金地商置(00535) - 2018 - 年度财报

Corporate Information Board of Directors The company's Board of Directors comprises four executive directors, two non-executive directors, and three independent non-executive directors, with Mr. Huang Junchan as Chairman, Mr. Xu Jiajun as CEO, and Mr. Wei Chuanjun as CFO, and includes audit, nomination, remuneration, and executive committees - The Board of Directors consists of 9 directors: 4 executive directors, 2 non-executive directors, and 3 independent non-executive directors[6] - Key management includes: Huang Junchan (Chairman), Xu Jiajun (CEO), and Wei Chuanjun (CFO)[6] - The Board has established an audit committee, a nomination committee, a remuneration committee, and an executive committee[6] Company Secretary and Registered Office The Company Secretary is Mr. Wong Ho Yin, with the registered office in Bermuda and the principal place of business in Central, Hong Kong, and Ernst & Young serves as the auditor, collaborating with major banks - The Company Secretary is Mr. Wong Ho Yin[6] - The registered office is in Bermuda, and the principal place of business is in Central, Hong Kong[6][8] - The auditor is Ernst & Young, and principal bankers include China Everbright Bank, China Merchants Bank, DBS Bank, and Standard Chartered Bank[8] Chairman's Statement Market Overview In 2018, China's property market experienced overall slower growth, despite transaction volumes and prices reaching record highs, with popular cities maintaining purchase restrictions and some adjusting regulations to counter downward pressure on housing prices, while rising financing costs and tight capital supply were common industry challenges - In 2018, China's property market experienced overall slower growth, but transaction volumes and prices reached record highs[11] - Popular cities continued to implement measures to curb unreasonable housing demand, while some cities adjusted policies to resist downward pressure on housing prices[11] - Higher financing costs and tight capital supply are common challenges for the real estate industry, leading to shrinking development space for small and medium-sized developers[11][12] Business Overview And Outlook Despite market adjustments, the Group's 2018 contracted sales and profit attributable to shareholders both reached record highs, with a gross profit margin of 58%, as the Group actively expanded its business park operations and acquired new land, and plans to focus on first and second-tier cities in 2019 to expand sales and land reserves, seek M&A and cooperation opportunities, and develop high-end business parks and commercial projects 2018 Key Performance Indicators | Indicator | 2018 Data | | :--- | :--- | | Contracted Sales | RMB 49.03 billion | | Year-on-year Growth | 8% | | Profit Attributable to Shareholders | RMB 2.253 billion | | Year-on-year Growth | 37% | | Gross Profit Margin | 58% | - The Group actively expanded its business park investment and development, with Phase I and II of Shenzhen Vanke Technology Park successfully attracting world-class tenants such as DJI, Amazon, and Intel[16][17] - In 2018, 24 new development plots were acquired, with a total gross floor area of approximately 2.73 million sq.m., of which 20% are located in Beijing and Shanghai[17][18] - Looking ahead to 2019, the Group will focus on first-tier and selected second-tier cities to expand contracted sales and land reserve scale, and seek equity M&A and cooperation opportunities[20] - For commercial properties, the Group will actively expand its development of high-end business parks and commercial projects in core areas of China's first and second-tier cities[20] Management Discussion and Analysis Financial Highlights In FY2018, the company's revenue and profit attributable to shareholders grew significantly, with earnings per share increasing by 37% year-on-year, while total assets and total equity increased, total loans and net loans decreased, and the gearing ratio and net loans to total equity ratio substantially improved FY2018 Key Financial Data (Consolidated Statement) | Indicator | 2018 (RMB thousand) | 2017 (RMB thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 7,079,136 | 4,711,019 | 50.27% | | Profit Attributable to Owners of the Company | 2,252,622 | 1,643,529 | 37.06% | | Earnings Per Share (Basic) | 0.1419 | 0.1039 | 36.57% | | Total Assets | 51,987,757 | 43,668,752 | 19.06% | | Total Liabilities | 38,117,372 | 30,621,124 | 24.49% | | Total Equity | 13,870,385 | 13,047,628 | 6.31% | | Total Loans | 6,061,306 | 9,544,591 | -36.40% | | Net Loans | 1,960,484 | 2,993,271 | -34.50% | | Current Ratio | 0.9 | 1.1 | -18.18% | | Gearing Ratio | 44% | 73% | -39.73% | | Net Loans to Total Equity | 14% | 23% | -39.13% | Financial Review In FY2018, the Group's revenue significantly increased, primarily driven by a substantial rise in recognized property sales revenue, despite a decrease in fair value gains on investment properties, while direct operating and administrative expenses rose due to business expansion, and finance costs slightly increased due to higher market interest rates, leading to a 37% year-on-year growth in profit attributable to shareholders, improved liquidity and capital structure, and a significantly reduced net debt ratio FY2018 Key Profit or Loss Statement Data | Indicator | 2018 (RMB million) | 2017 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 7,079.1 | 4,711.0 | 50.27% | | Adjusted Revenue (excluding HKFRS 15 impact) | 12,160.6 | 4,711.0 | 158.13% | | Other Income and Gains | 588.2 | 426.0 | 38.08% | | Fair Value Gains on Investment Properties | 324.1 | 545.8 | -40.62% | | Direct Operating Expenses | 1,233.1 | 948.1 | 29.00% | | Administrative Expenses | 92.2 | 82.4 | 11.89% | | Finance