Stock Code: 000029, 200029 Stock Name: SPG, SPG-B Announcement No. 2020-064
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO., LTD.INTERIM REPORT 2020 (SUMMARY)
Part I Important NotesThis Summary is based on the full text of the Interim Report of ShenZhen Special Economic Zone Real Estate & Properties (Group)Co., 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 | SPG, SPG-B | Stock code | 000029, 200029 | |
| Stock exchange for stock listing | Shenzhen Stock Exchange | |||
| Contact information | Board Secretary | Securities Representative | ||
| Name | Tang Xiaoping | Luo Yi | ||
| Office address | 47/F, SPG Plaza, Renmin South Road, | 47/F, SPG Plaza, Renmin South Road, | ||
| Shenzhen, Guangdong, P.R.China | Shenzhen, Guangdong, P.R.China | |
| Tel. | （86 755）82293000-4638 | （86 755）82293000-4715 |
| E-mail address | tangxiaoping0086@126.com | spg@163.net |
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| H1 2020 | H1 2019 | Change (%) | |
| Operating revenue (RMB) | 596,258,495.40 | 1,251,337,802.57 | -52.35% |
| Net profit attributable to the listed company’s shareholders (RMB) | 97,274,985.72 | 333,155,843.41 | -70.80% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 85,184,270.99 | 322,865,954.53 | -73.62% |
| Net cash generated from/used in operating activities (RMB) | -212,242,798.59 | 685,675,245.10 | -130.95% |
| Basic earnings per share (RMB/share) | 0.0962 | 0.3293 | -70.79% |
| Diluted earnings per share (RMB/share) | 0.0962 | 0.3293 | -70.79% |
| Weighted average return on equity (%) | 2.68% | 9.81% | -7.13% |
| 30 June 2020 | 31 December 2019 | Change (%) | |
| Total assets (RMB) | 4,485,810,299.86 | 4,909,669,536.09 | -8.63% |
| Equity attributable to the listed company’s shareholders (RMB) | 3,597,595,143.65 | 3,666,874,569.99 | -1.89% |
3. Shareholders and Their Holdings as at the End of the Reporting Period
Unit: share
| Number of ordinary shareholders | 76,442 | 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 shares | Shares in pledge or frozen | ||||
| Status | Shares | ||||||||
| Shenzhen Investment Holdings Co., Ltd. | State-owned legal person | 63.55% | 642,884,262 | ||||||
| Shandong Gold Financial Holding Capital Management Co., Ltd.－Shandong Gold Financial Holding Sustaining Fund 1 | Domestic non-state-owned legal person | 1.02% | 10,300,000 | ||||||
| Lu Zhigao | Domestic natural person | 0.32% | 3,246,949 | ||||||
| Tan Shiqing | Domestic natural person | 0.13% | 1,286,701 | ||||||
| Yang Shuilian | Domestic natural person | 0.13% | 1,273,700 | |||
| Yang Jianxiong | Domestic natural person | 0.12% | 1,255,750 | |||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 0.12% | 1,165,500 | |||
| Peng Wei | Domestic natural person | 0.11% | 1,129,082 | |||
| Wu Haoyuan | Foreign natural person | 0.11% | 1,109,300 | |||
| Guotai Junan Securities (Hong Kong) Limited | Foreign legal person | 0.10% | 1,015,683 | |||
| Related or acting-in-concert parties among the shareholders above | The Company has found no related parties or acting-in-concert parties as defined in the Administrative Measures for Shareholding Changes in Listed Companies among the shareholders above. | |||||
| Shareholders involved in securities margin trading (if any) | The fourth shareholder holds all his shares in the Company in his accounts of collateral securities for margin trading. And the third shareholder holds some of his shares in the Company in such accounts. | |||||
4. Change of the Controlling Shareholder or the Actual Controller in the Reporting Period
Change 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.
