Impact of COVID-19 - The Group's operations in the PRC were significantly impacted by the COVID-19 pandemic, leading to the suspension of construction and sales activities, as well as the complete closure of certain hotels[15]. - The ongoing impact of COVID-19 and regional outbreaks in China continues to create uncertainty for the Group's business operations[28]. - The challenges faced by the Group are reflective of broader issues within the Chinese real estate industry, particularly regarding financing and market confidence[17]. - The Group recorded a gross loss for the year ended 31 December 2021, mainly due to property development activities impacted by the COVID-19 pandemic[111]. Financial Performance - The Group achieved a record high in contracted sales for the year ended December 31, 2021, with total contracted sales amounting to RMB4,821.1 million and attributable contracted sales of RMB2,308.1 million[26]. - Revenue from property leasing and hotel operations increased by 10.4% compared to the same period in 2020, indicating a recovery to pre-pandemic levels[27]. - The Group's revenue increased by approximately 28.3% from approximately RMB1,389.1 million in 2020 to approximately RMB1,782.5 million in 2021, primarily due to increased revenue from property sales and hotel operations[93]. - Revenue from property development increased by 32.1% from approximately RMB1,144.5 million in 2020 to approximately RMB1,512.3 million in 2021, driven by an increase in the average selling price from approximately RMB9,521 per sq.m. in 2020 to RMB16,329 per sq.m. in 2021[99]. - The Group incurred a loss attributable to equity shareholders of approximately RMB1,987.1 million for the year, primarily due to gross losses from property sales and significant revaluation losses on investment properties caused by the COVID-19 pandemic[131]. Financing Challenges - Since mid-2021, the Group has faced difficulties in securing onshore and offshore financing, resulting in reduced access to capital for real estate development[17]. - The adverse reaction from offshore capital markets to onshore events has limited the Group's funding sources for addressing upcoming debt maturities[18]. - The Group's reliance on the offshore bond market for refinancing and growth capital has been severely restricted, as it is effectively unavailable for privately-owned Chinese property developers[18]. - The restructuring of existing senior notes has received support from over 85% of noteholders, which will extend the maturity by 3 years and reduce the interest rate to 10%[33]. Operational Strategies - The Group plans to accelerate pre-sale activities and offer significant discounts on projects to enhance sales and maintain liquidity[25]. - The Group aims to focus on developing projects connected to metro stations or transportation hubs as part of its core strategy for future growth[34]. - The Group's management remains focused on strategic growth and market expansion despite challenges posed by the pandemic[58]. Land and Property Development - The Group has significant land bank and operations in the PRC, which are crucial for its future growth prospects[15]. - As of December 31, 2021, the Group's total land bank was approximately 1,528,843 sq.m., including 102,658 sq.m. of completed but unsold properties[55]. - The Group's properties under development totaled approximately 673,734 sq.m. as of December 31, 2021[55]. - The Group's approach to land acquisition in 2021 was more prudent due to the impact of the COVID-19 pandemic[53]. Cost Management - Increased costs in raw materials and manpower are affecting the Group's profitability and operational efficiency[28]. - The Group is implementing stricter cost control measures to manage discretionary capital expenditures amid the current market conditions[32]. - The average land acquisition cost as a percentage of average selling price rose from 35.9% in 2020 to 45.3% in 2021[107]. Cash Flow and Liquidity - The Group's cash flows and liquidity have decreased due to a significant slowdown in residential property sales and a substantial reduction in property prices in the PRC[21]. - As of December 31, 2021, the Group had bank deposits and cash of approximately RMB1,214.9 million, a decrease from RMB1,413.3 million in 2020[132]. - The Group's net cash generated from operating activities was approximately RMB1,023.4 million for the year, compared to RMB536.6 million in 2020, driven by a decrease in properties under development for sale[142][145]. Debt and Gearing Ratios - The net gearing ratio increased to approximately 130.7% as of December 31, 2021, compared to 95.6% in 2020, indicating a higher level of debt relative to equity[134]. - The debt-to-asset ratio was approximately 61.7% as of December 31, 2021, compared to 60.4% in the previous year, reflecting an increase in total indebtedness[138]. Market Risks - The Group's exposure to market risks includes foreign exchange rate risk, interest rate risk, credit risk, liquidity risk, and equity price risk, all of which are monitored regularly[180]. - The Group does not currently have a foreign currency hedging policy but closely monitors foreign exchange exposure for potential hedging opportunities[186]. - The Directors believe that the possibility of default by property purchasers is remote, leading to no value being recognized for financial guarantee contracts at inception as of December 31, 2021[177].
金轮天地控股(01232) - 2021 - 年度财报