Financial Performance - Revenue for the six months ended June 30, 2024, was HK90.483 million in the same period in 2023[1] - Gross profit for the period was HK41.908 million in 2023[1] - Operating loss for the period was HK8.026 million in 2023[1] - Total comprehensive loss for the period was HK15.589 million loss in 2023[2] - Total comprehensive income for the period ending June 30, 2024, was HKD 310,151 thousand, compared to HKD 507,626 thousand in the same period last year[5] - The company reported a comprehensive pre-tax loss of HKD 11,740 thousand for H1 2024, compared to a loss of HKD 8,026 thousand in H1 2023[12] - Total revenue from external customers in China for H1 2024 was HKD 56,461 thousand, a significant decrease from HKD 90,483 thousand in H1 2023[14] - The company's total revenue for the first half of 2024 was approximately HKD 56.46 million, with a loss of HKD 11.74 million, compared to HKD 90.48 million in revenue and a loss of HKD 8.03 million in the same period in 2023[55] Assets and Liabilities - Property, plant, and equipment decreased to HK79.890 million in December 2023[3] - Investment properties decreased to HK661.819 million in December 2023[3] - Total assets less current liabilities increased to HK1,332.412 million in December 2023[4] - Net assets decreased to HK371.726 million in December 2023[4] - Total equity attributable to owners of the company decreased to HK382.611 million in December 2023[4] - Non-controlling interests decreased to a negative HK34.334 million in December 2023[4] - Total assets as of June 30, 2024, were HKD 1,118,553 thousand, a slight decrease from HKD 1,142,157 thousand as of December 31, 2023, with property development and investment assets accounting for HKD 1,114,176 thousand[11] - Total liabilities as of June 30, 2024, were HKD 744,155 thousand, a decrease from HKD 843,881 thousand as of December 31, 2023, with property development and investment liabilities at HKD 744,130 thousand[11] - The company's total assets as of June 30, 2024, were approximately HKD 1.69 billion, with total liabilities of HKD 1.38 billion. The cash and bank balances stood at HKD 9.52 million, and the current ratio was 3.31[57] - The capital-to-debt ratio (liabilities/equity) as of June 30, 2024, was 78%, up from 74% at the end of 2023[58] Cash Flow - Cash and cash equivalents increased by HKD 37,939 thousand in the first half of 2024, compared to an increase of HKD 89,229 thousand in the same period in 2023[7] - Net cash used in financing activities was HKD 19,436 thousand in the first half of 2024, compared to HKD 29,360 thousand in the same period last year[7] - Net cash from operating activities was HKD 57,842 thousand in the first half of 2024, down from HKD 118,779 thousand in the same period in 2023[7] - The company's cash and cash equivalents as of June 30, 2024, stood at HKD 9,518 thousand, compared to HKD 8,102 thousand on the same date in 2023[7] Business Segments - The company operates in two reportable segments: property development and investment, and supermarket retail in China[10] - Revenue from external customers for property development and investment decreased to HKD 30,065 thousand in H1 2024 from HKD 26,286 thousand in H1 2023, while supermarket retail revenue dropped significantly to HKD 26,396 thousand from HKD 64,197 thousand[11] - Total segment profit for H1 2024 was HKD 34,104 thousand, a decrease from HKD 41,908 thousand in H1 2023, with property development and investment contributing HKD 15,732 thousand and supermarket retail contributing HKD 18,372 thousand[11] - Rental income and related management service revenue increased to HKD 30,065 thousand in H1 2024 from HKD 26,059 thousand in H1 2023, while supermarket retail sales in mainland China dropped to HKD 26,396 thousand from HKD 64,424 thousand[15] - The company's supermarket business in mainland China faced significant challenges in the first half of 2024, with a sharp decline in revenue due to macroeconomic adjustments and intense competition. The company plans to gradually reduce its focus on this business[51] Investment Properties - The total book value of investment properties in Guangzhou and Luoyang as of June 30, 2024, was HKD 647,106,000, compared to HKD 661,819,000 as of December 31, 2023[22][26] - The book value of Guangzhou Property 1 decreased from HKD 594,229,000 as of December 31, 2023, to HKD 581,012,000 as of June 30, 2024[22][26] - The book value of Luoyang Property decreased from HKD 67,590,000 as of December 31, 2023, to HKD 66,094,000 as of June 30, 2024[22][34] - Guangzhou Property 1 and Guangzhou Property 2 are both held for rental income and capital appreciation, with fair value measured using Level 3 significant unobservable inputs[26][31][32] - The fair value of Guangzhou Property 1 is determined using the income approach, while Guangzhou Property 2 uses the direct comparison method[28][33] - The estimated rental income for investment properties ranges from RMB 55 to RMB 80 per square meter per month, with a discount rate of 4.5%[25] - The adjusted market value for