CONTENTS 2 Corporate Information 6 Financial Highlights 8 Business Review 32 Corporate Governance and Other Information 40 Report of Review of Interim

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3 CONTENTS 2 Corporate Information 6 Financial Highlights 8 Business Review 32 Corporate Governance and Other Information 40 Report of Review of Interim Condensed Consolidated Financial Statements 42 Interim Condensed Consolidated Statement of Profit or Loss 43 Interim Condensed Consolidated Statement of Comprehensive Income 44 Interim Condensed Consolidated Statement of Financial Position 46 Interim Condensed Consolidated Statement of Changes in Equity 48 Interim Condensed Consolidated Statement of Cash Flows 52 Notes to Interim Condensed Consolidated Financial Statements

4 CORPORATE INFORMATION BOARD OF DIRECTORS Executive Directors Mr. Shum Chiu Hung (Chairman and Chief Executive Officer) Mr. Guan Jianhui Mr. Bai Xihong Mr. Li Qiang Mr. Cen Zhaoxiong Mr. Niu Jimin Independent Non-executive Directors Mr. Jin Qingjun Ms. Sun Hui Mr. Wong Wai Man JOINT COMPANY SECRETARIES Mr. Lui Wai Pang Ms. Lai Siu Kuen AUTHORISED REPRESENTATIVES Mr. Li Qiang Mr. Lui Wai Pang AUDIT COMMITTEE Mr. Wong Wai Man (Chairman) Mr. Jin Qingjun Ms. Sun Hui REMUNERATION COMMITTEE Ms. Sun Hui (Chairlady) Mr. Shum Chiu Hung Mr. Wong Wai Man

5 CORPORATE INFORMATION Clifton House 75 Fort Street P.O. Box 1350 Grand Cayman KY Cayman Islands Estera Trust (Cayman) Limited P.O. Box 1350 Clifton House 75 Fort Street Grand Cayman KY Cayman Islands NOMINATION COMMITTEE Mr. Shum Chiu Hung (Chairman) Mr. Jin Qingjun Ms. Sun Hui REGISTERED OFFICE Clifton House 75 Fort Street P.O. Box 1350 Grand Cayman KY Cayman Islands PRINCIPAL PLACE OF BUSINESS IN THE PEOPLE S REPUBLIC OF CHINA 36-38/F, Times Property Center Dongfeng Road Guangzhou Guangdong Province PRC PRINCIPAL PLACE OF BUSINESS IN HONG KONG Suites , 47/F Two Exchange Square 8 Connaught Place Central Hong Kong PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE Estera Trust (Cayman) Limited P.O. Box 1350 Clifton House 75 Fort Street Grand Cayman KY Cayman Islands 2016 INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 3

6 CORPORATE INFORMATION HONG KONG SHARE REGISTRAR Computershare Hong Kong Investor Services Limited Shops , 17th Floor Hopewell Centre 183 Queen s Road East Wanchai Hong Kong LEGAL ADVISERS As to Hong Kong and U.S. law: Sidley Austin Level 39, Two International Finance Center 8 Finance Street Central Hong Kong 12 6 As to PRC law: Commerce & Finance Law Offices 6/F, NCI Tower A12 Jianguomenwai Avenue Chaoyang District Beijing China As to Cayman Islands law: Appleby Rooms , Jardine House 1 Connaught Place Central Hong Kong

7 CORPORATE INFORMATION INDEPENDENT AUDITOR Ernst & Young Certified Public Accountants 22/F, CITIC Tower 1 Tim Mei Avenue Central Hong Kong STOCK CODE 1233 COMPANY S WEBSITE PRINCIPAL BANKERS Industrial and Commercial Bank of China Limited Agricultural Bank of China China Construction Bank Bank of China Shanghai Pudong Development Bank Ping An Bank Co., Ltd INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 5

8 FINANCIAL HIGHLIGHTS Six months ended 30 June Note Change Selected financial information Recognised revenue (RMB million) 5, , % Gross profit (RMB million) 1, , % Profit for the period Including non-controlling interests (RMB million) % Attributable to owners of the Company (RMB million) % Core profit attributable to owners of the Company (RMB million) % As at 30 June 2016 As at 31 December 2015 Notes RMB million RMB million Total assets 55, ,870.3 Total liabilities 43, ,612.3 Cash and bank balances 2 9, ,749.2 Total interest-bearing bank loans and other borrowings current non-current 18, ,331.1 Debt component of convertible bonds , ,906.8 Total equity 11, ,258.0 Equity attributable to owners of the Company 7, ,

9 FINANCIAL HIGHLIGHTS Six months ended 30 June Note Selected financial information Gross profit margin 26.3% 25.7% Net profit margin 9.3% 11.4% Core profit margin attributable to owners of the Company 4 9.5% 10.9% Basic earnings per share, RMB cents Diluted earnings per share, RMB cents Note As at 30 June 2016 As at 31 December 2015 Current ratio Gearing ratio % 77.3% Notes: Core profit attributable to owners of the Company represents profit after tax attributable to owners of the Company excluding changes in fair values of investment properties and the derivative component of the convertible bonds, net of the impact of the related deferred tax Cash and bank balances include restricted bank deposits and cash and cash equivalents Total interest-bearing bank loans and other borrowings include senior notes, the debt component of convertible bonds and corporate bonds Core profit margin attributable to owners of the Company is calculated based on core profit attributable to owners of the Company over total recognised revenue Gearing ratio is calculated by the Group s net debts (total interestbearing bank loans and other borrowings, net of cash and bank balances) over net assets at the end of each period INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 7

