中国海外发展(00688) - 2020 - 中期财报

Chairman's Report Chairman Yan Jianguo's report highlights the Group's resilient performance in H1 2020 despite the COVID-19 pandemic and global economic downturn, emphasizing social responsibility, robust financial strategies, sales growth, quality land reserves, optimized commercial assets, new business cultivation, and commitment to technological innovation Chairman's Report Chairman Yan Jianguo's report highlights the Group's resilient performance in H1 2020 despite the COVID-19 pandemic and global economic downturn, emphasizing social responsibility, robust financial strategies, sales growth, quality land reserves, optimized commercial assets, new business cultivation, and commitment to technological innovation Key Financial Indicators for H1 2020 | Indicator | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | | Revenue (RMB) | 88.63 billion | +11.0% | | Profit Attributable to Shareholders (RMB) | 20.53 billion | -3.7% | | Core Net Profit (RMB) | 17.94 billion | +0.3% | | Net Profit Margin (%) | 23.2% | Industry Leading | | Basic Earnings Per Share (RMB) | 1.87 | - | | Interim Dividend Per Share (HKD) | 0.45 | - | - Despite the pandemic, the Group achieved contracted sales of RMB 172.01 billion, a 4.2% year-on-year increase, with June's single-month sales reaching a record RMB 57.56 billion, up 32.3% year-on-year[19] - Adhering to a prudent financial strategy, the Group held RMB 111.38 billion in cash at period-end, with an asset-liability ratio of 59.77% and a net gearing ratio of 32.95%, maintaining one of the lowest levels in the industry[19] - The Group continued to deepen its presence in mainstream cities and acquired large-scale projects, adding RMB 52.28 billion in land premium for new land interests during the period, bringing the total land reserve of the Group's series companies to 90.06 million square meters[20] - Total operating revenue from commercial assets reached RMB 2.03 billion, a 1.1% year-on-year increase, with asset structure continuously optimized through the sale of Chengdu projects and acquisition of Foshan projects; successful CMBS issuance at a coupon rate of 2.5% demonstrated market recognition for quality commercial assets[21] - Actively cultivating new growth drivers, new supply chain management and technology companies were established to build a B2B building materials trading platform and provide technology products and services for real estate development and operations[21] Management Discussion and Analysis Overall Performance In H1 2020, the Group's revenue grew 11.0% to RMB 88.63 billion, while profit attributable to shareholders decreased 3.7% to RMB 20.53 billion, maintaining industry-leading gross and net profit margins of 30.6% and 23.2% respectively, with a robust financial position and a net gearing ratio of 32.95% H1 2020 Performance Overview | Indicator | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Revenue (RMB) | 88.63 billion | 79.84 billion | | Operating Profit (RMB) | 31.26 billion | 31.30 billion | | Profit Attributable to Shareholders (RMB) | 20.53 billion | 21.32 billion | | Basic Earnings Per Share (RMB) | 1.87 | 1.95 | | Net Gearing Ratio (%) | 32.95% | - | Property Development Property development, the Group's core revenue source, saw revenue increase 11.2% year-on-year to RMB 86.35 billion, with 7.32 million square meters of projects completed across 21 cities and 21 new land plots acquired in 13 cities totaling 5.82 million square meters, bringing the Group's total land reserve to 90.06 million square meters at period-end Property Development Segment Performance | Indicator | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | | Revenue (RMB) | 86.35 billion | +11.2% | | Segment Profit (RMB) | 27.39 billion | +1.9% | - During the period, the Group acquired 21 new land plots in 13 cities in mainland China, adding a total gross floor area of 5.82 million square meters with an attributable land premium of RMB 52.28 billion[31][32] - As of June 30, 2020, the total land reserve of the Group's series companies (including China Overseas Grand Oceans) reached 90.06 million square meters[33] Property Investment Property investment business showed stable performance, with rental income increasing 6.2% year-on-year to RMB 1.92 billion, and segment profit growing 10.3%, primarily driven by a RMB 5.20 billion increase in fair value of investment properties Property Investment Segment Performance | Indicator | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | | Rental Income (RMB) | 1.92 billion | +6.2% | | Segment Profit (RMB) | 6.49 billion | +10.3% | Other Businesses During the period, other businesses generated RMB 0.36 billion in revenue, with hotels and other commercial properties' revenue decreasing to RMB 0.11 billion due to the pandemic's impact Other Business Revenue | Business Category | H1 2020 Revenue (RMB) | H1 2019 Revenue (RMB) | | :--- | :--- | :--- | | Total Other Business Revenue | 0.36 billion | 0.38 billion | | Of which: Hotels and Other Commercial Properties | 0.11 billion | 0.19 billion | Liquidity, Financial Resources and Debt Structure The Group maintained prudent financial management with a strong financial position, holding RMB 111.38 billion in cash and a net gearing ratio of 32.95% at period-end, with a weighted average borrowing cost of 4.01%, effectively managing debt structure and exchange rate/interest rate risks through flexible domestic and international financing platforms Key Financial Ratios and Financing Costs (As of June 30, 2020) | Indicator | Value | | :--- | :--- | | Current Ratio (times) | 2.3 | | Interest Coverage Ratio (times) | 7.2 | | Weighted Average Borrowing Cost (%) | 4.01% | | Net Gearing Ratio (%) | 32.95% | - The Group successfully utilized financing tools, issuing multi-tranche senior notes totaling USD 1 billion and the largest domestic green CMBS, raising RMB 3.70 billion at a coupon rate of just 2.5%[36] - As of period-end, total interest-bearing debt amounted to RMB 208.61 billion, with 16.0% due within one year; bank balances and cash reached RMB 111.38 billion, indicating ample available funds[37] Sustainable Development The Group integrated sustainable development into its operations, establishing the "Four Good Company" ESG strategic framework with specific 2019-2023 targets, achieving significant progress in green building, targeted poverty alleviation, and employee care during the first half, and successfully being included in the Hang Seng ESG 50 Index - The "Four Good Company" (Good Citizen, Good Product, Good Service, Good Performance) ESG strategic framework was established, along with 61 sustainable development goals[41][43] - During the period, 21 new green building certified projects were added, covering 2.57 million square meters; cumulative certified projects reached 315, totaling 58.04 million square meters[41][47] - The "Haihui Wanjia" targeted poverty alleviation initiative continued, establishing the "Kangle Mushroom" brand in Kangle County, Gansu, to help open up sales channels[41][45] - As of period-end, the Group employed over 6,100 staff, launched the MAPS job grade system to broaden employee career development paths, and conducted multiple series of online training programs[42] Financial Statements Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2020, the Group achieved revenue of RMB 88.63 billion, operating profit of RMB 31.26 billion, profit for the period of RMB 22.80 billion, and profit attributable to owners of the Company of RMB 20.53 billion H1 2020 Statement of Profit or Loss Key Data | Item | Amount (RMB thousands) | | :--- | :--- | | Revenue | 88,625,398 | | Operating Profit | 31,261,975 | | Profit Before Tax | 33,373,292 | | Profit for the Period | 22,803,100 | | Profit Attributable to Owners of the Company | 20,526,531 | Condensed Consolidated Statement of Financial Position As of June 30, 2020, the Group's total assets were RMB 764.00 billion, total liabilities were RMB 456.64 billion, and equity attributable to owners of the Company was RMB 295.09 billion, representing a 5.2% increase from the end of 2019 Statement of Financial Position Key Data (As of June 30, 2020) | Item | Amount (RMB thousands) | | :--- | :--- | | Total Assets (Non-current + Current) | 764,001,315 | | Total Liabilities (Non-current + Current) | 456,636,792 | | Equity Attributable to Owners of the Company | 295,085,932 | | Total Equity | 307,364,523 | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2020, net cash inflow from operating activities was RMB 7.06 billion, net cash outflow from investing activities was RMB 2.78 billion, net cash inflow from financing activities was RMB 13.05 billion, and cash and cash equivalents increased to RMB 110.39 billion at period-end H1 2020 Cash Flow Overview | Item | Amount (RMB thousands) | | :--- | :--- | | Net Cash from Operating Activities | 7,056,059 | | Net Cash Used in Investing Activities | (2,780,041) | | Net