ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
Stock Code: 000011, 200011 Stock Name: PRD, PRD-B Announcement No. 2021-06
SHENZHEN PROPERTIES & RESOURCES DEVELOPMENT
(GROUP) LTD.
ANNUAL REPORT 2020 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the Annual 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 full
understanding of the Company’s operating results, financial position 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 the Proxy entrusted to attend the
Name Office title
meeting in person meeting
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders for the Reporting Period:
√ Applicable □ Not applicable
Bonus issue from capital reserves:
□ Yes √ No
The Board has approved a final dividend plan for ordinary shareholders as follows: based on the share capital of 595,979,092 shares,
a cash dividend of RMB4.1 (tax inclusive) per 10 shares is to be distributed to the shareholders, with no bonus issue from either
profit or capital reserves.
Board-approved final cash and/or stock dividend plan for preferred shareholders for the Reporting Period:
□ 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.
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ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
Part II Key Corporate Information
1. Stock Profile
Stock name PRD, PRD-B Stock code 000011, 200011
Stock exchange for stock
Shenzhen Stock Exchange
listing
Contact information Board Secretary Securities Representative
Name Zhang Gejian Ding Minghua and Chen Qianying
20/F, International Trade Center, Renmin South 39/F, International Trade Center, Renmin South
Address Road, Luohu District, Shenzhen, Guangdong Road, Luohu District, Shenzhen, Guangdong
Province, P.R.China Province, P.R.China
Fax 0755-82210610 82212043 0755-82210610 82212043
Tel. 0755-82211020 0755-82211020
Email address 000011touzizhe@szwuye.com.cn 000011touzizhe@szwuye.com.cn
2. Principal Activities or Products in the Reporting Period
(I) Core Business Overview
Established in 1982, the Company was originally known as "Luohu Engineering and Construction Headquarters" and renamed
"Shenzhen Municipal Property Development Corporation" in August 1985. The Company was determined as the second batch of
pilot units for joint-stock reform of state-owned enterprises in 1988. Approved by the municipal government, the Company renamed
to ShenZhen Properties & Resources Development (Group) Ltd. in 1990. The stock of the group company (stock name: SZPRD, A/B;
stock code: 000011, 200011) was officially listed in Shenzhen Stock Exchange in March 1992.
The Company contracted and built Shenzhen International Trade Center Building as Party A and created, planned, and organized the
world-famous "Shenzhen Speed". The building was the place where Chairman Deng Xiaoping gave talks in his inspection to the
south. SZPRD came into being because of the building and has risen amid the Reform and Opening up campaign. Emerging and
growing together with Shenzhen, a city of miracles, the Company has been “a loyal practitioner of the spirit of the ox” and overcome
difficulties in proposing new services in the new era. In the past four decades of trials and hardships, generations of SZPRD
employees have manifested the enterprise spirit of "going ahead and reforming" and centered on the functional positioning as state
assets of "serving national economic and social development, the city, the industry, and the people". The Company has adhered to the
original aspiration and striven ahead to be a pioneer. Therefore, it has made remarkable achievements in development speed and
quality. So far, the Company has grown into a large comprehensive industrial group from the project company that built Shenzhen
International Trade Center Building. Looking ahead, it will size up the situation and seize the momentum in the new era and phase
and forge ahead toward the goal and vision of becoming a "leading smart operator of industry-city space in China".
The year 2020 marks the end of the "13th Five-Year" plan and is a key year for the Company to make major adjustments to win
critical battles in implementing its reforms on all fronts. In the Reporting Period, facing the abrupt COVID-19 and deep regulation
and control in real estate, the Company vigorously explored ways to make breakthroughs in transformation and integrated and
renovated traditional businesses, such as real estate, property management, and house asset operations. Besides, it optimized and
reshaped its business segments so as to form four major business segments, that is, industry-city space development, property
management services, industrial ecosystem operation, and main business ecosystem investment. SZPRD endeavored to further
consolidate and highlight its advantages of industry-city integration and the whole industry chain through expanding the main
business and making breakthroughs.
1. Industrial & urban space development
In terms of the space development segment, the Company is specialized in developing the residence, the hi-end apartment, the office
building, and the industrial park and has developed a batch of brand projects, including Shenzhen International Trade Center Building,
Huanggang Port, Tian'an International Building, Qianhai Gangwan Garden, and Golden Collar Holiday Apartment. Based on its
present real estate development business, the Company will improve its existing portfolio and plan for new businesses. It will engage
a number of subsidiaries in property development and urban renewals, including Huangcheng Real Estate, Rongyao Real Estate, the
Urban Renewal Company, Dongguan Company, Xuzhou Company, and Yangzhou Company, strengthen capital operation via the
listing platform, and make a reasonable layout of the city space development segment. In the Reporting Period, SZPRD made
multiple efforts for this segment. For instance, it steadily advanced the existing project development inside and outside Shenzhen,
accelerated the sales of projects in Xuzhou, Yangzhou, and Dongguan, and sped up the recovery of investment. Moreover, it focused
on the development and construction of industry-city complexes and accelerated to create an integrated and co-existing model for the
development of boutique urban residences and high-end industry space.
2. Property management services
In the Reporting Period, SZPRD deeply integrated its property management segment to establish a business layout featuring the
platform of ITC Property Management and "1+1>2" coordinated development. The total area of property management exceeded 24
million square meters. Over more than 30 years of development, ITC Property Management has developed into a domestic top
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ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
branded property service provider of industrial parks. It has won the titles of "Top 100 National Property Management Enterprises"
and "Excellent Enterprise of Property Management of Industrial Park in China" for several years successively, and has subsidiaries,
including Shenzhen Guomaomei Life Service Co., Ltd., Shandong Shenguomao Real Estate Management, and Chongqing
Shenguomao Real Estate Management, and three joint ventures, namely, Shenshan Guomao Property Management, Guomao Tongle
Property Management, and Shouxihu Jingyue. It has built striking brand advantages and established property service projects all over
the country. Next, the Company will take advantage of the brand, ITC Property Management, strive to integrate property
management resources inside and outside the system, quickly expand channel space, upgrade property management, and significantly
enhance channel service quality. In addition, it will combine industry chain and new requirements of community development and
earnestly utilize new technologies, such as the Internet of Things (IoT), big data, and artificial intelligence (AI) to develop a smart
service platform where production and life services can be scheduled in a unified manner.
