上实城市开发(00563) - 2019 - 年度财报

Chairman's Statement Operating Performance and Strategic Review In 2019, facing complex domestic and international conditions and real estate market controls, the company achieved stable growth with contract sales of RMB 7.69 billion, total revenue of HKD 8.58 billion, and profit attributable to shareholders of HKD 0.60 billion, proposing a total dividend of HKD 4.1 cents per share Operating Performance Summary | Indicator | 2019 | | :--- | :--- | | Contract Sales | RMB 7.69 billion | | Total Revenue | HKD 8.58 billion | | Profit After Tax | HKD 1.22 billion | | Profit Attributable to Shareholders | HKD 0.60 billion | | Proposed Total Dividend | HKD 4.1 cents per share | - The company's strategy focuses on four core business segments: residential property development, investment property development, urban renewal services, and industry-finance capital cooperation, promoting diversified business development[19] - The commercial real estate segment performed steadily, with full-year commercial and office rental income reaching HKD 0.75 billion, a 6.6% year-on-year increase, while the company steadily advanced its new rental housing business by signing the first Caohejing project[22] - The company adopted a comprehensive land acquisition strategy, successfully acquiring quality land in Yantai, Shandong, and by year-end, held 26 projects across 11 key cities with a salable gross floor area of 3.78 million square meters[23] Management Discussion and Analysis Business Review In 2019, the Group's core business focused on real estate development and investment in first and second-tier cities, achieving significant growth in contract sales to RMB 7.69 billion, with land reserves of approximately 3.78 million square meters supporting 3-5 years of development, and a 6.6% increase in investment property rental income Contract Sales Performance | Item | 2019 | 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Contract Sales | RMB 7.688 billion | RMB 5.149 billion | +49.3% | | Of which: Commercial Properties | RMB 6.180 billion | RMB 5.149 billion | +20.0% | | Of which: Affordable Housing | RMB 1.508 billion | - | - | - As of the end of 2019, the Group's land reserves comprised 26 projects across 11 key mainland cities, with a future salable planned gross floor area of approximately 3.777 million square meters, sufficient to support 3 to 5 years of development[28] - The total area of investment properties was approximately 0.756 million square meters, with overall rental income increasing by 6.6% year-on-year to HKD 0.75 billion; the first rental housing project, Caohejing, has signed a construction contract with a total gross floor area of approximately 0.066 million square meters[30] Financial Performance In 2019, the Group's total revenue increased by 23.0% to HKD 8.58 billion, with gross profit up 8.7% to HKD 3.68 billion, while profit attributable to shareholders grew 4.8% to HKD 0.60 billion, despite a slight increase in net debt-to-equity ratio to 29.1% and a decrease in current ratio to 1.9 times Key Financial Indicators | Financial Indicator | 2019 | 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | HKD 8.58 billion | HKD 6.98 billion | +23.0% | | - Property Sales Revenue | HKD 7.54 billion | HKD 5.97 billion | +26.3% | | Gross Profit | HKD 3.68 billion | HKD 3.38 billion | +8.7% | | Gross Profit Margin | 42.8% | 48.5% | -5.7 percentage points | | Profit for the Year | HKD 1.22 billion | HKD 1.27 billion | -3.9% | | Profit Attributable to Shareholders | HKD 0.60 billion | HKD 0.57 billion | +4.8% | | Basic Earnings Per Share | HKD 12.48 cents | HKD 11.91 cents | +4.8% | - Revaluation of investment properties recorded a net appreciation of approximately HKD 0.21 billion, primarily from Shanghai Mart, compared to a net impairment of HKD 0.176 billion in the prior year[31] Key Financial Ratios | Financial Ratio | End of 2019 | End of 2018 | | :--- | :--- | :--- | | Net Debt to Total Equity Ratio | 29.1% | 26.4% | | Current Ratio | 1.9 times | 2.3 times | Outlook Despite global economic uncertainties and short-term challenges from the COVID-19 pandemic, the Group anticipates compensating for first-half impacts by increasing sales in the second half of 2020, continuing to focus on high-end residential development and commercial asset operations in core cities - The Group anticipates that while the COVID-19 pandemic may affect contract sales and construction progress, the impact can be mitigated by increased sales efforts in the second half, given the first quarter is traditionally a low season and the Group has no projects in Hubei[36] - The Group will continue to adhere