investment properties in Luoyang ranges from RMB 7,583 to RMB 12,000 per square meter[33] - The Luoyang Property, with a land area of 69,942.185 square meters, has a total developable gross floor area of 173,724.12 square meters[34] - The company faces potential penalties of 0.1% of the original land use right payment (approximately RMB 31,270,000) per day if construction delays exceed 60 days[34] - The construction delay of the Luoyang property was due to changes in land policies by the Luoyang government, with construction expected to commence by the end of 2017[35] - The Luoyang property, with a book value of approximately HKD 66,094,000, was mortgaged to secure bank loans as of June 30, 2024[36] - The company's investment property in Luoyang received a construction land use permit in September 2023, following adjustments to the construction plan[52] - The company's investment properties in Guangzhou, Luoyang, and Zhuhai were used as collateral for bank loans as of June 30, 2024[61] Loans and Financing - Total bank loans amounted to HKD 682,247,000 as of June 30, 2024, with varying interest rates and maturity dates[39] - The Guangzhou Bank loan agreement involved multiple disbursements totaling RMB 418,932,000 (approximately HKD 461,103,000) with interest rates ranging from 3.65% to 7.153%[40] - The company's subsidiary, Guangdong Changyang, secured a loan of RMB 36,000,000 (equivalent to HKD 39,672,000) from Guangzhou Rural Commercial Bank, with an interest rate of 6.300% and a repayment period of 84 months[41] - Another subsidiary, Guangdong Changliu, obtained a loan of RMB 320,000,000 (equivalent to HKD 352,640,000) from Guangzhou Rural Commercial Bank, with an interest rate based on 155 basis points plus the 5-year loan prime rate, and a repayment period of 12 years[41] - The company issued 30,701,754 new shares at HKD 0.66 per share, totaling approximately HKD 20,264,000, to settle a payable to a director[43] Legal and Regulatory Matters - The company's subsidiaries, Guangdong Changyang and Guangdong Changliu, are involved in a legal dispute requiring a payment of RMB 5.79 million plus interest and costs, with an appeal currently pending[44] - The company entered into new lease agreements for office spaces, parking spaces, and staff dormitories with related parties, effective from June 1, 2024, for a period of one year[48] Future Business Development - The company's future business development theme, "Everyday, Life, New City," aims to integrate various business units to meet daily life needs, focusing on property management, supermarket operations, and property development in different regions[49] - The company's wholly-owned subsidiary, Guangdong Changliu Investment Co., Ltd., generated slightly increased profits from rental and related management services compared to the same period last year, with rental income expected to remain stable in the coming year[50] - The company is cautiously monitoring the property market in Zhuhai, part of its Greater Bay Area commercial property development plan, while maintaining a long-term optimistic outlook on China's real estate market[53] - The company acquired 70 concrete mixer trucks for a total consideration of RMB 12.01 million (approximately HKD 13.06 million), aiming to diversify its business by providing concrete logistics and transportation services to property developers in mainland China[54] Dividends and Shareholder Information - The company did not recommend the payment of an interim dividend for H1 2024, consistent with the previous year[19] - The company did not recommend an interim dividend for the first half of 2024, consistent with the same period in 2023[56] - Basic loss per share for H1 2024 was HKD (10,727) thousand, compared to HKD (8,655) thousand in H1 2023, with the weighted average number of shares used for calculation increasing to 117,245,044 from 86,543,290[20] - Chairman and CEO Han Junran holds 32.18% of the company's shares through Junyi Investment Limited, a wholly-owned company[64] - Zhongtai Dingfeng Classified Fund SP holds a 50.99% stake in the company through Qilu International Funds SPC[66] Corporate Governance - The audit committee consists of three independent non-executive directors: Chen Yaodong, Zhang Jing, and Liang Guihua[69] - The company has 53 employees in Hong Kong and China as of June 30, 2024[63] Miscellaneous - Prepayments for the Luoyang property construction amounted to approximately RMB 6,305,000 (HKD 6,746,000) as of June 30, 2024[37] - Prepayments for the Zhuhai property construction totaled approximately RMB 287,361,000 (HKD 307,419,000) as of June 30, 2024[37] - An additional deposit of HKD 20,000,000 was paid to New Century International Trade (Beijing) Co., Ltd. for potential project investment opportunities[38] - The fair value of listed equity investments in Taiwan was HKD 29,021,000 as of June 30, 2024[38] - The company recorded revenue of approximately HKD 56,461,000 and a post-tax loss of approximately HKD 11,740,000 for the six months ended June 30, 2024[47]
新城市建设发展(00456) - 2024 - 中期财报