碧桂园(02007) - 2023 - 中期业绩

Cover and Financial Highlights Financial Highlights For the six months ended June 30, 2023, Country Garden's contracted sales significantly declined, total revenue increased, but the company recorded substantial gross loss and core net loss, with overall financial condition remaining severe Key Financial and Operational Indicators for H1 2023 | Indicator | Amount/Value | | :--- | :--- | | Contracted Sales Attributable to Shareholders' Equity | Approx. RMB 128.76 billion | | Equity Contracted Sales Collection Rate | 92% | | Total Revenue | Approx. RMB 226.31 billion | | Gross Loss | Approx. RMB 24.26 billion | | Core Net Loss Attributable to Shareholders | Approx. RMB 45.35 billion | | Marketing and Administrative Expenses as % of Total Revenue | Approx. 4.4% (down 1.1 percentage points YoY) | | Total Borrowings (Period-end) | Approx. RMB 257.91 billion (down 4.9% from year-end) | | Net Gearing Ratio (Period-end) | 50.1% | Performance Review and Outlook Management acknowledged the severe challenges in the real estate sector during H1 2023, facing the greatest difficulties since the company's inception, leading to significant core net losses despite increased revenue, and pledged proactive self-rescue measures while maintaining confidence in China's economic outlook - In the first half, nearly 278,000 units were delivered, ranking first in the industry, demonstrating the company's commitment to "ensuring project delivery"[4] H1 2023 Performance Overview | Indicator | 2023 H1 | | :--- | :--- | | Revenue | Approx. RMB 226.31 billion (up 39.4% YoY) | | Core Net Loss Attributable to Shareholders | Approx. RMB 45.35 billion | | Contracted Sales Attributable to Shareholders' Equity | Approx. RMB 128.76 billion | | Total Interest-bearing Debt Balance | RMB 257.91 billion | | Net Gearing Ratio | 50.1% | - Company management conducted a deep self-reflection, admitting insufficient understanding and ineffective mitigation of risks such as the depth of the market downturn and excessive investment in third and fourth-tier cities, which led to the current predicament[5] - The company proposed self-rescue measures including: implementing project delivery tasks, improving sales, revitalizing assets, cutting expenses, and adopting debt management measures to alleviate liquidity pressure[5] Interim Condensed Consolidated Financial Statements This section presents the Group's unaudited interim financial statements as of June 30, 2023, including the consolidated statement of financial position, consolidated income statement, and consolidated statement of comprehensive income, comprehensively reflecting the Group's financial position and operating results for the first half Interim Condensed Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets were RMB 1.62 trillion, total liabilities were RMB 1.36 trillion, and total shareholders' equity decreased to RMB 254.37 billion, indicating financial pressure with reduced net current assets and total borrowings of approximately RMB 257.91 billion Key Balance Sheet Items (As of June 30, 2023) | Item | June 30, 2023 (RMB million) | December 31, 2022 (RMB million) | | :--- | :--- | :--- | | Total Assets | 1,618,529 | 1,744,467 | | Total Liabilities | 1,364,160 | 1,434,894 | | Total Equity | 254,369 | 309,573 | | Cash and Cash Equivalents | 101,115 | 128,281 | | Total Borrowings | 257,905 | 271,307 | Interim Condensed Consolidated Income Statement In H1 2023, Group revenue increased by 39.4% to RMB 226.31 billion, but due to a significant increase in cost of sales and asset impairments, a gross loss of RMB 24.26 billion was recorded, resulting in a net loss attributable to company shareholders of RMB 48.93 billion, compared to a profit of RMB 612 million in the prior period, with basic loss per share at RMB 1.79 Key Income Statement Items (For the six months ended June 30, 2023) | Item | 2023 H1 (RMB million) | 2022 H1 (RMB million) | | :--- | :--- | :--- | | Revenue | 226,309 | 162,363 | | (Gross Loss)/Gross Profit | (24,263) | 17,210 | | Operating (Loss)/Profit | (45,213) | 7,044 | | (Loss)/Profit for the Period | (51,461) | 1,907 | | (Loss)/Profit Attributable to Company Shareholders | (48,932) | 612 | | Basic (Loss)/Earnings Per Share (RMB) | (1.79) | 0.03 | Interim Condensed Consolidated Statement of Comprehensive Income Building on a net loss of RMB 51.46 billion, and after accounting for other comprehensive losses, the Group's total comprehensive loss for H1 2023 was RMB 51.85 billion, with RMB 49.35 billion attributable to company