ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2019 (Summary)
Stock Code: 000029, 200029 Stock Name: SPG, SPG-B Announcement No. 2019-059
SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE &
PROPERTIES (GROUP) CO., LTD.
INTERIM REPORT 2019 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the 2019 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 full understanding of the Company’s operating results, financial condition and future development plans, investors should
carefully read the aforesaid full text, which has been disclosed together with this Summary on the media designated by the Ch ina
Securities Regulatory Commission (the “CSRC”).
Objections raised by any of the directors, supervisors or senior management against any contents in this Report or its summary:
Name Office title Objection and explanation of why
Statement of objection:
Except for the following directors, all the other directors attended in person the Board meeting for the review of this Report and its
summary.
Reason for not attending
Name Office title Proxy
meeting in person
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 or
misunderstandings 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
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2019 (Summary)
Stock exchange for stock listing Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Tang Xiaoping Luo Yi
47/F, SPG Plaza, Renmin South Road, 47/F, SPG Plaza, Renmin South Road,
Office address
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 2019 H1 2018 Change (%)
Operating revenue (RM B) 1,251,337,802.57 1,317,541,631.35 -5.02%
Net profit attributable to the listed 333,155,843.41 329,066,084.53 1.24%
company’s shareholders (RM B)
Net profit attributable to the listed
company’s shareholders before exceptional 322,865,954.53 329,143,873.10 -1.91%
gains and losses (RM B)
Net cash generated from/used in operating
685,675,245.10 594,728,129.67 15.29%
activities (RM B)
Basic earnings per share (RM B/share) 0.3293 0.3253 1.23%
Diluted earnings per share (RM B/share) 0.3293 0.3253 1.23%
Weighted average return on equity (%) 9.81% 11.00% -1.19%
30 June 2019 31 December 2018 Change (%)
Total assets (RMB) 5,069,809,256.04 4,665,891,514.25 8.66%
Equity attributable to the listed company’s
3,463,168,724.16 3,332,259,641.39 3.93%
shareholders (RM B)
3. Shareholders and Their Holdings as at 30 June 2019
Unit: share
Number of preferred
Number of ordinary shareholders 76,443 shareholders with resumed 0
voting rights (if any)
Top 10 shareholders
Name of Nature of Shareholding Number of Shares in pledge or frozen
Restricted shares
shareholder shareholder percentage shares Status Shares
Shenzhen
Investment State-owned
63.55% 642,884,262
Holdings Co., legal person
Ltd
Shandong Gold
Financial
Holding Capital
M anagement Domestic
Co., Ltd. － non-state-owne 1.02% 10,300,000
Shandong Gold d legal person
Financial
Holding
Sustaining Fund
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2019 (Summary)
1
Domestic
Lu Zhigao 0.32% 3,246,949
natural person
Domestic
Tan Shiqing 0.13% 1,286,701
natural person
Domestic
Yang Shuilian 0.13% 1,273,700
natural person
Yang Jianxiong Domestic 0.12% 1,255,750
natural person
Central Huijin
Asset State-owned
0.12% 1,165,500
M anagement legal person
Co., Ltd.
Domestic
Peng Wei 0.11% 1,129,082
natural person
Foreign natural
Wu Haoyuan 0.11% 1,109,300
person
Guotai Junan
Securities Foreign legal
0.10% 1,015,683
(Hong Kong) person
Limited
Related or acting-in-concert The Company has found no related parties or acting-in-concert parties as defined in the
parties among the shareholders Administrative M easures for Shareholding Changes in Listed Companies among the
above shareholders above.
The fourth shareholder holds all his shares in the Company in his accounts of collateral securities
Shareholders involved in
for margin trading. And the third shareholder holds some of his shares in the Company in such
securities margin trading (if any) 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 this
Report’s approval or were due but could not be redeemed in full?
No.
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2019 (Summary)
Part III Operating Performance Discussion and Analysis
1. Business Overview of the Reporting Period
Is the Company subject to any industry -specific disclosure requirements?
No.
(I) Operating Results of the Reporting Period
In face of the complicated and changeable economic conditions at home and abroad in 2019,
China’s economy continued to see progress amid overall stability. Major macro-economic
indicators remained at reasonable levels, the supply-side structural reform carried forward, and
high-quality development promotion continued. Regarding the domestic real estate market, it was
still under great pressure due to the restrictive measures. Under such circumstances, in addition to
carrying forward its major assets restructuring programme, the Company adhered to the thinking of
“Carefully Draw up Development Strategies, Particularly Focus on Core Business, Strictly Control
Costs and Continuously Improve Management Capability” and put greater efforts into promoting
project construction and marketing, so as to achieve continual and stable development.
