand[39]
新城市建设发展(00456) - 2021 - 中期财报