to pragmatic and prudent principles, focusing on high-end residential development while expanding investment and operation of commercial assets in core urban areas to maintain market advantage[37] Property Information Land Reserves As of December 31, 2019, the Group held 26 real estate projects across 11 major cities, with a total planned gross floor area of 13.17 million square meters and approximately 3.78 million square meters of future salable gross floor area, laying a solid foundation for long-term development Land Reserve Summary | Item | Area (square meters) | | :--- | :--- | | Total Site Area | 5,853,038 | | Total Planned Gross Floor Area | 13,170,320 | | Total Salable Gross Floor Area | 10,594,234 | | Cumulative Sold Area | 6,817,303 | | Future Salable Area | 3,776,931 | - Land reserve projects are distributed across 11 key mainland cities including Shanghai, Beijing, Tianjin, Xi'an, Chongqing, Kunshan, Wuxi, Shenyang, Yantai, Changsha, and Shenzhen[28] Major Investment Properties As of the end of 2019, the Group's major investment properties had a total planned gross floor area of 0.756 million square meters, located in core cities like Shanghai, Chongqing, and Beijing, encompassing commercial, office, exhibition, and parking facilities Key Investment Properties | Project | City | Property Type | Planned Gross Floor Area (square meters) | | :--- | :--- | :--- | :--- | | Shanghai Mart | Shanghai | Exhibition, Trading Market, Office, and Parking Spaces | 284,651 | | City on City | Chongqing | Commercial, Parking Spaces | 251,847 | | Chenkai International Plaza | Shanghai | Office Building | 45,239 | | Shenyang Chenkai Center | Shenyang | Commercial | 30,332 | | Total | - | - | 756,269 | Corporate Governance Report Board and Committees The company maintains high corporate governance standards, complying with all Listing Rules, with a 10-member Board (6 executive, 4 independent non-executive directors) overseeing strategy and four specialized committees ensuring professional and independent decision-making - For the year ended December 31, 2019, the company consistently complied with all code provisions of Appendix 14 "Corporate Governance Code" of the Listing Rules[115] Board Committee Composition | Committee | Chairman | Composition | | :--- | :--- | :--- | | Audit Committee | Li Jiahui (INED) | 3 Independent Non-Executive Directors | | Remuneration Committee | Du Huikai (INED) | 2 Independent Non-Executive Directors, 1 Executive Director | | Nomination Committee | Zeng Ming (Chairman) | 1 Executive Director, 2 Independent Non-Executive Directors | | Investment Appraisal Committee | Fan Renda (INED) | 2 Independent Non-Executive Directors, 2 Executive Directors | Internal Control and Risk Management The Board is responsible for maintaining sound internal control and risk management systems to safeguard assets and shareholder interests, with regular reviews by the Audit Committee and annual assessments of risk management effectiveness by internal auditors - The Board is responsible for maintaining and regularly reviewing the effectiveness of internal control and risk management systems to ensure they adequately meet business needs[159] - The Group has established anti-fraud policies and procedures, along with risk management procedures to identify and control internal and external risks, with the Audit Committee having reviewed the system's effectiveness on behalf of the Board during the reporting period[160][161] Environmental, Social and Governance Report Talent Management The Group adheres to a "people-oriented" philosophy, ensuring fair employment and promotion, comprehensive compensation, and extensive training, totaling 21,114 hours in 2019, while prioritizing occupational health and safety with no major accidents reported Employee and Training Statistics | Category | Data | | :--- | :--- | | Total Employees (Year-end) | 782 persons | | - Male | 329 persons | | - Female | 453 persons | | Total Training Hours | 21,114 hours | | Percentage of Employees Trained | 100% | - The Group strictly prohibits child and forced labor, ensuring occupational health and safety through measures such as establishing an Occupational Safety and Health Committee, formulating emergency plans, and providing safety training[174][193][194] Product Responsibility and Supply Chain The Group prioritizes project quality with a systematic management structure, ensuring no reconstruction due to safety or quality issues, while maintaining a sustainable supply chain through a comprehensive vendor list and actively combating corruption through education and disciplinary measures - The Group has established a