[Q1 2023 Report](index=1&type=section&id=2023%20%E5%B9%B4%E7%AC%AC%E4%B8%80%E5%AD%A3%E5%BA%A6%E6%8A%A5%E5%91%8A) [Important Notes](index=1&type=section&id=%E9%87%8D%E8%A6%81%E5%86%85%E5%AE%B9%E6%8F%90%E7%A4%BA) The board, supervisory board, and management assure the report's integrity and financial information accuracy; the quarterly financial statements are unaudited - The board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report, assuming individual and joint legal responsibility[2](index=2&type=chunk) - The company's head, chief accountant, and head of accounting department guarantee the truthfulness, accuracy, and completeness of the financial information in the quarterly report[3](index=3&type=chunk) - The first quarter financial statements are unaudited[4](index=4&type=chunk) [Key Financial Data](index=1&type=section&id=%E4%B8%80%E3%80%81%20%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE) [Key Accounting Data and Financial Indicators](index=1&type=section&id=(%E4%B8%80)%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) Revenue grew by **5.90%**, with net profit attributable to shareholders increasing by **209.73%** and non-recurring net profit by **174.89%** 2023 Q1 Key Financial Indicators | Item | Current Period (RMB) | YoY Change (%) | | :--- | :--- | :--- | | Operating Revenue | 1,259,351,735.70 | 5.90 | | Net Profit Attributable to Shareholders | 232,574,053.31 | 209.73 | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 196,960,933.80 | 174.89 | | Net Cash Flow from Operating Activities | -129,146,146.52 | Not Applicable | | Basic Earnings Per Share (RMB/share) | 0.0204 | 208.42 | | Diluted Earnings Per Share (RMB/share) | 0.0204 | 208.42 | | Weighted Average Return on Net Assets (%) | 1.03 | 0.64 | 2023 Q1 End vs. Prior Year-End Financial Indicators | Item | End of Current Period (RMB) | End of Prior Year (RMB) | Change from Prior Year-End (%) | | :--- | :--- | :--- | :--- | | Total Assets | 55,912,159,055.86 | 56,125,450,011.91 | -0.38 | | Total Equity Attributable to Shareholders | 22,682,132,351.00 | 22,414,738,281.39 | 1.19 | [Non-recurring Gains and Losses and Amounts](index=2&type=section&id=(%E4%BA%8C)%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%87%91%E9%A2%9D) Total non-recurring gains and losses amounted to **RMB 35.61 million**, primarily from government subsidies and investment income 2023 Q1 Non-recurring Gains and Losses | Item | Current Period Amount (RMB) | Notes | | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | -12,857.65 | | | Government Subsidies Included in Current Profit/Loss | 29,803,806.53 | | | Fair value changes and investment income from financial assets/liabilities (excluding hedging) | 14,831,682.76 | | | Reversal of impairment provisions for receivables and contract assets subject to individual impairment testing | 3,268,412.11 | | | Other non-operating income and expenses | -2,219,180.72 | | | Less: Income tax impact | 348,199.28 | | | Minority interests impact (after tax) | 9,710,544.24 | | | **Total** | **35,613,119.51** | | [Changes and Reasons for Key Accounting Data and Financial Indicators](index=3&type=section&id=(%E4%B8%89)%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87%E5%8F%91%E7%94%9F%E5%8F%98%E5%8A%A8%E7%9A%84%E6%83%85%E5%86%B5%E3%80%81%E5%8E%9F%E5%9B%A0) Significant growth in net profit is attributed to improved airport operations, increased gross profit margin, and enhanced investment income - Net profit attributable to shareholders increased by **209.73%** year-on-year, primarily due to a significant increase in airport operational indicators and an overall improvement in the company's gross profit margin[9](index=9&type=chunk) - Net profit attributable to shareholders (excluding non-recurring items) increased by **174.89%** year-on-year, driven by improved airport operational indicators, higher gross profit margin, and enhanced investment income from improved performance of investee companies[9](index=9&type=chunk) - Both basic and diluted earnings per share increased by **208.42%**, mainly due to the rise in net profit attributable to parent company shareholders compared to the prior year[9](index=9&type=chunk) [Shareholder Information](index=4&type=section&id=%E4%BA%8C%E3%80%81%20%E8%82%A1%E4%B8%9C%E4%BF%A1%E6%81%AF) [Total Common Shareholders and Top Ten Shareholders' Holdings](index=4&type=section&id=(%E4%B8%80)%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E4%B8%9C%E6%80%BB%E6%95%B0%E5%92%8C%E8%A1%A8%E5%86%B3%E6%9D%83%E6%81%A2%E5%A4%8D%E7%9A%84%E4%BC%98%E5%85%88%E8%82%A1%E8%82%A1%E4%B8%9C%E6%95%B0%E9%87%8F%E5%8F%8A%E5%89%8D%E5%8D%81%E5%90%8D%E8%82%A1%E4%B8%9C%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5%E8%A1%A8) The company had **120,172** common shareholders; top two shareholders, Hainan Development Holdings and HNA Infrastructure Holdings, held **24.51%** and **19.69%** respectively, with significant pledges - As of the end of the reporting period, the total number of common shareholders was **120,172**[10](index=10&type=chunk) Top 10 Shareholders' Holdings (Partial) | Shareholder