[年报]深物业B:2018年年度报告（英文版）
SHENZHEN PROPERTIES & RESOURCES DEVELOPMENT (GROUP) LTD. ANNUAL REPORT 2018 （ Announcement No. 2019 - 12 ） March 2019 Table of Contents Part I Important Notes, Table of Contents and Definitions ................................ ........................... 3 Part II Corporate Information and Key Financial Information ................................ ................... 5 Part III Business Summary ................................ ................................ ................................ ............. 10 Part IV Operating Performance Discussion and Analysis ................................ ........................... 16 Part V Significant Events ................................ ................................ ................................ ................ 38 Part VI Share Changes and Shareholder Information ................................ ................................ . 49 Part VII Preferred Shares ................................ ................................ ................................ ............... 59 Part VIII Directors, Supervisors, Senior Management and Staff ................................ ................ 60 Part IX Corporate Governance ................................ ................................ ................................ ...... 70 Part X Corporate Bonds ................................ ................................ ................................ .................. 77 Part XI Financial Statements ................................ ................................ ................................ .......... 78 Part XII Documents Available for Reference ................................ ................................ .............. 226 Part I Important Notes, Table of Contents and Definitions The Board of Directors (or the “Boar d”), the Supervisory Committee as well as the directors, supervisors and senior management of ShenZhen Properties & Resources Development (Group) Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein. Liu Shengxiang, the Company’s legal representative, Cai Lili , the Company’s head of fin ancial affairs, and Liu Qiang , head of the Company’s financial department (equivalent to financial manager) hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete. All the Company’s directors have attended the Board meeting for the review of this Report and its summary . 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 which it is required to in clude in this Report the changes in the country’s real estate policy and the related financial policy, as well as the supply and demand changes in the real estate sector. The Board has approved a final dividend plan as follows: based on the 595,979,092 sh ares, a cash dividend of RMB 3.00 (tax inclusive) per 10 shares is to be distributed to the shareholders, with no bonus issue from either profit or capital reserves. This Report and its summary have been prepared in both Chinese and English. Should there b e any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail. Definitions Term Definition The “Company” , the “Group”, “ SZPRD ” or “we” ShenZ hen Properties & Resources Development (Group) Ltd. and its consolidated subsidiaries, except where the context otherwise requires SIHC Shenzhen Investment Holdings Co., Ltd. SCIHC Shenzhen Construction Investment Holdings C orporation SIM Shenzhen Investment Management Co., Ltd. Part II Corporate Information and Key Financial Information I Corporate Information Stock name PRD, PRD-B Stock code 000011 , 200011 Changed stock name (if any) N/A Stock exchange for stock listing Shenzhen Stock Exchange Company name in Chinese 深圳市物业发展 ( 集团 ) 股份有限公司 Abbr. 深物业集团 Company name in English (if any) ShenZhen Properties & Resources Development (Group) Ltd. Abbr. (if any) SZPRD Legal representative Liu Shengxiang Registered address 39/F and 42/F, International Trade Center, Renmin South Road, Shenzhen, Guangdong Province, P.R.China Zip code 518014 Office address 39/F and 42/F, International Trade Center, Renmin South Road, Shenzhen, Guangdong Province, P.R.China Zip code 518014 Company website www.szwuye.com.cn Email address 000011t ouzizhe@szwuye.com.cn II Contact Information Board Secretary Securities Representative Name Fan Weiping Qian Zhong and Ding Minghua Address 42/F, International Trade Center, Renmin South Road, Shenzhen, Guangdong Province, P.R.China 42/F, International Trade Center, Renmin South Road, Shenzhen, Guangdong Province, P.R.China Tel. 0755 - 82211020 0755 - 82211020 Fax 0755 - 82210610 82212043 0755 - 82210610 82212043 Email address 000011touzizhe@szwuye.com.cn 000011touzizhe@szwuye.com.cn III Media for Information Disclosure and Place where this Report Is Lodged Newspapers designated by the Company for information disclosure For A - stock investors : Securities Times For B - stock investors : Ta Kung Pao (HK) Website designated by CSRC for publication of this Report www.cninfo.com.cn Place