Office Rental Business Performance - The company's office rental business faced challenges with both rental rates and occupancy rates declining, but managed to stabilize the occupancy rate at 77.6% by the end of 2023[3] Cost Reduction Measures - The company significantly reduced costs, including cutting entertainment expenses to almost zero and implementing a company-wide salary reduction at the end of 2023[3] Corporate Social Responsibility and Sustainability - The company actively participated in charity and public welfare activities, including the completion of the "Yangzheng Library" in April 2023, which is one of China's first truly zero-carbon buildings[4] - The company received a five-star rating, the highest possible, from the international rating agency GRESB[4] Technology and Innovation - The company emphasized the importance of embracing new technologies, particularly artificial intelligence, as a key driver for future growth and transformation[4] Real Estate Industry Trends - The company highlighted the significant changes in the real estate industry over the past few decades, driven by societal demand and the collective efforts of multiple industries[5] Market Confidence and Ethical Practices - The company stressed the importance of confidence in the face of market uncertainty, advocating for action over words and aligning thoughts with actions[6] - The company reiterated its commitment to legal and ethical use of funds, emphasizing that every penny must be used lawfully[6] Property Portfolio Details - Beijing Wangjing SOHO has a total construction area of approximately 510,000 square meters, with a rentable area of 133,766 square meters, including 123,568 square meters of office space and 10,198 square meters of retail space[10] - Shanghai SOHO Fuxing Plaza has a total construction area of approximately 124,068 square meters, with a rentable area of 88,234 square meters, including 46,344 square meters of office space and 41,890 square meters of retail space[18] - Beijing Guanghua Road SOHO II has a total construction area of approximately 117,179 square meters, with a rentable area of 94,279 square meters, including 63,308 square meters of office space and 30,971 square meters of retail space[12] - Beijing Lize SOHO has a total construction area of approximately 158,434 square meters, with a rentable area of 135,637 square meters[16] - Shanghai SOHO Tianshan Plaza has a total construction area of approximately 155,827 square meters, with a rentable area of 97,751 square meters, including 74,498 square meters of office space and 23,253 square meters of retail space[22] - Shanghai Gubei SOHO has a total construction area of approximately 156,654 square meters, with a rentable area of 112,541 square meters[24] Financial Performance - The company's annual operating revenue for 2023 was approximately RMB 1.679 billion, a decrease of 5.4% compared to RMB 1.775 billion in 2022[26] - The company's gross profit for 2023 was approximately RMB 1.379 billion, a decrease of 4.1% compared to RMB 1.438 billion in 2022[26] - The company's gross profit margin for 2023 was 82%, compared to 81% in 2022[26] - Sales expenses decreased to RMB 0.33 billion in 2023 from RMB 0.50 billion in 2022, a reduction of RMB 0.17 billion[27] - Administrative expenses decreased to RMB 1.36 billion in 2023 from RMB 1.81 billion in 2022, a reduction of RMB 0.45 billion[27] - Financial income increased to RMB 0.12 billion in 2023 from RMB 0.03 billion in 2022, an increase of RMB 0.09 billion[28] - Financial expenses decreased to RMB 7.78 billion in 2023 from RMB 8.02 billion in 2022, a reduction of RMB 0.24 billion[28] - Income tax expenses decreased to RMB 2.26 billion in 2023 from RMB 4.43 billion in 2022, a reduction of RMB 2.17 billion[29] - Total borrowings as of December 31, 2023, amounted to RMB 158.85 billion, with a net gearing ratio of 41%[30] - Foreign currency debt as of December 31, 2023, was RMB 3.58 billion, accounting for 2.3% of total borrowings[31] - The company's average financing cost remained at a low level of 4.7% as of December 31, 2023[31] - The company's capital commitments as of December 31, 2023, were RMB 0.02 billion, down from RMB 0.17 billion in 2022[33] - The company reported a net loss of RMB 180.07 million in 2023, compared to a net profit of RMB 64.51 million in 2022[38] - Non-current assets decreased to RMB 65,536,289 thousand in 2023 from RMB 65,940,695 thousand in 2022[39] - Current assets increased to RMB 3,081,267 thousand in 2023 from RMB 2,906,414 thousand in 2022[39] - Current liabilities decreased significantly to RMB 10,451,535 thousand in 2023 from RMB 18,583,179 thousand in 2022[39] - Non-current liabilities increased to RMB 20,970,997 thousand in 2023 from RMB 12,895,409 thousand in 2022[39] - Total equity remained stable at RMB 37,195,024 thousand in 2023 compared to RMB 37,368,521 thousand in 2022[39] - The company's total issued shares remained unchanged at 5,199,524,031 shares as of December 31, 2023[41] - The company's reserves and equity details are disclosed in the audited consolidated statement of changes in equity[42] Executive Leadership and Governance - Key executives, including Pan Shiyi and Zhang Xin, have service agreements effective from January 1, 2024, for a term of 3 years[43] - Pan Shiyi and Huang Jingsheng are required to retire by rotation at the Annual General Meeting and are eligible for re-election[44] - Pan Shiyi and Zhang Xin co-founded SOHO China in 1995, leading the company to become one of China's most experienced office developers with over 5 million square meters developed in Beijing and Shanghai[45][46] - SOHO China Foundation was established in 2005 by Ms. Zhang Xin and her husband Mr. Pan Shiyi, focusing on education in China[47] - The SOHO China Scholarship Program was launched in 2014, supporting Chinese undergraduate students to study at world-class universities[47] - Ms. Xu Jin, aged 52, is the Chairman and Co-CEO of the company, with over 20 years of experience in China's real estate development industry[48] - Mr. Qian Ting, aged 47, is the Co-CEO of the company, with over 20 years of experience in China's real estate