Name | Shareholder Type | Number of Shares Held (shares) | Shareholding Ratio (%) | Pledged, Marked, or Frozen Status (number of shares) | | :--- | :--- | :--- | :--- | :--- | | Hainan Development Holdings Co., Ltd. | State-owned Legal Person | 2,800,000,000 | 24.51 | Pledged 1,400,000,000 | | HNA Infrastructure Holdings Group Co., Ltd. | Domestic Non-state-owned Legal Person | 2,249,297,094 | 19.69 | Pledged 2,249,296,969 | | HNA Infrastructure Investment Group Co., Ltd. Bankruptcy Estate Disposal Special Account | Other | 847,177,062 | 7.41 | None 0 | - HNA Infrastructure Holdings Group Co., Ltd. and HNA Industrial Group Co., Ltd. have an affiliated relationship[12](index=12&type=chunk) [Other Reminders](index=6&type=section&id=%E4%B8%89%E3%80%81%20%E5%85%B6%E4%BB%96%E6%8F%90%E9%86%92%E4%BA%8B%E9%A1%B9) [Other Important Information](index=6&type=section&id=%E9%9C%80%E6%8F%90%E9%86%92%E6%8A%95%E8%B5%84%E8%80%85%E5%85%B3%E6%B3%A8%E7%9A%84%E5%85%B3%E4%BA%8E%E5%85%AC%E5%8F%B8%E6%8A%A5%E5%91%8A%E6%9C%9F%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5%E7%9A%84%E5%85%B6%E4%BB%96%E9%87%8D%E8%A6%81%E4%BF%A1%E6%81%AF) No other significant operational information requiring investor attention was identified during the reporting period - There is no other significant operational information during the reporting period that requires special attention from investors[13](index=13&type=chunk) [Quarterly Financial Statements](index=6&type=section&id=%E5%9B%9B%E3%80%81%20%E5%AD%A3%E5%BA%A6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Type of Audit Opinion](index=6&type=section&id=(%E4%B8%80)%E5%AE%A1%E8%AE%A1%E6%84%8F%E8%A7%81%E7%B1%BB%E5%9E%8B) The financial statements for this quarter are unaudited - The financial statements for this quarter are unaudited[13](index=13&type=chunk) [Financial Statements](index=6&type=section&id=(%E4%BA%8C)%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) Unaudited consolidated balance sheet, income statement, and cash flow statement are disclosed, reflecting financial position, operating results, and cash flow changes - The financial statements include the consolidated balance sheet, consolidated income statement, and consolidated cash flow statement, all of which are unaudited[13](index=13&type=chunk)[18](index=18&type=chunk)[22](index=22&type=chunk) [Consolidated Balance Sheet](index=6&type=section&id=%E5%90%88%E5%B9%B6%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of March 31, 2023, total assets were **RMB 55.91 billion**, a slight **0.38%** decrease from year-end, with equity showing a modest increase Consolidated Balance Sheet Key Items (March 31, 2023 vs. December 31, 2022) | Item | March 31, 2023 (RMB) | December 31, 2022 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 6,803,304,117.19 | 7,382,998,899.43 | -7.85 | | Financial Assets Held for Trading | 1,998,236,082.95 | 1,502,539,329.94 | 33.00 | | Accounts Receivable | 1,262,862,114.44 | 1,452,126,468.53 | -13.03 | | Inventories | 12,787,057,693.09 | 12,790,377,329.69 | -0.03 | | Investment Properties | 12,809,011,739.43 | 13,540,913,745.43 | -5.41 | | Fixed Assets | 9,192,453,306.09 | 8,515,850,282.78 | 7.94 | | **Total Assets** | **55,912,159,055.86** | **56,125,450,011.91** | **-0.38** | | **Total Liabilities** | **31,788,767,283.44** | **32,316,545,516.39** | **-1.59** | | **Total Equity Attributable to Parent Company Shareholders** | **22,682,132,351.00** | **22,414,738,281.39** | **1.19** | [Consolidated Income Statement](index=9&type=section&id=%E5%90%88%E5%B9%B6%E5%88%A9%E6%B6%A6%E8%A1%A8) Q1 2023 total operating revenue grew **5.90%** to **RMB 1.26 billion**, with net profit attributable to parent company shareholders increasing **209.73%** to **RMB 233 million**, driven by improved investment income Consolidated Income Statement Key Items (Q1 2023 vs. Q1 2022) | Item | Q1 2023 (RMB) | Q1 2022 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1,259,351,735.70 | 1,189,136,237.86 | 5.90 | | Total Operating Costs | 1,017,919,552.36 | 1,046,783,292.76 | -2.76 | | Investment Income | 52,237,900.84 | -76,966,117.36 | Significant Improvement | | Operating Profit | 334,672,884.13 | 92,407,400.21 | 262.17 | | Total Profit | 332,453,703.41 | 94,275,332.24 | 252.64 | | Net Profit | 266,374,349.27 | 85,341,416.80 | 212.13 | | Net Profit Attributable to Parent Company Shareholders | 232,574,053.31 | 75,089,647.67 | 209.73 | | Basic Earnings Per Share (RMB/share) | 0.0204 | 0.0066 | 209.09 | - Investment income from associates and joint ventures significantly improved, turning from a **RMB 92.88 million** loss in the prior year to a **RMB 44.75 million** profit[19](index=19&type=chunk) [Consolidated Cash Flow Statement](index=11&type=section&id=%E5%90%88%E5%B9%B6%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Q1 2023 net cash flow from operating activities was **-RMB 129 million**, a significant improvement; investing activities had a net outflow of **RMB 687 million**, and financing activities a net outflow of **RMB 33.44 million** Consolidated Cash Flow Statement Key Items (Q1 2023 vs. Q1 