where this Report is lodged Board Office, 42/F, International Trade Center, Renmin South Road, Shenzhen, Guangdong Province, P.R.China IV Change to Company Registered Information Unified social credit code No change Change to principal ac tivity of the Company since going public (if any) No change Every change of controlling shareholder since incorporation (if any) On 29 September 2004, the State - Owned Assets Supervision and Administration Commission of Shenzhen Municipality (“SA SAC Shenzhen”) decided to incorporate Shenzhen Investment Holdings Co., Ltd. (“SIHC”) to include Shenzhen Investment Management Co., Ltd. (“SIM”, the former controlling shareholder of the Company) and Shenzhen Construction Investment Holdings C orporation ( “SCIHC”). SCIHC and SIM hold 323,796,324 and 56,582,573 shares respectively in the Company, representing a combined stake of 63.82% . On 19 October 2018, the Company was notified by its actual controlling shareholder SIHC that it had received the Confirmat ion of Securities Transfer Registration from China Securities Depository and Clearing Co., Ltd. (Shenzhen branch), marking the completion of the equity transfer to SIHC. As such, SIHC has become the controlling shareholder of the Company. V Other Information The independent audit firm hired by the Company: Name Ruihua Certified Public Accountants LLP Office address 9 - 10/F, Taiping Finance Tower, 6001 Yitian Road, Futian District, Shenzhen City, Guangdong Province, China Accountants writing signatures Cai Xiaodong and Wang Huansen The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period: □ Applicable √ Not applicable The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period: □ Applicable √ Not applicable VI Key Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ N o 2018 2017 2018 - over - 2017 change (%) 2016 Operating revenue (RMB) 2,787,240,632.53 2,904,690,690.53 - 4.04% 2,059,204,077.18 Net profit attributable to the listed company‘s shareholders (RMB) 592,723,852.71 622,962,734.37 - 4.85% 354,857,241.74 Net profit attributable to the listed company‘s shareholders before exceptional items (RMB) 591,362,024.37 559,625,850.90 5.67% 357,519,344.14 Net cash generated from/used in operating activities (RMB) 1,123,594,927.59 - 346,269,760.94 424.49% 2,252,041,183.42 Basic earnings per share (RMB/share) 0.9945 1.0453 - 4.86% 0.5954 Diluted earnings per share (RMB/share) 0.9945 1.0453 - 4.86% 0.5954 Weigh ted average return on equity (%) 18.94% 26.64% - 7.70% 15.79% 31 December 201 8 31 December 201 7 Change of 31 December 201 8 over 31 December 201 7 (%) 31 December 201 6 Total assets (RMB) 5,820,202,137.54 5,393,331,548.87 7.91% 6,654,356,144.10 Equity attributable to the listed company‘s shareholders (RMB) 3,337,949,324.64 2,921,693,794.08 14.25% 2,410,434,735.75 VII Accounting Data Differences under China’s Accounting Standards for Business Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards 1. Net Profit and Equity under CAS and IFRS □ Applicable √ Not applicable No difference for the Reporting Period. 2. Net Profit and Equity under CAS and Foreign Accounting Standards □ Applicable √ Not applicable No difference for the Reporting Period. VIII Key Financial Information by Quarter Unit: RMB Q1 Q2 Q3 Q4 Operating revenue 544,366,414.09 280,647,570.88 373,989,694.46 1,588,236,953.10 Net profit attributable to the listed company‘s shareholders 53,456,824.88 29,515,702.71 61,216,163.81 448,535,161.31 Net profit attributable to the listed company‘s shareholders before exceptional items 53,039,124.57 28,924,009.75 61,962,097.63 447,436,792.42 Net cash generated from/used in operating activities - 96,704,935.74 - 128,887,050.07 275,573,016.00 1,073,613,897.40 Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially f rom what have been disclosed in the Company’s quarterly or interim reports. □ Yes √ No IX Exceptional Gains and Losses √ Applicable □ Not applicable Unit: RMB Item 2018 2017 2016 Note Gain or loss on disposal of non - current assets (inclusive of impairment allowance write - offs) - 79,489.58 104,883,756.37 - 182,886.11 Disposal of miscellaneous assets Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) 165,676.08 The subsidy for keeping stable jobs Gain or loss on contingencies that do not arise in the Company’s ordinary course of business - 5,491,792.67 - 4,366,315.82 Non - operating income and expense other than the above 1,724,017.41 - 466,062.66 1,010,733.64 Penalty and liquidated damages income Less: Income tax effects 448,375.57 35,589,017.57 - 876,365.89 Total 1,361,828.34 63,336,883.47 - 2,662,102.40 -- Explana tion of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public — Exceptional Gain/Loss Items: □ Applicab le √ Not applicable No such cases for the Reporting Period. Part III Business Summary I Principal Activity of the Company in the Reporting Period Is the Company subject to any industry-specific disclosure requirements? Yes, because the