3. Industrial ecosystem operation
With respect to the industrial ecosystem operation segment, the Company gave full play to its foundation in the three basic industries,
namely, real estate development, property management, and leasing and the advantage of the whole industry chain and deepened
internal and external strategic cooperation. It is committed to creating a closed loop of the whole industrial ecosystem, covering
project development services, park operation services, and supporting rental operations, and keeping improving the space service and
rental ecosystem in the industrial park. The Company is expediting the stock taking and assessment of its properties in stock and
strengthening the management over them. In the future, it will gradually expand the scope of leasing and raise the development
capability of property rental. Moreover, the Company will gradually shift the focus of industrial ecosystem operation to sci-tech
parks, provide supporting services covering the whole value chain, such as the import of industrial ecosystem, project development
services, and park operation services, and serve the role of "space service provider" centering on sci-tech parks.
4. Other business
In the Reporting Period, the Company's businesses also included catering service and project supervision service. The catering
service is operated by Shenzhen Guomao Catering Co., Ltd. Guomao Catering Co., Ltd., established in 1986, became famous at
home and abroad, as it was the place where President Deng Xiaoping gave talks during his inspection to the south in 1992. Since its
establishment, it has received more than 600 domestic and overseas state heads, famous people, and numerous domestic and overseas
guests, with its reputation spreading all over the world. The revolving restaurant had its integrated renovation completed and was
reopened in 2020. The project supervision service is handled by the subordinated supervision company of the Group. The company
has the Grade A supervision qualification of building works of the Ministry of Housing and Urban-Rural Development (MOHURD).
It was originally known as Shenzhen Property Engineering Management Department, and takes part in the construction and
management work of Shenzhen International Trade Center Building. It is a witness of the whole process of "Shenzhen speed", and
mainly serves for the development project of the Group.
(II) Industry development stage and cyclic characteristics of the Company, and industry position of the Company during the
Reporting Period
1. Real estate industry
During the Reporting Period, China maintained the basic tone of real estate policy regulation and control unchanged, including
"Houses are for living in, not for speculating on." and "three stabilities" and further reinforced its financial regulation. In order to
fight against the COVID-19 pandemic, the primary objectives for the first half of the year were "six stabilities" and "six guarantees".
Local governments adopted more flexible policies commensurate with their local situations. Multiple regions released an
underpinning policy for the real estate market. Thus, real estate sales remained high in the country. In the second half of the year,
China constantly tightened its real estate financing policies, issued new regulations for the investment of insurance funds and trusts in
real estate, and strictly investigated the rule-violating transfer of funds from the bank to the real estate industry. Under such a policy
background, China's real estate industry mainly presents the following characters:
(1) Real estate market remains resilient and has broad prospects
According to the National Bureau of Statistics, in 2020, the sales area of national commercial housing was 1,761 million square
meters, with an increase of 2.6% year-on-year (YoY), while the sales amount was RMB17.36 trillion, up by 8.7% YoY and higher
than the growth rate of 6.5% in 2019. The sales amount of residential housing reached RMB15.46 trillion, rising by 10.8% YoY,
representing nearly 90% of the total sales amount of commercial housing. However, the sales amount of office buildings and houses
for business use dropped by 5.3% and 11.2%, respectively, from the same period last year. Prices of commercial housing generally
climbed and demonstrated apparent differences by region. The dramatic increase in the prices in core cities, such as those in the
Yangtze River Delta and the Pearl River Delta, drove the growth in surrounding areas. The real estate industry remained resilient
amid the pandemic.
(2) Financing regulation turned stricter than expectations. The capital chain of real estate enterprises became tight
The central monetary policies were loose so as to effectively promote the resumption of work and production at the beginning of the
year. Governments in multiple regions loosened the regulation and credit policies for real estate enterprises. Monetary policies have
resume tight since May, as the adverse impact of the pandemic turned weaker and weaker and the sales of commercial housing and
land remained hot. The principle that "Houses are for living in, not for speculating on." has been stressed again. The monitoring of
the flow of funds from the bank to real estate enterprises has been intensified. The "Three Red Lines" policy was introduced and
piloted in August to further regulate the financing of real estate enterprises. Financing in the real estate industry slowed down in 2020
amid stricter regulation over financing and growth in the scale of debts due. The financing scale fell. The overall financing cost
dropped slightly. In terms of structure, self-raised funds and mortgage loans accounted for a higher proportion. Bond issuance
continued to grow in China, while the scale of bonds overseas plunged drastically. Innovative products like ABS became increasingly
important. The peak of the repayment of overseas bonds brought some cash flow risks to real estate enterprises. The industry might
usher in a new cycle of supply-side reform.
(3) Land sales remained hot. Both sales volumes and prices increased
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ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
Real estate enterprises showed an increasing willingness to purchase land, attributable to the loose monetary policies and
performance of the commercial housing market better than expectations. Besides, local governments accelerated to promote land
sales. Both the supply and demand sides jointly pushed forward the increase in sales volumes and prices. In 2020, turnover of land
sales through tendering, auctioning and listing was approximately RMB8.05 trillion, rising by 18.8% YoY. 4,925 million square
meters of planned building area were transferred with a YoY increase of 14.9%. The average sales price of land was
RMB1,635/square meter throughout the year, which climbed by 3.5% YoY. By regions, tier-1 cities represented by those in the
Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei Region maintained high increases in both the sales area
and amount of land, followed by tier-3 cities. Because of a high inventory, the growth rates in tier-2 cities were weak and at the
downside of the cycle.