2022) | Item | Q1 2023 (RMB) | Q1 2022 (RMB) | Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -129,146,146.52 | -1,027,543,917.59 | Net outflow significantly reduced | | Net Cash Flow from Investing Activities | -686,775,444.01 | -3,090,417,683.79 | Net outflow significantly reduced | | Net Cash Flow from Financing Activities | -33,439,210.76 | 2,719,499,985.68 | Turned from net inflow to net outflow | | Net Increase in Cash and Cash Equivalents | -849,363,263.67 | -1,398,461,615.70 | Net decrease narrowed | | Cash and Cash Equivalents at Period End | 5,630,962,679.57 | 8,709,710,297.04 | Decreased | - Cash received from sales of goods and services increased by approximately **61%** year-on-year, reaching **RMB 1.78 billion**[23](index=23&type=chunk) - Taxes and surcharges paid decreased significantly by approximately **55%** year-on-year, to **RMB 627.07 million**[23](index=23&type=chunk) [Implementation of New Accounting Standards](index=12&type=section&id=(%E4%B8%89)2023%20%E5%B9%B4%E8%B5%B7%E9%A6%96%E6%AC%A1%E6%89%A7%E8%A1%8C%E6%96%B0%E4%BC%9A%E8%AE%A1%E5%87%86%E5%88%99%E6%88%96%E5%87%86%E5%88%99%E8%A7%A3%E9%87%8A%E7%AD%89%E6%B6%89%E5%8F%8A%E8%B0%83%E6%95%B4%E9%A6%96%E6%AC%A1%E6%89%A7%E8%A1%8C%E5%BD%93%E5%B9%B4%E5%B9%B4%E5%88%9D%E7%9A%84%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) The company did not adjust its opening financial statements due to the initial adoption of new accounting standards or interpretations in this reporting period - The company did not adjust its opening financial statements for the current year due to the initial adoption of new accounting standards or interpretations during this reporting period[25](index=25&type=chunk)

Financial Performance - The net profit attributable to the parent company's shareholders for 2022 was ¥1,856,312,763.47, while the undistributed profit as of December 31, 2022, was -¥14,816,700,729.55[4] - The parent company reported a net profit of -¥52,822,843.57 for the year, resulting in a total distributable profit of ¥223,189,170.68[4] - The board of directors decided not to distribute profits for 2022 to ensure the company's long-term development and stability[4] - The company's operating revenue for 2022 was approximately CNY 4.70 billion, an increase of 3.89% compared to CNY 4.52 billion in 2021[17] - The net profit attributable to shareholders for 2022 was approximately CNY 1.86 billion, a significant increase of 300.68% from CNY 463 million in 2021[17] - The net cash flow from operating activities for 2022 was negative CNY 3.15 billion, a decrease of 844.70% compared to CNY 422 million in 2021[17] - The total assets at the end of 2022 were approximately CNY 56.13 billion, a decrease of 8.25% from CNY 61.17 billion at the end of 2021[17] - The basic earnings per share for 2022 was CNY 0.1625, an increase of 301.23% from CNY 0.0405 in 2021[18] - The weighted average return on equity for 2022 was 8.71%, an increase of 2.66 percentage points from 6.05% in 2021[18] - The company experienced a significant decline in net profit after deducting non-recurring gains, reporting a loss of CNY 516 million in 2022 compared to a profit of CNY 61 million in 2021, a decrease of 947.73%[17] Risk Management - The company has not identified any significant risks that would impact its ongoing operations during the reporting period[6] - The company aims to enhance its risk resistance capabilities based on its current operational environment and long-term funding needs[4] - The company has not engaged in any non-operating fund occupation by controlling shareholders or related parties[5] - There are no violations of decision-making procedures regarding external guarantees during the reporting period[5] - The company is facing macroeconomic risks due to global economic instability and domestic pressures, which may impact operational performance[68] - The company is addressing market risks related to the recovery pace of the aviation sector and the ongoing adjustments in the real estate market[68] Audit and Compliance - The audit report issued by Zhongzheng Zhonghuan Accounting Firm confirmed the financial statements as standard and unqualified[3] - The company has not received any non-standard audit opinions from its accounting firm[128] - The company has not reported any significant impact on profits from ongoing litigation, as most cases have been settled[143] - The company has not faced any penalties or violations during the reporting period[144] - The company has committed to purchasing liability insurance for its directors and senior management to mitigate risks[94] Operational Highlights - The company managed a total of 7 airports and participated in 2 additional airports through equity investments, demonstrating a stable operational structure[24] - The rental area for the company's self-owned commercial projects reached approximately 403,500 square meters, with an overall rental rate of 75.9%[24] - The company has 23 ongoing and land reserve projects covering over 6,500 acres, with a book value of completed and ongoing projects around CNY 10.661 billion[24] - The