HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
Stock Code: 000505, 200505 Stock Name: *ST Pearl River A, *ST Pearl River B Announcement No. 2017-024
HAINAN PEARL RIVER HOLDINGS CO., LTD.
ANNUAL REPORT 2016 (ABSTRACT)
I Important information
This Abstract is based on the full text of the Annual Report. In order for a full understanding
of the operating results, financial condition and future development planning of the Company,
investors are kindly reminded to read the full text carefully on the media designated by the
China Securities Regulatory Commission (the “CSRC”).
This Annual Report and its abstract have been prepared in both Chinese and English. Should
there be any discrepancies or misunderstandings between the two versions, the Chinese
version shall prevail.
All directors attended in person the board meeting for the review of this Report.
The Board of Directors and the Supervisory Board have given a detailed explanation on the
relevant matters, which investors are kindly reminded to read carefully.
The Company plans not to distribute cash dividends or bonus shares or convert capital
reserve into share capital.
II Company profile
1. Stock profile
*ST Pearl River A, *ST
Stock Name Stock code 000505, 200505
Pearl River B
Stock Exchange Shenzhen Stock Exchange
Contact information Board Secretary Securities Representative
Name Zhao Yinhu
Jing Liang Building, 16 East Third Ring
Office Address
Middle Road, Chaoyang District, Beijing
Fax 010-51672010
Tel. 010-51672029
E-mail 593374748@qq.com
2. Brief introduction to the main business or products in this Reporting Period
The Company's main business includes real estate development, hotel tourism, property
management. It has a total of 15 subsidiaries and 2 branches.
Real estate development business: in 2016, the country's macroscopic environment had a good trend
as a whole, which effectively promoted the rise of both volume and price of the national real estate
market. In 2016, although the growth rate of the domestic economy slowed down, but the overall
trend was stable, and the fundamental indicators performed well. The supply side of the real estate
1
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
industry had outstanding reform achievements. Under such situation, the Company's real estate
development business was progressed smoothly. By 31 Dec. 2016, Meilin Qingcheng Phase III
project achieved to contract 699 orders, with contracted area of 67,417.31 square meters; real estate
development business achieved operating income of RMB 661,692,200, with net profit of RMB
88,625,600.
Property management business: in 2016, the market competition of property management industry
is fierce. Under the situation that there was no large rising space for property costs and there was a
rapid growth for management cost, the profit margin of property management was low generally. In
2016, the Company's property management business operated smoothly. The property company
achieved the operating income of RMB 260,442,100 and the net profit of RMB -2,644,800. By now,
the regions of projects under the Company's management have involved Haikou, Qionghai,
Wenchang, Lingao, Baoting, Sanya, Changsha, Wuhan, Nanning, Zhengzhou, etc. The main serving
project types involve residence, office buildings, passenger stations of high-speed railway, schools,
government compound, shopping malls, gymnasiums and so on. Among them, there are 67
residential projects, 14 office projects and 3 other types. Seen from the project structure, residential
projects accounts for 80%. Under the situation that the property costs have not been raised for many
years and the operating costs increase rapidly, the profitable space of residential projects is
increasingly tight or even in a loss state.
Hotel tourism business: the Company's holding subsidiary, Mudanjiang Pearl River Wanjia Tourism
Group Co., Ltd is mainly responsible for the construction and operation of Chinese snow village. At
present, it has invested a total of RMB 400 million to promote the scenic spot construction work of
the snow village, and it has completed the work successively, such as the "Overall Development
Plan from Snow Village to Taipinggou", acquisition of Xuesongge Hotel, acquisition of Xueyuan
Hotel, construction of Yangcaoshan highway, scenic sightseeing entertainment and other traffic
vehicle acquisition, construction of Yongan staff's living area, construction of ski equipment hall for
the skiing resort and other work. It has greatly improved and perfected each tourism and basic
facility of the snow village, and the passenger flow of the snow village has been rapidly increased
year by year. However, in recent years, because that the Company invests too much for the
construction of each basic and tourism facility of the snow village, and the financing cost is higher,
and the projects in construction are gradually converted into fixed assets, which generate larger
depreciation expense, it is difficult to achieve profitability from the current income scale.