2. Industry of property management
With the acceleration of urbanization, the upgrading of citizen's consumption level, and the constant increase of stock property area,
the Chinese property management industry enters a cycle of rapid progress, as driven by favorable policies. At present, the property
management industry is scattered in China. In other words, its market concentration is not high. Large property management
enterprises will occupy a higher market share, along with the progress of M&As of such enterprises. China's property management
industry mainly presents the following characteristics:
(1) Market prospects are broad. Revenue grows rapidly
According to the Evaluation Report of Comprehensive Strengths of Property Service Enterprises for 2020, in 2019, the total national
management area of the property management industry was 31 billion square meters with a YoY increase of 11%. The top 100
property management enterprises actively implemented diversified expansion strategies. Their number of projects under management
in 2019 averaged 212, up by 10.42% YoY, while the area under management, 42,788,300 square meters with a YoY increase of
15.08%. The market share of the top 100 property management enterprises was approximately 43.6%. The industry concentration
further increased. The gap among enterprises at different levels turned wider. In general, the property service fee grew. In December
2020, the composite index of property service prices in 20 major cities reached 1070.32, up by 0.6% YoY. The property service
industry in China will enter a golden period of rapid development, along with the increase in the existing and new properties and the
progress of new types of communities. The industry scale will hopefully surpass RMB2 trillion.
(2) The craze of listing among property management enterprises continues. Industry competition is becoming stronger
Property management enterprises have endeavored to get listed since 2018, thanks to the high valuation in the market. The year 2020
witnessed the listing of 17 such enterprises, most of which were H-share-listed, indicating an apparent Matthew Effect. Nevertheless,
the stock prices on the first day of over half of the property management enterprises listed in 2020 were lower than their issue prices,
which implied that the valuation of property management enterprises diverged from reality. Property management enterprises
accelerate to perform M&As and integration in order to cope with the increasingly fierce industry competition and expand scale and
business. Quality underlying assets are like "sweet pastries". Leading enterprises have raised the area under management to a new level
of 500 million square meters through M&As.
(3) The industry speeds up to transform and vigorously expand the Blue Ocean Market
The ten ministries and departments of China published the Notice on Strengthening and Improving Residential Property Management
in January 2021. The document encourages property service enterprises to proactively employ technologies, such as the IoT, cloud
computing, big data, blockchain, and AI, to build a smart property management service platform and explore the "property service +
life service" model. As property services are expanding to cover elderly and child care, housekeeping, culture, health, house agency,
and express delivery and receipt, multi-level and diversified residential and life demands of owners will be better satisfied. Furthermore,
property management enterprises will hopefully expand the Blue Ocean Market and improve the profitability per unit area. The legal
status of the owners' committee of the community is specified upon the implementation of the Civil Code. The committee is becoming
stronger. Disputes over the rights to operations and earnings of public space are surging, leading to pressure on the sustainable
development of the property management industry.
3. Industry position of the Company
SZPRD arises together with Shenzhen opening up and devotes to Shenzhen real estate and property management and other fields for
more than 30 years. Its comprehensive capacity and brand influence is getting stronger. Its industry position improves gradually. It
has won many honors and awards in the past years. During the Reporting Period, at the 10th Grand Ceremony of Shenzhen Real
Estate held by the Shenzhen Real Estate Association, the Group won the honor of "Brand Value Enterprise of Shenzhen Real Estate
Development Industry".
ITC Property Management was among the first batch of national qualified Level I enterprises of property management. During the
Reporting Period, thanks to its continuous improvement in internal control, steady progress in property management quality, and
constant R&D of services and products matching customer requirements, ITC Property Management was granted the titles of "Top
100 Enterprises of China's Property Management in 2020" and "Property Management Enterprises of China's Industrial Park in
2020". Additionally, it was ranked 27th among China's top 100 property services for comprehensive competency, up by six places
over 2019. It has been included in the Top 100 Enterprises of China's Property Service for five consecutive years since 2016. Besides,
it was ranked 11th of the "Top 100 of Comprehensive Capacity of Shenzhen Property Service Enterprises in 2019".
3. Key Financial Information
(1) Key Financial Information of the Past Three Years
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
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ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
Reasons for the retrospective restatements:
Business combination involving entities under common control
Unit: RMB
2020-over-2019 2018
2020 2019
change (%) Before Restated
Operating revenue 4,104,374,646.02 3,961,669,942.44 3.60% 2,787,240,632.53 3,376,673,249.90
Net profit attributable to
the listed company’s 798,572,121.74 817,805,780.12 -2.35% 592,723,852.71 698,050,728.96
shareholders
Net profit attributable to
the listed company’s
shareholders before 788,377,322.39 695,675,201.19 13.33% 591,362,024.37 591,362,024.37
exceptional gains and
losses
Net cash generated
from/used in operating 385,497,782.12 939,789,565.96 -58.98% 1,123,594,927.59 1,231,718,056.18
activities
Basic earnings per share
1.3399 1.3722 -2.35% 0.9945 1.1713
(RMB/share)
Diluted earnings per share
1.3399 1.3722 -2.35% 0.9945 1.1713
(RMB/share)
Weighted average return
23.47% 20.46% 3.01% 18.94% 19.47%
on equity (%)
Change of 31 31 December 2018
December 2020
31 December 2020 31 December 2019 over 31
December 2019 Before Restated
(%)
Total assets 12,207,356,912.54 10,772,491,740.53 13.32% 5,820,202,137.54 7,023,354,613.55
Equity attributable to the
listed company’s 3,727,917,440.03 3,147,949,009.38 18.42% 3,337,949,324.64 3,872,406,104.67
shareholders
(2) Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 861,546,080.08 559,531,687.75 332,619,949.47 2,350,676,928.72
Net profit attributable to the listed
152,014,318.10 59,953,416.66 -19,555,182.58 606,159,569.56
company’s shareholders
Net profit attributable to the listed
company’s shareholders before 152,909,860.77 57,711,762.61 -19,618,268.67 597,373,967.68
exceptional gains and losses
Net cash generated from/used in
-609,307,576.52 -1,013,874,562.38 1,170,415,181.72 838,264,739.30
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what
have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
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ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
4. Share Capital and Shareholder Information at the Period-End
(1) Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders
Unit: share
Number of Number of preferred
Number of
ordinary shareholders with
Number of preferred
shareholders at resumed voting
ordinary shareholders
52,587 the month-end 54,313 0 rights at the 0
shareholders at with resumed
prior to the month-end prior to
the period-end voting rights at
disclosure of this the disclosure of this
the period-end
Report Report
Top 10 shareholders
Shares in pledge or
Nature of Shareholding Total shares held Restricted frozen
Name of shareholder
shareholder percentage at the period-end shares held
Status Shares
Shenzhen Investment Holdings State-owned legal
56.96% 339,452,527 3,326
Co., Ltd. person
China Orient Asset Management State-owned legal
4.99% 29,798,300 0
Co., Ltd. person
Hong Kong Securities Clearing
Foreign legal person 0.31% 1,874,823 0
Company Ltd.