company achieved a 100% complaint closure rate and reported no equipment safety incidents during the reporting period[25] - The company managed a total of 5 hotels, with nearly 2,000 rooms, and received multiple industry awards, including being ranked in the top 10 hotels in Hainan Province[25] Future Plans and Strategies - The company plans to accelerate the development of key projects in the Haikou area, focusing on integrated development models[24] - The company aims to enhance its market position by leveraging its airport management and commercial operations to drive future growth[24] - The company plans to continue investing in airport construction on the island to provide more commercial space, leveraging the unique advantages of the Hainan Free Trade Port[30] - The company is committed to becoming a leading airport operation management service provider, benchmarking against global standards[65] - The company is actively preparing to launch cross-border e-commerce services at Sanya Phoenix Airport, aiming to enhance international cargo capacity[67] Shareholder and Governance - The company held five shareholder meetings in 2022, with the first meeting on January 10 and the last on December 28[74] - Legal compliance for the shareholder meetings was confirmed by a law firm, ensuring all procedures and voting results were valid[74] - The company has a strong focus on risk management and internal auditing, with several key personnel holding relevant qualifications and experience[84] - The company emphasizes its commitment to corporate governance and compliance with regulatory requirements[84] - The company has a diverse management team with experience across multiple sectors, including finance, risk management, and operations[84] Environmental and Social Responsibility - The company invested 2.8274 million yuan in environmental protection during the reporting period[112] - The company reduced carbon emissions by 8,572 tons through various carbon reduction measures in 2022[115] - The company has not experienced any negative ecological events in 2022, demonstrating its commitment to environmental responsibility[116] - The company is actively exploring renewable energy technologies and has initiated a photovoltaic power generation project[116] - The company has established 16 new energy vehicle charging stations to support its fleet of new energy vehicles[117] Legal Matters - The company is involved in significant litigation matters, including disputes over bankruptcy claims totaling RMB 14,802,793.29 and RMB 58,567,579.10, with some cases already concluded[132] - The company has successfully claimed a construction priority right for a debt of 7,172,917.8 CNY against Tianjin HNA Design[133] - The company has a total of 10 ongoing legal disputes related to loan agreements and construction contracts, indicating a significant level of financial engagement in these areas[140][141] - The company has reported a successful outcome in several legal cases, enhancing its financial position and recovery of debts[140][141] Financial Management - The company has reported a total of 164,130,000 CNY in related party transactions during the reporting period, with an estimated 305,413,000 CNY expected for the year[145] - The company has invested 12,102,000,000 CNY in bank wealth management products, with an outstanding balance of 1,500,000,000 CNY[153] - The company has ongoing plans for future entrusted financial management, indicating a strategic focus on optimizing returns through structured financial products[154] - The company has not recognized any impairment provisions for entrusted loans during the reporting period[157] - The company has not reported any changes in the number of restricted shares during the reporting period[159]

Financial Performance - The net profit attributable to the parent company's shareholders for 2022 was CNY 1,856,312,763.47, while the undistributed profit as of December 31, 2022, was CNY -14,816,700,729.55[4] - The parent company reported a net profit of CNY -52,822,843.57 for the year, resulting in a distributable profit of CNY 223,189,170.68[4] - The board of directors decided not to distribute profits for 2022 to ensure the company's long-term development and stability for investors[4] - The company's operating revenue for 2022 was approximately CNY 4.70 billion, representing a year-over-year increase of 3.89% compared to CNY 4.52 billion in 2021[16] - The net profit attributable to shareholders for 2022 was approximately CNY 1.86 billion, a significant increase of 300.68% from CNY 463 million in 2021[16] - The net cash flow from operating activities for 2022 was negative CNY 3.15 billion, a decline of 844.70% compared to a positive cash flow of CNY 422 million in 2021[16] - The total assets at the end of 2022 were approximately CNY 56.13 billion, a decrease of 8.25% from CNY 61.17 billion at the end of 2021[16] - The net assets attributable to shareholders increased by 16.10% to approximately CNY 22.41 billion at the end of 2022, up from CNY 19.31 billion at the end of 2021[16] - The