Stock Code: 000011, 200011 Stock Name: PRD, PRD-B Announcement No. 2020-35
SHENZHEN PROPERTIES & RESOURCES DEVELOPMENT
(GROUP) LTD.INTERIM REPORT 2020 (SUMMARY)
Part I Important NotesThis Summary is based on the full text of the Interim Report of ShenZhen Properties & Resources Development (Group) Ltd.(together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). In order for a fullunderstanding of the Company’s operating results, financial condition and future development plans, investors should carefully readthe aforesaid full text, which has been disclosed together with this Summary on the media designated by the China SecuritiesRegulatory Commission (the “CSRC”).Except for the following directors, all the other directors attended in person the Board meeting for the review of this Report and itssummary.
| Name | Office title | Reason for not attending meeting in person | Proxy |
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable √ Not applicable
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies ormisunderstandings between the two versions, the Chinese versions shall prevail.Part II Key Corporate Information
1. Stock Profile
| Stock name | PRD, PRD-B | Stock code | 000011, 200011 | |
| Stock exchange for stock listing | Shenzhen Stock Exchange | |||
| Contact information | Board Secretary | Securities Representative | ||
| Name | Fan Weiping | Qian Zhong and Ding Minghua |
| Office address | 39/F, International Trade Center, Renmin South Road, Luohu District, Shenzhen, Guangdong Province, P.R.China | 39/F, International Trade Center, Renmin South Road, Luohu District, Shenzhen, Guangdong Province, P.R.China |
| Tel. | 0755-82211020 | 0755-82211020 |
| E-mail address | 000011touzizhe@szwuye.com.cn | 000011touzizhe@szwuye.com.cn |
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reason for retrospective restatement:
Business combination under common control
| H1 2020 | H1 2019 | Change (%) | ||
| Before | Restated | Restated | ||
| Operating revenue (RMB) | 1,421,077,767.83 | 755,390,079.96 | 1,065,480,882.30 | 33.37% |
| Net profit attributable to the listed company’s shareholders (RMB) | 211,967,734.76 | 103,749,398.16 | 155,922,425.40 | 35.94% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 210,621,623.38 | 103,686,185.29 | 103,686,185.29 | 103.13% |
| Net cash generated from/used in operating activities (RMB) | -1,623,182,138.90 | -459,952,236.98 | -396,688,011.70 | 309.18% |
| Basic earnings per share (RMB/share) | 0.3557 | 0.1741 | 0.2616 | 35.97% |
| Diluted earnings per share (RMB/share) | 0.3557 | 0.1741 | 0.2616 | 35.97% |
| Weighted average return on equity (%) | 6.66% | 3.09% | 4.19% | 2.47% |
| 30 June 2020 | 31 December 2019 | Change (%) | ||
| Before | Restated | Restated | ||
| Total assets (RMB) | 10,948,847,072.58 | 10,772,491,740.53 | 10,772,491,740.53 | 1.64% |
| Equity attributable to the listed company’s shareholders (RMB) | 3,145,941,136.36 | 3,147,949,009.38 | 3,147,949,009.38 | -0.06% |
3. Shareholders and Their Holdings as at the End of the Reporting Period
Unit: share
| Number of ordinary shareholders | 42,099 | Number of preferred shareholders with resumed voting rights (if any) | 0 | ||||
| Top 10 shareholders | |||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Number of shares | Restricted ordinary shares | Shares in pledge or frozen | ||
| Status | Shares | ||||||
| Shenzhen Investment Holdings Corporation | State-owned legal person | 57.96% | 345,412,223 | 3,326 | |||
| China Orient Asset Management Co., Ltd. | State-owned legal person | 5.87% | 34,970,000 | 0 | |||
| ICBC- Fullgoal Growth Selected Open-End Dynamic Asset Allocation Mixed Type Securities Fund with A Fixed Period of 3 Years | Other | 0.62% | 3,682,638 | 0 | ||
| ICBC-Hua An Mid-cap and Small-cap Growth Mixed Type Securities Investment Fund | Other | 0.41% | 2,458,951 | 0 | ||
| Duan Shaoteng | Domestic natural person | 0.30% | 1,777,555 | 0 | ||
| Shenzhen Duty-Free Commodity Enterprises Co., Ltd. | Domestic non-state-owned legal person | 0.29% | 1,730,300 | 1,730,300 | ||
| Industrial Bank Co., Ltd.- ICBC Credit Suisse Financial Real Estate Industry Mixed Type Securities Investment Fund | Other | 0.24% | 1,439,900 | 0 | ||
| Yang Yaochu | Domestic natural person | 0.24% | 1,425,020 | 0 | ||
| National Social Security Fund 504 Portfolio | Other | 0.22% | 1,308,200 | 0 | ||
| Mai Furong | Domestic natural person | 0.20% | 1,221,500 | 0 | ||
| Related or acting-in-concert parties among the shareholders above | The largest shareholder Shenzhen Investment Holding Corporation is the actual controlling shareholder of the Company. And the Company does not know whether there are related parties or acting-in-concert parties among the other 9 shareholders. | |||||