Domestic
Shenzhen Duty-Free Commodity
non-state-owned 0.29% 1,730,300 1,730,300
Enterprises Co., Ltd.
legal person
Domestic natural
Duan Shaoteng 0.27% 1,618,565 0
person
Domestic natural
Yang Yaochu 0.25% 1,500,384 0
person
Domestic natural
Mai Furong 0.18% 1,049,200 0
person
UBS AG Foreign legal person 0.17% 1,036,938 0
Domestic natural
He Simo 0.17% 1,011,750 0
person
China Construction Bank-Wanjia
Selected Mixed Type Securities Other 0.16% 982,300 0
Investment Fund
The first largest shareholder, Shenzhen Investment Holdings Co., Ltd., is
Related or acting-in-concert parties among the the actual controlling shareholder of the Company. And the Company does
shareholders above not know whether there are related parties or acting-in-concert parties
among the other 9 shareholders.
Shareholders involved in securities margin trading (if
N/A
any)
(2) Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
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ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
(3) Ownership and Control Relations between the Actual Controller and the Company
5. 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.
Part III Operating Performance Discussion and Analysis
1. Business Overview of the Reporting Period
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.
(I) Industry review for the Reporting Period
1. Macro economic situation
The COVID-19 pandemic exerted a severe impact across the world in 2020 and became a systematic system with extremely great
uncertainties co-existing with trade frictions and geopolitics. It constituted a tremendous shock to the world economy. Currently,
COVID-19 has been effectively controlled in China, while the situation overseas is still not optimistic. In the financial field, the
economic downturn has resulted in soaring risk aversion and frequent fluctuations in the global stock market. Rising unemployment
rates and decreasing income are inhibiting consumption. Central banks in all countries have taken loose monetary policies to promote
economic recovery. Global debts have hit a new high. Generally, pandemic rebound hinders economic recovery in the United States and
Europe. Global inflation remains sluggish. It is predicted that the economy in 2020 would shrink by 3.5%. That said, the severest
moment has passed. The world economy will hopefully enter a recovery cycle, as the pandemic across the world becomes a new normal,
the world political situation turns stable, and trade protection measures are expected to decrease. The recovery progress is mainly
determined by the pandemic trend all over the world.
In the context of the global economic depression, China recorded a GDP of RMB101.6 trillion in 2020 with a YoY increase of 2.3%.
It was the first time for China to surpassed RMB10 billion. Besides, China was the only major economy in the world that achieved
positive growth in the year. Most regions across the country stopped work and production, as influenced by the sudden outbreak of
COVID-19 at the beginning of the year. Consequently, the first quarter (Q1) witnessed a YoY decrease of 6.8% in GDP. However, as
the pandemic was gradually controlled and the resumption of work and production was orderly promoted, China's economy steadily
recovered. The YoY growth rates of GDP in Q2, Q3, and Q4 were 3.2%, 4.9%, and 6.5%, respectively. China took the lead in
controlling the pandemic, while repeated outbreaks occurred overseas. Hence, China had an outstanding performance in exports. The
export trade totaled RMB32.16 trillion in the year, growing by 1.9% YoY. Specifically, exports rose by 4%, while imports declined
by 0.7%. Total retail sales of consumer goods amounted to RMB3.92 billion, down by 3.9% YoY. Prices slowly recovered after a
slight decrease at the beginning of the year. The annual CPI climbed by 2.5%. Generally, investment in fixed assets first declined and
then rose. The growth rates of investment in manufacturing and infrastructure construction gradually picked up. Investment in the
real estate industry continued to be resilient. From January to November, investment in real estate development amounted to
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ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
RMB12,949.2 billion with a YoY increase of 6.8%. The industry prospects kept recovering.
The year 2021 marks the start of the "14th Five-year Plan". The pandemic still exists. China is recovering its economy. Its fiscal and
monetary policies will resume neutral. Endogenous consumption and manufacturing investment will become the main engine of
economic growth. It is expected that China's economy will gradually return to normal in 2021 and make significant contributions to the
global economic recovery. In general, the momentum of the steady economic progress in China will remain unchanged.
2. Policy environment of the industry
In 2020, the central government of China observed the basic tone that "Houses are for living in, not for speculating on." in terms of real
estate regulation and control. It adopted loose monetary policies, when the pandemic was the most severe in the first half of the year. As
a result, the fund environment of the real estate industry was improved. Local governments implemented more flexible policies in line
with their actual situations. For the demand side, priority was given to the talent attraction policy and loosened requirements for
household registration. For the supply side, relevant market support policies were released. For instance, Shanghai, Hangzhou, and
Nanjing relaxed the time limit for real estate enterprises to pay the land transfer fee. Fuzhou, Huzhou, and Tianjin allowed the delay of
the start and completion of projects. Xuzhou and Dongguan adjusted the pre-sale conditions for commercial housing. Nanchang, Jinan,
Wuxi, and Xi'an reduced the regulatory requirements for funds. Xiamen, Shenzhen, and Guangzhou raised credit lines.
In the second half of the year, as the pandemic turned weaker and the real estate market enjoyed high popularity against the trend,
regulation and control policies turned tighter. Financial regulation was constantly reinforced. In August, the MOHURD and the
People's Bank of China (PBoC) held a symposium attended by key real estate enterprises in order to stress again that "Houses are for
living in, not for speculating on.", stabilize land prices, house prices, and expectations, and maintain the continuity and stability of
regulation and control policies for the real estate industry. Fund monitoring and financing management rules were formulated for key
real estate enterprises at the symposium. Through the "Three Red Lines", new requirements were raised to change the traditional
financing model of real estate enterprises, which would be beneficial to guide the benign development of the real estate industry.