basic earnings per share for 2022 were CNY 0.1625, reflecting a 301.23% increase from CNY 0.0405 in 2021[17] - The weighted average return on net assets for 2022 was 8.71%, an increase of 2.66 percentage points compared to 6.05% in 2021[17] Risk Management - The company has not faced any significant risks that would impact its ongoing operations during the reporting period[5] - The company is committed to enhancing its risk resistance capabilities based on its current financial situation and operational needs[4] - The company has outlined various risks and countermeasures in its management discussion and analysis section of the report[5] - The company is facing macroeconomic risks due to global economic instability and domestic pressures, which may impact its operational performance[65] - The company acknowledges market risks in the aviation sector, including uncertainties in the recovery pace of air travel and potential operational pressures[65] Audit and Governance - The audit report issued by Zhongshen Zhonghuan Certified Public Accountants was a standard unqualified opinion[3] - The company's financial report has been confirmed for its authenticity, accuracy, and completeness by its management[3] - The board's resolution regarding profit distribution has been approved by the third meeting of the tenth board of directors and the third meeting of the tenth supervisory board[4] - The company is committed to improving its governance structure and ensuring the independence of its operations and financial management[68] - The company emphasizes its commitment to corporate governance and compliance through regular updates and disclosures regarding board activities[78] Operational Highlights - The company managed a total of 7 airports and participated in 2 additional airports through equity investments, demonstrating a stable operational footprint in the aviation sector[23] - The rental area for self-owned commercial projects reached approximately 403,500 square meters, with an overall rental rate of 75.9%[23] - The company has 23 ongoing and land reserve projects, covering over 6,500 acres, indicating a strong pipeline for future development[23] - The company achieved recognition as one of the top 100 airports globally by SKYTRAX, with Sanya Phoenix Airport ranked 96th, highlighting its service quality[23] - The company managed 2 self-operated hotels and 3 managed hotels, totaling nearly 2,000 rooms, with multiple industry awards received[24] Financial Position - The total balance of investment properties at the end of the period was approximately CNY 13.54 billion, showcasing the company's asset strength in real estate[22] - The company reported a total non-operating income of approximately CNY 2.37 billion, with a significant increase of CNY 899.93 million compared to the previous period[21] - The company reported a significant reduction in short-term borrowings to ¥0, down 100% from ¥20,036,666.67 in the previous period[40] - The company has a total of 750,900 CNY in pre-tax remuneration for all directors and supervisors during the reporting period[72] - The company has a total of 1,521,876.80 square meters of land for future development, with a planned construction area of 1,973,630.84 square meters[44] Social Responsibility and Sustainability - The company invested 2.8274 million yuan in environmental protection during the reporting period[104] - The company reduced carbon emissions by 8,572 tons through various carbon reduction measures in 2022[106] - The company has committed to sustainable development, integrating environmental responsibility into all operational stages, with no negative ecological events reported in 2022[105] - The company actively engages in social responsibility initiatives, contributing to local economic growth and supporting rural communities[113] - The company has implemented energy-saving measures, including a central air conditioning system upgrade at Sanya Phoenix Airport, expected to save 200,000 kWh annually[108] Legal and Compliance Issues - The company is involved in significant litigation matters, including disputes over bankruptcy claims totaling RMB 14,802,793.29, with a court ruling confirming a principal amount of RMB 7,693,543.29[119] - The company has successfully concluded several litigation cases, including a partial victory in a dispute involving RMB 58,567,579.10[119] - The company has a pending claim of 109,900,078.3 yuan against Tianjin HNA Design, with a court ruling in favor of the company[120] - The company has a claim of 95,298,293.38 yuan against Hainan Haikou Airport, with ongoing legal proceedings[121] - The company has not faced any delisting risks or bankruptcy reorganization issues during the reporting period[119] Future Outlook - The company plans to focus on market expansion and new product development in the upcoming year, aiming to enhance its competitive position[186] - The company aims to enhance non-aeronautical revenue and develop a SKYTRAX star-rated airport cluster[62] - The company plans to continue investing in airport construction on the island to provide more commercial space, leveraging the unique advantages of the Hainan Free Trade Port[29] - The company is actively preparing to launch cross-border e-commerce services at Sanya Phoenix Airport, aiming to enhance international cargo capacity[64] - The company plans to open the second phase of its duty-free store at Sanya Phoenix Airport in 2023, expanding its duty-free rental area significantly[64]

