Financial Performance - The group achieved rental income of approximately RMB 896 million for the period, an increase of about 11% compared to RMB 805 million in the same period of 2021, primarily driven by the strong performance of newly completed projects, namely Lize SOHO and Gubei SOHO[20] - Gross profit for the period was approximately RMB 742 million, reflecting a year-on-year increase of about 13% from RMB 659 million in 2021[20] - The rental business gross profit margin was approximately 83%, slightly up from 82% in the same period of 2021[20] - Operating revenue for the six months ended June 30, 2022, was RMB 896,040,000, an increase of 11.3% from RMB 804,992,000 in the same period of 2021[50] - Net profit attributable to shareholders for the period was RMB 190,568,000, compared to a loss of RMB 80,216,000 in the previous year[50] - The company reported a pre-tax profit of RMB 312,877,000, significantly higher than RMB 67,733,000 in the prior year[50] - Other income for the six months ended June 30, 2022, was RMB 281,281 thousand, up 42.3% from RMB 197,504 thousand in the same period of 2021[77] - The total income tax expense for the current period was RMB 119,226,000, a decrease of 17.7% from RMB 144,763,000 in the previous year[80] Assets and Liabilities - Total assets as of June 30, 2022, were RMB 69,193,190,000, a decrease from RMB 70,446,515,000 at the end of 2021[53] - Total liabilities decreased to RMB 31,869,471,000 from RMB 33,346,751,000 at the end of 2021[53] - The company’s cash and cash equivalents amounted to RMB 461,533,000, compared to RMB 734,698,000 at the end of 2021[52] - Total liabilities exceeded current assets by RMB 3,120,566 thousand as of June 30, 2022, raising concerns about liquidity[60] - The group’s total liabilities as of June 30, 2022, were not explicitly stated but can be inferred from the total assets and equity figures[71] - The company’s accounts payable decreased to RMB 973,918,000 from RMB 1,017,607,000, reflecting a decline of about 4.3%[91] - The company’s total liabilities as of June 30, 2022, were RMB 2,921,193,000, a decrease of 10.1% compared to the previous year[91] Cash Flow - The company reported a net cash flow from operating activities of RMB (334,433) thousand for the six months ended June 30, 2022, compared to RMB 68,193 thousand for the same period in 2021, indicating a significant decline[57] - Cash and cash equivalents decreased by RMB 294,571 thousand, with an ending balance of RMB 461,533 thousand as of June 30, 2022, compared to RMB 1,492,098 thousand at the same time in 2021[58] - The company generated RMB 848,063 thousand from sales of properties and services during the first half of 2022, down from RMB 1,024,137 thousand in the same period of 2021, reflecting a decrease of approximately 17.3%[57] - The company’s cash flow from financing activities showed a net outflow of RMB (1,290,842) thousand, compared to an inflow of RMB 58,756 thousand in the previous year[57] Market Conditions - For the first half of 2022, SOHO China's rental income and occupancy rates in major projects showed a decline compared to the end of 2021, with Beijing's occupancy rates dropping from 77% to 69% and Shanghai's from 98% to 92%[9][10] - The net absorption of Grade A office space in Beijing and Shanghai for the first half of 2022 was 444,000 square meters and 301,000 square meters respectively, representing a significant decrease compared to the same period in 2021[6] - The rental market is expected to remain under pressure in the next six months due to a large number of new projects delayed from the first half of the year entering the market[6] - SOHO China believes that the long-term stability and asset scarcity of the Beijing and Shanghai office markets will continue to attract investors as the impact of the pandemic gradually diminishes[7] Environmental and Social Initiatives - The total energy consumption of 24 managed properties decreased by approximately 67.89 million kWh, achieving an energy-saving rate of about 36.5% and a carbon reduction of approximately 55,000 tons in the first half of 2022[7] - SOHO China provided rent deferrals and pandemic subsidies to tenants facing difficulties, maintaining a high level of customer satisfaction during the challenging period[7] - The company emphasizes its commitment to environmental, social, and governance (ESG) initiatives, enhancing corporate governance and environmental protection measures[7] - The company is advancing the construction of China's first "Zero Carbon Library" demonstration building, which is expected to be completed and delivered in the second half of 2022[7] Corporate Governance - The company has confirmed compliance with the Corporate Governance Code during the reporting period[41] - All directors have acknowledged adherence to the standards set forth in the Listing Rules during the reporting period[41] - The board of directors includes two executive directors and three independent non-executive directors, ensuring a balanced core competency structure[43] - The company has purchased liability insurance for directors and senior executives to cover potential legal responsibilities[43] Shareholder Information - As of June 30, 2022, the company has a total of 3,324,100,000 shares held by Pan Shiyi, representing a 63.9309% ownership stake[33] - Boyce Limited and Capevale Limited each hold 1,662,050,000 shares, accounting for 31.9654% of the company's equity[34] - The company did not declare an interim dividend for the period, consistent with the previous year[31][87] Financial Adjustments and Risks - The group reported an adjustment of RMB 693,878,000 in liabilities due to underreported corporate income tax and land value-added tax from previous years[65] - The total amount due for underpaid corporate income tax and land value-added tax is RMB 197,511,000, with related penalties and late fees totaling RMB 514,538,000[65] - The group has not made any significant changes to its risk management policies since the year ended December 31, 2021[68] - The financial risk factors include market risk, credit risk, and liquidity risk, which the group continues to manage[68]
SOHO中国(00410) - 2022 - 中期财报