Eight key tasks of the central government of China were proposed for 2021 at the Central Economic Work Conference held in
December 2020. Prominent problems about housing in major cities should be properly addressed. Housing problems are related to the
well-being of the people. Multiple policies should be adopted in line with the actual situation to push forward the steady and wholesome
progress of the real estate market. Great importance should be attached to the construction of security rental houses. The long-term
rental market should be strictly standardized. Moreover, more land should be provided for the construction of rental houses. Real estate
enterprises should be encouraged to utilize collective land for construction and self-owned idle land to construct rental houses.
Meanwhile, the tax burden of rental houses should be reduced. The rental market should be remedied. The rent level should be
reasonably regulated and controlled.
The PBoC and the China Banking and Insurance Regulatory Commission (CBIRC) jointly published a notice on December 31, 2020, to
decide to formulate a policy for managing the concentration of real estate loans provided by financial institutions in the banking
industry. The policy is designated to facilitate market entities to form stable policy expectations and promote the sustainable
development of the real estate market.
3. Regional market layout
In 2020, the real estate market in Shenzhen led the national market in both supply and demand despite the pandemic and policy
regulation and control. In Q1, due to the impact of the pandemic, the real estate market was basically stagnant. In Q2, as the pandemic
was gradually controlled and policies were relaxed, a large amount of capital flew in to boost the real estate market. House prices surged
dramatically, resulting in pain points, such as hot housing speculation, the rule-violating flow of funds, and supply-demand imbalance.
In view of this, the Shenzhen Municipal Bureau of Housing and Urban-Rural Development issued eight measures on July 15 to regulate
and control the real estate market from eight aspects, including identification of the house purchase qualification and time of household
registration, adjustment of the policy for the restricted purchase of commercial houses, and promotion of signing of the mortgage loan
contract online. The market quickly recovered upon the implementation of new policies. Second-hand houses were sold at a low price.
The government relaxed the pre-sales policy, followed by an increase in the supply of houses. Q4 marked the 40th anniversary of the
establishment of the Shenzhen Special Economic Zone. The construction of the Guangdong-Hong Kong-Macao Greater Bay Area and
the Demonstration Area of Socialism with Chinese Characteristics was promoted constantly. There were high expectations for the
long-term prospects of the real estate market. The enthusiasm of buyers ran high again.
Generally, in 2020, Shenzhen supplied 54,000 sets of new houses. 4,489,000 square meters/45,384 sets of new residential houses
were sold, up by 20.5% and 19.8% YoY, respectively. The transaction scale had reached a record high since 2016. Throughout the
year, the sales rate on the opening day was higher than 60%, setting a new record in the past three years. The average annual
transaction price of new houses was RMB53,000/square meter, which was stable with a slight decline. 95,273 sets of second-hand
houses were sold in the year, rising by 23.5% YoY. The Longgang Center, Buji, and Xixiang took the first three places in transaction
volumes. The average transaction price in the city was RMB66,000/square meter, higher than that in the same period last year.
Throughout the year, 24,910 sets of commercial apartments were approved and sold with a total area of 1.47 million square meters.
The two figures increased by 23.6% and 23.7% over the same period last year. Apartments demonstrated a stronger quasi-residential
property. In 2020, Shenzhen listed and transferred 96 plots of land, including 34 plots of residential land with an accumulative land
transfer fee of RMB80 billion. Looking into 2021, the real estate market in Shenzhen will continue the basic tone that "Houses are
for living in, not for speculating on." and raise house supply. Shenzhen will stabilize land prices, house prices, and expectations,
drive the steady and wholesome progress of the real estate market, and effectively prevent and mitigate risks in the market.
(II) Business Review for the Company in 2020
In 2020, the Company successfully accomplished various objectives. For the year, it recorded operating revenue of approximately
RMB4.1 billion and a gross profit of around RMB1.03 billion. In addition, its total assets reached RMB12.2 billion, hitting a record
high. All these remarkable results represented a perfect ending for the “13th Five-Year Plan” of the Company.
For the 13th Five Year, the Company cumulatively recorded operating revenue, a gross profit and a net profit of RMB16.82 billion,
RMB4.33 billion and RMB3.19 billion respectively, up 132%, 114% and 112% compared to the 12th Five Year; and its total assets
and net assets as at the end of the period went up 179% and 80% respectively from five years ago. These data represented
considerable over-fulfillment of the goals set. During the 13th Five Year, the Company adopted a sustained, consistent and active
8
ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
dividend policy, taking into account both reasonable return to investors and the sustainability of the Company. The five-year period
saw a total dividend payout amount of RMB924 million (including the 2020 dividend payout plan).
1. A phased victory was achieved in fighting against the pandemic through unity of efforts
In the face of the sudden outbreak of the COVID-19 pandemic, the Group immediately established an anti-pandemic leading group,
accurately implemented all anti-pandemic tasks, and spared no pains to arrange the resumption of work and production. No
suspicious or confirmed cases were identified among over 8,000 employees of the Group. In addition, the Group actively adopted the
policy requirement for rent reduction and exemption and joined hands with small- and medium-sized private enterprises to respond to
challenges. Approximately RMB38 million of rents were reduced and exempted, benefiting nearly 700 tenants. The Group and
individuals donated over RMB2 million, which fully reflected the mission and responsibility as a state-owned enterprise.
2. The Company stuck to the business philosophy of market orientation and achieved remarkable performances in the two
major segments
In the Reporting Period, the Company hosted a real estate work meeting and introduced a whole-cycle development management
system. It specified the goal of "efficiency, benefits and effects" of operations and management of real estate projects and strove to
manage the process in a planned, coordinated, and cooperative manner. Furthermore, it followed the "117" specific implementation
path to holistically and constantly improve the operations and management of real estate projects. The Company planned and
precisely implemented strategies amid the pandemic. It delivered 100% of finely decorated Tower C of Golden Collar Holiday
Apartment in advance and successfully sold Phase II of Xuzhou out. Throughout the year, the Company recorded revenue of
approximately RMB2.9 billion in real estate and a net profit of around RMB661 million. Project resources were expanded through
multiple channels, such as tendering, auctioning, listing, and cooperative development. Substantial progress was made in the
Integrated Industry-city Project of the Ecological Health Valley of Yangzhou Shouxihu, the urban renewal project in the Fuyuan
Industry Park, the Guangming Tangjia Project, and the Baolu Project in the year.