In the Reporting Period, the Company made a concerted effort to steadily promote project
construction. As a result, for this period, the Company achieved operating revenue of RMB1,251
million, down 5.02% compared to the same period of last year; a profit before taxation of RMB446
million, representing a year-on-year growth of 1.28%; and a net profit attributable to the listed
company’s shareholders of RMB333 million, increasing 1.24% from a year earlier. As at 30 June
2019, equity attributable to the listed company’s shareholders amounted to RMB3,463 million, a
3.93% rise compared to the end of last year.
1. Focused on residential property development, the Company has been building a professional and
high-quality development team, as well as improving the management mechanism and processes for
project development. As a result, the operational capability in the core business of real estate keeps
increasing, along with the core competitiveness. During the Reporting Period, the key projects of
the Company were mostly located in Shenzhen and Shantou. The Company paid close attention to
product quality and progress, and adjusted marketing strategies in a timely manner. As a result,
project development and sales progress basically met expectations, and the core business was in
good order and health.
2. The Company’s main real estate projects under construction or available for sale during the
Reporting Period included the Shenzhen-based Chuanqi Jingyuan, Cuilinyuan and Chuanqi Donghu
Mingyuan projects, as well as the Shantou- located Tianyuewan project, etc., with details as follows:
The
Floor area
Locati Comp Site area（㎡）with plot ratio Completed Expected total Accumulated
Project Usage Status investment investment
on any’s floor area（㎡）
（㎡） (RMB’0,000) (RMB’0,000)
stake
Chuanqi Shenzh Rental Availab 49% 4,243.34 43,156 43,156 24,865 20,023
Jingyuan en le for
sale
Cuilinyuan Shenzh Residenti Availab 100% 16,424.29 60,450 60,450 57,000 51,634
en al le for
sale
Tianyuewan Shanto Residenti Availab 100% 31,167.50 153,470 153,470 79,801 68,983
Phase I u al le for
sale
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2019 (Summary)
Tianyuewan Shanto Residenti Under 100% 33,361.70 127,661 0 65,485 20,802
Phase II u al constru
ction
Chuanqi Shenzh Residenti Under 100% 5,889.70 34,073 0 51,000 36,723
Donghu en al constru
M ingyuan ction
3. Land bank for future development by the end of the Reporting Period:
Project Location Land area（㎡） Floor area with plot ratio （㎡）
Xinfeng Building Shantou 5,920 26,640
Total 5,920 26,640
Note: The Company's real estate projects do not involve primary land development.
(II) Ope ration Review for H1 2019
1. The Company’s fundamentals remain positive with sufficient cash flows and a healthy financial
condition. In late May 2019, the Company implemented its final cash dividend plan of 2018.
2. The major property developments proceed smoothly. The Company has further improved the
development and management system, attached importance to construction safety and tightened
cost control. During the Reporting Period, the overall progress of the Company’s property
developments was in line with the schedule. In Shenzhen, the Cuilinyuan project has finished the
initial registration; the Chuanqi Jingyuan project has successfully completed fine decoration; and
the Chuanqi Donghu Mingyuan project has wrapped up construction and is going through
acceptance. In Shantou, the Tianyuewan Phase II project has completed the pile foundation and the
pit support structure and is progressing as scheduled.
3. Property sales were generally good. The Company kept a close eye on policy and market
dynamics, and adjusted marketing strategies accordingly in a timely manner. Sales by project were
basically satisfying. The Chuanqi Jingyuan project has been almost sold out; the Chuanqi Donghu
Mingyuan project has been sold approximately 10%; the Cuilinyuan project has been sold around
80%; and the Tianyuewan Phase I project has seen about 35% of its residential units sold.