Company engages in real estate. (I) Core Business Overview Shenzhen Property Group was established in November 1982 that the predecessor was Luohu Engineering Construction Headquarters and renamed to 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. (SZPRD) in April 1990. The stock of the group company (Shenzhen Property A+B; securities code 000011/200011) was officially listed in Shenzhen Stock Exchange in March 1992. The Company is headquartered in International Trade Centre Building, Renmin South Road, Luohu District. At its inception, the Company contracted and built Shenzhen International Trade Centre Building as Party A, and created the world-famous "Shenzhen Speed" that "one floor was completed in three days". International Trade Centre Building ranked the first place in several places in China: It was the first super-high-rise building in China, which has occupied the position of "the tallest building in the country" for ten years; It was the first building project involving bidding in China. It is the landmark building in Luohu and even Shenzhen, a resounding historical and cultural symbol in Shenzhen and the "cultural card in Shenzhen". It was selected into the first batch of 45 historical buildings in Shenzhen and became "The Reflection of the Shenzhen Speed and the Symbol of the Reform and Opening-up" with a reputation for the whole country and even the world. The enterprise spirit of "going ahead and reforming" of Shenzhen Property Group has also become the spiritual totem of the numerous entrepreneurs in Shenzhen. The three generations of leaders of the Party and the State are very concerned about the growth and development of the Company. On 22 June 1990, Comrade Jiang Zemin inspected the International Trade Centre Building and commemorated the inscription; On 20 January 1992, Comrade Deng Xiaoping overlooked Shenzhen in the revolving restaurant at the 53rd floor of the International Trade Centre Building, and delivered a 30-minute "South Inspection Speech"; On 13 November 1994, Comrade Hu Jintao personally inspected the Company and commemorated the inscription. Since its establishment 37 years ago, the Company has developed into a large-scale comprehensive group company from a simple project company at that time, taking Luohu as its base area and radiating all over the country. The group has successively won a number of honors, such as the second place of "Top-100 Real Estate Enterprises with Comprehensive Benefits in China", the 23rd place of the first rating of "Top 100 Companies with Comprehensive Strength of Listed Companies in China", "Top-500 Real Estate Development Enterprises in China" for eight consecutive years (2011-2018), the 35th place of "National Property Service Industry in 2018", the fourth place of "Excellent property Management Enterprises in China's Industrial Park in 2017", etc. The Company currently has 9 functioning secondary subsidiaries in total, including 4 property development subsidiaries (Shenzhen Huangcheng Real Estate Co., Ltd., Dongguan ITC Changsheng Real Estate Development Co., Ltd ., SZPRD Xuzhou Dapeng Real Estate Development Co., Ltd. and SZPRD Yangzhou Real Estate Development Co., Ltd.), 1 property management subsidiary , 1 housing assets operation subsidiary, 2 joint ventures (SZPRD Jifa Warehouse Co., Ltd. and Shenzhen Tian’an I nternational Building Property Management Co., Ltd., with the Company holding a 50% stake in both), and 1 catering subsidiary. 1. Property Development The property development business is principally operated by 4 subsidiaries. Those four subsidiaries a re Shenzhen Huangcheng Real Estate Co., Ltd. , Dongguan ITC Changsheng Real Estate Development Co., Ltd., SZPRD Xuzhou Dapeng Real Estate Development Co., Ltd., and SZPRD Yangzhou Real Estate Development Co., Ltd. The following 6 property developments are c urrently ongoing: (1) SZPRD - Golden Collar’s Resort (Shenzhen): Located at the Huanggang Port, historical land, site area 12,600 ㎡ , plot ratio 10.5 , total floor area 130,000 ㎡ and sales have started in 2018. (2) SZPRD - Qianhai Gangwan Garden (Shenzhen): Obtained in July 2011 in an asset swap promised in the share reform, site area 19,900 ㎡ , plot ratio 3.2 , total land price RMB270 million, ope n for sale in November 2015 and is currently selling the remaining houses . (3) SZPRD - Songhu Langyuan (Dongguan): Won on 15 July 2010, site area 66,900 ㎡ , plot ratio 2.2 , total land price RMB214 million, open f or sale at the end of July 2015 and is currentl y selling the remaining houses. (4) SZPRD - Fuhui Huayuan (Shenzhen): Located in Fumin New Village, Futian District, historical land , site area 4,274 ㎡ , total floor area 43,819 ㎡ and construction has officially begun on 29 December 2018. (5) SZPRD - Hupan Yuj ing Phase I (Yangzhou): Won through bidding on 28 January 2011 , site area 25,228 ㎡ , and total floor area 50,948 ㎡ . So far, residential units have been sold out and it is currently selling commercial and office space. SZPRD - Hupan Yujing Phase II (Yangzhou): Site area 41,331 ㎡ , and total floor area 74,382 ㎡ . Currently, it is selling the remaining residential units, as well as the commercial and office space. (6) SZPRD - Banshan Yujing Phase I (Xuzhou): Won through bidding on 10 February 2010 , site area 65,332 ㎡ , and total floor area 101,605 ㎡ . Currently, it is selling the remaining space. SZPRD - Banshan Yujing Phase II (Xuzhou): Site area 31,537 ㎡ , and total floor area 34,956 ㎡ . Construction has begun in late 2018. 