Core Insights - The company reported a decline in net profit attributable to shareholders by 16.6% year-on-year for the first half of 2025, with a total net profit of 8.7 billion yuan [1] - The company's revenue for the same period was 83.2 billion yuan, reflecting a 4.5% year-on-year decrease [1] - The decline in net profit is primarily attributed to a decrease in turnover scale and a drop in gross profit margin, which fell by 4.7 percentage points to 17.4% [1] Sales Performance - The company achieved a sales amount of 120.2 billion yuan in the first half of 2025, down 19% year-on-year, but maintained a leading position in the industry [1] - The sales area reached 5.12 million square meters, a decrease of 6% year-on-year [1] - The company holds a strong market share, ranking among the top three in 31 cities, with 14 cities being the market leader [1] Land Investment and Reserves - In the first half of 2025, the company invested in 17 new land parcels, with an equity land acquisition amounting to 40.1 billion yuan, of which 86% was in first-tier and strong second-tier cities [1] - The total land reserve area reached 26.93 million square meters, with an equity area of 23.66 million square meters, indicating a robust development momentum [1] Commercial Operations - The company's commercial operations generated revenue of 3.5 billion yuan in the first half of 2025, with shopping centers and office buildings contributing 81% to the revenue [2] - The occupancy rate for mature shopping center projects was 96.2%, with an operating profit margin of 56.8% [2] - The average occupancy rate for hotels was 68.2%, while long-term apartment projects had a 94% occupancy rate for those open for over six months [2] Financial Health - The company holds a leading industry rating, being the only domestic real estate company with a double A- international credit rating [2] - As of the end of the first half of 2025, the company’s asset-liability ratio, excluding advance receipts, was 45.7%, and the net debt ratio was 28.4% [2] - The cash-to-short-term debt ratio stood at 4.9 times, indicating strong liquidity and financial stability [2]

Core Viewpoint - The credit rating of Shenzhen Zhenye (Group) Co., Ltd. is maintained at AA with a stable outlook, while the specific bond "23 Zhenye 02" is rated AAA, reflecting the company's solid financial support and external backing from the Shenzhen Municipal Government [3][29]. Financial Overview - As of 2025, the total assets of the company are reported at 263.99 billion, with total liabilities at 179.30 billion, resulting in a net asset value of 84.69 billion [8]. - The company has experienced significant losses, with a net profit of -17.51 billion in 2024, following a loss of -9.02 billion in 2023 [21]. - The net debt ratio has improved to 50.04% as of 2022, down from 61.97% in 2023, indicating a reduction in leverage [10][21]. Operational Performance - The company has not acquired new projects since 2024, leading to a high proportion of existing projects in lower-tier cities, which face significant sales challenges [15][16]. - The total land reserve area is reported at 2,129.58 million square meters, with a focus on projects in Huizhou, Heyuan, and Nanning, which are experiencing low market demand [16][25]. Industry Context - The real estate industry is facing downward pressure, with sales and investment expected to remain low in 2024, although supportive policies are anticipated to improve the market environment [14]. - The company benefits from its status as a key real estate development platform under the Shenzhen State-owned Assets Supervision and Administration Commission, which provides it with certain external support [25][26]. Debt and Financing - The bond "23 Zhenye 02" has a total issuance of 7.5 billion, fully backed by Shenzhen High-tech Investment Guarantee Co., Ltd., ensuring strong repayment support [26][28]. - The company maintains a favorable financing environment, with a comprehensive financing cost reduced to 3.76% as of March 2025, and has successfully rolled over mid-term notes at lower interest rates [16][27]. Risk Factors - The company faces challenges due to the real estate market's supply-demand imbalance, particularly in projects located in low-demand areas, which may impact future sales performance [4][7]. - The profitability has deteriorated, with significant impairment provisions recorded for inventory, indicating potential future risks related to asset values [20][21].

Core Viewpoint - The credit rating agency maintains the credit rating of China Merchants Shekou Industrial Zone Holdings Co., Ltd. at AAA with a stable outlook, reflecting the company's strong support from its parent company and its robust position in the real estate industry [4][24]. Financial Overview - Total assets for the company were reported at 886.47 billion yuan in 2022, projected to increase to 908.51 billion yuan in 2023, and decrease to 860.31 billion yuan in 2024 [6]. - The company's total liabilities were 602.03 billion yuan in 2022, increasing to 611.82 billion yuan in 2023, and projected to decrease to 573.56 billion yuan in 2024 [6]. - Net profit for 2022 was 9.10 billion yuan, with a slight increase to 9.11 billion yuan in 2023, but a significant drop to 4.19 billion yuan in 2024 [6]. - EBITDA was reported at 21.35 billion yuan in 2022, decreasing to 20.04 billion yuan in 2023, and further down to 14.05 billion yuan in 2024 [6]. Business Performance - The company is recognized as one of the leading national real estate enterprises, with extensive development experience and sufficient land reserves, which provide a solid foundation for future growth [4][9]. - The company’s development business remains the largest revenue contributor, although sales volume is expected to decline by 25.31% in 2024 [11][21]. - The company has a strong brand competitive advantage and a well-established management team, which enhances its operational efficiency [11][9]. Risk Factors - The real estate industry is facing significant challenges due to changes in supply and demand dynamics, leading to increased operational challenges for the company [5][9]. - The company has experienced a decline in gross profit margin and has recognized impairment losses, which have weakened its profitability [4][14]. External Support - The company benefits from strong backing by its parent company, China Merchants Group, which provides substantial support in project acquisition and funding arrangements [8][23]. - The parent company holds 58.47% of the shares, ensuring continued support and stability for the company [10][23]. Market Outlook - The overall economic environment in China is expected to improve, with structural highlights in supply and demand, although external shocks may pose risks [8][9]. - The real estate market is anticipated to face downward pressure in sales and investment in 2025, but supportive policies may help stabilize the industry [9][21].