10 BUSINESS REVIEW 5, % % % % (1) ,198,000 OVERVIEW For the six months ended 30 June 2016, Times Property Holdings Limited (the Company ) and its subsidiaries (collectively, the Group ) recorded a revenue of RMB5,699.1 million, representing an increase of 41.1% when compared with that for the six months ended 30 June Profit for the six months ended 30 June 2016 amounted to RMB527.9 million, representing an increase of 14.3% when compared with that for the six months ended 30 June The core profit attributable to the owners of the Company for the six months ended 30 June 2016, excluding changes in fair values of investment properties and the derivative component of the convertible bonds, net of the impact of the related deferred tax, increased to RMB540.4 million, representing an increase of 22.7% when compared with that for the six months ended 30 June Profit attributable to the owners of the Company amounted to RMB549.6 million, representing an increase of 20.6% as compared to that for the six months ended 30 June Basic earnings per share and diluted earnings per share for the six months ended 30 June 2016 were RMB32 cents (for the six months ended 30 June 2015: RMB26 cents) and RMB30 cents (for the six months ended 30 June 2015: RMB25 cents), respectively. Property Development The Group focuses on the major core cities in the Pearl River Delta area. As at 30 June 2016, the Group had in total 45 major projects on various stages, including 44 projects in major cities of Guangdong Province, namely, Guangzhou, Foshan, Zhongshan, Zhuhai, Dongguan and Qingyuan and 1 project in Changsha, Hunan Province. For the six months ended 30 June 2016, the Group s contracted sales (1) amounted to approximately RMB13.36 billion with total GFA of approximately 1,198,000 sq.m.. The Group focuses on its projects on peripheral facilities, seeking to enhance customers experience in art and to fulfill needs of the middle to upper class households. 1 Note 1: Contracted sales is summarised based on sale and purchase agreements and purchase confirmation agreements

11 BUSINESS REVIEW The table below illustrates the contracted sales achieved by the Group by region for the six months ended 30 June 2016: Region Available for sale project numbers Contracted sales area Contracted Percentage sales amount of total (sq.m.) (RMB million) (%) Guangzhou 9 197,000 2, Foshan 8 342,000 3, Zhuhai 6 441,000 5, Zhongshan 3 23, Qingyuan 2 94, Changsha 1 101, Total 29 1,198,000 13, , , % Properties for Leasing and Sub-leasing As at 30 June 2016, the Group held a GFA of approximately 32,305 sq.m. and 277 car parking spaces at Times Property Center for rental purposes and the GFA for Guangzhou Zhide Commercial Management Co., Ltd. and its subsidiary for sub-leasing purposes was approximately 278,994 sq.m.. For the six months ended 30 June 2016, the rental income amounted to RMB149.3 million, contributing to 2.6% of the total turnover of the Group. Property Management Services Property management fee income represents revenue generated from property management services provided in relation to properties delivered by the Group. For the six months ended 30 June 2016, the Group provided property management services for 42 project phases. The Group s revenue from property management services increased from RMB75.7 million for the six months ended 30 June 2015 to RMB107.6 million for the six months ended 30 June This increase was primarily due to the increase in the number of project phases that the Group managed with the delivery of the properties we made for the six months ended 30 June INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 9

12 BUSINESS REVIEW 12.1 Land Reserves As at 30 June 2016, the Group had total land reserves of approximately 12.1 million sq.m., which the Group believes will be sufficient to support the Group s development need for the next three to five years. The table below sets forth the information on land reserves in major cities that the Group has established footholds: Region Total land reserves (sq.m.) (%) Guangzhou 2,317, Foshan 2,751, Zhuhai 1,793, Zhongshan 111, Qingyuan 3,228, Changsha 1,740, Dongguan 185, Total 12,129, The following table sets forth the GFA breakdown of the Group s land reserves by planned use as at 30 June 2016: Planned Use Total land reserves (sq.m.) (%) Residential 8,692, Commercial 913, Others (Note) 2,522, Total 12,129, Note: Others mainly comprises car parks and ancillary facilities

13 BUSINESS REVIEW (1) Portfolio of Property Development Projects The table below is a summary of the portfolio of property development projects as at 30 June 2016 (1) : Completed Under development/ future development Project Project type Actual/ Expected completion dates (2)(4) (3) (4) (3) (5) Site area GFA for sale (2)(4) Other GFA (3) GFA (4) Other GFA (3) Pre-sold Ownership interest (5) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (%) Guangzhou Times Bund Residential and commercial ,123 7,146 61,685 4, Ocean Times Residential and commercial ,156 26,920 61,693 49, II Times Peanut II Residential and commercial ,891 1,219 28,565 25, Times King City (Guangzhou) Residential and commercial ,238 43,970 43, Guangzhou Tianhe Project (Pige Factory Project) (6) Industrial (6) Pending 51 Guangzhou Tiansi Project (Qingchu Shiliu Gang Project) (7) Industrial (7) Pending 70 Guangzhou Wuyang Paint Factory Project Apartment and commercial , ,115 5, Times Cloud Atlas (Guangzhou) Residential and commercial ,593 9,312 84,082 48, , INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 11