2. Property M anagement This business is principally run by Shenzhen International Trade Cente r Property Management Co., Ltd., which has four subsidiaries, namely, Shenzhen Huangcheng Property Management Co., Ltd. , Shandong International Trade Cente r Property Managemen t Co., Ltd., Chongqing International Trade Cente r Property Management Co., Ltd. and Yangzhou Jingyue Property Management Co., Ltd. Yangzhou Jingyue Property Management Co., Ltd. is a new joint venture incorporated in 2018, with the Company holding a 51% in terest. The establishment of this sub - subsidiary marked the Company’s official entrance to the area of cultural and tourism property management. International Trade Property Management Co., Ltd. has been developed into the domestic first-class industrial park brand property service provider. At present, the Company has 14 branches and three national-level qualified enterprises in the whole country, and employs more than 4,000 employees, including Hulun Buir, Manzhouli, Baoding in Southern Market, Shandong, Shanghai, Zhejiang and Jiangsu in East China Market, Shenzhen and Dongguan in South China Market, etc. The Company manages over 100 projects and covers an area of 16 million m2 (including the property park exceeding 5 million m2 (including trusteeship). The Company has provided service for the famous enterprise parks (Huawei, Alibaba, Jingdong, Hikvision) and a large batch of government property projects in Shandong and Chongqing with its excellent market competitiveness. 3 . Prop erty Rental This was formerly run by the Leasing Center of the Group Headquarters, which has become SZPRD Housing Assets Operation and Management Co., Ltd. in 2018, running independently. The Company has now a total floor area of 81,610.23 ㎡ available for rental, with an occupancy rate of 9 5% . 4 . Catering Service The catering business of the Company is operated by Shenzhen International Trade Catering Co., Ltd., with a total operating area of 1,892 square meters. Shenzhen International Trade Catering Co., Ltd. was established in 1986. The revolving restaurant under the operation of the Company has been listed as "The Highest-level Revolving Restaurant in China" by the State Council, and is also the only revolving restaurant in the country that runs Chinese food. Located on the 53rd floor of the International Trade Centre Building, the restaurant has received more than 600 Party and state leaders, domestic and foreign dignitaries, and cultural celebrities. The restaurant is also a scenic spot with unique historical significance in Shenzhen. 5 . Warehousing Service The warehousing service is mainly provided by SZPRD Jifa Warehouse Co., Ltd., a joint venture where the Company holds a 50% stake, with the total area of the warehouses reaching 35,000 ㎡ . (II) The Development Stage, Periodic Features and Status of The Company’s Industry Involved within the Reporting Period The development of the industry the Company is in is closely related to the development of the national economy and orientation of national policy with positive correlation with economic cycle fluctuations. 1. Real Estate In March 2018, the government work report during the two sessions further emphasized the positioning of ―Houses are for living in, not for speculating on‖, and defined the local subject‘s responsibilities so as to continue the differentiated regulation and control, establish a sound long-term mechanism, and promote the stable and healthy development of the real estate market. Under the guidance of this general idea, the market has begun to show favorable trend at a moderate growth speed. In 2018, the sales area of commercial houses was 171.654 million square meters with a year-on-year increase of 1.3%, but the growth rate dropped by 0.1 percentage point when compared to that from January to November and declined 6.4 percentage points when compared to that in last year. However, the sales volume of commercial houses achieved RMB 1,499.7 billion yuan with an increase of 12.2% (increasing 0.1 percentage point when compared to that from January to November and dropping by 1.5 percentage points when compared to that in last year). At present, the current real estate inventory has been massively sold out to reach a record low value. At the end of 2018, the area of commercial houses for sale was 524.14 million square meters, decreasing 2.14 million