Costs | 249.8 | 241.8 | 3.31% | | Share of Profits of Joint Ventures and Associates | 1,341.4 | 1,192.8 | 12.46% | | Profit Attributable to Owners of the Company | 2,252.6 | 1,643.5 | 37.06% | | Basic Earnings Per Share | 0.1419 | 0.1039 | 36.57% | - Total shareholders' funds increased from RMB 10.9148 billion at the end of 2017 to RMB 11.8352 billion at the end of 2018, primarily due to profit for the year[43][47] - Deposits, bank and cash balances decreased by 40% to RMB 3.2379 billion, mainly used for land acquisitions and project development[44][48] - Total loans amounted to RMB 2.0605 billion, with annual interest rates ranging from 3.0% to 5.2%[45][49] - Net debt (total loans less cash and bank deposits) decreased by RMB 1.0328 billion to RMB 1.9605 billion, and the net debt ratio decreased from 23% to 14%[51] Loan Repayment Profile (RMB thousand) | Repayment Period | December 31, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Total Short-term and Long-term Bank and Other Loans | 2,060,512 | 1,556,756 | | Total Loans from Related Parties | 4,000,794 | 7,987,835 | | Total Loans | 6,061,306 | 9,544,591 | - The Group's principal operations are in mainland China, with most transactions, assets, and liabilities denominated in RMB, making foreign exchange risk acceptable[55][56] - 53% of loans are interest-bearing at floating rates (2017: 72%), and interest rate risk is considered acceptable with no immediate hedging requirements[58][59] - As of the end of 2018, investment properties with a total carrying value of RMB 542.5 million were pledged to secure other loans[61][64] - Guarantees for property buyers' mortgage loans amounted to RMB 1.6266 billion (2017: RMB 3.1486 billion), and guarantees for joint ventures amounted to RMB 486.9 million[62][63][65] - The Board recommended a final dividend of RMB 0.0275 per share (2017: RMB 0.025 per share), totaling approximately RMB 437 million[15][67][68] Five-year Financial Summary The company provides a financial summary for the five fiscal years ended December 31, 2018, illustrating historical trends in revenue, profit before tax, profit for the year, total assets, total liabilities, and total equity Five-year Financial Summary (RMB thousand) | Indicator | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 7,079,136 | 4,711,019 | 8,706,669 | 4,240,759 | 2,168,450 | | Profit Before Tax | 4,787,694 | 2,751,774 | 3,832,765 | 2,255,892 | 944,868 | | Profit for the Year | 2,752,139 | 1,807,248 | 2,004,369 | 1,375,151 | 645,925 | | Profit Attributable to Owners of the Company | 2,252,622 | 1,643,529 | 1,366,512 | 1,056,202 | 360,884 | | Total Assets | 51,987,757 | 43,668,752 | 32,167,328 | 25,100,925 | 14,899,651 | | Total Liabilities | (38,117,372) | (30,621,124) | (20,529,931) | (15,250,899) | (8,773,621) | | Total Equity | 13,870,385 | 13,047,628 | 11,637,397 | 9,850,026 | 6,126,030 | Review of Operations The Group possesses a substantial and high-quality land bank totaling 13.75 million sq.m., primarily located in first and second-tier cities, and in 2018, 24 new land projects were successfully acquired, with a total planned gross floor area of approximately 2.73 million sq.m., while property sales achieved contracted sales of RMB 49.03 billion despite market adjustments, with average selling prices increasing by 19% year-on-year, and property leasing business performed strongly, with projects like Shenzhen Vanke Technology Park achieving nearly 100% occupancy, and rental/management fee income growing significantly by 32% - As of December 31, 2018, the Group's total land bank amounted to 13.75 million sq.m., with 23% located in first-tier cities, 66% in second-tier cities, and 11% in third-tier cities[72][73] - In 2018, 24 land projects were acquired, with a total planned gross floor area of approximately 2.733 million sq.m., of which the Group's attributable interest was 1.415 million sq.m., and the average land acquisition cost was approximately RMB 11,200/sq.m.[101] 2018 Property Sales Data | Indicator | 2018 Data | 2017 Data | Year-on-year Change | | :--- | :--- | :--- | :--- | | Total Contracted Sales | RMB 49.03 billion | RMB 45.4 billion (estimated) | 8% | | Total Contracted Sales Area | 2.263 million sq.m. | 2.495 million sq.m. (estimated) | -9% | | Average Selling Price | RMB 21,700/sq.m. | RMB 18,236/sq.m. (estimated) | 19% | - Shenzhen Vanke Technology Park Phase I and II, Beijing Sohu Internet Building, and Shanghai Bridge 8 projects achieved nearly 100% occupancy, with the newly opened Hangzhou shopping center also achieving nearly 100% occupancy[105][106] - In 2018, total rental/management fee income was approximately RMB 507 million, a significant year-on-year increase of 32%[105][106] - Commercial projects under development are expected to generate an additional RMB 1.5 billion in rental income for the Group[106] Profiles of Directors and Company Secretary Executive Directors This section introduces the backgrounds and responsibilities of four executive directors: Ling Ke, Huang Junchan, Xu Jiajun, and Wei Chuanjun, all possessing extensive experience in property development, corporate management, and strategic planning within Gemdale Group, holding key positions - Mr. Ling Ke (59 years old) has served as an Executive Director since November 2012, responsible for Gemdale Group's strategic planning, holding a Master's degree in Engineering Management and a Senior Economist qualification[107][109] - Mr. Huang Junchan (48 years old) has served as an Executive Director and Group Chairman since November 2012, responsible for Gemdale Group's overall operations, holding a Bachelor's degree in Civil Engineering and an MBA[108][109] - Mr. Xu Jiajun (40 years old) has served as an Executive Director since October 