With respect to the property management segment, the Company vigorously blazed a trail based on endogenous expansion and
M&As. In 2020, it accumulatively had 27 new projects with a total area of over 3 million square meters, better than the annual
objective for endogenous growth. Moreover, the Company explored non-conventional investment methods for the first time, such as
overseas investment and private non-controlling investment so as to open a new path to cope with the fierce competition. First, it
successfully expanded the overseas market by establishing a subsidiary in Vietnam. Besides, it entered into an agreement with VCEP
to jointly create a national demonstration zone of the "the Belt and Road" initiative. The new area under property management in the
park was approximately 1.96 million square meters. Second, new investment cooperation models were proposed. The three joint
ventures, namely, Shenzhen Guomao Tongle Property Management Co., Ltd., Shenshan Guomao Property Development, and
Shouxihu Jingyue, have grown gradually by taking advantage of the resources of their partners. Especially, Shouxihu Jingyue won
key projects like Sanwan Scenic Spot of Yangzhou Canal, Songjia City, and Hua Du Hui. Its area under management was up to
around 3.7 million square meters. It is an effective example of the market-oriented expansion of the property management business.
3. The Company adhered to the idea that development is the top priority and addressed many prominent problems concerning
overall operations and development.
First, it actively promoted the demolition of the Bangling Project, held the opening ceremony in October, and started the substantial
construction of Phase II. Second, it assisted foreign trade groups in activating assets. The first batch of assets have been disposed of.
Over RMB1.5 billion was realized. Third, it actively supported the tax examination over the key and large enterprises specified by
the State Taxation Administration, spared no effort to solve the historical problem of land costs in the Huangyuyuan Area, and
basically eliminated the risk of a supplementary payment of increment tax on land value. Fourth, it strongly supported shanty house
renovation projects of the government and completed the signing for the removal of tenants and house delivery of tenants on
Chuanbu Street. It is estimated that the Group will obtain an area of relocated property of approximately 14,000 square meters by
2025. For other aspects, a comprehensive agreement was signed for Yupinluanshan Garden project after nearly one decade. The
Fumin Complex was renovated and put into operation, becoming the first rental house project for special talent of professional
lawyers. Effective measures have been adopted to promote Phase II of Fuchang, upon negotiation with several parties. Basements
were constructed in the Reporting Period.
4. Internal reform was deepened. Vitality and power of quality development of the Group were significantly stimulated
The remuneration reform was earnestly promoted. The long-acting incentive and restraint plan for the first phase has been
implemented. The integration of business segments was coordinated. Incentive and performance assessment mechanisms, such as the
remuneration reform and incremental sharing, were comprehensively conducted in all subordinated companies from top to bottom. In
addition, the Company orderly promoted the optimization of the organizational structure after the acquisition of TK Property and the
integration of property management and rental segments. The Project Management Department and the Industry Operation Office
were newly set up in the Headquarters. Shortcomings in operations were improved. A development platform was created for the four
major businesses. A platform business system with a reasonable structure and independent operations was developed. Furthermore,
policies were revised as appropriate. Over 30 regulations and rules were revised, including the Articles of Association, to practically
improve corporate governance. In terms of other aspects, a new stride was made in integrated financial management. Approximately
RMB1.6 billion new financing was added. Tendering and the determination of bid winners were strengthened. Cost control was
reinforced. Additionally, the Company firmly upheld the concept of safe development and took multiple measures to ensure
production safety.
(III) Land Bank
1. New additions to the land bank
There were no new additions to the land bank in the current period.
2. Cumulative land bank
Floor area available for
Name of project/area Site area（0,000 ㎡） Floor area（0,000 ㎡）
development（0,000 ㎡）
9
ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
Yupinluanshan Garden
2.19 7.89 7.89
project
Baolu project 3.24 8.16 8.16
Land in Danshui, Huiyang
1.77 6.20 6.20
District, Huizhou City
Land in Hongqi Town,
15.8 - -
Haikou City
Total 23 22.25 22.25
Note: The floor areas of the Yupinluanshan Garden project, the Baolu project and the land in Danshui, Huiyang District, Huizhou
City are floor areas with plot ratio.
(IV) Development status of major projects
Floor
area
Cumulat
that
ive floor
Time for comple Estimate Cumulat
Planned area that
The commen ted d total ive
% % that has floor has
City/regi Name of Locatio Compa cement Site area constru investme investme
Usage develo completed area with complete
on project n ny’s of （㎡） plot ratio ction in d nt nt
ped construction
interest construct the (RMB’0, (RMB’0,
（㎡） Curren construct
ion 000) 000)
ion
t
Period （㎡）
（㎡）
Golden
Collar’s
Shenzhe Futian Resid
Resort 100% 2014.03 100% 100% 12,598 133,800 0 183,295 138,311 108,406
n District ential
apartmen
ts
Concrete roof
completed for
the basements
Affor
Under in Section 1
Shenzhe Fuhui Futian dable
100% 2018.12 constru and 2; 4,274 33,430 0 0 90,439 60,072
n Huayuan District housin
ction structure
g
completed for
-2/F of Section
3
Banshan Tongsha Under Pre-acceptance
Xuzhou Resid
Yujing n 100% 2019.03 constru completed for 31,537 22,795 0 0 23,581 15,997
City ential
(Phase II) District ction the main frame
Shenzhe Guanlan Longhu Resid Under 75.88%
n Bangling a ential, constru completed for