Financial Performance - The net profit attributable to the parent company for 2021 was ¥463,289,691.71, while the undistributed profit as of December 31, 2021, was -¥17,129,012,836.79[4] - The parent company reported a net profit of -¥24,327,148.80 for the year, resulting in a distributable profit of ¥276,012,014.25 for shareholders[4] - The company plans not to distribute profits for 2021 to enhance its risk resistance capabilities and ensure long-term development[4] - The company's operating revenue for 2021 was approximately CNY 4.52 billion, a decrease of 28.40% compared to 2020[18] - The net profit attributable to shareholders for 2021 was approximately CNY 463.29 million, a significant turnaround from a loss of CNY 7.77 billion in 2020, representing a 105.97% increase[18] - The net cash flow from operating activities for 2021 was approximately CNY 422.54 million, down 36.67% from 2020[18] - The total assets at the end of 2021 were approximately CNY 61.17 billion, an increase of 5.37% compared to 2020[18] - The net assets attributable to shareholders at the end of 2021 were approximately CNY 19.31 billion, a substantial increase of 159.81% from 2020[18] - Basic earnings per share for 2021 were CNY 0.0405, a recovery from a loss of CNY 0.6796 in 2020, marking a 105.96% increase[19] - The weighted average return on equity for 2021 was 6.05%, a significant improvement from -38.05% in 2020[19] Operational Highlights - The company reported a quarterly revenue of CNY 1.34 billion in Q1 2021, with a gradual decline to CNY 853.63 million in Q4 2021[21] - The company received government subsidies amounting to approximately CNY 125.45 million in 2021, which are closely related to its normal business operations[22] - In 2021, the company managed 7 airports, including Sanya Phoenix Airport and Qionghai Boao Airport, while maintaining zero safety responsibility accidents throughout the year[26] - The company operates duty-free businesses across multiple locations, including a total operating area of 17,944 square meters at Haikou Meilan Airport[26] - The company operates 2 self-managed hotels and 2 managed hotels, with nearly 2000 rooms in operation or under development[27] - The aviation training segment served over 40 clients, totaling approximately 140,000 hours of simulator training[27] Market and Industry Trends - The total retail sales of duty-free shops in Hainan reached RMB 601.7 billion, a year-on-year increase of 84%[28] - The number of duty-free shopping travelers in Hainan increased by 102% to 6.28 million[28] - Nationally, real estate development investment reached RMB 14,760.2 billion, a year-on-year increase of 4.4%[29] - Hainan's real estate sales area grew by 18.3% to 8.89 million square meters, with sales revenue increasing by 26.6% to RMB 155.9 billion[29] - The tourism industry in Hainan received 81.0 million domestic and international visitors, a year-on-year increase of 25.5%[29] - The total tourism revenue in Hainan reached RMB 138.4 billion, a year-on-year increase of 58.6%[29] Corporate Governance and Compliance - The audit report for the company was issued with a standard unqualified opinion by Zhongshen Zhonghuan Accounting Firm[3] - The board of directors and supervisory board members confirmed the authenticity, accuracy, and completeness of the annual report[2] - The company has not engaged in any non-operating fund occupation by controlling shareholders or related parties[6] - The company has not violated decision-making procedures in providing guarantees to external parties[6] - The company is committed to transparency and effective information disclosure to ensure stakeholder trust and compliance with regulatory requirements[69] - The company has established a complete governance structure and independent organizational framework to ensure compliance with legal and regulatory requirements[112] Risk Management - The company has not identified any significant risks that would impact its ongoing operations during the reporting period[7] - The company faces risks from macroeconomic fluctuations, particularly due to the ongoing COVID-19 pandemic, which may adversely impact operational performance[67] - Regulatory risks in the civil aviation industry could affect the company's airport investment and operational management due to potential changes in government policies[67] Strategic Initiatives - The company is focusing on ensuring stable and long-term returns for investors amidst its current operational environment[4] - The company is actively expanding its market presence through new media partnerships and enhancing service quality[27] - The company plans to enhance its product