2012 and CEO since January 2013, responsible for Gemdale Group's capital management and strategic planning, holding a Master's degree in Management[110][111] - Mr. Wei Chuanjun (50 years old) has served as an Executive Director and CFO since October 2012, responsible for Gemdale Group's overall finance and accounting, and is a Fellow of the Association of Chartered Certified Accountants[111][112] Non-executive Directors This section introduces the backgrounds of two non-executive directors, Mr. Loh Lian Huat and Ms. Zhang Feiyun, who bring extensive experience in real estate asset management and investment to the company - Mr. Loh Lian Huat (55 years old) has served as a Non-executive Director since May 2015, possessing over 18 years of corporate real estate asset management experience, and is the founder of Silkrouteasia Capital Partners Pte. Ltd[113][115] - Ms. Zhang Feiyun (33 years old) has served as a Non-executive Director since May 2015, currently a director of OUE Lippo Limited, a major shareholder of the company, and previously served as CEO of Shanghai Shengxiang Asset Management Co., Ltd[114][115] Independent Non-executive Directors This section introduces the backgrounds of three independent non-executive directors: Mr. Hui Chiu Chung, Mr. Jiang Shangyi, and Mr. Hu Chunyuan, who bring extensive professional knowledge and experience in securities investment, law, and accounting audit, providing independent and objective opinions to the company - Mr. Hui Chiu Chung (71 years old) has served as an Independent Non-executive Director since December 2004, possessing over 47 years of securities and investment experience, and is currently the Chairman and CEO of Luk Fook Financial Services Limited[116][117] - Mr. Jiang Shangyi (61 years old) has served as an Independent Non-executive Director since November 2012, is a practicing solicitor in Hong Kong, and has extensive experience in foreign investment and property transactions in China[118] - Mr. Hu Chunyuan (49 years old) has served as an Independent Non-executive Director since November 2012, currently the Vice Chairman and Executive Partner of Ruihua Certified Public Accountants, and is a senior certified public accountant[119][120] Company Secretary Mr. Wong Ho Yin serves as the Company Secretary, responsible for ensuring compliance with Board procedures, providing information on regulatory developments, and assisting directors with induction training and professional development, possessing over 21 years of experience in accounting, treasury, finance, and M&A - Mr. Wong Ho Yin (43 years old) has served as Company Secretary since October 2012, responsible for corporate governance and statutory compliance[121][122] - Mr. Wong is a member of the Hong Kong Institute of Certified Public Accountants and a Chartered Financial Analyst, with over 21 years of experience in accounting, treasury, finance, and M&A[121][122] Corporate Governance Report Corporate Governance Practices The company is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code set out in Appendix 14 of the Listing Rules, and despite some deviations, such as certain non-executive directors and the chairman not attending the AGM, and board meetings being held less frequently than quarterly, the company believes it has provided sufficient information and ensured directors fulfill their duties - The company is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code in Appendix 14 of the Listing Rules[124] - Some non-executive directors and the Chairman were unable to attend the Annual General Meeting on May 16, 2018, constituting deviations from Code Provisions A.6.7 and E.1.2[125][126][127] - Only two regular Board meetings were held in 2018, fewer than the minimum of four per year required by Code Provision A.1.1; the company explained this was due to not publishing quarterly results and management providing sufficient information[126][127] Board of Directors and Committees The Board of Directors comprises four executive directors, two non-executive directors, and three independent non-executive directors, ensuring independent judgment and objective decision-making, and has three committees: Audit, Remuneration, and Nomination, each with clear terms of reference and sufficient resources to fulfill their duties, with the roles of Board Chairman and CEO separated to maintain an effective division of responsibilities - The Board of Directors comprises four executive directors, two non-executive directors, and three independent non-executive directors, with independent non-executive directors constituting one-third of the Board[130][131][135] - The Board Chairman is Mr. Huang Junchan, and the CEO is Mr. Xu Jiajun, with roles separated to ensure an effective division of responsibilities[148][151] - The Board has established an Audit Committee, a Remuneration Committee, and a Nomination Committee, each with written terms of reference and reporting regularly to the Board[162][163] - The Audit Committee comprises three independent non-executive directors, responsible for reviewing financial reporting, risk management, and the effectiveness of internal control systems[164][165][166] - The Remuneration Committee is responsible for making recommendations on the remuneration policy and structure for directors and senior management, and for determining the remuneration packages of individual executive directors and senior management[172][173][175] - The Nomination Committee is responsible for reviewing the Board's structure, size, and composition, identifying suitable candidates for Board appointment, and has adopted a Board Diversity Policy[181][183] Directors' Induction and Continuous Professional Development The company provides comprehensive induction