SHIMAO GROUP(HK:00813)2024-09-26 08:40Sales Performance - In the first half of 2024, Shimao Group achieved a contract sales amount of RMB 17.09 billion, with a total sales area of 1.313 million square meters[5]. - The company delivered approximately 25,000 housing units across 41 projects in 34 cities during the first half of 2024[6]. - Property sales revenue amounted to RMB 23.17 billion, accounting for 79.4% of total revenue, down 5.0% year-on-year; the sales area was 1.508 million square meters, a decline of 25.4%[11]. - The total area sold in the first half of 2024 was 1,508,249 square meters, compared to 2,021,593 square meters in the same period of 2023[21]. - Total revenue for the first half of 2024 reached RMB 29.19 billion, a decrease of 3.9% compared to the same period in 2023[11]. Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 29,194,689 thousand, a decrease of 3.9% from RMB 30,393,587 thousand in the same period of 2023[72]. - Gross profit for the period was RMB 14,859 thousand, significantly down from RMB 3,124,334 thousand in the previous year, indicating a drastic decline in profitability[72]. - Operating loss increased to RMB 14,232,355 thousand from RMB 1,787,968 thousand year-on-year, reflecting a worsening operational performance[72]. - The company's total assets decreased to RMB 485,584,590 thousand as of June 30, 2024, down from RMB 543,250,395 thousand at the end of 2023[75]. - The net loss attributable to equity holders of the company was RMB 22,667,515 thousand, compared to RMB 12,057,786 thousand in the prior year, indicating a significant increase in losses[73]. Debt and Restructuring - Shimao Group is actively advancing debt restructuring efforts, particularly for its overseas debts, with a detailed restructuring plan launched on March 25, 2024[6]. - The company is actively pursuing a proposed restructuring of its offshore debt, which includes approximately USD 6.8 billion in senior notes and various loans totaling approximately USD 2.1 billion and HKD 20.4 billion[84]. - The company has applied for loans totaling approximately RMB 504 million, of which RMB 139 million has been approved, as part of efforts to secure financing for ongoing projects[84]. - As of June 30, 2024, total borrowings were approximately RMB 256.603 billion, a decrease from RMB 263.963 billion as of December 31, 2023[35]. - The asset-to-liability ratio increased to approximately 52.8% as of June 30, 2024, compared to 48.6% as of December 31, 2023[35]. Operational Strategy - The group is focusing on internal asset revitalization and maximizing asset value by halting land acquisitions and enhancing existing projects[5]. - The company emphasizes risk prevention and management to ensure stable operations amid ongoing market challenges[5]. - Shimao Group aims to enhance operational efficiency and product quality to meet its annual business targets[6]. - The company plans to focus on enhancing customer-centric core competitiveness and improving operational agility in the second half of 2024[9]. - The company will continue to pause land acquisitions while optimizing existing asset management to maximize asset value[14]. Property Management and Hotel Operations - Shimao Services reported revenue of RMB 4.032 billion in the first half of 2024, with a gross profit of RMB 812 million, and a net profit of RMB 211 million, marking a 5.7% year-on-year increase in property management service revenue[7]. - The hotel segment generated total revenue of RMB 1.07 billion in the first half of 2024, reflecting a 1.4% year-on-year growth, with RevPAR increasing by 2.1%[7]. - The overall occupancy rate for managed commercial projects was close to 90%, remaining stable compared to the end of the previous year[17]. - The overall occupancy rate for managed office buildings was below 75%, a decrease of 5-6 percentage points compared to the end of the previous year[17]. - Hotel operating revenue increased by 1.4% to approximately RMB 1.074 billion in the first half of 2024, compared to RMB 1.059 billion in the same period of 2023[22]. Employee and Shareholder Information - As of June 30, 2024, the group employed 49,993 employees, with a total salary expenditure of approximately RMB 2.557 billion[39]. - The group has adopted three share incentive plans to recognize and encourage contributions from selected employees, with a maximum number of shares granted under the 2011 plan being 69,319,016 shares, representing 2% of the issued shares at the adoption date[44]. - The company’s major shareholder, Xu Rongmao, holds 2,422,840,586 shares, representing approximately 63.795% of the issued share capital[54]. - The company did not recommend an interim dividend for the six months ended June 30, 2024, consistent with the previous year[70]. - The company has a dedicated remuneration committee to evaluate the performance and compensation of directors and senior management[65]. Legal and Compliance Matters - The company is in communication with auditors regarding uncertainties related to going concern, primarily influenced by the current state of the Chinese real estate market and the progress of overseas debt restructuring[42]. - The company has ongoing legal proceedings related to comprehensive borrowing or financial guarantees, but management believes these will not have a significant adverse impact on the company's operations or financial condition[145]. - The company has reached preliminary agreement with auditors on accounting treatment for financing arrangements with third-party trust companies, which is expected to eliminate the non-standard audit opinion for the year ending December 31, 2024[41]. - The group has communicated recent operational conditions and debt restructuring progress to auditors, who are currently unable to provide a definitive opinion[42]. - The company has provided mortgage financing guarantees amounting to RMB 36,479,599 thousand as of June 30, 2024, down from RMB 39,635,718 thousand as of December 31, 2023, indicating a decrease of approximately 5.5%[144].