shareholders Summary of Comprehensive Income Statement (For the six months ended June 30, 2023) | Item | 2023 H1 (RMB million) | 2022 H1 (RMB million) | | :--- | :--- | :--- | | (Loss)/Profit for the Period | (51,461) | 1,907 | | Other Comprehensive Loss for the Period | (393) | (3) | | Total Comprehensive (Loss)/Income for the Period | (51,854) | 1,904 | | Total Comprehensive (Loss)/Income Attributable to Company Shareholders | (49,350) | 610 | Notes to the Interim Financial Information This section details the basis of preparation for the interim financial statements, significant accounting policies, and specifics of various accounts, with Note 1.1 "Going Concern Basis" being central, disclosing the company's liquidity pressure, debt situation, and significant uncertainties that may cast substantial doubt on its ability to continue as a going concern, along with management's crisis response plans and measures Note 1.1: Going Concern Basis This note reveals significant doubts about the Group's ability to continue as a going concern, with substantial net losses, RMB 108.7 billion in debt maturing within 12 months against only RMB 101.1 billion in cash, and a failure to pay interest on some senior notes, despite management's seven response plans whose successful implementation is subject to significant uncertainties - Explicitly states the existence of significant uncertainties that may cast substantial doubt on the Group's ability to continue as a going concern[12] Liquidity Pressure Status (As of June 30, 2023) | Item | Amount (RMB million) | | :--- | :--- | | Debt Maturing within 12 Months | 108,703 | | Cash and Cash Equivalents | 101,115 | | Restricted Cash | 29,454 | - Management has formulated seven key measures to maintain going concern, including debt management, securing financing, accelerating sales, controlling construction payments, monitoring financial covenants, revitalizing assets, and cutting expenses[13][14] - Subsequent to the reporting period, the company failed to pay interest on certain senior notes due in August 2023, which, despite being within the 30-day grace period, exacerbates default risk[12] Note 4: Revenue and Segment Information The Group's operations are divided into two reportable segments: property development and technology construction, with total revenue in H1 2023 at RMB 226.31 billion, where property development revenue at RMB 220.8 billion held an absolute dominant position and showed significant year-on-year growth, while technology construction revenue at RMB 3.27 billion experienced a year-on-year decrease Segment Revenue (For the six months ended June 30, 2023) | Segment | Revenue (RMB million) | YoY Change | | :--- | :--- | :--- | | Property Development | 220,803 | +41.2% | | Technology Construction | 3,272 | -6.7% | | Other | 2,234 | -10.0% | | Total | 226,309 | +39.4% | Notes 8-10: Debt Instruments (Senior Notes, Corporate Bonds, Convertible Bonds) As of June 30, 2023, the Group's outstanding senior notes, corporate bonds, and convertible bonds were RMB 68.68 billion, RMB 26.94 billion, and RMB 6.10 billion, respectively, with some debt repaid through maturity and repurchases, and approximately RMB 1.89 billion in new corporate bonds issued during the period Balances of Various Debt Instruments (As of June 30, 2023) | Debt Type | Balance (RMB million) | Due within 1 year (RMB million) | | :--- | :--- | :--- | | Senior Notes | 68,682 | 11,490 | | Corporate Bonds | 26,944 | 21,590 | | Convertible Bonds | 6,103 | 6,103 | Note 18: Events After the Reporting Period Subsequent to the reporting period, the Group undertook several significant measures to address the liquidity crisis, including securing approximately RMB 6.06 billion in 30-month dual-currency term loan refinancing, negotiating extensions for domestic corporate bonds, failing to pay interest on some senior notes due in August, and selling a 26.67% equity stake in an associate for approximately RMB 1.29 billion, having received about RMB 700 million in cash - Successfully secured approximately RMB 6.06 billion in 30-month dual-currency term loan refinancing, providing support for short-term liquidity relief[46] - Failure to pay interest on some senior notes due in August indicates that liquidity pressure has transformed into substantive default risk[46] - The sale of an associate's equity stake generated approximately RMB 700 million in cash, demonstrating the company's active asset disposal to supplement liquidity[46] Management Discussion and Analysis Management provided an in-depth