14 BUSINESS REVIEW Completed Under development/ future development Project Project type Actual/ Expected completion dates (2)(4) (3) (4) (3) (5) Site area GFA for sale (2)(4) Other GFA (3) GFA (4) Other GFA (3) Pre-sold Ownership interest (5) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (%) Time Bridges (Zengcheng) Residential and commercial , , , , Luogang Kaiyuan Road Project Residential and commercial , ,211 76, , Nansha Times Long Island Project Residential and commercial , ,522 76,877 84, Guangzhou Huadu Jinghu Avenue Project Residential and commercial ,959 78,311 17, Guangzhou Panyu Shiqiao Project (Times Park Laurel) Residential and commercial , ,666 59, Zengjiang Project (Zengcheng) Residential and commercial , ,254 81, Huangpu Chemical Commercial ,279 82, B2-2 (9) B2-2 land parcel, Sino-Singapore Knowledge City (9) Residential , , B2-1 (9) B2-1 land parcel, Sino-Singapore Knowledge City (9) Residential , ,

15 BUSINESS REVIEW Completed Under development/ future development Project Project type Actual/ Expected completion dates (2)(4) (3) (4) (3) (5) Site area GFA for sale (2)(4) Other GFA (3) GFA (4) Other GFA (3) Pre-sold Ownership interest (5) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (%) Foshan Times King City (Shunde) Times City (Phase I to VI) Foshan Stainless Steel Factory Project Times Cloud Atlas (Foshan) Times King City (Foshan) Phase IV Foshan Denghu Project Times Prime (Foshan) Times Riverbank (Michong Project) Times Xianghai Shore (Foshan) (North of Lujing Road East Project) Haisan Road Project 22 Times Riverbank Phase II (Michong Project 2) Sanshui Baiyingda Project Residential and commercial Residential and commercial Residential and commercial Residential and commercial Residential and commercial Residential and commercial Residential and commercial Residential and commercial Residential and commercial Residential and commercial Residential and commercial Residential and commercial ,782 18,107 32, ,953 56, , ,776 4,574 94, ,974 87, , ,860 32,422 8,644 32, , ,326 44, , ,308 2,125 26,775 28, ,464 61,634 25,168 76, ,148 44,543 10,930 51, , ,297 75, , , ,534 47, ,383 88,347 30, , , , , ,659 90, INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 13

16 BUSINESS REVIEW Completed Under development/ future development Project Project type Actual/ Expected completion dates (2)(4) (3) (4) (3) (5) Site area GFA for sale (2)(4) Other GFA (3) GFA (4) Other GFA (3) Pre-sold Ownership interest (5) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (%) Zhuhai Zhuhai Jingrun Project Residential and commercial , ,226 5, Times Harbor (Zhuhai) Residential and commercial ,393 29,450 6, Phase I of Times King City (Zhuhai) Residential and commercial ,950 4,750 23,946 9, Phase II, III and IV of Times King City Residential and (Zhuhai) commercial , , ,037 53, , The Shore (Zhuhai) Residential and commercial , ,935 68, , Baoli Xiangbin Huayuan Project (Jinwan Airport City Project) Residential and commercial , ,016 54, , Zhuhai Baisheng (8) Industrial (8) Pending 100, West of Tin Ka Ping Secondary School, Zhuhai Residential and commercial , ,902 49, Zhuhai Qingwan Lakeside Project (Zhuhai Jinwan New Project) Residential and commercial , ,180 27, Zhuhai Hongqiao Project (Phase V of Times King City (Zhuhai)) Residential and commercial ,791 38,870 14, Shizimen Project (Zhuhai) Residential and commercial , , ,

17 BUSINESS REVIEW Completed Under development/ future development Project Project type Actual/ Expected completion dates (2)(4) (3) (4) (3) (5) Site area GFA for sale (2)(4) Other GFA (3) GFA (4) Other GFA (3) Pre-sold Ownership interest (5) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (%) Zhongshan Times King City (Zhongshan) Residential and commercial ,821 39,164 45, Times Cloud Atlas (Zhongshan) Residential and commercial , ,844 19, Qingyuan Times King City (Qingyuan) Residential and commercial ,368 5,484 57, , , , Times Garden (Qingyuan) Residential and commercial ,650 64,091 22,403 65,145 25,218 98, Fogang Shilian Project Residential and commercial Pending 551,087 1,090,746 43, Fogang Huanghua Lake Project Residential and commercial Pending 477, , Changsha Times King City (Changsha) Residential and commercial , ,501 1,484, , , Dongguan Dongguan Hengli Project Total Residential and commercial , ,734 27, ,302, , ,818 9,348,076 1,962,458 2,713, INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 15

18 BUSINESS REVIEW Notes: (1) (i) (ii) (1) The table above includes properties for which (i) the Group has obtained the relevant land use rights certificate(s), but have not obtained the requisite construction permits; or (ii) the Group has signed a land grant contract with the relevant government authority, but have not obtained the land use rights certificate(s). The figures for total and saleable GFA are based on figures provided in the relevant governmental documents, such as the property ownership certificates, the construction work planning permits, the pre-sale permits, the construction land planning permits or the land use rights certificate. The categories of information are based on our internal records. (2) (2) Certain completed projects have no GFA available for sale by the Group as all saleable GFA have been sold, pre-sold or rented out. (3) (3) Other GFA mainly comprises car parks and ancillary facilities. (4) (4) GFA for sale and GFA under development and GFA held for future development are derived from the Group s internal records and estimates. (5) (5) Ownership interest is based on the Group s effective ownership interest in the respective project companies. (6) (6) The Group is in the process of applying for the conversion of the land use for Guangzhou Tianhe Project from industrial use to residential and commercial use. (7) (7) The Group is in the process of applying for the conversion of the land use for Guangzhou Tiansi Project from industrial use to residential and commercial use. (8) (8) The Group is in the process of applying for the conversion of the land use for Zhuhai Baisheng to residential and commercial use. (9) (9) The Group is in the course of acquiring the land parcels as at 30 June Such projects have been managed by the Group