full-process engineering quality management system from design to construction and delivery, ensuring product quality, with no major quality or safety incidents reported during the period[209][210] - In supply chain management, the Group has established a supplier database of 282 suppliers and manages them meticulously through an evaluation mechanism to ensure product quality and service levels[218][220] - The Group is resolute against corruption, conducting anti-corruption education, investigations, and handling through its Disciplinary Inspection Committee, and requiring middle management to sign "Commitment Letters on Integrity in Practice"[222][223] Environmental Protection The Group integrates environmental protection into all stages of property development and operation, focusing on energy conservation and emission reduction, promoting green buildings like Binjiang Chenkai Center, and implementing eco-friendly office practices - The Group actively promotes green buildings, with its Binjiang Chenkai Center project receiving a Two-Star Green Building Design Label certificate and the TODTOWN TIANHUI project obtaining LEED Gold pre-certification[226][231] Greenhouse Gas Emissions | Greenhouse Gas Emissions (Scope 1 + Scope 2) | 2019 | Unit | | :--- | :--- | :--- | | Total Emissions | 46,302.80 | tonnes of CO2e | | Total Emission Intensity | 0.054 | tonnes/HKD 10,000 revenue | Resource Consumption | Resource Consumption | 2019 | Unit | | :--- | :--- | :--- | | Electricity Consumption | 59,459,597.80 | kWh | | Water Consumption | 943,880.18 | tonnes | Community Investment The Group actively fulfills its social responsibility through continuous contributions to education, charity, and community building, including donations to Chongming District and Xuhui District, and ongoing support for Hope Primary Schools and rural teacher training programs - During the reporting period, the Group's major donations included RMB 1 million to Shanghai Chongming District, RMB 0.15 million to Shanghai Xuhui District Charity Foundation, and financial aid to impoverished university students[246] - The Group continuously carries out branded public welfare activities, including supporting Lu'an Chenkai Hope Primary School, organizing the "Art for Children" care program, and the seventh consecutive "Wanyuan Spark" rural teacher training program[247][248][250] Directors' Report Results and Distributions The Board reported the annual results for the year ended December 31, 2019, and proposed a final dividend and a special dividend, with the total amount remaining consistent with the previous year Proposed Dividends | Dividend Item | Proposed for 2019 | For 2018 | | :--- | :--- | :--- | | Final Dividend | HKD 1.8 cents per share | HKD 1.8 cents per share | | Special Dividend | HKD 2.3 cents per share | HKD 2.3 cents per share | | Total Dividend | HKD 4.1 cents per share | HKD 4.1 cents per share | Share Capital and Share Option Schemes During the reporting period, the company repurchased and cancelled 4.65 million ordinary shares, with 27.75 million share options remaining unexercised under the 2002 scheme by year-end, and no options granted under the new 2013 scheme - For the year ended December 31, 2019, the company repurchased a total of 4,650,000 ordinary shares on the Stock Exchange for a total consideration of approximately HKD 4.92 million, all of which have been cancelled[358] Unexercised Share Options | Share Option Scheme | Number of Unexercised Options as at End of 2019 | % of Issued Share Capital | | :--- | :--- | :--- | | 2002 Scheme | 27,750,000 options | Approx 0.58% | | 2013 New Scheme | 0 options | 0% | Financial Statements and Notes Consolidated Statement of Profit or Loss and Other Comprehensive Income In 2019, the Group's total revenue was HKD 8.58 billion, a 23.0% increase, with gross profit at HKD 3.68 billion, up 8.7%, resulting in a profit attributable to owners of HKD 0.60 billion, a 4.8% increase, despite a slight decrease in profit for the year to HKD 1.22 billion due to reduced income tax expense Consolidated Profit or Loss Summary | Item (HKD thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Total Revenue | 8,583,906 | 6,977,683 | | Gross Profit | 3,676,392 | 3,380,865 | | Profit Before Tax | 2,745,131 | 2,824,387 | | Profit for the Year | 1,219,698 | 1,269,747 | | Profit Attributable to Owners of the Company | 600,292 | 573,074 | Consolidated Statement of Financial Position As of the end of 2019, the Group's total assets were HKD 60.44 billion, total liabilities HKD 36.66 billion, and total equity HKD 23.78 billion, indicating a stable financial structure, with non-current assets increasing