ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020 (Summary)
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 Notes
This 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 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 China Securities
Regulatory 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 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
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,
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020 (Summary)
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
97,274,985.72 333,155,843.41 -70.80%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before exceptional 85,184,270.99 322,865,954.53 -73.62%
gains and losses (RMB)
Net cash generated from/used in operating
-212,242,798.59 685,675,245.10 -130.95%
activities (RMB)
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
3,597,595,143.65 3,666,874,569.99 -1.89%
shareholders (RMB)
3. Shareholders and Their Holdings as at the End of the Reporting Period
Unit: share
Number of preferred
Number of ordinary shareholders 76,442 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
Management
Domestic
Co., Ltd. －
non-state-owne 1.02% 10,300,000
Shandong Gold d legal person
Financial
Holding
Sustaining Fund
1
Domestic
Lu Zhigao 0.32% 3,246,949
natural person
Domestic
Tan Shiqing 0.13% 1,286,701
natural person
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020 (Summary)
Domestic
Yang Shuilian 0.13% 1,273,700
natural person
Domestic
Yang Jianxiong 0.12% 1,255,750
natural person
Central Huijin
Asset State-owned
0.12% 1,165,500
Management 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 Measures 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 2020 (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?
The Company is subject to the Guideline No. 3 of the Shenzhen Stock Exchange on Information Disclosure by Industry—for Listed
Companies 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 net
profit 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 the
beginning amount; total liabilities stood at RMB1,030 million, down 25.63% from the beginning
amount; and the debt/asset ratio was 22.96%, down by 5.25 percentage points from the beginning
ratio.
Since its abrupt occurrence at the beginning of 2020, COVID-19 has continued to spread
throughout the whole world, dragging global economy into the most severe recession since the
Great Depression. The central government has stepped up effort in regular epidemic prevention and
control, and promoted the resumption of work and production on all fronts. In the first quarter, with
the substantial decline in domestic consumption and investment, the economy faced greater
downward pressure; in the second quarter, the real estate market operation exhibited a momentum
of recovery. In terms of policy, the country has continued the orientation that “Houses are for living
in, 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 targeted
way. They have balanced between the epidemic prevention and control and business development
and tightened effort in all work, in a bid to counter the negative impact brought by COVID-19. In
general, the Company has carried out its work orderly in all aspects, including the development of
main businesses, operations management, assets restructuring, Party building, epidemic prevention
and 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, including
placing equal focus on online and offline promotion. During the Reporting Period, the Company
outperformed the target for new contract-based sales, laying a solid foundation for the
accomplishment for the target of the whole year.
2. Projects were advanced steadily. As at the end of the Reporting Period, landscaping of Chuanqi
Donghu Mingyuan in Shenzhen was improved and handed over, and the construction and
installation for the residence gate were completed; main works of Shantou Tianyuewan were
completed, and landscaping of the mountain park was completed.
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020 (Summary)
(II) Stable Operations Management with Improvement
1. Financial management was regulated and effective. While ensuring the satisfaction of need for
working capital, the Company fully increased the efficiency of idle fund. It strengthened
communication 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, the
Company gained an income of more than RMB20 million from wealth management, including
structured deposits and agreement-based deposits with banks.
2. Property leasing moved ahead under pressure. Under the double impact of COVID-19 and
economic downturn, situations such as cancellation of leasing and reduction of leasing size have
been frequent. Focusing on customers’ needs, the Company made every effort to retain existing
customers 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 and
management fees, and won the lawsuits with executable judgement.
4. Solid achievements were made in cost control. By firmly sticking to a full-cost, whole-process
and penetrating management concept in production and operation, the Company continued to
strengthen project cost control, with satisfying results achieved.
(III) Continuous Advancement of Assets Restructuring
During the Reporting Period, the Company remained in share trading suspension due to major
assets restructuring. It continued to proactively work on fundamental matters, including due
diligence for restructuring, additional audit, additional evaluation and the updating of restructuring
related material and information. The Company disclosed the progress of those matters strictly in
accordance with regulations and went through the procedures for share trading suspension and
resumption. It continued to keep in touch with all restructuring related parties, and strengthened
communication with regulatory authorities. In addition, it answered calls from investors patiently
and attentively, and replied to their questions on irm.cninfo.com.cn, winning their understanding
and support.
(IV) Realistic and Pragmatic Approach for Party Building
The Company persisted in synchronous research, arrangement and advancement for its efforts in
Party building and business. It gave full play to the leading role of the Party committee in
controlling the direction, managing the overall situation and ensuring implementation. The
Company attached great importance to the Party’s political theory learning and education, and
ensured regular and policy-based learning in the Theory Center Group of its Party committee. All
its Party committee and branches strictly implemented the “Three Meeting One Lesson” System
and the “Five-One” Project for Party members’ education, promoted Xi Jinping Thought on
Socialism with Chinese Characteristics for a New Era into the Company’s front line, and
consolidated the results of themed education. The Company continued to improve the
accountability for the development of honest and non-corruptible practice. It established a list of
key tasks for such development, strengthened the “Two responsibility”, and continuously enforced
full and strict discipline over its Party members.