| Shareholders involved in securities margin trading (if any) | N/A | |||||
4. Change of the Controlling Shareholder or the Actual Controller in the Reporting PeriodChange of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The controlling shareholder remained the same in the Reporting Period.Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The actual controller remained the same in the Reporting Period.
5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
6. Corporate bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of thisReport’s approval or were due but could not be redeemed in full?No.Part III Operating Performance Discussion and Analysis
1. Business Overview of the Reporting Period
Is the Company subject to any industry-specific disclosure requirements?The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for ListedCompanies Engaging in Real Estate.In the first half year of 2020, the epidemic caused by the novel coronavirus produced big impact on the country’s overall economyand real estate market. As an effort to counter the impact, China substantially increased the effort in the counter-cyclical adjustmentto its macro policy, leading to more flexible implementation of policies according to local conditions of different cities. During theReporting Period, the overall development of the real estate industry in China took on the following characteristics:
In terms of policy, the industrial fund environment was quite relaxed in the context of “six stabilities and six guarantees”. At thesame time, greater efforts were made in driving new urbanization and promoting regional development strategies. Measures such asdelegating the authority for land approval, improving the market-based allocation of factors of production, and accelerating therenovation of aged and dilapidated residences, were beneficial to the medium- and long-term development of the real estate industry.In terms of real estate control, the central government persisted in the positioning of “Houses are for living in, not for speculating on”,with continuously strict financial regulation over the real estate sector. Local governments in many places introduced real estatesupporting policies from both supply and demand ends. They stuck to the bottom line of “housing purchase restriction and loanrestriction”, and promoted the stable operations of the real estate market by easing restrictions for household register policies,lowering the threshold for talent introduction, and increasing housing subsidies.In terms of market volume and price, the real estate experienced from depression to continuous recovery. From the perspective ofprice, according to the data of China’s real estate index system, the cumulative rise in the average price of newly built residences in100 cities was the lowest for the same period in recent five years; the month-on-month rise had increased slightly since March; andthe cumulative increase in the price for the first half year dropped by 0.18% to 1.27% compared to the same period of last year. Interms of transaction volume, the year-on-year drops in both new and secondhand houses reached the peak in recent years. Within ashort period, the regular epidemic prevention and control and the economic development pressure will increase the instability of thereal estate market.In terms of transaction structure, affected by factors such as city fundamentals and the development stages of real estate market, themarket differentiation trend was obvious in different cities, with some popular cities witnessing a strong momentum in the recoveryof demands and faster release of improvement demands. As the epidemic impact weakens in the future, market transaction volume isexpected to continuously recover, with great room for the release of improvement demands, and the proportion of mid- and high-endquality projects expected to rise.In terms of land market, the market launch of land for houses increased by a small margin in the first half year, with a slight fall intransactions. The central bank continued to maintain reasonably sufficient liquidity through positive monetary measures, includingcutting the reserve requirement ratio and interest rates. Some enterprises are facing less pressure for funds. The land market isexpected to develop towards rationality, but remain popular in some favored cities.