training for new directors, covering business operations, policy procedures, and statutory and regulatory responsibilities, and directors regularly receive updated briefings on relevant laws and regulations and are encouraged to attend professional development courses and seminars to continuously enhance their knowledge and skills - New directors receive comprehensive induction materials covering the company's business, policies, and statutory and regulatory responsibilities[153] - Directors are regularly informed of amendments or updates to relevant laws, rules, and regulations[154] - The company encourages directors and senior executives to attend professional development courses and seminars to continuously update and enhance their knowledge and skills[154][155] Responsibility of Directors and Management The Board is responsible for ensuring leadership continuity, sound business strategies, adequate capital and management resources, and the completeness of financial and internal control systems, while management is responsible for the Group's daily operations, and the Board confirms that financial statements are prepared in accordance with accounting standards and believes the Group has sufficient resources for continuous operation - The Board is responsible for ensuring leadership continuity, sound business strategies, adequate capital and management resources, and the completeness of financial and internal control systems[158] - Management is responsible for the Group's daily operations, with departmental heads overseeing different business areas[158][159] - The Board confirms that financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and believes the Group has sufficient resources for continuous operation[159][160] Accountability and Audit Directors confirm their responsibility for preparing true and fair financial statements, ensuring compliance with accounting standards and regulatory requirements, and external auditors issued an unqualified opinion on the financial statements, while the company has risk management and internal control systems, overseen by the Board and reviewed annually for effectiveness by the Audit Committee - Directors confirm their responsibility for preparing true and fair financial statements, complying with Hong Kong Financial Reporting Standards and regulatory requirements[192] - External auditors issued an unqualified opinion on the financial statements, finding no material uncertainties[192][195] - The Board is responsible for overseeing the Group's risk management and internal control systems, and reviews their effectiveness annually through the Audit Committee[193][196] - The internal audit department assists the Board and Audit Committee in reviewing the effectiveness of risk management and internal control systems[193][194][196] Investor Relations and Communications with Shareholders The company is committed to maintaining effective communication with shareholders and investors, promptly disseminating information through annual reports, interim reports, announcements, and the company website, and the Annual General Meeting serves as a crucial platform for direct communication between the Board and shareholders, while also providing procedures for shareholders to convene extraordinary general meetings and propose resolutions, along with contact information for inquiries to the Board - The company promptly communicates information to shareholders and investors through annual reports, interim reports, announcements, and its corporate website[203][205][207] - The Annual General Meeting is a crucial platform for direct communication between the Board and shareholders[206][208] - Shareholders holding not less than 10% of the paid-up share capital may, in accordance with the company's bye-laws and Bermuda Companies Act, request in writing to convene an extraordinary general meeting[210][211][212] - Shareholders may submit inquiries to the Board in writing through the Company Secretary[218][219] Environmental, Social and Governance Report About the Report and Commitments This report is prepared in accordance with the ESG Reporting Guide in Appendix 27 of the HKEX Listing Rules, covering ESG matters for property development, investment, and management businesses in FY2018, and the Group is committed to fulfilling social responsibilities, with the Board having ultimate decision-making authority on ESG matters and an ESG working group established to monitor and report ESG performance - The report covers the period from January 1, 2018, to December 31, 2018, primarily involving property development, property investment, and management businesses[220] - Report data primarily comes from three core property project subsidiaries: Shanghai Zhongjun, Shenzhen Weixin, and Xi'an Zhutai, accounting for over 70% of the Group's 2018 turnover[221][223] - The Group's Board of Directors has ultimate decision-making authority on ESG matters and has established an ESG working group to report regularly to the Board[222][224][225][226] - The Group's risk assessment and internal control systems also cover ESG-related risks, which are regularly assessed and reviewed[226][227] Stakeholder Engagement and Material ESG Issues The Group values stakeholder interests, maintaining communication with shareholders, employees, suppliers, communities, customers, and media through various channels to understand their opinions and expectations, and based on assessment results, identified material ESG issues for reporting, including environmental (emissions, resource use, environment and natural resources) and social (employment, health and safety, development and training, labor standards, supply chain management, product responsibility, anti-corruption, community