analysis of H1 2023 financial performance, liquidity, key risks, and business outlook, highlighting significant losses due to market downturns and asset impairments despite increased revenue, and reaffirmed commitment to ensuring deliveries, revitalizing assets, strict cost control, and exploring new business models to navigate current difficulties Financial Review In H1 2023, total revenue increased by 39.4% to RMB 226.31 billion, primarily driven by property development, but significant asset impairments and net exchange losses led to a pre-tax loss of RMB 46.15 billion and a core net loss attributable to shareholders of RMB 45.35 billion - The three main reasons for the substantial loss were: 1. Net impairment provisions of approximately RMB 40.34 billion for properties under development and completed properties held for sale 2. Net impairment losses of approximately RMB 6.66 billion for financial and contract assets 3. Net exchange losses of approximately RMB 3.04 billion due to foreign exchange fluctuations[53] Liquidity, Financial and Capital Resources As of June 30, 2023, the Group's total cash balance decreased to RMB 130.57 billion, with unrestricted cash and equivalents at RMB 101.12 billion, while total borrowings decreased to RMB 257.91 billion, but the net gearing ratio climbed to 50.1% due to a significant reduction in total equity Key Financial Position Indicators | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Cash Balance (RMB million) | 130,569 | 147,550 | | Total Borrowings (RMB million) | 257,905 | 271,307 | | Net Gearing Ratio | 50.1% | 40.0% | Principal Risks and Uncertainties The Group faces primary risks including: systemic risk from the prolonged downturn in mainland China's real estate market; interest rate risk from predominantly floating-rate bank borrowings; foreign exchange risk from outstanding foreign currency borrowings; and the most severe current phased liquidity risk, with plans to address liquidity pressure disclosed in Note 1 - The company explicitly faces four major risks: real estate market risk, interest rate risk, foreign exchange risk, and liquidity risk[57][58][59][60] - Liquidity risk is currently the most critical risk, with the company facing phased liquidity pressure[60] Business Development Outlook Looking ahead, the Group acknowledges unprecedented liquidity pressure, with the core task of ensuring cash flow safety through asset revitalization, expense reduction, and debt management, while strategically advancing a new "One Body, Two Wings" strategy to explore new real estate development models and overcome the current predicament - The core task for the future is to ensure cash flow safety, addressing liquidity pressure through asset revitalization, expense reduction, and debt management[64] - Proposed a new "One Body, Two Wings" strategy, simultaneously strengthening the core property business while vigorously expanding new businesses like entrusted management and construction technology, exploring new development models[64] Other Information This section covers corporate governance information, including the audit committee's review, the independent auditor's "Emphasis of Matter" paragraph on the going concern assumption, compliance with corporate governance codes, details of employee incentive schemes, and capital operations such as convertible bonds and share repurchases, with the Board resolving not to declare an interim dividend for 2023 Extracts from Independent Auditor's Review Report Independent auditor PricewaterhouseCoopers issued an unmodified review report, but included an "Emphasis of Matter" paragraph specifically drawing users' attention to the company's substantial losses, significant debt maturing soon, declining pre-sale performance, failure to pay interest on some notes, and potential financial covenant default risks, which collectively indicate material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern - The auditor issued an unmodified opinion but included an "Emphasis of Matter" paragraph[67] - The core content of the "Emphasis of Matter" is to highlight significant uncertainties that may cast substantial doubt on the Group's ability to continue as a going concern[69] Interim Dividend Considering the Group's current financial condition and liquidity pressure, the Board has resolved not to declare an interim dividend for the six months ended June 30, 2023, consistent with the policy for the same period in 2022 - The Board resolved not to declare an interim dividend for 2023 (2022 interim dividend: nil)[81]