sales and leasing[49] - Mr. Huang Jingsheng, aged 66, is an Independent Non-Executive Director with extensive experience in venture capital and private equity investments[50] - Mr. Xiong Minghua, aged 59, is an Independent Non-Executive Director and founder of Qihai Capital, with a background in technology innovation and investment[51] - Mr. Zhang Mingeng, aged 72, is an Independent Non-Executive Director with deep expertise in macroeconomic operations and real estate development trends[52] - Mr. Zhu Enlei, aged 43, is the CFO of the company, responsible for financial and investor relations management, with over a decade of experience in finance and auditing[53] - Ms. Huang Hongyu, aged 53, is the Vice President of the company, responsible for platform information management, design, and procurement, with over 20 years of experience in design and platform management[54] - Mr. Yan Guangping, aged 43, is the Vice President of the company, responsible for asset and property management, with extensive experience in these areas[55] - Total compensation for directors in 2023 amounted to RMB 11,304 thousand, with executive directors receiving the majority, including RMB 4,310 thousand for Pan Shiyi and RMB 3,182 thousand for Xu Jin[59] - Pan Shiyi holds a 63.9309% equity stake in the company through family and trust interests, representing 3,324,100,000 shares[64][66] - Senior management compensation for 2023 included one individual earning between HKD 1,000,001–2,000,000 and another earning between HKD 2,000,001–3,000,000[62] - Pan Shiyi also holds equity interests in affiliated companies, including 4.25% in Beijing Redstone Jianwai Real Estate Development Co., Ltd. and 5.00% in Beijing SOHO Real Estate Co., Ltd.[67] - Cititrust Private Trust (Cayman) Limited holds 3,324,100,000 shares, representing 63.9309% of the company's issued share capital[70] - Capevale Cayman and its wholly-owned subsidiaries, Boyce Limited and Capevale BVI, each hold 1,662,050,000 shares, representing 31.9654% of the company's issued share capital[70][71] Customer and Supplier Relationships - The top five customers accounted for approximately 13% of the company's total sales revenue for the year ended December 31, 2023[80] - The top five suppliers accounted for approximately 15% of the company's total procurement for the year ended December 31, 2023, with the largest supplier accounting for 5%[80] Charitable Donations - The company made charitable donations of approximately RMB 16,000,000 in 2023, compared to RMB 15,000,000 in 2022[78] Corporate Governance and Compliance - The company's public shareholding is at least 25% of the total issued share capital as of the annual report date[82] - The company has complied with the "Corporate Governance Code" as outlined in Appendix C1 of the Listing Rules[83] - No significant legal proceedings were reported during the year[84] - The company has established compliance procedures to ensure adherence to relevant laws and regulations in China[85] - The consolidated financial statements for the year were audited by PricewaterhouseCoopers (PwC), with no change in auditors over the past three years[86] - The company has adopted and continuously improved corporate governance and disclosure practices, emphasizing a culture of integrity and innovation[87] - The Board of Directors consists of seven members, including four executive directors and three independent non-executive directors[89] - The Board holds at least four regular meetings annually, with a 14-day notice period and materials provided at least three days in advance[89] - The company has three independent non-executive directors, accounting for more than one-third of the board, ensuring independent perspectives and opinions[93] - The board held 4 regular meetings and the 2023 Annual General Meeting during the year, with all directors attending all board meetings[94][95] - The audit committee is composed of three independent non-executive directors, responsible for evaluating financial statements and providing recommendations[97] - The board chairman is responsible for leading the board in formulating overall strategy and business direction, while the co-CEOs manage daily operations[91] - The company has purchased liability insurance for directors and senior executives to cover potential legal liabilities[90] - The nomination committee annually assesses the independence of each independent non-executive director, and any reappointment requires approval at the AGM[93] - Directors are entitled to consult independent professional opinions at the company's expense when necessary[96] - The audit committee is responsible for recommending the appointment, reappointment, or removal of external auditors and ensuring their independence[98] - The company has established policies and procedures to avoid potential conflicts of interest, requiring directors with significant interests to abstain from voting[93] - The board and its committees have the authority to seek independent professional advice from external consultants when deemed necessary[93] - The Audit Committee held two meetings in 2023, with all members attending both sessions[101] - The Audit Committee reviewed the company's financial reporting system, risk management, and internal control systems, ensuring compliance with accounting standards and regulations[102] - The Remuneration Committee held one meeting in 2023, with all members attending the session[104] - The Remuneration Committee reviewed the company's remuneration policy and found the compensation levels for executives to be fair and reasonable[105] - The Nomination Committee held one meeting in 2023, with all members attending the session[107] - The Nomination Committee reviewed the company's board structure, size, and composition, and discussed succession planning for key positions[106] Financial Position and Liabilities - The company's current liabilities exceeded its current assets by RMB 7,370 million as of December 31, 2023[117] - The company's total bank borrowings and other borrowings amounted to RMB 15,885 million as of December 31, 2023, including RMB 5,178 million in current portion[117] - The