For the first half of 2020, the Company recorded operating revenue of RMB596 million, down
52.35% year-on-year; a profit before tax of RMB141 million, down 68.40% year-on-year; and a netprofit attributable to the listed company’s shareholders of RMB97 million, down 70.80%year-on-year. As at 30 June 2020, total assets stood at RMB4,486 million, down 8.63% from thebeginning amount; total liabilities stood at RMB1,030 million, down 25.63% from the beginningamount; and the debt/asset ratio was 22.96%, down by 5.25 percentage points from the beginningratio.Since its abrupt occurrence at the beginning of 2020, COVID-19 has continued to spreadthroughout the whole world, dragging global economy into the most severe recession since theGreat Depression. The central government has stepped up effort in regular epidemic prevention andcontrol, and promoted the resumption of work and production on all fronts. In the first quarter, withthe substantial decline in domestic consumption and investment, the economy faced greaterdownward pressure; in the second quarter, the real estate market operation exhibited a momentumof recovery. In terms of policy, the country has continued the orientation that “Houses are for livingin, not for speculating on” and implemented real estate policies appropriate to local situation,leading to an obvious trend of differentiation between urban regions.Facing the complicated and tough macro-economic environment and the fierce market competition,the Company’s operation team has braved the challenges and implemented policies in a targetedway. They have balanced between the epidemic prevention and control and business developmentand tightened effort in all work, in a bid to counter the negative impact brought by COVID-19. Ingeneral, the Company has carried out its work orderly in all aspects, including the development ofmain businesses, operations management, assets restructuring, Party building, epidemic preventionand control, and production safety.(I) Highlights in Main Business Development
1. Property sales reached the target. To weaken the negative impact of COVID-19 on property sales,the Company carried out promotion and developed customers through multiple channels, includingplacing equal focus on online and offline promotion. During the Reporting Period, the Companyoutperformed the target for new contract-based sales, laying a solid foundation for theaccomplishment for the target of the whole year.
2. Projects were advanced steadily. As at the end of the Reporting Period, landscaping of ChuanqiDonghu Mingyuan in Shenzhen was improved and handed over, and the construction andinstallation for the residence gate were completed; main works of Shantou Tianyuewan werecompleted, and landscaping of the mountain park was completed.
(II) Stable Operations Management with Improvement
1. Financial management was regulated and effective. While ensuring the satisfaction of need forworking capital, the Company fully increased the efficiency of idle fund. It strengthenedcommunication with its cooperating banks to withdraw the fund from property sales. In early May,the Company successfully executed the cash dividends for 2019. During the Reporting Period, theCompany gained an income of more than RMB20 million from wealth management, includingstructured deposits and agreement-based deposits with banks.
2. Property leasing moved ahead under pressure. Under the double impact of COVID-19 andeconomic downturn, situations such as cancellation of leasing and reduction of leasing size havebeen frequent. Focusing on customers’ needs, the Company made every effort to retain existingcustomers and develop new customers in a bid to expand business while maintaining the base.
3. Breakthroughs were made in problems carried over from the past. During the Reporting Period,the Company sped up the collection of overdue payment in lawsuits involving overdue rentals andmanagement fees, and won the lawsuits with executable judgement.
4. Solid achievements were made in cost control. By firmly sticking to a full-cost, whole-processand penetrating management concept in production and operation, the Company continued tostrengthen project cost control, with satisfying results achieved.(III) Continuous Advancement of Assets RestructuringDuring the Reporting Period, the Company remained in share trading suspension due to majorassets restructuring. It continued to proactively work on fundamental matters, including duediligence for restructuring, additional audit, additional evaluation and the updating of restructuringrelated material and information. The Company disclosed the progress of those matters strictly inaccordance with regulations and went through the procedures for share trading suspension andresumption. It continued to keep in touch with all restructuring related parties, and strengthenedcommunication with regulatory authorities. In addition, it answered calls from investors patientlyand attentively, and replied to their questions on irm.cninfo.com.cn, winning their understandingand support.(IV) Realistic and Pragmatic Approach for Party BuildingThe Company persisted in synchronous research, arrangement and advancement for its efforts inParty building and business. It gave full play to the leading role of the Party committee incontrolling the direction, managing the overall situation and ensuring implementation. TheCompany attached great importance to the Party’s political theory learning and education, andensured regular and policy-based learning in the Theory Center Group of its Party committee. Allits Party committee and branches strictly implemented the “Three Meeting One Lesson” Systemand the “Five-One” Project for Party members’ education, promoted Xi Jinping Thought onSocialism with Chinese Characteristics for a New Era into the Company’s front line, andconsolidated the results of themed education. The Company continued to improve theaccountability for the development of honest and non-corruptible practice. It established a list ofkey tasks for such development, strengthened the “Two responsibility”, and continuously enforcedfull and strict discipline over its Party members.