offerings and technology development in the upcoming periods[52] - The company aims to improve its flight training services by offering promotional packages and expanding into new markets such as aviation experience products and vocational education[66] Employee and Management - The company employed a total of 8,776 staff, with 114 in the parent company and 8,662 in major subsidiaries[89] - The workforce includes 5,782 production personnel, 199 sales personnel, 1,592 technical personnel, 311 financial personnel, and 892 administrative personnel[89] - The company has a competitive salary policy aimed at attracting and retaining talent while ensuring fairness and motivation among employees[90] - The training program in 2021 focused on enhancing management quality, optimizing training systems, and improving training efficiency[91] Environmental and Social Responsibility - The company has actively engaged in environmental protection initiatives, including the installation of solar photovoltaic systems with a total capacity of 3.8MWP, generating approximately 4.5 million kWh of electricity in 2021[100] - The company replaced diesel shuttle buses with electric ones, resulting in a reduction of 76.88 tons of CO2 emissions annually[100] - The company has undertaken various green public welfare activities, including tree planting and waste collection campaigns, enhancing its corporate social responsibility profile[100] Legal and Financial Issues - The company is involved in several bankruptcy debt confirmation disputes, with claims totaling 56,801,109.54 CNY against Hainan Boao Airport[127] - The company has ongoing litigation related to bankruptcy claims, with amounts involved totaling approximately 14.8 million RMB and 58.6 million RMB in separate cases[125] - The company is involved in multiple legal disputes concerning construction contracts, indicating ongoing operational challenges[134] - The company has outstanding debts totaling ¥738,513,175.80, with a court case regarding unconfirmed debts of ¥1,107,769,763.64 related to Hainan Airport[130] Shareholder Information - The total number of shares increased from 3,907,592,460 to 11,425,309,602 due to a capital reserve conversion, resulting in a dilution of earnings per share from 0.1186 to 0.0405[150] - The largest shareholder, Hainan Development Holdings Co., Ltd., holds 2,800,000,000 shares, representing 24.51% of the total shares[160] - The second largest shareholder, HNA Infrastructure Investment Group Co., Ltd., holds 2,639,844,285 shares, representing 23.11% of the total shares[160] - The company has undergone a change in control, with Hainan Development Holdings becoming the controlling shareholder following a restructuring plan[163]

Financial Performance - The net profit attributable to the parent company for 2020 was -7,736,830,872.54 CNY, indicating a significant loss [4]. - As of December 31, 2020, the undistributed profits amounted to -8,196,530,247.63 CNY, reflecting ongoing financial challenges [4]. - The company reported a negative net profit of -659,079,677.54 CNY for the year, with actual distributable profits for shareholders at 300,339,163.05 CNY [4]. - The company will not distribute profits for 2020 to enhance its ability to withstand risks and ensure long-term development [4]. - The company reported a net loss of CNY 8,636,761,425.99 after deducting non-recurring gains and losses, compared to a loss of CNY 1,043,232,517.81 in 2019, marking a decline of 727.88% [16]. - The company’s total operating revenue decreased by 45.23% to CNY 6.31 billion compared to the previous year [35]. - The company’s operating cash flow net amount was CNY 871 million, a decline of 62.35% year-on-year [35]. - The company reported a total comprehensive loss of CNY 19,064,541,778.39 for 2020, compared to a loss of CNY 4,267,080,801.22 in 2019 [182]. - The company incurred a financial expense of CNY 2,700,704,149.17 in 2020, which was an increase from CNY 1,771,251,525.60 in 2019 [179]. - The company reported a net profit attributable to ordinary shareholders of -7.74 billion RMB in 2020, -1.21 billion RMB in 2019, and 1.73 billion RMB in 2018, indicating a significant decline in profitability over the three years [70]. Bankruptcy and Financial Risks - The company is undergoing bankruptcy reorganization, affecting its ability to assess and disclose potential liabilities related to guarantees provided to HNA Group [3]. - There are significant uncertainties regarding the financial impact of non-operating fund occupation by related parties and potential credit losses [3]. - The audit report issued by Zhongzheng Zhonghuan CPA indicates an inability to express an opinion due to the ongoing bankruptcy proceedings [3]. - The company faces major risks related to its financial stability and operational continuity, as detailed in the risk section of the report [7]. - The company has acknowledged the existence of non-compliance in decision-making procedures regarding external guarantees [6]. - The company reported a beginning balance of 78,976,000 RMB for funds occupied, with an