(1) Sales of major real estate projects carried forward to the Reporting Period:
Unit: RM B’0,000
Operating Gross profit margin
Location Cost of sales Gross profit margin
revenue (%)
Chuanqi Jingyuan Shenzhen 79,580 11,268 68,312 85.84
Cuilinyuan Shenzhen 11,185 3,078 8,107 72.48
Tianyuewan Phase Shenzhen 6,783 5,348 1,435 21.16
I
Yuejing Dongfang Shantou 182 135 47 25.82
Jinyedao Shantou 599 234 365 60.93
Total 98,329 20,063 78,266 79.60
(2) Real Estate sales during the Reporting Period:
Unit: square meters
Floor area
The Area actually
Time of opening available for Settled area in
No. Project Company’s Location sold in Current
for sale sale at Current Period
interest Period
year-beginning
1 Chuanqi October 2018 49% Shenzhen 18,011 16,125 12,006
Jingyuan
2 Cuilinyuan June 2017 100% 12,733 4,026 3,256
Shenzhen
3 Chuanqi December 2018 100% Shenzhen 32,762 2,772
Donghu
M ingyuan
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2019 (Summary)
4 Tianyuewan October 2016 100% Shantou 122,085 11,566 12,203
Phase I
5 The remaining December 2013 100% Shantou 944 211
units of Yuejing
Dongfang
6 The remaining July 1996 100% Shantou 3,408 916 526
units of
Jinyedao
Total 189,943 35,405 28,202
4. Corporate management keeps improving and internal potentials are tapped to help improve
corporate performance. Subsidiaries have enhanced strategic synergy with the core business of the
Company and generally achieved over half of the expected profit in H1 2019. Meanwhile, the
purchase of structured deposits at bank with idle funds has effectively increased the efficie ncy of
capital utilization. Moreover, the six expenses under intense monitoring went down 9.2% in H1
2019 compared to a year ago.
5. Property rental is stable with steadily rising rental prices as well as good occupancy rates and rent
collection rates. The major properties for rental are as follows:
Unit: square meters
Occupancy The Company’s
Location Name of building Rentable area Rented area Usage Land ownership
rate interest
Shenzhen Real Estate 3,413.88 3,413.88 100% Commercial The Company 100%
M ansion
Shenzhen North Block of 4,819.71 4,819.71 100% Commercial The Company 100%
Guoshang
M ansion
Shenzhen Petrel Building 22,475.47 22,475.47 100% Commercial The Company 100%
Shenzhen SPG Plaza 61,005.94 49,750.84 81.55% Office The Company 100%
SPG Plaza 19,903.30 19,825.30 99.61% Commercial The Company 100%
Podium
Shenzhen Wenjin Garden 3,531.60 3,531.60 100% Commercial The Company 100%
Total 115,159.90 103,816.80
6. The assets restructuring programme has been carried forward.
The Company’s major assets restructuring plan is subject to further communications and
improvements with the regulators. Due diligence material update, additional audit and assessment,
etc. are underway.
(III) Risks Facing the Company and Countermeasures
1. Risks Facing the Company:
(1) Risks from macroeconomic environment. Since this year, Chinese government has been
adhering to the general principle of seeking p rogress while maintaining stability, the domestic
economy runs within a reasonable range. However, given that the Sino-US trading dispute is still
going on, and that the global economic situation remains complicated and severe, the downward
pressure on the economy is difficult to relieve in a short term.
(2) Risks from policy on real estate industry. Against the convening of the 19 th National Congress
of the Communist Party of China, the Chinese government shows a clear attitude that “Houses are
for living in, not for speculating on”. The continuous implementation of real estate macro-control
policy curbs people’s investment demands at a large degree, and potential customers are
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2019 (Summary)
increasingly taking a wait-and-see attitude, which generates a certain impact o n the development
and sales of main business of the Company.
(3) Risks from development and operation of main business. The Company does not increase its
land reserve, influenced by the major assets restructuring and the land reserve at present is limited.
Moreover, there is a lag in the sales progress of Shantou Tianyuewan Phase I.
(4) Potential risks from assets restructuring. The major assets restructuring of the Company is a
significant and unprecedented event with complex trading structure for involved in the Shenzhen
State-owned Enterprise Reform and with large-scale assets since the underlying assets it plans to
purchase are industrial leading assets. Thus, the trading of its shares has been suspended for almost
three years since its start of trading on 14 September 2016. At present, matters such as the renewal
of diligence materials in restructuring and supplementary audit as well as evaluation are carried out
simultaneously. For the uncertainty of related events, investors are reminded of the investment
risks.
2. Countermeasures
Firstly, the Company will unremittingly pay attention to international and domestic macroeconomic
situation and the industrial trend, and then formulate flexible coping strategies.
Secondly, the Company will further strengthen its ability to develop main business, raise its
management level and make efforts to reinforce the marketing of projects so as to stabilize the
fundamental of the Company.
Thirdly, the Company will increase its land reserve timely and in an appropriate way to maintain
the sustainable development of the Company in the future.
Fourthly, the Company will enhance the communication with regulators together with parties
involved in the restructuring and make full efforts to promote the process of major assets
restructuring.
2. Matters Related to Financial Reporting
(1) Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared to the Last
Accounting Period
□ Applicable √ Not applicable
No such changes.
(2) Retrospective Restatements due to the Correction of Material Accounting Errors in the Reporting
Period
□ 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.
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