Days Hotel and Suites Sanya Resort has 180 rooms totally. It is located in the seaside of Sanya
coast and has superior geographical position. However, under the impact of slowdown in domestic
economic growth, downturn of Sanya tourism market, fierce market competition and other factors,
2
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
as well as the aging of the hotel's room facilities, the rise of labor costs and commodity prices, the
rise of energy costs, etc., it directly causes the increase of the hotel's operating costs. Considering
the financial pressure and the subsequent development of the Company, the Company has sold 100%
of the stock right of Sanya Wanjia Hotel Management Co., Ltd which the Company holds and sold
3 villa real estates which are under its name and are located in No. 212, Sanya Bay Road, Sanya
City, Hainan province. The transfer registration formality was completed on 26 Dec. 2016.
Considering the predicament and financial pressure of the subsequent development of the
Company's real estate business, the Company will actively promote asset restructuring to achieve
the transformation and upgrading.
3. Key financial results
(1) Key financial results for the past three years
Indicate by tick mark whether the Company performed any retroactive adjustments to or restatement of its
accounting data due to changes of accounting policies or correction of accounting errors.
□ Yes √ No
Unit: RMB
2016 2015 +/-% 2014
Operating revenues 969,140,915.32 267,068,750.88 262.88% 238,904,161.09
Net profit attributable to
73,300,570.54 -107,573,743.92 168.14% -173,422,925.66
shareholders of the Company
Net profit attributable to
shareholders of the Company -134,994,571.34 -237,953,658.00 43.27% -179,382,026.46
before exceptional profit and loss
Net cash flows from operating
257,914,814.62 259,599,625.38 -0.65% -243,681,708.74
activities
Basic earnings per share
0.17 -0.25 168.14% -0.41
(RMB/share)
Diluted earnings per share
0.17 -0.25 168.14% -0.41
(RMB/share)
Weighted average return on
0.00% 0.00% -262.21%
equity (%)
December 31,
December 31, 2016 December 31, 2015 +/-%
2014
Total assets 1,385,469,635.17 1,714,444,000.65 -19.19% 1,645,436,644.78
Net assets attributable to
65,088,302.88 -217,136,869.15 129.98% 15,564,470.40
shareholders of the Company
(2) Key financial results by quarter
Unit: RMB
1Q 2Q 3Q 4Q
Operating revenues 80,025,245.10 69,007,283.30 68,143,078.33 751,965,308.60
Net profit attributable to
-38,541,192.11 -8,829,402.77 -43,420,775.53 164,091,941.00
shareholders of the Company
Net profit attributable to
shareholders of the Company -38,415,455.62 -47,349,050.05 -44,205,595.65 -5,024,470.02
before exceptional profit and loss
Net cash flows from operating
124,823,160.50 36,522,405.02 11,839,497.76 84,729,751.32
activities
Indicate by tick mark whether there are any material differences between the financial indicators above or their
summations and those which have been disclosed in quarterly or semi-annual reports.
□ Yes √ No
3
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
4. Share capital and shareholders
(1) Numbers of common shareholders and preference shareholders with resumed voting rights as well as
shareholdings of top ten shareholders
Unit: share
Total number Total number of
of common Total number of preference
Total number
shareholders preference shareholders with
of common
at the prior shareholders resumed voting
shareholders 33,468 31,930 0 0
month-end with resumed rights at the prior
at the
before the voting rights at month-end before
period-end
disclosure of the period-end the disclosure of
this Report this Report
Top 10 shareholders
Pledged or frozen shares
Shareholding Total shares
Name of Nature of Number of restricted shares
percentage held at the
shareholder shareholder held Status Number
(%) period-end
Beijing Grain
Group Co., 28.95% 123,561,963
Ltd.
