Shanghai Xujiahui (SZ:002561) Hua Xia Shi Bao·2025-09-25 10:44Core Viewpoint - The company plans to significantly adjust the Shanghai Liu Bai project, increasing total investment from 708 million to 1.698 billion yuan, a nearly 140% increase, to enhance asset value and respond to intense market competition [2][5]. Investment and Scale - The total investment for the Shanghai Liu Bai project has been revised to approximately 1.698 billion yuan, up from 708 million yuan, reflecting a substantial increase in both investment and scale [5][10]. - The project will now feature a total construction area of about 42,500 square meters, including 30 above-ground floors and 2 underground floors, with a building height capped at 130 meters [5][6]. Market Competition - The adjustment is deemed necessary to address fierce competition in the retail sector, where the company faces challenges such as insufficient demand, increased e-commerce competition, and rising vacancy rates [6][8]. - The surrounding commercial landscape is evolving, with other established malls undergoing upgrades, intensifying competition in the Xu Jia Hui area [6][8]. Asset Value Enhancement - The new project design aims to create a mixed-use space combining a hotel and flagship stores, which is expected to stabilize rental income and improve operational performance [8][9]. - The company plans to seek quality partners for the hotel segment to enhance resource allocation and increase asset value [8]. Impact on Company Performance - The project adjustments may lead to short-term impacts on the company's performance, including the disposal of approximately 22 million yuan in pre-investment costs, which could reduce the company's profit for 2025 by the same amount [9][10]. - The company reported a revenue decline of 16.4% year-on-year in the first half of the year, although net profit increased by 325.7% due to reduced one-time expenses [9][10]. Financial Pressure - The significant increase in project investment poses challenges to the company's financial capacity, despite a recovery in net profit providing some funding support [10]. - The company plans to leverage market recovery opportunities and implement various strategies to stabilize performance and enhance profitability [10].