company's unrestricted cash and cash equivalents were RMB 769 million as of December 31, 2023[117] - The company's board of directors consists of 7 members, with 2 being female, representing 28.6% of the board[112] - The company's employee gender ratio as of December 31, 2023, was 28% female and 72% male, including senior management[112] - The company established an Environmental, Social, and Governance (ESG) Committee on November 16, 2021, consisting of 3 members[114] - The ESG Committee held one meeting during the year, with all members attending[115] - The company's nomination committee follows a policy of diversity, considering factors such as gender, age, cultural and educational background, and professional experience[113] - The company's board of directors is responsible for preparing the consolidated financial statements for the year ended December 31, 2023[116] - The company's nomination process for directors includes evaluating candidates based on character, integrity, relevant experience, and ability to contribute to the board[109] - The board of directors is responsible for overseeing the group's risk management and internal control systems, with the audit committee reviewing their effectiveness at least annually[118] - The group has established a clear organizational structure with defined levels of responsibility and reporting procedures for risk management and compliance[118] - The risk management and compliance department coordinates enterprise risk management activities and reports major risks to the audit committee during regular meetings[120] - Operational units within the group are responsible for identifying, assessing, mitigating, and monitoring their own risks, reporting to the risk management and compliance department every six months[120] - The group's internal audit department adopts a risk-based audit approach and reports its findings to the audit committee regularly[120] - The internal audit department provides independent assurance to the board, audit committee, and senior management regarding the adequacy and effectiveness of internal controls[121] - The group follows ISO 31000:2009 principles and guidelines for managing business and operational risks[121] - Business units are required to identify risks that may affect business objectives, assess their significance, and evaluate the adequacy of existing control measures[122] - The risk management and compliance department monitors the progress of risk mitigation measures and shares risk information with business units to enhance the group's risk management level[122] - The group has implemented policies and procedures to evaluate and improve the effectiveness of risk management and internal control systems, with senior management required to verify their proper operation at least annually[122] - The company has integrated its risk management system into core business operations, with ongoing reviews and assessments of potential risks that could impact business objectives[123] - The audit committee has established a whistleblowing policy and procedures to handle reports of actual or suspected misconduct, ensuring transparency and immediate investigation[123] - The company has standardized the handling and disclosure of insider information to ensure confidentiality and consistent release of information[123] - The risk management and compliance department has increased training and workshops, standardized risk reporting, and enhanced communication with designated directors regarding risk management[124] - The internal audit department conducted a review of the risk management and internal control systems, covering financial, operational, and compliance aspects, with no significant issues identified[125] - External auditors evaluated key risk management and internal controls, with their recommendations adopted to improve systems[125] - The company paid a total of RMB 3.35 million in audit and non-audit fees, including RMB 2.0 million for audit services and RMB 1.35 million for non-audit services such as interim financial reviews[126] - The company emphasizes effective communication with investors through regular updates, emails, calls, and participation in global investment conferences[127] - The company appointed Ms. Wu Xiuwei as company secretary, who completed over 15 hours of professional training to comply with listing rules[128] - Shareholders holding at least 1/10 of the company's paid-up share capital can request a special general meeting and propose resolutions[129] - The company's amended and restated articles of association were adopted and became effective on May 24, 2023[131] - The company provides comprehensive and tailored induction for newly appointed directors to ensure they understand the business and regulatory responsibilities[132] - The company's board of directors includes Pan Shiyi, Pan Zhangxin, Xu Jin (Chairman and Co-CEO), Qian Ting (Co-CEO), Huang Jingsheng, Xiong Minghua, Sun Qiang, and Zhang Mingeng[133] - The company's registered office is located in Grand Cayman, Cayman Islands, and its headquarters is in Beijing, China[133] - The company's major banks include Agricultural Bank of China, Bank of China, China Communications Bank, China Everbright Bank, China Merchants Bank, Industrial and Commercial Bank of China, Standard Chartered Bank (Hong Kong), and HSBC[134] - The company's independent auditor is PricewaterhouseCoopers, and the audit report confirms the financial statements comply with Hong Kong Financial Reporting Standards[135][136] - The company's current liabilities exceeded current assets by RMB 7,370 million as of December 31, 2023, indicating significant uncertainty regarding its ability to continue as a going concern[139] - The company's total bank and other borrowings amounted to RMB 15,885 million as of December 31, 2023, with RMB 5,178 million classified as current[139] - The company's unrestricted cash and cash equivalents were RMB 769 million as of December 31, 2023[139] - Investment properties measured at fair value reached RMB 63,421 million as of December 31, 2023, with an annual fair value loss of RMB 191 million[141] - The
SOHO中国(00410) - 2023 - 年度财报