19 BUSINESS REVIEW Acquisitions of Land Parcels for the Six Months Ended 30 June 2016 The Group continued to expand its land reserves through various channels, including participations in public land auctions, urban redevelopment projects, primary development, cooperation, and through acquisition of project companies. 11,766 For the six months ended 30 June 2016, the Group acquired five parcels of land in Guangzhou, Foshan, Zhuhai and Dongguan and the land acquisition costs amounted to a total of approximately RMB11,766 million. Number Expected Total land Location of projects Site area total GFA costs (sq.m.) (sq.m.) (RMB million) Guangzhou 2 159, ,502 1,641 Zhuhai 1 60, ,593 2,804 Foshan 1 111, ,717 6,406 Dongguan 1 55, , Total 5 387,568 1,240,188 11, INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 17

20 BUSINESS REVIEW 64, % 48, % MARKET REVIEW During the first half of 2016, given loosening credit policies, downward adjustments to the down payments of the property prices and the reduction in stamp duty rates in the cities without the home purchase restrictions, the property market continued to heat up. Property prices went up along with the sales volume of the properties. According to the figures from the National Bureau of Statistics, from January to June 2016, the area of commercial properties in China sold reached million sq.m., representing an increase of 27.9% as compared with the same period last year. The sales of the commercial properties amounted to RMB4,868.2 billion, representing an increase of 42.1% as compared with the same period last year. 6, % 6, % 1, % % The sales of properties in the markets of Pearl River Delta Metropolitan Area, the focus of the Group s development, remained active. During the first half of 2016, the sales volume of newly built commercial residential properties in Guangdong Province amounted to RMB641.0 billion, representing an increase of 58.4% as compared with the same period last year, and the area sold reached million sq.m., representing an increase of 38.4% as compared with the same period last year. For the same period, the Group recorded a significant increase in the sales of residential properties in the cities in which it had foothold, among which the sales of commercial residential properties in Guangzhou reached RMB billion, representing an increase of 33.8% as compared with the same period last year, and the area sold were 7.58 million sq.m., representing an increase of 22.1% as compared with the same period last year % % The Group actively grasped the momentum of the market and implemented proactive marketing strategies to drive the steady growth of its results. As at 30 June 2016, the Group s contracted sales amounted to RMB13.36 billion, representing an increase of 75.1% as compared with the same period last year, and sales area of million sq.m., representing an increase of 34.8% as compared with the same period last year

21 BUSINESS REVIEW PROSPECT AND STRATEGY Looking forward to the second half of the year, we expect that the government policies will remain unchanged and the local governments will introduce targeted policies based on the number of unsold properties and the extent of increase in property prices and land prices. It is expected that the monetary policies and liquidity will remain loose for the second half of the year, but the financial leverage for the industry may be tightened. Given that the number of unsold properties in the key first and second-tier cities decreased to a more reasonable level, we are optimistic about the housing sales market for the second half of the year. It is expected that there is still room for the increase in property prices and land prices during the second half of the year and the sales volume and the prices of the residential properties will hit a record high throughout the year. The Group will continue to focus on River Delta Metropolitan Area radiated from Guangzhou and Shenzhen, and expand its foothold in other cities with high growth potential. Meanwhile, the Group will insist on the implementation of rational investment strategies and proactively and progressively participate in urban renewal and renovation projects. With regard to the sale efforts, the Group will actively stimulate its sales so as to increase its profitability and achieve a better cash inflow. With regard to the financial strategy, the Group will pay close attention to market risks, strengthen its cash flow management and maintain a reasonable financial leverage. Urban development brings vast opportunities for the growth of enterprises. In the future, the Company will actively extend its business to the provision of community services, home offices and the operation of creative office parks while strengthening its core business in order to bring new driving force for the growth of the Company INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 19

22 BUSINESS REVIEW 95.5% 2.6% 1.9% 4, , , % FINANCIAL REVIEW Revenue The Group s revenue is primarily generated from property development, property leasing and sub-leasing and property management services, which contributed approximately 95.5%, 2.6% and 1.9% of the revenue for the six months ended 30 June 2016, respectively. The Group s revenue increased by RMB1,659.5 million, or 41.1%, to RMB5,699.1 million for the six months ended 30 June 2016 from RMB4,039.6 million for the six months ended 30 June This increase was primarily attributable to the increase in revenue from the sale of properties. The table below sets forth the Group s revenue by operating segment as indicated: For the six months ended 30 June 2016 For the six months ended 30 June 2015 (RMB million) (%) (RMB million) (%) Sales of properties 5, , Rental income Management fee income 5, , , , , % 488, ,540 Property development The Group s revenue from sales of properties increased by RMB1,593.0 million, or 41.4%, to RMB5,442.2 million for the six months ended 30 June 2016 from RMB3,849.2 million for the six months ended 30 June The increase was primarily due to the increase in delivered total GFA from approximately 488,478 sq.m. for the six months ended 30 June 2015 to approximately 661,540 sq.m. for the six months ended 30 June The projects that contributed substantially to the Group s revenue for the six months ended 30 June 2016 mainly include Times Cloud Atlas (Guangzhou), Times Bund Phase III, Times City (Foshan) Phase IV, Times King City (Shunde) Phase I, Times Cloud Atlas (Zhongshan), Times King City (Zhuhai) Phase II, Times King City (Qingyuan) Phase II and Times Garden (Qingyuan) Phase I