Li Sheryn Foreign
2.90% 12,380,000
Zhan Ming individual
Li Leon Foreign
1.98% 8,455,000
Zhan Wei individual
Bank of
China—Harv
est Service Domestic
Value-added non-state-ow
0.61% 2,595,200
Industry ned
Securities corporation
Investment
Fund
Dong Domestic
0.60% 2,560,400
Xueliang individual
Domestic
Xu Zhen 0.58% 2,478,000
individual
Domestic
Yang Shuling 0.57% 2,449,100
individual
Foreign
Yao Liyuan 0.46% 1,953,100
individual
Zhang Foreign
0.46% 1,949,250
Xiaoxia individual
Fenghe Value Domestic
Securities non-state-ow
0.45% 1,904,300
Investment ned
Fund corporation
Among shareholders above, there exists no related-party relationship between the principal
shareholder and other shareholders of the Company. Nor they are parties with concerted action
Related or acting-in-concert
as prescribed in the Information Disclosure Administrative Methods for Changes in
parties among the
Shareholding of Shareholders of Listed Companies. And it is unknown whether there is
shareholders above
related-party relationship among other shareholders and whether they are prescribed parties with
concerted action.
Shareholders conducting
securities margin trading (if N/A
any)
(2) Number of preference shareholders and shareholdings of top ten of them
□ Applicable √ Not applicable
No preference shareholders in this Reporting Period.
4
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
(3) Ownership and control relations between the actual controller and the Company
State-owned Assets Supervision and
Administration Commission of Beijing
Municipal Government
100%
Beijing Grain Group Co., Ltd.
28.95%
HaiNan Pearl River Holdings Co., Ltd.
5. Corporate bonds
Does the Company have any corporate bonds publicly offered and listed on the stock exchange, which were undue
before the approval date of this Report or were due but could not be redeemed in full?
No.
III Performance discussion and analysis
1. Performance review for this Reporting Period
Is the Company subject to any disclosure requirements for special industries?
Yes. For the Company engages in real estate, it is subject to the Guideline No. 3 of the Shenzhen Stock Exchange
on Information Disclosure by Industry—for Listed Companies Engaging in Real Estate.
A. Promoted the restructuring work solidly
The Company’s audited net profit was negative in two consecutive fiscal years of 2014 and 2015.
Until 31 Dec. 2015, the audited net asset was negative, and the Company’s stock had implemented
the delisting risk warning since April 26 Apr. 2016. Considering the subsequent development
dilemma of the Company’s real estate development business and the fund pressure brought by the
huge borrowings, the Company made the operation and management, actively promoted the major
asset restructuring work with BGG, and tried to realize the transformation and upgrading.
The Company received China Securities Regulatory Commission (CSRC) Administrative Licensing
Application Acceptance Notice issued by CSRC (hereinafter referred to as “CSRC”) on 30 Nov.
2016, CSRC reviewed the administrative licensing application material of Hainan Pearl River
Holdings Co., Ltd. Listed Company Issuing Stock Buying Asset Approval submitted by the Company
legally, and accepted the administrative licensing application; For the CSRC Administrative
Licensing Project Review One Feedback Opinion Notice issued by CSRC received on 23 Dec. 2016,
the Company gradually implemented the related problems according to the requirement in the
5
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
notice along with the related intermediary agency, and submitted the related materials to CSRC
Administrative Licensing Accepting Department within the prescribed term.
B. Business operating situation
Firstly, the real estate sales went well. The Company’s real estate development business mainly
came from Hubei Wuhan Meilin Qingcheng Project Phase III. There were 725 sets of housing with
the area of 69993.64 m2. Until 31 Dec. 2016, 699 sets had been signed for purchase with the signing
area of 67417.31m2, and the housing sales rate reached 97%; The contract signing amount was
RMB 858.41 million, and the actual total collection was RMB 839.68 million with the collecting
rate of 98%; 545 sets of housing had been transferred with the area of 52656 m2. In 2016, the real
estate development business realized the business income of RMB 661.6922 million with the net
profit of RMB 88.6256 million.
Secondly, the property management business was operated steadily. The Company’s property
management business was steady with increase, while the profit margin was low. In 2016, the
property company completed the business income of RMB 260.4421 million with the net profit of
RMB -2.6448 million. Until now, the Company’s management project region involved Haikou,
Qionghai, Wenchang, Lingao, Baoting, Sanya, Changsha, Wuhan, Nanning, Zhengzhou and others.