(I) Characteristics of the Company’s Main Business OperationsFirst, the Company’s city space development stood out from other segments and sustained the challenges of the epidemic. Inthe first half year, the Company achieved operating revenue of RMB859 million from its real estate business, accounting for 60.43%of the total revenue, representing a growth rate of as much as 82.71% year-on-year; and the gross profit margin reached 82.55%,representing a growth of 12.58% year-on-year. During the Reporting Period, the revenue from real estate mainly comprised RMB807million from SZPRD-Golden Collar’s Resort, RMB18 million from SZPRD-Banshan Yujing, and RMB17 million fromSZPRD-Songhu Langyuan, with SZPRD-Golden Collar’s Resort contributing the majority of the substantial growth in revenue andgross profit. In addition, Fuchang Phase II, Yupinluanshan Garden and Fuyuan Industrial Park were advanced orderly; ShenzhenRongyao Real Estate Development Co., Ltd., SZPRD Yangzhou Real Estate Development Co., Ltd. and SZPRD Xuzhou DapengReal Estate Development Co., Ltd. maintained normal operations under the impact of COVID-19, and will drive the progress of allprojects in the second half year.Second, the Company’s property management saw growth in stability with continued faster market expansion. In the first halfyear, under the impact of COVID-19, some subsidiaries experienced low collection rates of property management fees but highercosts in the epidemic prevention and control. In light of the situation, the Company proactively took countermeasures by taking theinitiative to communicate with customers and steadily promoting the normal operations of projects under management. During the
Reporting Period, the Company achieved operating revenue of RMB491 million from its property management business, accountingfor 34.52% of the total revenue and remaining the second biggest source of operating revenue; and the gross profit margin was
14.73%, representing a slight increase year-on-year. The Company climbed to the 27
thplace in the ranking among China’s top 100property services for comprehensive competency, with continuously rising brand values and expanded market influence. In thesecond half year, the Company will proactively drive the market development of its property management business, improve servicequality, enhance customer loyalty, and achieve the growth of projects in stock and the advancement of new projects.Third, the Company’s industrial ecosystem operations and other segments were advanced orderly, with achievements madefrom the strategy of diversified operations. Housing Assets Operation and Management Company grasped the developmentopportunity brought by the transformation and upgrading for the post-pandemic era, fully implemented the rental exemption policy,and took effective measures to maintain quality customers. Steady progress was made as scheduled in a number of projects, includingthe Six-Storey Building at Yingchun Road in Luohu, Food Court in the International Trade Center, and Fumin Complex. SupervisionCompany performed supervision over a group of key projects, including refined decorations of SZPRD-Golden Collar’s Resort, anddecoration works of Fuchang Phase II, Xuzhou Phase II and International Trade Building, continued to step up efforts in expansion,and acquired external projects through multiple channels. Guomao Catering was in business suspension due to decoration works.While cooperating with the restaurants in the decoration and renovation works, Guomao Catering carried out market survey,developed new dishes, and improved the standard management mechanism for catering services. It increased efforts in the publicitybefore opening to enhance the brand visibility and professional service quality, demonstrating the new vitality, new start point andnew height of Shenzhen International Trade Revolving Restaurant as a “time-honored” catering brand.(II) Progress of Major Projects under ConstructionThe Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for ListedCompanies Engaging in Real Estate.
1. New additions to the land bank
There were no new additions to the Company’s land bank during the Reporting Period.
2. Cumulative land bank
| Name of project/area | Site area（0,000 ㎡） | Floor area（0,000 ㎡） | Floor area available for development（0,000 ㎡） |
| Guanlan Bangling project | 6.83 | 61.33 | 61.33 |
| Yupinluanshan Garden project | 2.19 | 7.89 | 7.89 |
| Baolu project | 3.24 | 8.16 | 8.16 |
| Land in Danshui, Huiyang District, Huizhou City | 1.77 | 6.20 | 6.20 |
| Land in Hongqi Town, Haikou City | 15.8 | - | - |
| Total | 29.83 | 83.58 | 83.58 |
Note: The floor areas of the Yupinluanshan Garden project, the Baolu project and the land in Danshui, Huiyang District, HuizhouCity are floor areas with plot ratio.