23 BUSINESS REVIEW % % 3, , , % 1, , % 25.7%26.3% Property leasing and sub-leasing The Group s gross rental income increased by RMB34.6 million, or 30.2%, to RMB149.3 million for the six months ended 30 June 2016 from RMB114.7 million for the six months ended 30 June The increase was primarily due to the increase in the rental income and occupancy rate for the six months ended 30 June Property management services The Group s revenue from property management services increased by RMB31.9 million, or 42.1%, to RMB107.6 million for the six months ended 30 June 2016 from RMB75.7 million for the six months ended 30 June The increase was primarily attributable to the increase in the number of project phases and area that the Group managed. Cost of sales The Group s cost of sales increased by RMB1,197.8 million, or 39.9%, to RMB4,200.6 million for the six months ended 30 June 2016 from RMB3,002.8 million for the six months ended 30 June The increase was primarily attributable to increase in the total GFA of properties delivered as compared with the corresponding period in 2015, which led to the increase in the cost of property sales. Gross profit and gross profit margin The Group s gross profit increased by RMB461.7 million, or 44.5%, to RMB1,498.6 million for the six months ended 30 June 2016 from RMB1,036.9 million for the six months ended 30 June For the six months ended 30 June 2016, the Group s gross profit margin increased to 26.3% from 25.7% for the six months ended 30 June The increase was primarily due to increase in recognised income from products with higher gross profit margin as compared with the corresponding period in Other income and gains The Group s other income and gains decreased to RMB49.6 million for the six months ended 30 June 2016 from RMB51.6 million for the six months ended 30 June 2015 which is primarily attributable to combined effects of the increase of bank interest income, the decrease of foreign exchange gain, net and the decrease in fair value gains of derivative component of the convertible bonds INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 21

24 BUSINESS REVIEW % % % % % Selling and marketing costs The Group s selling and marketing costs increased by RMB57.9 million, or 42.0%, to RMB195.7 million for the six months ended 30 June 2016 from RMB137.8 million for the six months ended 30 June The increase was mainly attributable to the increase in scale of sales of the Group. Administrative expenses The Group s administrative expenses increased by RMB64.4 million, or 43.0%, to RMB214.4 million for the six months ended 30 June 2016 from RMB150.0 million for the six months ended 30 June 2015, which was primarily due to the increase in the number of middle and senior officers as the result of the employment of highcalibre talents. Other expenses The Group s other expenses increased by RMB26.3 million, or 133.8%, to RMB45.9 million for the six months ended 30 June 2016 from RMB19.7 million for the six months ended 30 June The increase was primarily due to the increase of donation and exchange loss. Finance costs The Group s finance costs increased to RMB123.1 million for the six months ended 30 June 2016 from RMB84.8 million for the six months ended 30 June The increase was mainly due to the Group s finance costs relating to land acquisition and expansion of property development. Income tax expenses The Group s income tax expenses increased by RMB201.6 million, or 86.0%, to RMB435.9 million for the six months ended 30 June 2016 from RMB234.3 million for the six months ended 30 June The increase was primarily attributable to the increase in the Group s taxable profit for the six months ended 30 June Profit of the Company The Company s profit increased by RMB66.0 million, or 14.3%, to RMB527.9 million for the six months ended 30 June 2016 from RMB461.9 million for the six months ended 30 June

25 BUSINESS REVIEW % , , % 3, ,907.9 Profit attributable to the owners of the Company Profit attributable to the owners of the Company increased by RMB94.0 million, or 20.6%, to RMB549.6 million for the six months ended 30 June 2016 from RMB455.6 million for the six months ended 30 June Basic earnings per share and diluted earnings per share for the six months ended 30 June 2016 were RMB32 cents (for the six months ended 30 June 2015: RMB26 cents) and RMB30 cents (for the six months ended 30 June 2015: RMB25 cents), respectively. LIQUIDITY, FINANCIAL AND CAPITAL RESOURCES Cash position As at 30 June 2016, the carrying balance of the Group s cash and bank balances was approximately RMB9,345.9 million (31 December 2015: RMB8,749.2 million), representing an increase of 6.8% when compared with that of 31 December Under relevant PRC laws and regulations, some of the Group s project companies are required to place a certain amount of pre-sale proceeds in designated bank accounts as guarantee deposits for construction of the relevant properties. These guarantee deposits may only be used for payments to construction contractors in the project development process and for other construction-related payments, such as purchase of materials. The remaining guarantee deposits are released when certificates of completion for the relevant properties have been obtained. In addition, a portion of the Group s bank deposits represented loan proceeds in the monitoring accounts designated by the banks, in which case the use of the restricted bank deposits, subject to the banks approval, is restricted to the purposes as set out in the relevant loan agreements. The remaining restricted deposits were primarily guarantee deposits for the construction workers in accordance with certain local requirements. As at 30 June 2016, the Group s restricted bank deposits was RMB3,318.5 million (31 December 2015: RMB3,907.9 million) INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 23

