China South City Holdings (1668) investor relations material

Executive summary

• Revenue increased 16.4% year-over-year to HK$4,083.4 million, driven by higher property sales and recurring income.

• Net loss attributable to owners widened to HK$8,975.8 million, up 107.9% from the prior period, mainly due to inventory impairment, deferred tax asset reversal, higher finance costs, and fair value losses on investment properties.

• The Group faces severe liquidity challenges, with current liabilities exceeding current assets by HK$2,848.1 million and significant debt defaults.

• A winding-up petition was filed in January 2025, and the auditor issued a disclaimer of opinion due to multiple material uncertainties about going concern.

Financial highlights

• Revenue: HK$4,083.4 million (+16.4% year-over-year); property sales up 18.7%, recurring income up 10.3%.

• Net loss: HK$8,975.8 million (vs. HK$4,317.5 million prior period); basic loss per share: HK78.45 cents.

• Gross profit: HK$765.9 million (-5.3% year-over-year); gross margin fell to 18.8% from 23.0%.

• Fair value losses on investment properties: HK$2,483.5 million.

• Finance costs: HK$1,522.5 million (+140.3% year-over-year); weighted average financing cost decreased to 6.8%.

• Cash and bank balances: HK$717.7 million (down from HK$1,143.6 million); restricted cash: HK$676.6 million.

• Gearing ratio: 110.9% (vs. 84.0% prior year).

Outlook and guidance

• The Group will focus on merchant recruitment, operations, prudent financial management, asset destocking, and cost reduction.

• Plans to explore new business areas such as health, tourism, new energy, and smart logistics.

• Ongoing efforts to restructure debt, accelerate property sales, and control costs to address liquidity issues.