3. Development status of major projects
| City/region | Name of project | Location | Usage | The Company’s interest | Time for commencement of construction | % developed | % that has completed construction | Site area（㎡） | Planned floor area with plot ratio （㎡） | Floor area that completed construction in the Current Period（㎡） | Cumulative floor area that has completed construction （㎡） | Estimated total investment (RMB’0,000) | Cumulative investment (RMB’0,000) |
| Shenzhen | Golden Collar’s Resort apartments | Futian District | Residential | 100% | March 2014 | 100% | 100% | 12,598 | 133,800 | 182,585 | 182,585 | 138,311 | 94,995 |
| Shenzhen | Fuhui Huayuan | Futian District | Affordable housing | 100% | December 2018 | Under construction | Pile foundation completed | 4,274 | 32,050 | 0 | 0 | 90,439 | 58,377 |
| Xuzhou City | Banshan Yujing (Phase | Tongshan District | Residential | 100% | March 2019 | Under construction | Interior and exterior | 31,537 | 22,605 | 0 | 0 | 23,581 | 12,738 |
| II) | decoration ongoing, scaffolds of certain building removed |
4. Sales status of major projects
| City/region | Name of project | Location | Usage | The Company’s interest | Floor area with plot ratio （㎡） | Floor area available for sale （㎡） | Cumulative pre-sold/sold floor area （㎡） | Floor area pre-sold/sold in the Current Period（㎡） | Pre-sale/sales revenue generate in the Current Period (RMB’0,000) | Cumulative settled floor area (㎡) | Floor area settled in the Current Period（㎡） | Pre-sale/sales revenue settled in the Current Period (RMB’0,000) |
| Shenzhen | Golden Collar’s Resort apartments | Futian District | Residential, studio apartments and commercial | 100% | 133,800.6 | 125,234.63 | 40,345.32 | 5,502.54 | 29,941 | 39,842.12 | 12,739.99 | 80,667.69 |
| Yangzhou City | Hupan Yujing | 80 Hangou Road, Yangzhou City | Multi-storey, Phase I | 100% | 36,141.28 | 48,870.98 | 41,817.57 | 338.9 | 131.6 | 41,609.81 | 338.63 | 345.43 |
| Yangzhou City | Hupan Yujing | 80 Hangou Road, Yangzhou City | Multi-storey, Phase II | 100% | 56,935.75 | 73,121.96 | 66,307.52 | 101.69 | 40.98 | 63,775.58 | 655.59 | 535.22 |
| Xuzhou City | Banshan Yujing (Phase I) | 6 Huashan Road, Tongshan District, Xuzhou City, Jiangsu Province | Villa | 100% | 53,921.82 | 87,447.35 | 85,652.81 | 0 | 0 | 85,652.81 | 2,331.54 | 1,802.17 |
| Xuzhou City | Banshan Yujing (Phase II) | 6 Huashan Road, Tongshan District, Xuzhou City, Jiangsu Province | Low-density residential units | 100% | 22,604.96 | 21,720.72 | 20,769 | 9,041 | 11,035.89 | 0 | 0 | 0 |
5. Rental status of major projects
| Name of project | Location | Usage | The Company’s working interest | Rentable area （㎡） | Cumulative rented area （㎡） | Average occupancy rate |
| Xi Apartments (Longyuan) | Shenzhen | Apartments for long-term rental | 100.00% | 3967 | 3967 | 100.00% |
| Xi Apartments (Longhua) | Shenzhen | Apartments for long-term rental | 100.00% | 1609 | 1609 | 100.00% |
| Xi Apartments (Xinhu) | Shenzhen | Apartments for long-term rental | 100.00% | 1600 | 1600 | 100.00% |
| Food Court in the International Trade Center | Shenzhen | Commercial | 100.00% | 4080 | 3250 | 80.00% |
| Tower A of Wenjindu Port Building | Shenzhen | Office building | 75.00% | 5884 | 5703 | 97.00% |
| Haiwai Lianyi Building | Shenzhen | Commercial units and offices | 75.00% | 9788 | 9788 | 100.00% |
| Anhua Building | Shenzhen | Offices | 75.00% | 1414 | 757 | 54.00% |
| Training Building/Dormitory | Shenzhen | Residential units/offices/commercial units | 75.00% | 2796 | 2796 | 100.00% |
