Hainan Airport Infrastructure(600515)2021-04-29 16:00Financial 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].