square meters from that at the end of November, and decreasing 65.1 million square meters from that at the end of the previous year. The growth rate of land transfer revenue and the real estate investment maintained at a higher level, which can facilitate the transition from the strict policy to the tolerant policy. From January to December in 2018, the nationwide real estate development investment reached RMB 1202.64 billion yuan with a year-on-year increase of 9.5%, and the growth rate declined 0.2 percentage point when compared to that from January to November while increasing 2.5 percentage points when compared to that during the same period last year. In 2018, the land acquisition area of real estate enterprises was 291.42 million square meters with a year-on-year increase of 14.2%, but the growth rate declined 0.1 percentage point when compared to that from January to November while dropping 1.6 percentage points when compared to that during the same period last year. The land transaction price amounted to RMB 1610.2 billion yuan with a year-on-year increase of 18.0%, but the growth rate declined 2.2 percentage points when compared to that from January to November while decreasing 31.4 percentage points when compared to that during the same period last year. The financing situation in 2018 was not so good, and the increase in the availability of funds was mainly driven by the self-raised funds and the deposits for public recognition. In 2018, the real estate development enterprises received the available funds of RMB 1,659.6 billion yuan with a year-on-year increase of 6.4%, but the growth rate dropped by 1.2 percentage points when compared to that from January to November while declining 1.8 percentage points when compared to that last year. However, the domestic loans were RMB 2,005 billion yuan, decreasing 4.9%; the utilized foreign capital reached RMB 10.8 billion yuan, declining 35.8%; the self-raised funds were RMB 558.31 billion yuan, increasing 9.7%; the deposits and advances received were RMB 5541.8 billion yuan, increasing 13.8%; the individual mortgage loans were RMB 2,370.6 billion yuan, declining 0.8%. During 2018 Central Economic Work Conference, 2019 monetary policies were worked out with the emphasis placed on ―moderate monetary policies shall achieve a proper balance and maintain the rational and sufficient flexibility‖ rather than ―neutral‖. From the perspective of monetary policies, the central bank has carried out multiple RRR cuts, and in terms of financial supervision, it has gradually shifted from ―Deleveraging‖ to ―Stabilizing leverages‖. On the whole, policies have become relatively loose. As the proverb goes that ―the small river will spill when the big river is full of water‖, when the funds flowing into the real estate industry are expected to increase, the real estate financing environment is expected to improve. From the perspective of real estate policies, the two meetings of Political Bureau of the Central Committee respectively held on October 31 and December 13, 2018 did not mentioned the real estate for two consecutive times since July 2015, but emphasized ―stable employment, stable financing, stable foreign trade, stable foreign investment, stable investment, and stable expectations‖. Similarly, ―regulation and control‖ was not mentioned during 2018 Central Economic Work Conference on the deployment of real estate policies in 2019, but emphasis was placed on ―building a long-term mechanism for the healthy development of the real estate market; insisting on the positioning of .Houses are for living in, not for speculating on’; implementing different policies in line with the actual situation under classified guidance; strengthening main responsibilities of the city’s government; improving the housing market system and the housing guarantee system ‖, which indicates that the current real estate market price drop is consistent with the forecast made by the central government, and the real estate policy has changed from ―regulated‖ to ―moderate‖. Looking forward to 2019, ―stabilized housing price‖ is the main keynote. 2. Property Management Industry Up to now, the property management industry successively experienced the initial development period, the period of standardization and the new diversified development period. As the industry continues to develop, various government departments are paying more and more attention to the property management, and relevant laws and regulations have also been published in succession with the policy content evolving from normative content to supportive and encouraging content. In the future, various companies providing property services will accelerate their transformation and upgrading, and gradually transform from traditional providers of property services to integrated providers of modern services. Through outsourcing traditional property services to more specialized companies, refined and