26 BUSINESS REVIEW 18, , , , Borrowings and pledged assets The Group had aggregate interest-bearing borrowings (excluding convertible bonds) of approximately RMB18,738.7 million as at 30 June Borrowings that are due within one year increased from RMB359.1 million as at 31 December 2015 to RMB369.1 million as at 30 June 2016, and approximately RMB18,097.0 million of borrowings are due within two to five years and approximately RMB272.6 million of borrowings are due in over five years. As at 30 June 2016, the Group s outstanding loans were secured by certain property, plant and equipment, completed properties held for sale, properties under development, investment properties and prepaid land lease payments with carrying values of approximately RMB360.0 million, RMB403.4 million, RMB1,762.8 million, RMB1,306.2 million and RMB37.3 million, respectively. Details of the equity or debt securities issued by the Company and/ or its subsidiaries are set out below: (a) 7.88% 3, % 7.88% 7.88% (a) RMB 7.88% Non-Public Domestic Corporate Bonds due 2019 On 18 January 2016, Guangzhou Times Property Group Co., Ltd. ( Guangzhou Times ), a wholly-owned subsidiary of the Company, issued non-public domestic corporate bonds for a term of three years (the RMB 7.88% Non- Public Domestic Corporate Bonds due 2019 ) in a principal amount of RMB3,000 million with an annual coupon rate of 7.88% and an option to redeem by Guangzhou Times at the end of the second year. RMB 7.88% Non-Public Domestic Corporate Bonds due 2019 are listed on Shenzhen Stock Exchange. The Group intends to apply the proceeds from the issue of the domestic bonds for general working capital purposes. Such issue of the domestic bonds will be beneficial in optimizing the debt structure of the Group and further improving the fund position of the Group. (b) 7.85% 100% 3,000,000, % 7.85% 7.85% 7.85% (b) RMB 7.85% Non-Public Domestic Corporate Bonds due 2018 On 26 October 2015, Guangzhou Times issued 7.85% non-public domestic corporate bonds due 2018 (the RMB 7.85% Non-Public Domestic Corporate Bonds due 2018 ) in a principal amount of RMB3,000,000,000 at 100% of the principal amount of such bonds. RMB 7.85% Non-Public Domestic Corporate Bonds due 2018 are listed on Shanghai Stock Exchange and bear interest from and including 26 October 2015 at the rate of 7.85% per annum, payable annually in arrears

27 BUSINESS REVIEW (c) 6.75% 100% 2,000,000, % 6.75% 6.75% 6.75% (c) RMB 6.75% Public Domestic Corporate Bonds due 2020 On 10 July 2015, Guangzhou Times issued 6.75% public domestic corporate bonds due 2020 (the RMB 6.75% Public Domestic Corporate Bonds due 2020 ) in a principal amount of RMB2,000,000,000 at 100% of the principal amount of such bonds. Guangzhou Times shall be entitled to increase the coupon rate after the end of the third year and the investors shall be entitled to sell back the bonds. RMB 6.75% Public Domestic Corporate Bonds due 2020 are listed on Shanghai Stock Exchange and bear interest from and including 15 July 2015 at the rate of 6.75% per annum, payable annually in arrears. (d) 11.45% 99.35% 280,000,000 1,722,784, % 11.45% 11.45% 11.45% (d) USD 11.45% Senior Notes due 2020 On 5 March 2015, the Company issued 11.45% senior notes due 2020 (the USD 11.45% Senior Notes due 2020 ) in a principal amount of USD280,000,000 (approximately equivalent to RMB1,722,784,000) at 99.35% of the principal amount of such notes. USD 11.45% Senior Notes due 2020 are listed on the Stock Exchange and bear interest from and including 5 March 2015 at the rate of 11.45% per annum, payable semi-annually in arrears. (e) % 100% 900,000, % % 600,000, % % % % (e) RMB % Senior Notes due 2017 On 16 July 2014, the Company issued % senior notes due 2017 (the Senior Notes July 2014 ) in an aggregate principal amount of RMB900,000,000 at 100% of the principal amount of such notes. On 14 October 2014, the Company issued additional % senior notes due 2017 in a principal amount of RMB600,000,000 at % of the principal amount of such notes (the Senior Notes October 2014 ). Senior Notes July 2014 and Senior Notes October 2014 were consolidated and formed a single series which are referred to as the RMB % Senior Notes due The RMB % Senior Notes due 2017 are listed on the Stock Exchange and bear interest from and including 16 July 2014 at the rate of % per annum, payable semiannually in arrears INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 25

28 BUSINESS REVIEW (f) Schiavona Investment Holdings Ltd. 100% 388,000, ,369,000 8% 100% % ,857,142 11,085, % (f) Convertible Bonds On 7 July 2014, the Company entered into a subscription agreement with Schiavona Investment Holdings Ltd., pursuant to which the Company conditionally agreed to issue convertible bonds in an aggregate principal amount of HKD388,000,000 (approximately equivalent to RMB308,369,000) due 2019 (the Bonds ) at the price of 100% of their principal amount. The Bonds bear interest at the rate of 8% per annum and payable quarterly in arrears. Subject to the terms of the Bonds, the bondholders have the right to convert their Bonds into Shares (the New Shares ) to be allotted and issued by the Company upon conversion of the Bonds at any time during the conversion period. The Bonds are jointly and severally guaranteed by certain subsidiaries of the Group. The funds raised have been applied in accordance with the specified uses as previously disclosed in the Company s announcement dated 7 July % of the net proceeds were utilised for repayment of the financial indebtedness of the Group. The initial conversion price is HKD3.50, representing a premium of approximately 12.9% of the closing price of HKD3.10 per share as quoted on the Stock Exchange on 7 July Based on the initial conversion price of HKD3.50 and assuming full conversion of the Bonds at the initial conversion price, the Bonds will be convertible into 110,857,142 New Shares, with the aggregate nominal value of HKD11,085,714.2, representing approximately 6.05% of the ordinary share capital of the Company, as enlarged by the issue of New Shares. On 25 July 2014, the Company issued the Bonds when all of the conditions precedent under the subscription agreement were satisfied. Further details of the Bonds are set forth in the announcement of the Company dated 7 July For the six months ended 30 June 2016, the conversion rights attaching to the Bonds were not exercised