(V) Marked Achievements in Epidemic Prevention and ControlDuring the Reporting Period, there was no cluster infection among the Group’s more than 1,900employees, over 30 residences operated and managed by its property management subsidiary, andthousands of office workers at SPG Plaza. Additionally, the Company proactively fulfilled its socialresponsibilities as a state-owned enterprise. During the Reporting Period, it cut and exemptedproperty rentals of more than RMB10 million and donated RMB500,000 for the epidemicprevention and control in Hubei.(VI) Stable and Orderly Safe ProductionThe Company upheld the safety concept in its entire production process, implemented theaccountability system for production safety, and strengthened the roles in production safety. It kepta tight grip on the identification and management of safety hazards, persisted in zero tolerance onsafety hazards, and reinforced its defense line for production safety. Through a combination ofmeasures, the Company conducted training to promote safety knowledge to its employees as atangible step to strengthen the safety awareness among all its staff. It continued to organizeemergency drills on a regular basis to improve its emergency management capability in all aspects.During the Reporting Period, the Company’s project construction and the production situations ofits subsidiaries were stable and orderly without any major safety accident.
Currently, China is gradually getting rid of the negative impact brought by COVID-19. While itseconomic operation takes on a momentum of growth towards recovery, the future situation remainscomplicated and tough with great instability and uncertainties. The Company will actively adapt tothe macro economic development trend, and stick to the concept of pursuing progress whileensuring stability and of seeking continuous development. It will continue to focus on the goal ofbuilding a competitive and professional real estate enterprise, and speed up the development andconstruction of existing land and projects. It will prudently look for new investment opportunities,and seek a path of high quality development in the context of complicated and changeable externalenvironment and intense market competition.
Centering around the goal for 2020, the Company will set the tone of “improving operations,advancing restructuring, ensuring safety and strengthening Party building”, and make every effort inthe following four aspects.(I) Achieving Business Stability with Focus on BusinessThe Company will focus on project sales and ensure the accomplishment of its annual sales target.It will make full effort to guarantee the quality and progress of its project construction, and developprojects with fine quality. It will closely follow the land market updates, and strive to develop newland or make breakthroughs in project development within the year. In terms of property leasing,the Company will endeavor to reach the year’s leasing target by all possible means. Its subsidiariesshould drive the resumption of work and production in a steady pace, and strive towards the annualtargets.(II) Ensuring Orderly Progress of Key Work through Rational CoordinationThe Company will keep close watch on the trends of capital market and regulatory policies and
strengthen communication with regulatory authorities. It will perform its obligation of informationdisclosure, properly handle its investor relations, and drive the restructuring process together withall parties of the major assets restructuring according to regulations. The Company will continue toimprove the allocation of human resources, strengthen its staff team building, optimize the agestructure and knowledge structure of its talent team, and maintain the strength and execution of theteam. It will work on the formulation of its “14th Five-Year” strategic plan as a blueprint for thenew journey of the next five-year plan. It will make solid steps to ensure the sustainability andstability of its routine operations management, and continue to enhance its management quality.(III) Implementing the Epidemic Prevention and Control and Ensuring Production Safetythrough Persistent EffortThe Company will always be on full alert and implement the epidemic prevention and control withhigh standards and strict requirements. It will ensure targeted and strong epidemic prevention andcontrol, and make full effort in the battle against the virus. The Company will promote the conceptof production safety, continue to improve the production safety management system, and advancethe standardization of production safety and the building of the “double” prevention mechanism. Itwill strengthen the accountability for production safety, step up effort in the identification of safetyhazards, and intensity safety management in key areas, so as to prevent production safety accidentand create favorable conditions for the accomplishment of the year’s business target.