specialized division of labor can thus be realized; by providing standardized ―Personal Butler‖ services based on hi-tech means, the owners‘ needs for life services can be satisfied; in combination with fine-sorted, complete and professional outsourcing services, the quality of property services will be continuously improved to create much more value for the owners. With new ideas and thought, various property service companies will pay much more attention to the owners‘ diversified needs while improving their service efficiency and quality by means of high and new technologies including the AI technology, and continue to strengthen the reserve of talents in order to realize the property management service‘s standardization, the technological modernization, the business diversification, and the specialization of talents. The sales area of nationwide commercial houses and affordable houses is expected to exceed 4 billion square meters from 2018 to 2020 in line with the internal and external macroeconomic environment. Taking the property management area of 24.665 billion square meters in 2017 as the benchmark, the nationwide property management area will exceed 28.7 billion square meters in 2020; if calculated based on the average property management fees charging standards of Top 100 Property Management Companies, China‘s basic property management market size in the next five years will achieve RMB 1.5 trillion yuan. In 2018, the property service industry became much more diversified and involved various fields including pension service, financing, leasing, education, tourism, new retail and agriculture etc., and some property management companies have even built their own brand. Based on the compound growth rate of 11.3% of total retail sales of consumer goods from 2012 to 2017, the total retail sales of consumer goods in 2020 is estimated to reach RMB 62.56 trillion yuan. If the community business‘s proportion is 40% and the community value-added service‘s market penetration rate is 13.5%, it can be comprehensively predicted that the community‘s value-added property service scale could reach RMB 3.38 trillion yuan. By means of the diversified community-level value-added service, various enterprises can enhance their own profitability, and stimulate the huge community terminal consumption resources, which is vital to better the capital market. 3. Industrial Position of the Company (1) The Company has won such titles as Top 500 Real Estate Development Companies in China and Top 500 Companies in Guangdong for eight consecutive years, and obtained the honorary title of Top 100 Property Service Companies in China for three consecutive years. (2) As the Company‘s wholly-owned subsidiary, Shenzhen International Trade Center Property Management Co., Ltd. is the first property management company positioned to office buildings in China. Up to now, its service area has exceeded 13 million square meters, of which, the industrial park‘s property service area has exceeded 2.7 million square meters. Shenzhen International Trade Center Property Management Co., Ltd. has also won various honorary titles including 2018 Annual Top 100 (ranking 35th), and 2018 China‘s Outstanding Enterprises Specialized in the Property Management of Industrial Parks (ranking 4th) etc.. II Significant Changes in Major Assets 1. Significant Changes in Major Assets Major assets Main r eason for significant change s Equity assets Up 3.28% from the beginning amount, primarily driven by gains on joint ventures recognized at the equity method Fixed assets Up 11.13% from the beginning amount, primarily driven by new purchases and the reclassification of certain investment property to fixed assets Intangible assets No such assets Construction in progress No such assets Monetary capital Up 36.83% from the begi nning amount, primarily driven by a larger inflow of sales revenue Other receivables Down 73.26% from the beginning amount, primarily driven by the receipt of the payment for the sale of two taxi service subsidiaries Inventory Down 36.14% from the beginning amount, primarily driven by the settlement on real estate projects in the Reporting Period Deferred income tax assets Up 33.96% from the beginning amount, primarily driven by larger amounts of deductable loss and land VAT provision Other non - current assets Up by RMB108.97 million from the beginning amount, primarily driven by prepayments for investments 2. Major Assets Overseas □ Applicable √ Not applicable III Core Competitiveness Analysis Is the Company subject to any industry-specific disclosure requirements? Yes, because the Company engages in real estate. In the recent ye ars, the Company has maintained a stable business model with real estate as the core, supplemented by other diverse operations. Its asset size, operating revenue and net profit have kept hitting new records , which is mainly attributed to the Company’s accurate market positioning and