SHIMAO GROUP(00813)2024-04-29 09:11Financial Performance - The company reported a loss attributable to equity holders of approximately RMB 21 billion for the year ending December 31, 2023[99]. - Total revenue for 2023 was RMB 59,463,712, a decrease from RMB 63,040,148 in 2022, representing a decline of approximately 2.9%[150]. - Gross profit for 2023 increased to RMB 5,847,907, compared to RMB 5,281,374 in 2022, marking a growth of about 10.7%[150]. - Operating loss for 2023 was RMB 13,249,715, worsening from a loss of RMB 2,300,012 in 2022[150]. - Net loss attributable to equity holders for 2023 was RMB 21,030,181, compared to a loss of RMB 21,492,478 in 2022, indicating a slight improvement[150]. - Total assets decreased to RMB 543,250,395 in 2023 from RMB 616,210,939 in 2022, a decline of approximately 11.8%[150]. - Total liabilities decreased to RMB 491,999,365 in 2023 from RMB 536,705,854 in 2022, reflecting a reduction of about 8.3%[150]. - Non-current assets were valued at RMB 115,518,303 in 2023, down from RMB 131,010,397 in 2022, a decrease of approximately 11.8%[150]. Sales and Revenue - The company achieved a contract sales amount of RMB 42.822 billion in 2023, with a total contracted sales area of 2.947 million square meters, resulting in an average sales price of RMB 14,532 per square meter[22]. - Property sales revenue for 2023 was RMB 46.986 billion, accounting for 79.0% of total revenue, with a sales area of 3.641 million square meters[165]. - The hotel segment generated total revenue of RMB 2.295 billion in 2023, up 31.4% year-on-year, with RevPAR increasing by 39.8%[187]. - The revenue from the Shanghai Conrad Hotel was RMB 310 million in 2023, up from RMB 134 million in 2022, reflecting a significant increase in performance[193]. - The revenue from the Hong Kong Tung Chung Sheraton Hotel decreased from RMB 215 million in 2022 to RMB 196 million in 2023, indicating a decline in occupancy or revenue per room[193]. - The revenue from the Wuhan Shimao Hilton Hotel increased from RMB 84 million in 2022 to RMB 130 million in 2023, highlighting a recovery in the local market[193]. - The total revenue from other hotel operations was RMB 117 million in 2023, slightly up from RMB 116 million in 2022, indicating stable performance in this segment[193]. Corporate Governance and Ethics - The company has established a commitment to maintain high standards of business ethics and corporate governance, which is crucial for long-term business objectives[11]. - The company has a total of eight directors on the board, including four executive directors, one non-executive director, and three independent non-executive directors, ensuring a diverse governance structure[14]. - The company is committed to gender diversity on the board, aiming to have at least one director of a different gender[20]. - The board has reviewed the implementation and effectiveness of the shareholder communication policy, confirming its proper execution in 2023[46]. - The group is committed to transparent communication with shareholders, ensuring timely access to comprehensive information[45]. - The company emphasizes compliance with insider information policies to ensure timely reporting and disclosure responsibilities[69]. Risk Management and Financial Stability - The independent auditor was unable to express an opinion on the consolidated financial statements for the year ended December 31, 2023, due to uncertainties regarding the company's ability to continue as a going concern[36]. - The board of directors is responsible for the company's risk management and internal control systems, which are reviewed annually to ensure risks are kept within acceptable limits[38]. - The audit committee is overseeing the group's risk management and internal control systems, ensuring adequate resources and training for staff[64]. - The company is addressing uncertainties regarding the management's ability to implement plans and measures effectively[63]. - The company has outstanding borrowings that were not repaid as scheduled, totaling RMB 169.4 billion as of December 31, 2023, and RMB 174.1 billion as of the report date[99]. - The company has faced challenges in meeting repayment schedules, raising concerns about its financial stability and operational continuity[99]. - The company is involved in various litigation and arbitration cases, indicating significant uncertainty that may affect its ability to continue as a going concern[99]. Market Conditions and Strategic Adjustments - The real estate market remains sluggish in 2023, with ongoing pressure on the industry despite government policy adjustments aimed at stabilizing market expectations and financing conditions[66]. - The overall financing environment for the real estate industry remains weak, with confidence not fully restored and sales not recovering comprehensively[66]. - The real estate market is expected to face continued pressure in sales, but structural opportunities remain in different cities and segments[67]. - The company did not replenish any land reserves in 2023, reflecting a strategic adjustment in response to market conditions[22]. - The company plans to adapt its land acquisition and development plans in response to market supply and demand[166]. - The company has actively engaged with local financing mechanisms and submitted applications for eligible projects, indicating a proactive approach to align with market trends and government policies[67]. Operational Focus and Future Plans - The company has implemented a precise resource allocation strategy to manage project classifications and control, adapting to the complex market environment[22]. - The company aims to enhance internal controls to ensure fair value assessments of large project assets, addressing non-standard audit opinions[42]. - The company has established a delivery assurance task force to prioritize project delivery as a core operational focus[143]. - The company is focusing on market expansion and new product development to enhance its competitive position in the hospitality sector[194]. - The company is focusing on enhancing its self-owned brand development and providing immersive experiences for travelers[155]. - The company plans to expand its hotel business with new openings, including Chengdu Rui Xuan Hotel and Qingdao Dengzhou Road Rui Xuan Hotel, enhancing its brand portfolio[155]. - The group aims to enhance property management services through collaborations with small and medium-sized real estate companies in 2024[171]. Financing and Debt Restructuring - The company has entered into financing agreements, including a HKD 1.5 billion term loan with a 48-month term, indicating ongoing financial support for operations[6]. - The company is actively pursuing offshore debt restructuring to maximize stakeholder value[44]. - The company is actively restructuring approximately $11.5 billion in offshore debt and has successfully extended domestic bonds totaling about RMB 18.9 billion to alleviate liquidity pressure[144]. - The company has prepared a creditor support agreement to facilitate a restructuring plan, which is expected to be implemented through arrangements in Hong Kong and other jurisdictions[105]. Asset Valuation and Impairment - The fair value of investment properties was approximately RMB 13.4 billion, with a loss in fair value changes of about RMB 1.1 billion for the year ending December 31, 2023[102]. - The company recorded an impairment loss on inventory amounting to approximately RMB 300 million for the year ending December 31, 2023[102]. - The company has not provided sufficient, appropriate audit evidence regarding the valuation of significant unobservable inputs and assumptions used in the asset valuation[102]. - The valuation of a project company’s 60% equity stake was determined using the asset-based approach, with a total consideration of RMB 30 million for equity transfer and approximately RMB 215.7 million for debt transfer[81]. - The company aims to maximize financial recovery through the sale of the project company’s equity, which is expected to revitalize stalled projects and promote construction resumption[81]. Construction and Project Delivery - The company achieved delivery of 158 batches across 114 projects in 88 cities in 2023, emphasizing quality in its operations[143]. - The company plans to complete approximately 4.5 million square meters of construction in 2024, with a total construction area of about 26.7 million square meters[182]. - The total area of green buildings reached 93.65 million square meters in 2023, representing a year-on-year growth of 13.99%[131].