(IV) Strengthening the Development of Honest and Non-corruptible Practice Led by PartyBuildingThe Company will further study and implement Xi Jinping Thought on Socialism with ChineseCharacteristics for a New Era, and put into effect the guiding principles of the Party’s 19th NationalCongress and the second and third plenary sessions of its 19th Central Committee. It will strengthenthe roles of political discipline and political rules, intensify supervision, discipline implementationand accountability, and extend the strict discipline over the Party to its grassroots level. TheCompany will fully implement the decisions and arrangements of the superior Party committees,exert its leading role in controlling the direction, managing the overall situation and ensuringimplementation as a Party committee of a state-owned enterprise, and integrate Party leadership intoits corporate governance to lead itself into high quality development.
2. Matters Related to Financial Reporting
(1) Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared to the LastAccounting Period
√ Applicable □ Inapplicable
On July 5, 2017, the Ministry of Finance revised and issued the "Accounting Standards for Enterprises No.14-Revenue".According to the required of the Ministry of Finance, the group implemented the above new standard and changed theaccounting policy from January 1 2020, the main conditions as follows.The Company recognizes revenue when it has satisfied the performance obligation under the contract, that is, when thecustomer has obtained the right to control the relevant goods or services “Obtaining the right to control the relevant
goods or services” means that it is able to dominate the use of the goods or services and derive almost all economicbenefits therefrom. When certain conditions are met, the Group shall perform its performance obligations within acertain period of time; otherwise, it shall perform its performance obligations at a certain point in time. If a contractcontains two or more performance obligations, the company shall allocate the transaction price to each individualperformance obligation in accordance with the relative proportion of the stand-alone selling price of the goods orservices promised by each individual performance obligation on the date of the contract The Company measuresrevenue based on the transaction price allocated to each individual performance obligation.The group adjusted relevant accounting policies in accordance with the specific provisions of the new revenue standardson specific matters or transactions, for example: contractual cost, quality assurance, distinction between principal andagent, sales with sales return clauses, additional purchase options, intellectual property license, repurchase arrangement,advances from customers and handling of initial fee without refund, etc.The Group has the right to receive consideration by transferring goods to customers, and this right depends on factorsother than the passage of time as contractual assets. The Group’s obligation to transfer goods to customers forconsideration received or receivable from customers is listed as contractual liabilities.Reclassify the tax-exclusive part of the " advance form customers" that should have the delivery obligation to thecustomer to contractual liabilities, and reclassify the tax part to tax payable. The company will adjust the retainedearnings at the beginning of the year and the amount of other related items in the financial statements based on thecumulative impact of the first implementation of the new income standard when preparing the financial reports for 2020and each period, and will not adjust the information for the comparable period. Please refer the table below
| Item | Dec 31 2019 | Jan 1 2020 | Adjusted amount |
| Advance form customers | 159,482,510.43 | 4,864,243.00 | -154,618,267.43 |
| contractual liabilities | 151,007,450.32 | 151,007,450.32 | |
| Tax payable | 585,700,815.36 | 589,311,632.47 | 3,610,817.11 |
(2) Retrospective Restatements due to the Correction of Material Accounting Errors in the ReportingPeriod
□ Applicable √ Not applicable
No such cases.
(3) Changes to the Scope of Consolidated Financial Statements Compared to the Last Accounting Period
□ Applicable √ Not applicable
No such changes for the Reporting Period.