unique core competitiven ess advantages: The first is the enterprise spirit of "going ahead and reforming". The Company is headquartered in Shenzhen. The "Shenzhen Speed" that "one floor was completed in three days" reflected the good style of work of Shenzhen Property personnel, such as taking courage to explore, attacking and overcoming difficulties, advancing despite the difficulties, and being pragmatic and efficient, etc. The enterprise spirit of "going ahead and reforming" has encouraged a generation of Shenzhen property people to seek for a higher and stronger goal, and the continuous and healthy development of the Company. Second , the Company has a stable operation team, which persists in the corporate development strategy , continuously making the 12 th Five - Year Strategic Plan and the 13 th Five - Year Strategic Plan and pioneering with the strategic plans as the guideline and road map, thus ensuring the continuity of the Company’s principal policy. Third , the Company is curre ntly adopting a mode of two levels, Group Headquarters - City Companies for controlling its property development projects. At the headquarters level, the group mainly manages issues such as land investment, planned operation, key marketing nodes, above - nor m plan and design and cost control, while companies in the cities are engaged in project management, on - site marketing, under - norm on - site design and cost control. Thus, the project companies are given sufficient independence. The group focuses on systemat ic management, currently having established a standardized internal operation system such as Real Estate Handbook , etc. for the comprehensive management policy for real estate . The Company’s property control mode is being improved and matured. Fourth , the Company’s development areas are mainly in Shenzhen and its neighboring cities, thanks to the price advantage of land obtainment costs and the rapid development of Shenzhen’s real estate market. The Company’s regional projects in Shenzhen will bring itself with good economic profits. Fifth , the Company has an advantage in brand and culture condensation. Over more than 30 years of development and accumulation, the Company is highly recognized in the market by virtue of its brand value of “Shenzhen Properties & Resources” that carries the spirit of international trade in the reform and opening up and comprehensive competence. The Company has won multiple honor titles such as “Best 500 of Ch ina Real Estate Developers” and “Guangdong Top 500 Enterprises” . Part IV Operating Performance Discussion and Analysis I Overview (I) Review of industry development during the reporting period 1. Macroeconomic environment In 2018, China's economic growth rate was declining, and t he growth rate of GDP in four quarters was 6.8%, 6.7%, 6.5%, and 6.4%, respectively. The growth rate in the third quarter has been lower than the operating ranged that has been kept for 12 quarter s (6.7% ～ 6.9%). The Value - added of Industrial Enterprises Abo ve Designated Size was 5.8% in September and reduced by 0.3% than that in August. Since March 2016, it has fallen below 6% for the first time; The growth rate was 5.9% and 5.4% respectively in Octobe r and November with a further decline. More notably, the growth rate in consumer demand continued to decline. The year - on - year growth rate of Total Retail Sales of Consumer Goods was 8.1% in October 2018, which was the lowest growth rate since June 2003; Affected by the continuous declination in the growth rate of resident income, rapid increase in resident sector leverage ratio, weakening wealth effect and other factors, the declining tendency of residents' consumption ability and willingness began to appear and the downward trend of consumption demand became o bvious. In terms of investment, the downward pressure of real estate investment was increasing, the confidence of real estate enterpr ises in the future market was insufficient, and the development and construction activities tended to shrink; Infrastructu re investment growth has fallen. After the Meeting of the political Bureau of the Central Committee on July 31, 2018, the growth rate became stabl e at a low level after October with the steady growth of related measures. However, taking into account the la ck of local government financing capacity and other issues, the ability to pick up became further weak. Private enterprises, small and medium - sized enterprises were faced with more difficulties, and lack of confidence, investment will and capacity in the f uture market. When the domestic demand growth capacity was insufficient, the export growth rate also began to decline. The Central Economic Work Conference convened in December 2018 pointed out that: The development of our country is still and will be in the period of important strategic opportunity for a long time. We should be good at turning a crisis into an opportunity and （未完）  |