investment) - The Group communicates with stakeholders through various methods such as press releases, annual reports, employee newsletters, performance evaluations, charitable activities, customer satisfaction surveys, and interviews[228][229][230] - Material ESG issues include environmental aspects such as emissions, resource use, environment and natural resources, and social aspects such as employment, health and safety, development and training, labor standards, supply chain management, product responsibility, anti-corruption, and community investment[232][233][234] Environmental The Group considers environmental protection a crucial business consideration, requiring outsourced contractors in property development to conduct environmental assessments and implement eco-friendly measures, with some projects achieving a 1-star Green Building Design certification, while for property management, energy-saving and emission reduction policies are implemented, and tenants and occupants are required to sort waste and handle special waste, and the Group's offices also implement eco-friendly practices, with total greenhouse gas emissions in 2018 amounting to 825 tons of CO2 equivalent, and the Group is committed to conserving energy and water resources, saving approximately 11% of public energy consumption through measures such as smart lighting, HVAC system optimization, and automatic irrigation - Property development projects are outsourced to third-party contractors; the Group commissions engineering consulting firms to regularly inspect environmental conditions and integrates green concepts into design, with some projects obtaining 1-star Green Building Design certification[237][238][239] - For property management, Gemdale Property is entrusted, which has obtained ISO9001/ISO14001/OHSAS18001 certifications and collaborates with Dongjiang Environmental for waste disposal[239][240] - Tenants and occupants are required to sort waste, and control measures are established for catering businesses' oil fume emissions and wastewater treatment[241][242][243][244] - Group offices implement eco-friendly practices, promoting electronic records and paper recycling, generating 3.6 tons of disposable paper products and 0.05 tons of plastic water bottle waste in 2018[245][246][248] 2018 Greenhouse Gas Emissions and Energy/Water Consumption | Indicator | Data | Intensity (per employee) | | :--- | :--- | :--- | | Total CO2e Emissions | 825 tons | 3 tons | | Total Electricity Consumption | 1,170,000 kWh | 4,500 kWh | | Total Gasoline Consumption | 41,914 liters | 162 liters | | Total Water Consumption | 18,926 cubic meters | 73 cubic meters | - Project public energy consumption saved approximately 11% through energy-saving measures such as smart lighting, HVAC system optimization, and automatic irrigation[257][258][262][263] - Environmental impact assessments are conducted before project construction, and measures to control noise and dust are implemented, such as using external scaffolding, tower cranes, and road sprinklers[267][268] - Property renovation projects require clients to apply and submit supporting documents that meet environmental and safety standards, with renovation materials complying with national green environmental requirements[269][270] - Projects implement a comprehensive smoking ban during operation, install air purifiers or fresh air conditioning systems, and equip catering waste rooms with ventilation, exhaust, and refrigeration equipment to eliminate odors[271][272] Social The Group views human resources as a vital asset, attracting and retaining talent through competitive compensation and benefits, promotion opportunities, and diverse activities, strictly adhering to labor laws, opposing discrimination, child labor, and forced labor, while supply chain management focuses on quality and environmental protection, prioritizing local suppliers, and in terms of product responsibility, the Group ensures advertising truthfulness, project quality, and customer service, while protecting customer privacy, and upholds principles of integrity and honesty, conducts regular anti-corruption training, and actively participates in community investment and charitable activities - The Group's human resources policy adheres to the "Employee Code of Conduct," with core values of dedication, integrity, courage, and ambition[273][274] - Employee compensation references market levels and industry practices, with promotions and rewards based on performance and individual contributions, and benefit plans include MPF, insurance, and training allowances[274] - The Group complies with regulations such as the "Hong Kong Employment Ordinance" and "Labor Law of the People's Republic of China," ensuring legal and reasonable practices in recruitment, dismissal, working hours, and holidays[274][279] 2018 Employee Percentage Distribution | Category | Shanghai Zhongjun | Xi'an Zhutai | Shenzhen Weixin | | :--- | :--- | :--- | :--- | | Male | 73% | 80% | 66% | | Female | 27% | 20% | 34% | | Management | 19% | 10% | 14% | | Business Personnel | 73% | 85% | 73% | | Support Staff | 8% | 5% | 13% | | 25 years old or below | 3% | 3% | 10% | | 26-29 years old | 8% | 8% | 28% | | 30-39 years old | 84% | 84% | 50% | | 40-49 years old | 5% | 5% | 11% | | 50 years old or above | 0% | 0% | 1% | | Hong Kong | 3% | 0% | 0% | | Mainland China | 97% | 100% | 100% | - The Group provides diverse activities for employees, such as annual dinners, sports events, and birthday parties, to promote physical and mental well-being and team cohesion[277] - As an equal opportunity employer, the Group opposes all forms of discrimination and monitors the human resources policies of its outsourced contractors[278][280][281] - The Group provides