29 BUSINESS REVIEW (g) % % 225,000,000 1,383,188, % % 80,000, ,640, % % % % (g) USD % Senior Notes due 2019 On 21 March 2014, the Company issued % senior notes due 2019 in a principal amount of USD225,000,000 (approximately equivalent to RMB1,383,188,000) at % of the principal amount of such notes (the Senior Notes March 2014 ). On 2 May 2014, the Company issued additional % senior notes due 2019 in a principal amount of USD80,000,000 (approximately equivalent to RMB492,640,000) at % of the principal amount of such notes (the Senior Notes May 2014 ). The Senior Notes March 2014 and Senior Notes May 2014 were consolidated and formed a single series which are referred to as the USD % Senior Notes due The USD % Senior Notes due 2019 are listed on the Stock Exchange and bear interest from and including 21 March 2014 at the rate of % per annum, payable semi-annually in arrears. 25, , %77.3% Net current assets and current ratio As at 30 June 2016, the Group s net current assets amounted to approximately RMB25,588.8 million (31 December 2015: approximately RMB20,770.5 million). As at 30 June 2016, the Group s current ratio, calculated as current assets divided by current liabilities, was approximately 2.1 times as compared with 2.0 times as at 31 December Gearing ratio As at 30 June 2016, the Group s net debts (total interest-bearing bank loans and other borrowings, including debt component of the convertible bonds, net of cash and bank balances) over net assets was 83.0% (31 December 2015: 77.3%) INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 27

30 BUSINESS REVIEW 14, ,819.0 (i) (ii) Financial guarantee As at 30 June 2016, the outstanding guarantee mortgage loans that domestic banks provided to purchasers of the Group s properties amounted to approximately RMB14,655.8 million (31 December 2015: approximately RMB11,819.0 million). These guarantees are released upon the earlier of (i) the relevant certificates of registration of mortgage or the certificates of other interests with respect to the relevant properties being delivered to the mortgagor banks; and (ii) the settlement of mortgage loans between the mortgagor banks and the purchasers of the Group s projects. If a purchaser defaults on a mortgage loan before the guarantees are released, the Group may have to repurchase the underlying property by paying off mortgage. If the Group fails to do so, the mortgagor bank may auction the underlying property and recover any additional amount outstanding from the Group as the guarantor of the mortgage loans. In line with industry practices, the Group do not conduct independent credit reviews of our customers but rely on the credit reviews conducted by the mortgagor banks. Save as disclosed above, the Group has no other material contingent liabilities as at 30 June Foreign currency The Group mainly operates in the PRC and conducts its operations mainly in Renminbi. The Group will closely monitor the fluctuations of the Renminbi exchange rate and give prudent consideration as to entering into any currency swap arrangement as and when appropriate for hedging corresponding risks. As at 30 June 2016, the Group has not engaged in hedging activities for managing foreign exchange rate risk

31 BUSINESS REVIEW % 22,495 82,256 59, ,531 Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Material Investments or Capital Assets On 15 April 2016, Guangzhou Times Zichen Investment Co., Ltd., a wholly-owned subsidiary of the Company, acquired 49% equity interests in Guangzhou Huangpu Chemical Co., Ltd. ( Guangzhou Huangpu ) at a consideration of approximately RMB381.3 million. Guangzhou Huapu holds the entire interests in a parcel of land located in Huangpu East Road, Huangpu District in Guangzhou and the land and port facilities located in Huangpu District in Guangzhou. The construction of the project with the site area of 22,495 sq.m. for commercial use (or a gross floor area of 82,256 sq.m. measured based on plot ratio) and the site area of 59,374 sq.m. for residential use (or a gross floor area of 144,531 sq.m. measured based on plot ratio) have not yet been commenced as at the date of this report. The directors of the Company (the Directors ) are reasonably optimistic about the prospects of such investment in view of the prospects of the property market in the first-tier cities in the Mainland China as set forth in the section headed Business Review Prospect and Strategy in this report. Save as disclosed in this report, there were no other significant investments held, no material acquisitions or disposals of subsidiaries, associates and joint ventures during the year, nor was there any plan authorised by the board of Directors of the Company (the Board ) for other material investments or additions of capital assets at the date of this report INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 29