The main served project type involved residential, office building, high-speed passenger station,
school, government agency compound, shopping mall, stadium and others. 67 residential projects,
14 office projects and 3 other types were included. Seen from the project structure, the residential
projects accounted for 80%. Under the situation that the property management fee was not
increased for many years and the operating cost was increased rapidly, the profit space of residential
project was tighter even it was in a loss. Due to the market competition motivation, the Company’s
advantage was faded gradually, the market development was stagnated, the structural adjustment
was slow, and it influenced the Company’s business profitability. In recent three years, although the
Company’s scale and income were increased, the profitability was low, and the Company’s business
prospect was poor.
Thirdly, the hotel service business was continued in downturn. The Company’s subsidiary
Mudanjiang Pearl River Wanjia Tourism Group Company was mainly responsible for the
construction and operation of Chinese snow hometown. In 2016, it completed the business income
of RMB 19.8894 million with the net profit of RMB 4.6188 million (including disposing 70%
equity return of Heilongjiang Longshi Pearl River Media Co., Ltd.). In order to mitigate the fund
pressure, Mudanjiang Pearl River Wanjia Tourism Group Company and Harbin Jiangshan
International Travel Service Co., Ltd. reached the cooperation operating agreement of Erlongshan
Film and Television Base and “Snow Hometown Impression” restaurant, and realized the
6
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
continuous operation of two projects; strengthened the propaganda force with the use of Ctrip,
Tongcheng Net and other online recruiting platform, improved the occupancy rate and market
awareness. However, for the Company invested great on the infrastructure and tourism facility
construction in Snow Hometown in recent years, the financing cost was higher, the transferring of
projects being built successively into the fixed asset generated large depreciation cost, and it was
hard to realize the profit seen from the current income scale.
Although Sanya Wanjia Hotel was located in Sanya Bay Beach with the superior location, the
hotel’s operating cost was increased influenced by the downturn tourism market and fierce market
competition and other factors in Sanya added with the aging facility in the guest room and rising
management fee in the hotel. Considering the Company’s fund pressure and subsequent
development, the Company sold all holding 100% equity of Sanya Wanjia Hotel Management Co.,
Ltd. and three villa properties located in No.212, Sanya Bay Road, Sanya City, and completed the
transfer registration procedure on 26 Dec. 2016.
C. Invested project progress situation
a. Mulin Town Coal Logistics Project: In 2011, the Company and Zhonghe Investment Co.,Ltd.
Signed Cooperation Agreement on the Construction of Daqin Railway Mulin Town Railway Special
Line and Coal Wholesale Market and project supplementary agreement, and agreed that both parties
shall invest and cooperate to develop and construct Daqin railway Mulin Town Railway special line
and coal wholesale market construction project. For the project establishment and production line
construction were not carried out, RMB 40 million were collected in 2013, and RMB 36.6 million
were collected in 2014. In 2014, Zhonghe Investment Co., Ltd. mortgaged the project land and
property to the Company, while the mortgage registration formality was not handled. On 31 Dec.
2016, both parties signed the agreement, terminated the cooperation of the project and collected the
investment fund. Until the date of the report, the phase-I fund of RMB 10 million had been
collected according to the agreement.
b. Yunxi Iron Ore Project: In 2011, the Company signed Cooperation Agreement with Kangtai
Xingye and natural person Gu Liyun to set up a project Company jointly and responsible for the
development and sales of the iron ore resources in Dujiawan magnetite ore located in Cangfang
Village, Xiangkou Town, Yunxi County, Shiyan City, Hubei Province and Zhaojiayuan iron ore in
southwestern part. In recent years, for the price of iron essence pink was not stable, the Company’s
original mining production line construction and equipment installation plan did not achieve great
progress. Currently, the Company is actively handling the mining license.