a safe working environment, regularly organizes fire safety training and drills, and arranges annual medical examinations and fitness activities for employees[282][283][285] - Outsourced contractors are required to purchase social insurance for employees, conduct occupational safety training, and acquire commercial insurance for hazardous projects[286][287] - The Group has a comprehensive training system, including induction training, on-the-job training, and external training, with all costs borne by the Group[290][291] 2018 Average Employee Training Hours | Employee Category | Shanghai Zhongjun (hours) | Xi'an Zhutai (hours) | Shenzhen Weixin (hours) | | :--- | :--- | :--- | :--- | | Male | 3.4 | 3.8 | 23 | | Female | 3.7 | 3.2 | 23 | | Senior Management | 0 | 0 | 12 | | Middle Management | 5 | 3.5 | 24 | | Business Staff | 3.7 | 3.5 | 24 | | Support Staff | 0 | 0 | 18 | - The Group strictly complies with labor laws, recruits individuals aged 18 or above, prohibits child labor and forced labor, and conducts regular spot checks on subsidiaries and outsourced contractors[293][294][295] - In supply chain management, the Group has established supplier screening, bidding, and supervision/evaluation systems, promotes green procurement, and prioritizes local suppliers[297][298] - In FY2018, the Group collaborated with 153 suppliers, all from mainland China[298] - In product responsibility, the Group ensures real estate advertisements and labels are truthful and accurate, complies with the "Advertising Law of the People's Republic of China," and conducts long-term quality supervision of projects[300][303][304] - The Group has received multiple honors and certifications for its contributions to the real estate industry, such as "China Commercial Real Estate TOP100"[305] - In customer service, the Group has established comprehensive after-sales service and customer feedback channels, conducts regular customer satisfaction surveys, and protects customer privacy[306][308][309][310][311][312] - In anti-corruption, the Group adheres to principles of openness, responsibility, integrity, and honesty, regularly organizes anti-corruption training, and has a clear reporting mechanism[313][314][315] - In community investment, the Group actively utilizes resources and encourages employee participation in community and charitable activities, such as providing charitable donations to Songjiang District, Shanghai[317][318][319] Statutory Reports and Financial Statements Directors' Report The Directors' Report outlines the company's principal business, performance, dividend policy, business review (including risks and stakeholder relationships), segment information, share capital and share option movements, directors' and major shareholders' interests, and connected transactions for FY2018, emphasizing the company's commitment to legal compliance, enhancing corporate value, and shareholder returns - The company's principal business is investment holding, while the Group's main businesses include property investment, development, and management of residential, commercial, and industrial park projects, as well as micro-lending[322][323] - The Board recommended a final dividend of RMB 0.0275 per share and approved and adopted a dividend policy on February 26, 2019, aiming to maintain sufficient cash reserves, fund future growth, and enhance shareholder value[324][325][327][328] - The Group's principal risks include business risks arising from China's economic, political, and legal developments, as well as financial risks[333][334][336][338] - The Group values its relationships with employees, customers, service providers, partners, and shareholders, and is committed to providing quality products and services to ensure sustainable development[339][340][342][344][345][346] - In 2018, the Group had no material breaches or non-compliance with applicable laws and regulations[349][351] 2018 Revenue and Operating Profit by Business Segment | Business Segment | Revenue (RMB thousand) | Segment Profit/(Loss) (RMB thousand) | | :--- | :--- | :--- | | Property Development | 6,184,335 | 4,261,913 | | Property Investment and Management | 507,260 | 631,112 | | Micro-lending | 387,541 | 149,296 | | Corporate Expenses | – | (44,906) | | Total | 7,079,136 | 4,997,415 | - As of December 31, 2018, the total number of issued shares was 15,874,713,827, with 12,990,000 new shares issued due to the exercise of share options[375][388][400] - Directors and chief executives hold interests in the company's shares and share options, with Mr. Ling Ke holding 1.05% equity and Mr. Huang Junchan holding 0.91% equity[397][398] - Major shareholder Run An Limited holds 41.36% of the company's shares, and OUE Lippo Limited holds 14.82% of the shares[407] - The Group entered into several continuing connected transactions during the year, including property development and technical services, project operation entrustment, property management services, system installation engineering, bulk fitting-out services, leasing agreements, and financial advisory services[421][422][425][428][429][432][434][437][440][441][442] - Board members hold interests or positions in Gemdale Group and its subsidiaries, but the Board operates independently of Gemdale Group and has an Audit Committee to monitor potential conflicts of interest[456][457] - As of the end of 2018, the Group employed approximately 2,900 staff, maintained competitive remuneration levels, and provided various employee benefits[472][473] Independent Auditor's Report Ernst & Young issued an unqualified opinion on Gemdale Properties and Investments Corporation Limited's consolidated financial statements for the year ended December 31, 2018, deeming them to present a true and