2023-03-23 11:00Financial Data and Key Metrics Changes - The company reported a revenue of RMB 15.5 billion, with property sales amounting to RMB 11.7 billion and a net profit of RMB 1.47 billion, reflecting a year-on-year decline due to the impact of COVID-19 and rental concessions [20][21][24] - The profit attributable to shareholders was RMB 906 million, and total rental income decreased by 4% to approximately RMB 2.8 billion [7][20] - The net gearing ratio remained stable at 45%, although it increased by 13% due to the redemption of a US$600 million perpetual note [8][26] Business Line Data and Key Metrics Changes - Property sales were primarily driven by two projects in Shanghai, contributing over RMB 10 billion to total sales [21] - Rental income, excluding joint ventures, saw an 8% decline year-on-year, while the overall rental income, including joint ventures, decreased by 4% [20][22] - The company maintained a gross profit margin of 43%, consistent with historical performance [23] Market Data and Key Metrics Changes - The Chinese GDP dropped to 3% in 2022, with the residential market experiencing its deepest downturn since 1998 [10][12] - Retail sales in Shanghai contracted by 9.1% due to lockdowns, but there are signs of recovery in consumer spending post-COVID [13][14] - The office market faced challenges with increased vacancy rates and oversupply, leading to a cautious outlook [14][15] Company Strategy and Development Direction - The company plans to focus on selective markets, particularly in first-tier cities and leading second-tier cities, to replenish its land bank and capture urban regeneration opportunities [36][37] - The strategy includes maintaining strong liquidity, capital management, and leveraging brand strength for new land acquisitions [16][17] - Sustainability efforts have led to significant reductions in carbon emissions and energy intensity, with a focus on green building certifications [17][18] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the market operating environment, noting a crisis of confidence among buyers and ongoing challenges in the real estate sector [12][16] - The company anticipates a gradual recovery in the market, driven by easing policies and urban regeneration initiatives [10][36] - Management is preparing for potential acquisition opportunities as the market stabilizes, although they believe the market has not yet bottomed out [75][86] Other Important Information - The company declared a final dividend of HKD 0.064 per share, bringing the total dividend for 2022 to HKD 0.10 per share [9] - A share buyback plan of up to HKD 500 million was approved, with 35 million shares repurchased [9] Q&A Session Summary Question: What is the contract sales target for financial year 2023? - The sales target for 2023 is RMB 13 billion, with 80% of the residential GFA available for sales coming from Wuhan [62] Question: What are the plans for refinancing the U.S. Dollar senior notes due in the second half of 2023? - The company will focus on onshore financing due to lower costs and better liquidity, and it is unlikely to issue new U.S. Dollar bonds unless market conditions improve significantly [66][68] Question: Are there any off-balance sheet liabilities related to joint ventures? - There are no liability issues with joint venture projects, as all partners are substantial companies with good credit [70] Question: What projects should investors expect in Shanghai? - The company is confident in opportunities in Shanghai, particularly in urban regeneration projects like Panlong Tendi [72] Question: Are there any M&A or land banking opportunities in the pipeline? - The company is cautiously monitoring M&A opportunities arising from market corrections but believes the market has not yet bottomed out [74][75] Question: How is the Wuhan property market performing? - The Wuhan property market is showing signs of recovery, with a 28.6% year-on-year increase in housing transactions in early 2023 [80] Question: What is the status of the Xueersi Xinjiang IPO? - The IPO is currently on pause due to market conditions, with no rush to list until the right market window is identified [82] Question: How does management view the current market and policy opportunities? - Management believes the market is stabilizing but still faces challenges, and they are preparing to acquire good assets at bargain prices when opportunities arise [86]