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020 (Summary)
(V) Marked Achievements in Epidemic Prevention and Control
During the Reporting Period, there was no cluster infection among the Group’s more than 1,900
employees, over 30 residences operated and managed by its property management subsidiary, and
thousands of office workers at SPG Plaza. Additionally, the Company proactively fulfilled its social
responsibilities as a state-owned enterprise. During the Reporting Period, it cut and exempted
property rentals of more than RMB10 million and donated RMB500,000 for the epidemic
prevention and control in Hubei.
(VI) Stable and Orderly Safe Production
The Company upheld the safety concept in its entire production process, implemented the
accountability system for production safety, and strengthened the roles in production safety. It kept
a tight grip on the identification and management of safety hazards, persisted in zero tolerance on
safety hazards, and reinforced its defense line for production safety. Through a combination of
measures, the Company conducted training to promote safety knowledge to its employees as a
tangible step to strengthen the safety awareness among all its staff. It continued to organize
emergency 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 of
its 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 its
economic operation takes on a momentum of growth towards recovery, the future situation remains
complicated and tough with great instability and uncertainties. The Company will actively adapt to
the macro economic development trend, and stick to the concept of pursuing progress while
ensuring stability and of seeking continuous development. It will continue to focus on the goal of
building a competitive and professional real estate enterprise, and speed up the development and
construction 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 external
environment 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 in
the following four aspects.
(I) Achieving Business Stability with Focus on Business
The 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 develop
projects with fine quality. It will closely follow the land market updates, and strive to develop new
land 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 subsidiaries
should drive the resumption of work and production in a steady pace, and strive towards the annual
targets.
(II) Ensuring Orderly Progress of Key Work through Rational Coordination
The Company will keep close watch on the trends of capital market and regulatory policies and
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020 (Summary)
strengthen communication with regulatory authorities. It will perform its obligation of information
disclosure, properly handle its investor relations, and drive the restructuring process together with
all parties of the major assets restructuring according to regulations. The Company will continue to
improve the allocation of human resources, strengthen its staff team building, optimize the age
structure and knowledge structure of its talent team, and maintain the strength and execution of the
team. It will work on the formulation of its “14th Five-Year” strategic plan as a blueprint for the
new journey of the next five-year plan. It will make solid steps to ensure the sustainability and
stability of its routine operations management, and continue to enhance its management quality.
(III) Implementing the Epidemic Prevention and Control and Ensuring Production Safety
through Persistent Effort
The Company will always be on full alert and implement the epidemic prevention and control with
high standards and strict requirements. It will ensure targeted and strong epidemic prevention and
control, and make full effort in the battle against the virus. The Company will promote the concept
of production safety, continue to improve the production safety management system, and advance
the standardization of production safety and the building of the “double” prevention mechanism. It
will strengthen the accountability for production safety, step up effort in the identification of safety
hazards, and intensity safety management in key areas, so as to prevent production safety accident
and create favorable conditions for the accomplishment of the year’s business target.
(IV) Strengthening the Development of Honest and Non-corruptible Practice Led by Party
Building
The Company will further study and implement Xi Jinping Thought on Socialism with Chinese
Characteristics for a New Era, and put into effect the guiding principles of the Party’s 19th National
Congress and the second and third plenary sessions of its 19th Central Committee. It will strengthen
the roles of political discipline and political rules, intensify supervision, discipline implementation
and accountability, and extend the strict discipline over the Party to its grassroots level. The
Company 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 ensuring
implementation as a Party committee of a state-owned enterprise, and integrate Party leadership into
its 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 Last
Accounting 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 the
accounting 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 the
customer has obtained the right to control the relevant goods or services “Obtaining the right to control the relevant
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ShenZhen Special Economic Zone Real Estate & Properties (Group) Co., Ltd. Interim Report 2020 (Summary)
goods or services” means that it is able to dominate the use of the goods or services and derive almost all economic
benefits therefrom. When certain conditions are met, the Group shall perform its performance obligations within a
certain period of time; otherwise, it shall perform its performance obligations at a certain point in time. If a contract
contains two or more performance obligations, the company shall allocate the transaction price to each individual
performance obligation in accordance with the relative proportion of the stand-alone selling price of the goods or
services promised by each individual performance obligation on the date of the contract The Company measures
revenue 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 standards
on specific matters or transactions, for example: contractual cost, quality assurance, distinction between principal and
agent, 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 factors
other than the passage of time as contractual assets. The Group’s obligation to transfer goods to customers for
consideration 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 the
customer to contractual liabilities, and reclassify the tax part to tax payable. The company will adjust the retained
earnings at the beginning of the year and the amount of other related items in the financial statements based on the
cumulative impact of the first implementation of the new income standard when preparing the financial reports for 2020
and 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 159,482,510.43 4,864,243.00 -154,618,267.43
customers
contractual 151,007,450.32 151,007,450.32
liabilities
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 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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