ending balance of 76,589,450 RMB, indicating a reduction of 1,386,550 RMB during the reporting period [79]. - A total of 182,324,930 RMB was occupied during the reporting period, with an ending balance of 181,862,460 RMB, reflecting a significant increase in occupied funds [79]. - The company plans to resolve the occupied funds through a bankruptcy reorganization plan, with expected repayment timelines set for February 2021 and after the completion of the reorganization [79]. - The company has already cleared 2,386,550 RMB of occupied funds through debt offsetting during the reporting period [79]. - The company has identified significant internal control deficiencies, including non-operational fund occupation by related parties and large unauthorized guarantees [151]. Revenue and Operational Performance - The company's operating revenue for 2020 was CNY 6,314,792,845.84, a decrease of 45.23% compared to CNY 11,529,506,164.31 in 2019 [16]. - The company’s total operating costs for 2020 were CNY 8,840,694,868.89, down from CNY 11,274,470,099.58 in 2019, reflecting a reduction of 21.6% [179]. - The company reported a total revenue of 1,307,000,000.00 for the year 2019, with a guarantee responsibility of 1,307,000,000.00 [95]. - The company achieved total sales revenue of RMB 2,087.01 million and a sales area of 119,648.38 square meters during the reporting period [50]. - The company reported a total of ¥899,930,553.45 in non-recurring gains and losses for the year, a significant increase from the previous year's loss of ¥471,927,690.71 [22]. Investments and Acquisitions - The company has made significant equity investments in various subsidiaries, including Hainan HNA Duty Free Co., Ltd. with an investment balance of CNY 22,285,136.66 (50% stake) and Hainan Pacific Petroleum Industry Co., Ltd. with CNY 265,283,767.27 (35.29% stake) [55]. - The company approved the acquisition of 100% equity in Hainan Yingping Construction Development Co., Ltd. for 1,050 million RMB and the acquisition of 100% equity in Hainan Tianyu Flight Training Co., Ltd. for 749 million RMB [90]. - The company plans to invest 2,500 million RMB in HNA Technology Co., Ltd., resulting in a 31.93% equity stake post-investment [90]. - The company has signed an agreement to acquire 100% equity in Tianjin Airport Commercial Center Development Co., Ltd. for 310 million RMB, although the transaction has faced delays due to shareholder issues [91]. Shareholder and Governance Issues - The company has committed to resolving competition issues with its controlling shareholder, HNA Group, by ensuring that HNA Group's subsidiaries do not engage in overlapping business operations with the company [72]. - HNA Group has pledged to divest certain real estate projects to eliminate competition with the company, with plans to complete sales within three years [73]. - The company has not engaged in any share buybacks during the reporting period, as indicated by the lack of cash repurchase plans [70]. - The company has established measures to ensure the independence of its board and senior management, ensuring compliance with legal and regulatory requirements [77]. - The company has a shareholding of 2,249,297,094 shares that are subject to lock-up restrictions until performance commitments are fulfilled [122]. Market and Industry Trends - The company is focused on stabilizing the real estate market, emphasizing that housing is for living, not speculation, as part of its future development strategy [60]. - The company aims to transform its investment strategy under the Hainan Free Trade Port policy, focusing on increasing the supply of affordable housing through targeted land supply and tax incentives [61]. - The duty-free shopping policy in Hainan is expected to boost sales, with the global market share of China's duty-free industry anticipated to increase due to favorable policies and promotional strategies [61]. - The company plans to expand its duty-free operations at Phoenix Airport, introducing multiple international luxury brands to enhance the shopping experience for departing travelers [65]. Social Responsibility and Community Engagement - The company completed poverty alleviation procurement amounting to 2.3957 million RMB, focusing on agricultural products such as eggs and pork [102]. - The company has supported 262 students through its educational assistance program, contributing over 280,000 RMB in donations, with 10 students receiving 12,000 RMB in 2020 [102]. - The company has actively engaged in social responsibility initiatives, including the construction of a charity bridge in Hainan and ongoing community clean-up activities [109]. Future Outlook - The company provided a positive outlook for 2021, projecting a revenue growth of 10% to 12% based on current market trends [128]. - New product launches are expected to contribute an additional 200 million in revenue in 2021, with a focus on innovative technology solutions [129]. - The company plans to invest 50 million in research and development for new technologies in the upcoming fiscal year [130].