Financial Results

Unaudited Condensed Interim Consolidated Financial Statements For the six months ended 30 June 2021

Financials Archive

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Profit & Loss

profit and loss

Balance Sheet

Balance Sheet

Review of Performance
Statement of Comprehensive Income

Due to the nature of the industry that the Company operates in, recognition of revenue from the sale of completed properties is driven by project hand-over. Consequently, the interim financial results may not be a good indication of profitability trend.



Revenue for the 6 months increased by 45.4% Y-o-Y, or RMB35.3 million to RMB112.9 million (1H2020: RMB77.6 million), due to increase in sales of completed properties by RMB11.8 million and rental income by RMB 23.5 million.

Revenue from the sales of completed properties increased by 126.1% Y-o-Y, or RMB11.8 million, to RMB21.1 million (1H2020: RMB9.3 million), mainly attribute to more commercial units at Ying Li International Hardware and Electrical Centre (“IEC”) being sold and handed over in 1H2021.

Revenue from rental income increased by 34.4% Y-o-Y or RMB23.5 million to RMB91.8 million (1H2020: RMB68.3 million), lower rental income recognised 1H2020 due to the temporary closure of retail malls and retail spaces and affected by rental reliefs to support tenants business recovery. Rental income and occupancy rate of shopping malls gradually increased after the COVID-19 outbreak.

Gross profit and gross profit margin


Gross profit of the Group for 1H2021 increased by 55.9% Y-o-Y or RMB28.4 million, to RMB79.1 million (1H2020: RMB50.7 million) in tandem with the increase in revenue.

Overall gross profit margin for 1H2021 increased by 4.7%, to 70.1% (1H2020: 65.4%), primarily due to the effect of rental reliefs in 1H2020.

Other income

Other income for 1H2021 decreased by 41.5% Y-o-Y or RMB5.7 million, to RMB8.0 million (1H2020: RMB13.7 million), mainly due to lesser fixed deposits interest income and sundry income earned in 1H2021.

Selling expenses

Selling expenses for 1H2021 increased by 11.8% Y-o-Y or RMB1.9 million, to RMB18.1 million (1H2020: RMB16.2 million), mainly due to an increase in variable components of selling expense which was consistent with the increased in revenue of 1H2021.

Administrative expenses

For 1H2021, administrative expenses increased by 9.4% Y-o-Y or RMB4.0 million, to RMB47.0 million (1H2020: RMB43.0 million), mainly due to an increase in legal and professional fees incurred in 1H2021.

Finance costs

Finance costs in 1H2021 decreased by 14.4% Y-o-Y or RMB11.2 million to RMB66.4 million (1H2020: RMB77.6 million), mainly due to lower weighted average interest rates in 1H2021 and a decrease in outstanding loan principal as a result of repayment made in 1H2021.

Other losses – net

Other losses for 1H2021 increased by RMB15.2 million, mainly due to the increase in unreleased foreign currency exchange losses and additional provision for potential penalties of development projects.


Tax expenses for 1H2021 increased by RMB12.6 million as compared to 1H2020. This was due to forfeited deferred income tax assets in 1H2021.

Net loss attributable to ordinary shareholders of the Company


The Group reported a net loss attributable to the ordinary shareholders of the Company amounting to RMB93.5 million in 1H2021, mainly due to the recognition of higher revenue as well as the Group’s performance which has slightly recovered from the COVID-19 shock as compared with 1H2020.

Unaudited Condensed Interim Consolidated Statements of Financial Position

Total assets of the Group decreased by 1.4% or RMB99.2 million, to RMB7,135.6 million (31 December 2020: RMB7,234.8 million), mainly due to a decrease in development properties of RMB12.8 million arising from the handover of completed properties to purchasers, a decrease in cash and cash equivalents of RMB77.5 million mainly from the repayment of debts and interest.

The Group's total liabilities increased by 2.0% or RMB90.8 million, to RMB4,706.3 million (31 December 2020: RMB4,615.5 million), mainly due to an increase in trade and other payable of RMB124.7 million and provisions of RMB7.9 million, offset against a decrease in bank loan of RMB55.5 million as a result of loan principal repayments.

The Group's total equity decreased by RMB190.0 million to RMB2,429.3 million (31 December 2020: RMB2,619.3 million), mainly due to an increase in accumulated losses of RMB229.5 million, offset by a decrease in translation deficit of RMB43.8 million.

Unaudited Condensed Interim Consolidated Statements of Cash Flows

In 1H2021, the decrease in unrestricted cash and cash equivalent of RMB48.8 million was mainly due to:

  1. net cash outflow of RMB29.2 million from operating activities;
  2. net cash outflow of RMB0.1 million from investing activities; and
  3. net cash outflow of RMB19.5 million from financing activities.

The net cash outflow from operating activities of RMB29.2 million was mainly attributable from cash from operating before working capital changes of RMB3.4 million, a decrease in development property of RMB12.8 million, a decrease in trade and other receivables of RMB3.7 million and an increase in trade and other payables of RMB11.5 million, offset by net interest paid of RMB60.4 million.

Net cash used in financing activities of RMB19.5 million was due to the net repayment of borrowings amounting to RMB46.5 million, offset by a decrease in restricted deposits with financial institutions amounting to RMB27.0 million.

Commentary On Current Year Prospects


China economic growth registered a strong rebound at 12.7% YOY in the first half of 2021. The Chinese government has set an economic growth target of above 6% for 2021 after it grew by 2.3% in 2020.

In March 2021, China announced its 14th Five-year plan for 2021-2025 that aims to strengthen its domestic economy and improve its economic resilience, emphasize quality development, self-reliance in the development and adoption of advanced technology. Digitalisation, Sustainability & Environmental protection are the key themes.

To guard against excessive property speculation in the market, the Chinese authorities have stepped up control measures such as restricting debt financing to property developer, capping banks' lending to the real estate sector and increasing mortgage rates.

This has led to a weak demand in the residential market. China's new home prices, slowing for the first time since November last year on a month-on-month basis, where average new home prices in 70 major cities grew 0.5% in June from a month earlier, down from a 0.6% rise in May, as shown by Reuters calculations in July 2021, based on data released by NBS.

Furthermore, there has been a new onslaught of regulatory actions in China on digital platform companies in areas of finance, vehicle hiring, online-gaming and private education/tuition that add uncertainties in the market and may impact the property leasing market in China.

Against the backdrop of the evolving macro-economic challenges, the Group has undertaken a strategic review in calibrating our business model, direction shifting from asset heavy to asset light, property management service in order to mitigate the impact of regulatory control over the real estate development sector, offload non-core property assets and to identify emerging growth opportunities not related to residential, office and retail property development, but yet, is in line with the 14th Five-year (2021-2025) development plan.

On the retail rental segment, retailers are looking to improve consumer engagement through additional touchpoints and more meaningful experiences to enhance differentiation in an increasingly competitive retail market. Hence the Group continues to closely monitor new retail trends and create new retail concepts with our tenants so that our retail properties continue to be relevant and refreshing to our targeted group of consumers at various locations.

On the office rental segment, the Group continues to focus on improving rental yield by attracting new business tenants and retaining quality tenants.