c. Sanya Pearl River Pile Project: The Company signed the agreement with China Great Land
Holdings Ltd.( D 50). in May and August, 2013 and intended to cooperate to develop the plots in
7
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
No.20, Hairun Road, Lizhigou Industrial Park, Sanya City owed by Sanya Pearl River Pile Co., Ltd.,
a subsidiary of China Great Land Holdings Ltd. The Company has paid 50 million yuan to transfer
80% equity of the project Company held by China Great Land Holdings Ltd.. In June, 2015, the
land using right certificate of the project plot had been obtained. Currently, the project Company’s
equity held by China Great Land Holdings Ltd.had been transferred to Shijing International
Investment Co., Ltd., Shijing International Investment Co., Ltd. bears the transferring obligation of
the equity, and the equity transferring procedure had been started.
d. Shijiazhuang Luquan Luoling Community Project: For Luquan was transferred from city to
district, the approval authority was adjusted, and the whole planning shall be conducted according
to the overall arrangement of Shijiazhuang. The change had a huge impact on Luquan Luoling
Community project. Added with the huge project scale and huge starting fund demand, the project
had been suspended.
D. Asset disposal situation
Considering the Company’s subsequent development and fund demand, the Company had disposed
part asset: In order to reduce the operating fund pressure, the Company completed the transferring
of 70% equity of the subsidiary Company of Heilongjiang Longshi Pearl River Cultural
Communication Co., Ltd. in May 2016; To alleviate the fund pressure to pay the principal and
interests of the loan in the early stage, the Company sold 100% equity of Sanya Wanjia Hotel
Management Co., Ltd. and three villas property located in No.212, Sanya Bay Road, Sanya City,
Hainan Province. The net income of RMB 152.85 million was obtained to dispose the two above
assets.
2. Significant changes in the main business in this Reporting Period
□ Yes √ No
3. Products contributing over 10% of the main business revenue or profit
√ Applicable □ Not applicable
Unit: RMB
Operating Operating Gross profit
Operating Operating Gross profit
Product revenue: YoY profit: YoY margin: YoY
revenue profit margin
+/-% +/-% +/-%
Sale of real
659,767,504.00 143,335,532.14 34.33% 63,339.18% 341.31% -24.23%
estate
Property
management 263,353,193.00 -1,725,490.81 5.64% 30.01% -199.31% -5.14%
services
Tourism hotel
32,576,252.00 -14,293,480.59 40.54% -29.98% 73.50% -8.10%
service
4. Seasonal or periodic characteristics in the operating performance that need special attention
□ Yes √ No
8
HaiNan Pearl River Holdings Co., Ltd. Annual Report 2016 (Abstract)
5. Significant YoY changes in the operating revenues, operating costs and net profit attributable to the
common shareholders or their composition
√ Applicable □ Not applicable
The operating revenues, operating costs and total net profit attributable to common shareholders of
this Reporting Period changed significantly from last year mainly because of the property sales
revenue from the Wuhan Meilin Qingcheng Phase III project of controlled subsidiary Hubei Pearl
River Real Estate Development Co., Ltd., as well as the transfer of the 100% equity interests of
Sanya Wanjia Hotel Management Co., Ltd. and the three villas at 212 Sanya Bay Road, Sanya City,
Hainan Province.
6. Possibility of listing suspension or termination
□ Applicable √ Not applicable
7. Issues related to the financial report
(1) YoY changes in accounting policies, accounting estimations and measurement methods
No changes.
(2) Retroactive restatements due to correction of significant accounting errors in this Reporting Period
No such cases.
(3) YoY changes in the scope of the consolidated financial statements
√ Applicable □ Not applicable
Three entities were excluded from the consolidated financial statements for this Reporting Period, namely, Sanya
Wanjia Hotel Management Co., Ltd., Heilongjiang Longshi Pearl River Media Co., Ltd. and HaiNan Pearl River
Real Estate Marketing Co., Ltd. The formalities for the transfer of equity interests of Sanya Wanjia Hotel
Management Co., Ltd. were went through on December 15, 2016; the formalities for the transfer of equity
interests of Heilongjiang Longshi Pearl River Media Co., Ltd. were went through on May 16, 2016; and the
cancellation of HaiNan Pearl River Real Estate Marketing Co., Ltd. was registered with the industrial and
commercial administration on March 9, 2016.
HaiNan Pearl River Holdings Co., Ltd.
April 28, 2017
9