fair view of the Group's financial position, financial performance, and cash flows, in compliance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance, while also highlighting key audit matters such as the estimation of fair value for investment properties, determination of whether subsidiary acquisitions constitute business combinations, and revenue recognition from property sales - Ernst & Young issued an unqualified opinion on the consolidated financial statements[481] - Key audit matters include: estimation of fair value for investment properties, determining whether subsidiary acquisitions constitute business combinations, and revenue recognition from property sales[485][488][490][493][494] - Auditors assessed the competence and objectivity of the valuation experts engaged by the Group and evaluated the key assumptions and methodologies used in the valuations[489] - Auditors assessed management's judgment on whether acquisitions constituted business combinations and examined relevant contract terms and financial statements[492] - Auditors assessed the impact of the new accounting standard HKFRS 15 on revenue recognition and examined relevant contracts, bank statements, and completion certificates[494][496] Consolidated Statement of Profit or Loss For the year ended December 31, 2018, the Group's revenue reached RMB 7.079 billion, with a gross profit of RMB 4.109 billion, while profit before tax was RMB 4.788 billion, and profit for the year was RMB 2.752 billion, of which profit attributable to owners of the company was RMB 2.253 billion, with basic earnings per share of RMB 0.1419 2018 Consolidated Statement of Profit or Loss Summary (RMB thousand) | Indicator | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Revenue | 7,079,136 | 4,711,019 | | Cost of Sales | (2,970,181) | (2,851,551) | | Gross Profit | 4,108,955 | 1,859,468 | | Direct Operating Expenses | (1,233,079) | (948,062) | | Other Income and Gains | 588,247 | 425,992 | | Fair Value Change of Investment Properties | 324,144 | 545,840 | | Administrative Expenses | (92,189) | (82,373) | | Finance Costs | (249,776) | (241,843) | | Share of Profits of Joint Ventures | 1,347,197 | 1,189,781 | | Share of Losses of Associates | (5,805) | 2,971 | | Profit Before Tax | 4,787,694 | 2,751,774 | | Tax | (2,035,555) | (944,526) | | Profit for the Year | 2,752,139 | 1,807,248 | | Profit Attributable to Owners of the Company | 2,252,622 | 1,643,529 | | Non-controlling Interests | 499,517 | 163,719 | | Basic Earnings Per Share (RMB) | 0.1419 | 0.1039 | | Diluted Earnings Per Share (RMB) | 0.1396 | 0.1029 | Consolidated Statement of Comprehensive Income For the year ended December 31, 2018, the Group's profit for the year was RMB 2.752 billion, and other comprehensive loss primarily stemmed from exchange differences on translating foreign operations, resulting in a total comprehensive income for the year of RMB 2.702 billion, of which RMB 2.183 billion was attributable to owners of the company 2018 Consolidated Statement of Comprehensive Income Summary (RMB thousand) | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Profit for the Year | 2,752,139 | 1,807,248 | | Other comprehensive (loss)/income (to be reclassified to profit or loss in subsequent periods) | | | | Exchange differences on translating foreign operations | (512,540) | 597,880 | | Share of exchange differences on translating foreign operations of joint ventures | 86,022 | (99,659) | | Reversal on disposal of subsidiaries | 59,590 | – | | Debt investments at fair value through other comprehensive income: fair value changes, net of tax | 691 | – | | Net other comprehensive (loss)/income | (366,237) | 491,255 | | Other comprehensive income/(loss) (not to be reclassified to profit or loss in subsequent periods) | | | | Exchange differences on translating foreign operations | 307,537 | (470,724) | | Equity investments designated at fair value through other comprehensive income: fair value changes, net of tax | 8,292 | – | | Net other comprehensive income/(loss) | 315,829 | (470,724) | | Other comprehensive (loss)/income for the year, net of tax | (50,408) | 20,531 | | Total comprehensive income for the year | 2,701,731 | 1,827,779 | | Attributable to owners of the Company | 2,182,779 | 1,682,162 | | Non-controlling Interests | 518,952 | 145,617 | Consolidated Statement of Financial Position As of December 31, 2018, the Group's total assets were RMB 51.988 billion, comprising non-current assets of RMB 22.427 billion and current assets of RMB 29.561 billion, while total liabilities amounted to RMB 38.117 billion, with current liabilities of RMB 33.722 billion and non-current liabilities of RMB 4.395 billion, and total equity was RMB 13.870 billion 2018 Consolidated Statement of Financial Position Summary (RMB thousand) | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 126,963 | 63,372 | | Investment Properties | 8,839,014 | 6,366,809 | | Investments in Joint Ventures | 7,803,183 | 5,872,493 | | Investments in Associates | 2,620,385 | 632,736 | | Deferred Tax Assets | 965,358 | 554,852 | | Total Non-current Assets | 22,426,705 | 15,645,017 | | Current Assets | | | | Properties Held for Sale | 3,935,273 | 1,395,639 | | Properties Under Development | 12,410,071 | 13,562,264 | | Deposits, Bank and Cash Balances | 3,237,920 | 5,395,765 | | Total Current Assets | 29,561,052 | 28,023,735 | | Total Assets | 51,987,757 | 43,668,752 | | Current Liabilities | | | | Trade Payables | 2,010,954 | 1,537,372 | | Receipts in Advance, Accruals and Other Payables | 20,025,204 | 14,637,328 | | Interest-bearing Bank and Other Loans | 1,310,181 | 1,087,557 | | Loans from Ultimate Holding Company | 948,641 | 5,240,113 | | Loans from Joint Ventures | 4,010,559 | 1,856,269 | | Tax Payables | 3,393,054 | 1,849,866 | | Total Current Liabilities | 33,722,078 | 26,598,176 | | Non-current Liabilities | | | | Interest-bearing Bank and Other Loans | 750,331 | 469,199 | | Deferred Tax Liabilities | 1,040,485 | 960,027 | | Total Non-current Liabilities | 4,395,294 | 4,022,948 | | Total Liabilities | 38,117,372 | 30,621,124 | | Total Equity | 13,870,385 | 13,047,628 | Consolidated Statement of Changes in Equity For the year ended December 31, 2018, the Group's total equity increased from RMB 13.048 billion at the end of 2017 to RMB 13.870 billion, with equity attributable to owners of the company at RMB 11.835 billion and non-controlling interests at RMB 2.035 billion, and changes in equity were primarily influenced by profit for the year, the adoption of HKFRS 9 and HKFRS 15, and dividend distributions 2018 Consolidated Statement of Changes in Equity Summary (RMB thousand) | Indicator | January 1, 2018 (Restated) | Profit for the Year | Other Comprehensive Income/(Loss) | Total Comprehensive Income for the Year | Final Dividend Declared for 2017 | New Shares Issued upon Exercise of Share Options | Capital Contribution from Non-controlling Interests | Dividends Paid to Non-controlling Interests | As at December 31, 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | | | | | | | | | | | Issued Share Capital | 1,438,153 | – | – | – | – | 1,058 | – | – | 1,439,211 | | Share Premium Account | 3,651,830 | – | – | – | – | 8,441 | – | – | 3,660,271 | | Total Reserves | 5,276,965 | 2,252,622 | (78,826) | 2,173,796 | (396,848) | (4,531) | – | – | 6,939,790 | | Non-controlling Interests | 2,132,803 | 499,517 | 518,952 | 145,617 | – | – | 154,714 | (427,406) | 2,035,224 | | Total Equity | 13,047,628 | 2,752,139 | (50,408) | 2,701,731 | (396,848) | 4,968 | 154,714 | (427,406) | 13,870,385 | Consolidated Statement of Cash Flows For the year ended December 31, 2018, the Group's net cash from operating activities was RMB 6.168 billion, net cash used in investing activities was RMB 3.339 billion, and net cash used in financing activities was RMB 4.980 billion, resulting in cash and cash equivalents at year-end amounting to RMB 3.214 billion, a decrease of RMB 2.150 billion from the beginning of the year 2018 Consolidated Statement of Cash Flows Summary (RMB thousand) | Cash Flow Category | 2018 | 2017 (Restated) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 6,168,420 | 2,873,308 | | Net Cash (Used in)/from Investing Activities | (3,338,500) | 1,265,671 | | Net Cash Used in Financing Activities | (4,979,652) | (1,575,432) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (2,149,732) | 2,563,547 | | Cash and Cash Equivalents at Beginning of Year | 5,349,765 | 2,822,968 | | Cash and Cash Equivalents at End of Year | 3,214,170 | 5,349,765 | Notes to the Financial Statements The notes to the financial statements provide detailed information on the Group's accounting policies, significant accounting judgments and estimates, operating segment information, revenue and other income, finance costs, profit before tax, taxation, directors' and highest-paid employees' emoluments, earnings per share, dividends, property, plant and equipment, investment properties, properties held for sale, properties under development, prepayments for acquisition of land use rights, investments in joint ventures and associates, intangible assets, available-for-sale financial investments, financial assets at fair value through other comprehensive income, trade receivables, prepayments, deposits and other receivables, restricted cash, deposits, bank and cash balances, issued share capital, reserves, trade payables, receipts in advance, accruals and other payables, contingent liabilities, interest-bearing bank and other loans, loans to/from related parties, amounts due to/from related parties, deferred taxation, non-wholly owned subsidiaries with material non-controlling interests, business combinations, acquisition of assets through acquisition of subsidiaries, disposal and deemed disposal of subsidiaries, notes to the consolidated statement of cash flows, pledge of assets, commitments, related party transactions, financial instruments by category, fair value and fair value hierarchy of financial instruments, financial risk management objectives and policies, and details of principal subsidiaries - The Group first adopted new and revised Hong Kong Financial Reporting Standards in 2018, including HKFRS 9 Financial Instruments and HKFRS 15 Revenue from Contracts with Customers, resulting in transitional adjustments to the financial statements[25][26][132][134][141] - The adoption of HKFRS 15 resulted in a RMB 5.0815 billion decrease in 2018 revenue and a RMB 1.3525 billion decrease in profit attributable to owners of the company[143] - The Group exercises significant accounting judgments and estimates in areas such as property sales revenue recognition, asset impairment, land appreciation tax, and fair value estimation of investment properties[196][197][198][199][200][201] - In 2018, the Group acquired Women Touzi Group to expand its property leasing business and recognized a goodwill impairment of RMB 29.702 million[263][265][266] - In 2018, the Group disposed of subsidiaries including Jinheheng, Zhitao, and Shuokun, and deemed disposed of Xinyu Group and Ronghui Group, resulting in cash inflows and equity changes[270][271][272][273] - The Group's financial instruments are exposed to foreign exchange risk, interest rate risk, credit risk, and liquidity risk, with corresponding management policies in place[299][1202] - As of the end of 2018, 45% of the Group's debt was due within one year, with liquidity risk managed through related party loans and interest-bearing bank loans[303][1221]