District comm ction demolition
ercial
apart 69% 2020.10 68,300 433,640 0 0 694,150 330,262
ments
and
indust
rial
(V) Sales status of major projects
Pre-sale/
Floor Pre-sale/sal Floor area sales
The Cumulativ area es revenue Cumulativ settled in revenue
Floor area
Name Comp Floor area e pre-sold/s generate in e settled settled
City/re available the
of Location Usage any’s with plot pre-sold/s old in the the Current in the
gion for sale floor area Current
project interes ratio （㎡） old floor Current Period Current
（㎡） (㎡) Period
t area （㎡） Period (RMB’0,00 Period
（㎡）
（㎡） 0) (RMB’0
,000)
10
ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
Intersecti
Golde on of
Residenti
n Futian
al, studio
Collar’ South
Shenz apartmen
s Road and 100% 133,800.6 125,231.07 68,323.44 33,414.96 262,382 64,287.07 37,184.94 274,075
hen ts and
Resort Binhe
commerc
apartm Road in
ial
ents Futian
District
Songh Residenti
Dongg
u Dalang al,
uan 100% 147,139.96 140,911 140,911 0 0 145,443 0 0
Langy Town commerc
City
uan ial
Intersecti
on of
SZPR Yueliang
D-Qia wan
nhai Boulevar
Shenz Residenti
Gang d and 100% 64,625.13 63,448.26 63,448.26 0 0 63,336.29 0 0
hen al
wan Xinghai
Garde Boulevar
n d in
Nanshan
District
6
Huashan
Bansh Road,
an Tongshan
Xuzho
Yujing District, Villa 100% 54,589.12 85,652.81 85,652.81 0 0 85,652.81 2,331.54 1,802.17
u City
(Phase Xuzhou
I) City,
Jiangsu
Province
6
Huashan
Residenti
Bansh Road,
al
an Tongshan
Xuzho (elevator
Yujing District, 100% 22,794.76 21,720.72 21,720.72 9992.97 12,256.85 0 0 0
u City houses of
(Phase Xuzhou
4-7
II) City,
floors)
Jiangsu
Province
Residenti
Intersecti al units,
Hupan on of shops,
Yangz
Yujing Shouxihu apartmen
hou 100% 36,141.28 48,870.98 42,349.26 870.59 332.2 42,215.85 944.67 575.03
Phase Road and ts,
City
I Hangou parking
Road garages
and lots
Residenti
Intersecti al units,
Hupan on of shops,
Yangz
Yujing Shouxihu apartmen
hou 100% 56,935.75 73,121.96 67,523.37 1,317.54 1,678.47 64,177.89 1,060.9 1,042.74
Phase Road and ts,
City
II Hangou parking
Road garages
and lots
(VI) Rental status of major projects
The Company’s Cumulative
Locatio Rentable area Average
Name of project Usage working rented area
n （㎡） occupancy rate
interest （㎡）
11
ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
Apartments
Xi Apartments Shenzhe for
100.00% 3967 3967 100.00%
(Longyuan) n long-term
rental
Apartments
Shenzhe for
Xi Apartments (Longhua) 100.00% 1609 1609 100.00%
n long-term
rental
Apartments
Shenzhe for
Xi Apartments (Xinhu) 100.00% 1600 1600 100.00%
n long-term
rental
Food Court in the Shenzhe
Commercial 100.00% 4049 2645 65.00%
International Trade Center n
Shenzhe Commercial
Fumin Complex 100.00% 6450 4576 71.00%
n , apartments
Tower A of Wenjindu Port Shenzhe Office
75.00% 5884 5703 97.00%
Building n building
Commercial
Shenzhe
Haiwai Lianyi Building units and 75.00% 9788 9788 100.00%
n
offices
Shenzhe
Anhua Building Offices 75.00% 1414 1414 100.00%
n
Residential
Training Shenzhe units/offices
75.00% 4244 4244 100.00%
Building/Dormitory n /commercial
units
Shenzhe
Pengfu Building Offices 75.00% 6494 6494 100.00%
n
Shenzhe
n
Jinfu Building Commercial 75.00% 1702 1702 100.00%
Shenzhe
n
Shenzhe
n
Jinfu Building Commercial 100.00% 568 568 100.00%
Shenzhe
n
Shenzhe Residential/
Fuxing Garden 75.00% 5877 5877 100.00%
n commercial
Shenzhe
Fuxing Garden Commercial 100.00% 1417 1417 100.00%
n
Plant area in Tangxia Donggu
Plant 75.00% 22034 22034 100.00%
Town, Dongguan City an City
Shenzhe Commercial
Pacific Business Building 75.00% 3199 3199 100.00%
n units/offices
Shenzhe Commercial
Pacific Business Building 15.00% 14889 14718 99.00%
n units/offices
Shenzhe Commercial
Kangti Building 75.00% 2096 2096 100.00%
n units/offices
Shenzhe Commercial
Kangti Building 15.00% 1147 1147 100.00%
n units/offices
Commercial
Shenzhe
Lyuhua Building and 75.00% 6960 6578 94.51%
n
residential
Shops on the ground floor
Shenzhe
of Tower 48 in Lianhua Shops 75.00% 1000 1000 100.00%
n
North Village
12
ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
Apartments
Shenzhe and
Haonianhua Building 100.00% 1803 1774 98.00%
n commercial
units
Apartments
Shenzhe and
Haonianhua Building 75.00% 2278 2235 98.00%
n commercial
units
Shenzhe
Hostel 2 at Yuxin School Hostel 75.00% 3000 3000 100.00%
n
Kaifeng Garden in Shenzhe
Residential 100.00% 1307 1084 83.00%
Shangmeilin n
Shenzhe
Fuyuan Industrial Zone Plant area 75.00% 47130 47130 100.00%
n
Shenzhe
Tonglu Industrial Zone Plant area 100.00% 76886 73221 95.00%
n
Shenzhe Commercial
Gonglu Building 75.00% 317 317 100.00%
n /offices
Shenzhe
Gonglu Building Offices 100.00% 89 89 100.00%
n
Shenzhe
Jiangling Industrial Zone Plant area 75.00% 10397 10397 100.00%
n
Shenzhe Commercial
Zone 21 75.00% 9514 9514 100.00%
n /offices
Shenzhe
Baoli Community Residential 75.00% 9020 9003 99.81%
n
Shenzhe
Songgang Plant Plant area 75.00% 5700 5700 100.00%
n
Shenzhe
Longbu Plant Plant area 75.00% 7471 7471 100.00%
n
Gonglu Building in Shenzhe
Offices 75.00% 4600 4461 96.98%
Huanggang n
Shenzhe
Yuetong Complex Offices 75.00% 3044 3044 100.00%
n
(VII) Primary land development
□ Applicable √ Not applicable
(VIII) Financing channels
Financing cost Maturity structure
Ending balance of
Financing channel range/average Within 1
financings 1-2 years 2-3 years Over 3 years
financing cost year
Bank loans 3,618,800,000.00 4%-6% 3,000,000.00 3,615,800,000.00
Total 3,618,800,000.00 4%-6% 3,000,000.00 3,615,800,000.00
(IX) Development strategy and operating plan for the coming year
In regard to land reserves, the Company will continue to expand its land reserves through market competition and capital operation in
2021. It will exert more efforts in this aspect and push forward the fast launch of projects. By property types, residential projects will
be mainly distributed in the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta Metropolitan Area, and the
areas with existing projects. Besides, the Company will gradually pay attention to and expand its presence in key cities in the central
urban agglomeration centering on Wuhan, the Chengdu-Chongqing Region in western China, and the Beijing-Tianjin-Hebei Region.