to HKD 20.54 billion primarily due to investment property growth Consolidated Financial Position Summary | Item (HKD thousands) | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Non-current Assets | 20,536,554 | 17,461,508 | | Current Assets | 39,907,470 | 41,528,769 | | Total Assets | 60,444,024 | 58,990,277 | | Current Liabilities | 21,227,410 | 18,401,644 | | Non-current Liabilities | 15,434,988 | 17,212,827 | | Total Liabilities | 36,662,398 | 35,614,471 | | Total Equity | 23,781,626 | 23,375,806 | Consolidated Statement of Cash Flows In 2019, the Group generated HKD 1.22 billion in net cash from operating activities, a significant improvement, with net cash outflow from investing activities of HKD 1.19 billion and net cash inflow from financing activities of HKD 0.16 billion, resulting in year-end cash and cash equivalents of HKD 9.11 billion Consolidated Cash Flow Summary | Item (HKD thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 1,218,395 | 296,219 | | Net Cash Used in Investing Activities | (1,193,971) | (391,654) | | Net Cash Generated From (Used In) Financing Activities | 155,674 | (3,606,518) | | Net Increase (Decrease) in Cash and Cash Equivalents | 180,098 | (3,701,953) | | Cash and Cash Equivalents at End of Year | 9,111,782 | 9,127,828 | Notes to the Consolidated Financial Statements The financial statement notes detail the company's accounting policies and specific components of various items, including revenue recognition, fair value estimation of investment properties, net realizable value assessment of properties held for sale, and the structure and collateralization of bank borrowings Note 5. Revenue The Group's total revenue primarily derives from property sales, accounting for 87.8%, recognized upon completion and delivery, while hotel operations and property management revenue are recognized over time Revenue Breakdown | Revenue Source (HKD thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Property Sales | 7,536,760 | 5,966,198 | | Hotel Operations | 290,232 | 295,653 | | Property Management | 6,894 | 12,163 | | Rental | 750,020 | 703,669 | | Total | 8,583,906 | 6,977,683 | Note 16. Investment Properties As of the end of 2019, the fair value of the Group's investment properties significantly increased to HKD 14.80 billion from HKD 12.00 billion, mainly due to transfers from properties held for sale and fair value gains, with valuations performed by independent professional valuers using investment and direct comparison methods Changes in Fair Value of Investment Properties | Item (HKD thousands) | Amount | | :--- | :--- | | As at January 1, 2019 | 12,002,506 | | Transfers from Properties Held for Sale | 2,235,045 | | Net Fair Value Gain | 210,191 | | Others and Exchange Adjustments | 355,516 | | As at December 31, 2019 | 14,803,258 | - Valuation methods primarily include the investment method (based on market rents and reversionary yields) and the direct comparison method (based on comparable property transaction prices); reversionary yield is a key unobservable input, where a higher yield results in a lower fair value[605] Note 34. Bank and Other Borrowings As of the end of 2019, the Group's total borrowings were approximately HKD 16.71 billion, comprising HKD 9.19 billion in bank borrowings and HKD 7.52 billion in other borrowings, with HKD 4.91 billion being secured and HKD 5.43 billion due within one year Borrowing Classification | Borrowing Classification (HKD thousands) | December 31, 2019 | | :--- | :--- | | Bank Borrowings | 9,190,100 | | Other Borrowings | 7,522,202 | | Total Borrowings | 16,712,302 | | Secured Borrowings | 4,907,102 | | Unsecured Borrowings | 11,805,200 | Repayment Schedule | Repayment Period (HKD thousands) | Amount | | :--- | :--- | | Within one year | 5,426,344 | | Between one and two years | 3,242,916 | | Between two and five years | 6,902,203 | | After five years | 1,140,839 | Financial Summary Five-Year Financial Summary This section presents the Group's key financial data over the past five years, illustrating trends in revenue, profit, assets, and liabilities, showing stable growth in profit attributable to owners and expanding total assets and equity despite revenue fluctuations Five-Year Financial Highlights | Item (HKD thousands) | 2015 | 2016 | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 3,871,923 | 5,490,564 | 9,372,903 | 6,977,683 | 8,583,906 | | Profit Attributable to Owners of the Company | 517,385 | 521,888 | 536,109 | 573,074 | 600,292 | | Total Assets | 63,780,450 | 60,136,208 | 64,477,607 | 58,990,277 | 60,444,024 | | Total Liabilities | 44,266,699 | 38,157,202 | 40,280,312 | 35,614,471 | 36,662,398 |