| Pengfu Building | Shenzhen | Offices | 75.00% | 6494 | 6494 | 100.00% |
| Jinfu Building | Shenzhen | Commercial | 75.00% | 1702 | 1702 | 100.00% |
| Jinfu Building | Shenzhen | Commercial | 100.00% | 568 | 568 | 100.00% |
| Fuxing Garden | Shenzhen | Residential/commercial | 75.00% | 5877 | 5877 | 100.00% |
| Fuxing Garden | Shenzhen | Commercial | 100.00% | 1417 | 1417 | 100.00% |
| Plant area in Tangxia Town, Dongguan City | Dongguan City | Plant | 75.00% | 22034 | 22034 | 100.00% |
| Pacific Business Building | Shenzhen | Commercial units/offices | 75.00% | 3199 | 3029 | 95.00% |
| Pacific Business Building | Shenzhen | Commercial units/offices | 15.00% | 14889 | 14714 | 99.00% |
| Kangti Building | Shenzhen | Commercial units/offices | 75.00% | 2096 | 2096 | 100.00% |
| Kangti Building | Shenzhen | Commercial units/offices | 15.00% | 1147 | 1147 | 100.00% |
| Lyuhua Building | Shenzhen | Commercial and residential | 75.00% | 6960 | 6484 | 93.00% |
| Shops on the ground floor of Tower 48 in Lianhua North Village | Shenzhen | Shops | 75.00% | 1000 | 1000 | 100.00% |
| Haonianhua Building | Shenzhen | Apartments and commercial units | 100.00% | 1803 | 1758 | 98.00% |
| Haonianhua Building | Shenzhen | Apartments and commercial units | 75.00% | 2329 | 2233 | 96.00% |
| Hostel 2 at Yuxin School | Shenzhen | Hostel | 75.00% | 3000 | 3000 | 100.00% |
| Kaifeng Garden in Shangmeilin | Shenzhen | Residential | 100.00% | 1307 | 1277 | 98.00% |
| West Tower of Baihuo Square | Shenzhen | Commercial units/offices | 100.00% | 13632 | 13632 | 100.00% |
| Nanzheng Building | Shenzhen | Offices | 100.00% | 8810 | 6590 | 75.00% |
| Building 409 in Sangda Industrial Zone | Shenzhen | Plant | 100.00% | 3309 | 3309 | 100.00% |
| Mianshui Studio Apartments | Shenzhen | Apartments | 100.00% | 3440 | 3440 | 100.00% |
| Xiangfu Building | Shenzhen | Commercial units | 100.00% | 3109 | 3109 | 100.00% |
| Fuyuan Industrial Zone | Shenzhen | Plant | 75.00% | 59596 | 58887 | 99.00% |
| Tonglu Industrial Zone | Shenzhen | Plant | 100.00% | 76886 | 73221 | 95.00% |
| Gonglu Building | Shenzhen | Commercial/offices | 75.00% | 317 | 317 | 100.00% |
| Gonglu Building | Shenzhen | Offices | 100.00% | 89 | 89 | 100.00% |
| Jiangling Industrial Zone | Shenzhen | Plant | 75.00% | 10397 | 10397 | 100.00% |
| District 21 | Shenzhen | Commercial/offices | 75.00% | 9514 | 9514 | 100.00% |
| Baoli Estate | Shenzhen | Residential | 75.00% | 9020 | 9020 | 100.00% |
| Songgang Plant | Shenzhen | Plant | 75.00% | 5700 | 5700 | 100.00% |
| Bulong Plant | Shenzhen | Plant | 75.00% | 7471 | 7471 | 100.00% |
| Huanggang Road Building | Shenzhen | Offices | 75.00% | 4600 | 4600 | 100.00% |
| Yuetong Complex | Shenzhen | Offices | 75.00% | 3044 | 3044 | 100.00% |
6. Primary land development
□ Applicable √ Not applicable
7. Financing channels
Unit: RMB’0,000
| Financing channel | Ending balance of financings | Financing cost range/average financing cost | Maturity structure | |||
| Within 1 year | 1-2 years | 2-3 years | Over 3 years | |||
| Bank loans | 436,490.00 | 4%-6% | 78,000.00 | 6,180.00 | 6,180.00 | 346,130.00 |
| Total | 436,490.00 | 78,000.00 | 6,180.00 | 6,180.00 | 346,130.00 | |
8. Development Strategy and the Business Plan for the Coming Year