Urban renewal projects will primarily be launched in Shenzhen and the areas surrounding Shenzhen like Dongguan and Huizhou.
The Company will gradually track such projects in Guangzhou. Most of the comprehensive industry-city projects will be located in
the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta, central China centering on Wuhan, and the
Chengdu-Chongqing Region in western China.
In regard to sales, in 2021, the Company will constantly enhance the overall control over the general goal, phased objectives,
schedule, and investment plan of all projects, pay close attention to the whole sales of Tower A and the remaining houses of Tower C
of Golden Collar Holiday Apartment, and fully promote the construction of Phases I and II of Guanlan Bangling. Furthermore, it will
strive to sell all houses of Hupan Yujing out and complete and deliver Banshan Yujing Phase II in Xuzhou and endeavor to complete
the project setup of the Fuyuan Industry Park, the land replacement of Baolu, the capping of Phase II of Fuchang, and the
13
ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
construction of Yupin Luanshan.
Please refer to “IX Prospects” in “Part IV Operating Performance Discussion and Analysis”.
(X) 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 homebuyers
on their bank mortgages. As at 31 December 2020, security deposits for such outstanding guarantees amounted to RMB1,148,647.30,
which will be returned upon the expiry of the guarantees, i.e. when the relevant homebuyers paid off their bank mortgages. On the
ground that there have been no default by the homebuyers so far and that the market prices of the relevant properties are currently
higher than the trading prices, the Company believes the risk associated with such guarantees is low.
(XI) Joint investments by directors, supervisors and senior management and the listed company (applicable for such
investments where the directors, supervisors and senior management are the investment entities)
√ Applicable □ Not applicable
Compatibility
Amount of Cumu of actual
% of As % of the
Name of Type of investment investment lative Disinvest investment
investmen peak of the
project entity (RMB’0,00 inco ment amount and
t amount project funds
0) me distributed
income
Urban Mandatory investment
Renewal of entities (including
2,647.00 66.18% N/A 0 None N/A
Bangling directors and senior
Section at management)
Guanlan Voluntary investment
Street 1,353.00 33.82% N/A 0 None N/A
entities
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. Significant Change to Principal Activities in the Reporting Period
□ Yes √ No
3. Product Category Contributing over 10% of Principal Business Revenue or Profit
√ Applicable □ Not applicable
Unit: RMB
YoY change in YoY change in YoY change in
Operating Gross profit
Product category Operating profit operating revenue operating profit gross profit
revenue margin
(%) (%) margin (%)
Property
2,895,323,736.80 922,089,696.02 86.59% 8.62% -10.56% 2.88%
development
Property
1,070,094,746.33 74,696,857.92 14.74% -2.52% -0.56% -1.68%
management
4. Business Seasonality that Calls for Special Attention
□ Yes √ No
5. Significant YoY Changes in Operating Revenue, Cost of Sales and Net Profit Attributable to the Listed
Company’s Ordinary Shareholders or Their Compositions
□ Applicable √ Not applicable
14
ShenZhen Properties & Resources Development (Group) Ltd. Annual Report 2020 (Summary)
6. Delisting
□ Applicable √ Not applicable
7. Matters Related to Financial Reporting
(1) YoY Changes to Accounting Policies, Accounting Estimates or Measurement Methods
√ Applicable □ Not applicable
The Company has adopted the provisions of Accounting Standard for Business Enterprises No. 14 –Revenue (CK [2017] No. 22)
since 1 January 2020. According to cumulative effects, the Company adjusted retained earnings at the beginning of the year and other
relevant items in the financial statements, without adjustment of any information of the comparable period. The impact of accounting
policy changes includes:
Contents of changes in accounting policies and reasons
Items and amounts of financial statements affected
thereof
Consideration paid by customers before the delivery of goods In the consolidated balance sheet on 1 January 2020, “Advances
is listed as “contract liabilities” in accordance with the new from customers” are RMB516,988.76, “Contract liabilities” are
standard for income, and tax included is listed as “other RMB690,543,580.95 and “Other current liabilities” are
current liabilities”. RMB37,125,462.92;
In the balance sheet of the Company as the Parent on 1 January
2020, “Advances from customers” are RMB320,469.53, “Contract
liabilities” are RMB0.00 and “Other current liabilities” are
RMB0.00.
The right to receive consideration for goods or services that In the consolidated balance sheet on 1 January 2020, “Contract
have been transferred to customers (which depends on other assets” are RMB0.00;
factors other than time) is listed as “contract assets” in In the balance sheet of the Company as the Parent on 1 Januray
accordance with the new standard for income. 2020, “Contract assets” are RMB0.00.
Incremental cost (such as sales commission) incurred for In the consolidated balance sheet on 1 January 2020, “Other current
contract acquisition is recognized as an asset as cost of assets” are RMB0.00 and “Other non-current assets” are RMB0.00;
contract acquisition, and listed as cost of contract acquisition
in “other current assets” or “other non-current assets” in In the balance sheet of the Company as the Parent on 1 Januray
accordance with the new standard for income. However, if the 2020, “Other current assets” are RMB0.00 and “Other non-current
amortization of asset is within one year, it can be included in assets” are RMB0.00.
the current profit and loss when it occurs.
The Company adopts simple treatment method to include sales commission with amortization period within one year in the current
profit and loss when it occurs. The amortization period of sales commission in 2019 is within one year.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in the Reporting Period
□ Applicable √ Not applicable
No such cases.
(3) YoY Changes to the Scope of Consolidated Financial Statements
√ Applicable □ Not applicable
For the detailed changes to the scope of the Company’s consolidated statements of the Reporting Period, see “Part XII Financial
Statements”, VIII.
15