Cash from Financing Activities | 13,047,286 | | Net Increase in Cash and Cash Equivalents | 17,323,304 | | Cash and Cash Equivalents at End of Period | 110,391,906 | Notes to the Financial Statements This section of notes details the basis of financial statement preparation, application of accounting policies, segment information, dividends, debt, related party transactions, and other key financial information and calculation methods Note 5: Revenue and Segment Contribution The Group's businesses are primarily divided into property development, property investment, and other businesses, with property development contributing the vast majority of revenue and profit in H1 2020, accounting for 97.4% of total revenue H1 2020 Segment Revenue and Profit | Segment | Revenue (RMB thousands) | Profit (RMB thousands) | | :--- | :--- | :--- | | Property Development | 86,345,664 | 27,386,299 | | Property Investment | 1,922,976 | 6,493,906 | | Other Businesses | 356,758 | 5,232 | | Total | 88,625,398 | 33,885,437 | Note 10: Dividends The Board declared an interim dividend of HKD 0.45 per share for 2020, consistent with the prior year, which has not been recognized as a liability in these interim financial statements - The Board declared an interim dividend of HKD 0.45 per share for 2020 (H1 2019: HKD 0.45 per share)[80] Note 14: Bills Payable Due After One Year For the six months ended June 30, 2020, the Group newly issued three tranches of USD senior notes and one RMB commercial mortgage-backed security (CMBS) to optimize its debt structure H1 2020 Newly Issued Notes | Issue Date | Principal | Annual Interest Rate (%) | Maturity Date | | :--- | :--- | :--- | :--- | | March 2, 2020 | USD 300 million | 2.375% | March 2, 2025 | | March 2, 2020 | USD 500 million | 2.75% | March 2, 2030 | | March 2, 2020 | USD 200 million | 3.125% | March 2, 2035 | | April 28, 2020 | RMB 3.7 billion | 2.5% | April 28, 2038 | Other Information Purchases, Sales or Redemptions of the Group's Listed Securities During the period, the Company repurchased and cancelled 416,500 shares in June 2020, while subsidiaries issued multiple green asset-backed securities and housing rental special corporate bonds to raise funds for debt repayment and project construction - In June 2020, the Company repurchased 416,500 shares on the Stock Exchange for a total consideration of approximately HKD 9.94 million[104][105] - Subsidiaries issued two tranches of green asset-backed special schemes, raising approximately RMB 6.7 billion in total, and issued RMB 2 billion in housing rental special corporate bonds[106] Interests of Major Shareholders in Securities As of June 30, 2020, the Company's major shareholder was China State Construction Engineering Corporation (CSCEC), indirectly holding approximately 55.99% of the Company's shares through its subsidiaries, with China CITIC Group Corporation being another major shareholder, indirectly holding approximately 10.00% of the shares Major Shareholder Holdings (As of June 30, 2020) | Shareholder Name | Shareholding Percentage (Long Position) (%) | Capacity | | :--- | :--- | :--- | | China State Construction Engineering Corporation (CSCEC) | 55.99% | Interest in Controlled Corporation | | China CITIC Group Corporation | 10.00% | Interest in Controlled Corporation | Share Option Scheme The Company adopted a share option scheme in June 2018, under which 4,030,000 options had lapsed and 32,746,000 options had vested as of June 30, 2020, with no new options granted, exercised, or cancelled during the period - The Share Option Scheme was adopted on June 11, 2018, with a ten-year validity, aiming to incentivize and retain talent[123] - During the reporting period, 4,030,000 share options lapsed and 32,746,000 share options vested, with no share options granted, exercised, or cancelled during the period[125] Corporate Governance The Company complied with all code provisions of the Corporate Governance Code during the reporting period, with the sole exception of Code Provision A.4.1 regarding the appointment terms of non-executive directors, where the Company adopts a system of rotation and re-election instead of fixed terms - The Company complied with most provisions of the Corporate Governance Code, except for Code Provision A.4.1; the Company's non-executive directors do not have a specific term of appointment but are subject to retirement by rotation and re-election in accordance with the Company's articles of association[129]