First, the Company will promote the construction of key projects, focus on project implementation, continue to strengthenmanagement and control over the projects’ general goals, goals for different stages, schedules and investment plans. It will focus ondriving the progress of Block C of SZPRD-Golden Collar’s Resort, Guanlan Bangling, Fuchang Phase II, Xuzhou Phase II andYupinluanshan. Second, the Company will make full effort to collect payment from sales, speed up recovery of investment, dulyadjust its marketing strategy based on the market situation, and grasp opportunities and timings through flexible use of multiplemarketing approaches and channels. Third, the Company will fully activate and exert the efficiency of assets operation, activateassets in stock and improve both quality and efficiency while exercising routine leasing management. Fourth, the Company willspeed up the expansion of its property management segment, expand the brand influence, and persist in the double drive forces ofacquisition and self-expansion to rapidly achieve the expansion of property management across the country. It will complete thestandardization of products and services in the segment of project management to form advantages in system, brand and standard.
9. Provision of guarantees for homebuyers on bank mortgages
√ Applicable □ Not applicable
As a usual practice for real estate developers, the Company has been providing guarantees and security deposits for its homebuyerson their bank mortgages. As at 30 June 2020, security deposits for such outstanding guarantees amounted to RMB1,120,910.60,which will be returned upon the expiry of the guarantees, i.e. when the relevant homebuyers paid off their bank mortgages.As a usual practice for real estate developers, the Company and its subsidiaries has been providing guarantees for its homebuyers ontheir bank mortgages, and the homebuyers use their purchased homes as collateral. As at 30 June 2020, the outstanding guaranteeamount was RMB291,699.484.08 in total. On the ground that there have been no default by the homebuyers so far and that themarket prices of the relevant properties are currently higher than the trading prices, the Company believes the risk associated withsuch guarantees is low.
10. Joint investments by directors, supervisors and senior management and the listed company (applicable for suchinvestments where the directors, supervisors and senior management are the investment entities)
√ Applicable □ Not applicable
| Name of project | Type of investment entity | Amount of investment (RMB’0,000) | % of investment amount | As % of the peak of the project funds | Cumulative income | Disinvestment | Compatibility of actual investment amount and distributed income |
| Urban Renewal of Bangling Section at Guanlan Street | Mandatory investment entities (including directors and senior management) | 2,647.00 | 66.18% | N/A | 0 | None | N/A |
| Voluntary investment entities | 1,353.00 | 33.82% | N/A | 0 | None | N/A |
Note: Since this is an ongoing project, the peak of the project funds, cumulative income and disinvestment are unknown. For details,please refer to the relevant announcements disclosed by the Company on www.cninfo.com.cn dated 9 November 2019.
2. Matters Related to Financial Reporting
(1) Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared to the LastAccounting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Retrospective Restatements due to the Correction of Material Accounting Errors in the ReportingPeriod
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Changes to the Scope of Consolidated Financial Statements Compared to the Last Accounting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.