32 BUSINESS REVIEW (a) Duxton Investment And Development Pte. Ltd. Duxton Investment % ZSCN-B2-2 61,145 Duxton Investment Significant events affecting the Group after the Reporting Period (a) On 24 June 2016, Guangzhou Times Shichuang Real Estate Development Company Limited, a wholly-owned subsidiary of the Company, entered into an acquisition agreement with Duxton Investment and Development Pte. Ltd. ( Duxton Investment ), an independent third party, to acquire 75% equity interests in Guangzhou Xingsheng Real Estate Development Company Limited ( Guangzhou Xingsheng ) at a consideration of approximately RMB383 million. Guangzhou Xingsheng holds the entire interests in a parcel of land designated as ZSCN-B2-2 with a site area of 61,145 sq.m.. The consideration of such acquisition will be funded by internal resources of the Group. Subject to the approval of the shareholders of the Company (the Shareholders ), Duxton Investment has the right to dispose all but not part of its entire equity interests in Guangzhou Xingsheng upon fulfilment of certain conditions as set forth in the announcement of the Company dated 24 June (b) Optima Investment & Development Pte. Ltd.Optima Investment % ZSCN-B , ,883 Optima Investment (b) On 30 June 2016, Guangzhou Times Shichuang Real Estate Development Company Limited, a wholly-owned subsidiary of the Company, entered into an acquisition agreement with Optima Investment & Development Pte. Ltd. ( Optima Investment ), an independent third party, to acquire 75% equity interests in (Horizon (Guangzhou) Property Development Co., Ltd) ( Horizon (Guangzhou) ) at a consideration of approximately RMB880 million. Horizon (Guangzhou) holds the entire interests in a parcel of land designated as ZSCN-B2-1 with a site area of 103,890 sq.m. and a gross floor area of 268,883 sq.m. based on plot ratio. The consideration of such acquisition will be funded by internal resources of the Group. Subject to the approval of the Shareholders, Optima Investment has the right to dispose all but not part of its entire equity interests in Horizon (Guangzhou) upon fulfilment of certain conditions as set forth in the announcement of the Company dated 30 June

33 BUSINESS REVIEW 4,102 4, , % 55.1% Employees and Remuneration Policy As at 30 June 2016, the Group had approximately 4,102 employees (31 December 2015: approximately 4,219 employees). The remunerations of the employees are commensurate with their performance, skills, knowledge, experience and the market trend. Employee benefits provided by the Group include provident fund schemes, medical insurance scheme, unemployment insurance scheme and housing provident fund. The Group reviews the remuneration policies and packages on a regular basis and will make necessary adjustments that accommodate the pay levels in the industry. In addition to basic salaries, the employees may be offered with discretionary bonuses and cash awards based on individual performances. The Group also provides training programs for the employees with a view to constantly upgrading their skills and knowledge. Further, the Group adopted the share option scheme on 19 November 2013 (the Share Option Scheme ) as incentives or rewards for the employees contributions to the Group. Further information of the Share Option Scheme is available in the Company s annual report for the year ended 31 December As at the date of this report, no share options of the Company has been granted under the Share Option Scheme since its adoption. For the six months ended 30 June 2016, the Group s employee benefit expense (excluding Directors remuneration) is approximately RMB162.0 million (for the year ended 31 December 2015: RMB349.7 million). Interim Dividend The Directors do not recommend the payment of an interim dividend for the six months ended 30 June 2016 (six months ended 30 June 2015: Nil). Use of Net Proceeds from Listing The net proceeds from the listing of the Company (after deducting underwriting fees and related expenses) amounted to approximately HKD1,477.4 million, which shall be applied in compliance with the intended use of proceeds as set out in the section headed Future plans and use of proceeds of the Company s prospectus dated 29 November 2013 (the Prospectus ), of which approximately 33.3% of the net proceeds were utilised for settling part of the outstanding installments under the Restructuring Deed (as defined in the Prospectus) and approximately 55.1% of the net proceeds were utilised for financing new and existing projects, including the land acquisition and construction costs of potential development projects INTERIM REPORT TIMES PROPERTY HOLDINGS LIMITED 31

34 CORPORATE GOVERNANCE AND OTHER INFORMATION CORPORATE GOVERNANCE PRACTICES The Group is committed to maintaining high standards of corporate governance to safeguard the interests of the Shareholders and to enhance corporate value and accountability. The Company has adopted the code provisions as set out in the Corporate Governance Code (the CG Code ) contained in Appendix 14 to the Rules Governing the Listing of Securities (the Listing Rules ) on The Stock Exchange of Hong Kong Limited (the Stock Exchange ) as its own code of corporate governance. The Company has been conducting its business according to the principles of the CG Code as set out in Appendix 14 to the Listing Rules. A.2.1 In accordance with the code provision A.2.1 of the CG Code, the roles of chairman and chief executive should be separate and should not be performed by the same individual. Mr. Shum Chiu Hung currently assumes the roles of both the chairman and the chief executive officer of the Company. Mr. Shum is one of the founders of the Group and has extensive experience in property development. The Board believes that by holding both roles, Mr. Shum will be able to provide the Group with strong and consistent leadership and allows for more effective and efficient business planning and decisions as well as execution of long-term business strategies of the Group. As such, the structure is beneficial to the business prospects of the Group. Furthermore, the Directors had regular discussions in relation to major matters affecting the operations of the Group and the Group has an effective risk management and internal control systems in place for providing adequate checks and balances. Based on the foregoing, the Board believes that a balance of power and authority has been and will be maintained. A.2.1 Throughout the six months ended 30 June 2016, the Company complied with all code provisions set out in the CG Code, with the exception of code provision A.2.1 above. Model Code for Securities Transactions The Company has adopted a code of conduct regarding Directors securities transactions on terms no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers (the Model Code ) of Appendix 10 to the Listing Rules. Specific enquiry has been made to all Directors and the Directors have confirmed that they have complied with the Model Code throughout the six months ended 30 June