Author: Zhang Qian
On the evening of August 29, 2022, China Merchants Shekou (001979. SZ) disclosed its 2022 interim financial results. According to the data, in the first half of 2022, China Merchants Shekou achieved a total operating income of 57.563 billion yuan and a net profit attributable to the shareholders of listed companies of 1.887 billion yuan.
The rapid development of real estate so far, has gradually entered the second half, at present, under the influence of the repeated outbreak of the new crown epidemic, the weakening of residents' income expectations and other factors, how to get out of the new path has become the focus of attention of various housing enterprises. In the face of the new situation, China Merchants Shekou actively promotes the landing of the "three transformations" - from development to development and operation, and adheres to the value orientation to grasp the relationship between scale and growth; Shift from asset-heavy to light and heavy, and increase the development of asset-light business; From homogeneous competition to differentiated development, cultivate characteristics, form brands, enhance capabilities, and form culture - comprehensively improve the quality of development.
China Merchants Shekou said that in the face of the ever-changing market situation, it will firmly adhere to the direction of transformation, put risk prevention and control in the first place, and make a risk response plan; At the same time, adhere to the "three red lines" green file, retain the margin of safety. In the second half of 2022, China Merchants Shekou will take "comprehensive open source and throttling to ensure cash flow security" as the keynote, consolidate the basic development business plan, take into account medium- and long-term capacity building, enhance the basic skills of practicing the "three transformations", and cultivate the second curve of future performance growth.
The performance is better than the top 10 average
In the first half of 2022, China Merchants Shekou maintained its strategic focus, continued to optimize the work operation mechanism, took "one city, one template" 2.0 as the starting point, inventory and grasp dematerialization in a weak market environment, and used digital marketing methods to strengthen sales and payment collection management.
According to the data, from January to June 2022, China Merchants Shekou achieved a total contracted sales area of 4.8751 million square meters, with a signed sales amount of 118.827 billion yuan, a year-on-year decrease of 32.86%. Although there has been a decline compared with the same period last year, compared with the entire industry, the sales situation of China Merchants Shekou is still at the leading level in the industry. According to the statistics of Yihan Think Tank, the threshold value of the TOP10 housing enterprises in the first half of this year was 85.8 billion yuan, a year-on-year decrease of 47.7%. In the first half of 2022, the sales amount of China Merchants Shekou ranked 6th, up one place from the same period last year.
It is worth noting that in the 14 cities of Shanghai, Hefei, Suzhou, Xi'an, Chongqing, Wuhan, Kunming, Nantong, Xuzhou, Yantai, Shaoxing, Zhongshan, Wuxi and Taicang, the local traffic sales amount of China Merchants Shekou ranked in the top ten, an increase of three cities over the same period last year, and the deep ploughing effect of China Merchants Shekou was further highlighted.
In the "black iron era" of real estate, the investment control of China Merchants Shekou has been further strengthened, focusing on the "30 cities with strong hearts", deeply cultivating the "6+10 cities" and consolidating the quality of investment. From January to June this year, China Merchants Shekou acquired a total of 27 cases of land, with a new construction area of 4.1987 million square meters and an equity area of 2.6451 million square meters. The land acquired is mainly focused on first-tier cities such as Shanghai and Beijing, as well as key cities in the Yangtze River Delta such as Hangzhou and Suzhou.
In addition, China Merchants Shekou has also actively laid out the old reform, adopted the model of acquisition, cooperation and innovative finance, and promoted the differentiated development of the old reform. On April 2, 2022, China Merchants Shekou signed a strategic cooperation agreement with Great Wall Asset Management and Kaisa to promote cooperation plans on a number of projects. On August 25, Shenzhen Public Resources Trading Center released the "Shenzhen Longgang District Bantian Street Wuhe Hub Area Key Renewal Unit Pre-service Project" winning bid (transaction) results publicity, and on August 28 completed the publicity, China Merchants Shekou bid for the project pre-service provider. On behalf of China Merchants Shekou, he took over Kaisa Longgang Wuhe Hub Area City Change Project.
Focusing on the 30 cities of Qiangxin, China Merchants Shekou's business is making steady progress, and on this basis, China Merchants Shekou also emphasizes the safety management of funds. As of the end of June 2022, the asset-liability ratio of China Merchants Shekou excluding advance receipts was 62.38%, the net debt ratio was 48.96%, the cash short-term debt ratio was 1.48, and the "three red lines" were all in the green file range.
At the same time, China Merchants Shekou has fully implemented cost reduction and efficiency increase measures, strictly controlled the cost of funds, increased open market financing, adjusted the debt structure, firmly grasped the market window for the downward trend of LPR, and given full play to credit advantages for high-interest debt replacement, with remarkable results in cost reduction. In the first half of this year, the comprehensive capital cost of China Merchants Shekou was 4.1%, down 38BP from the beginning of the year.
When the "Double Hundred Strategy" is in progress
In addition to the deep cultivation of the city that develops the business, in terms of holding business, China Merchants Shekou also focuses on the advantage track, and the "double hundred strategy" is gradually landed.
At the end of the "Double Hundred Strategy", that is, at the end of the "14th Five-Year Plan", China Merchants Shekou strives to have 100 business projects and achieve 10 billion revenues. As a leader and vane who has been deeply engaged in the real estate industry for more than 40 years, China Merchants Shekou has a keen insight into the industry situation, and in the first half of 2022, China Merchants Shekou has basically completed the organizational structure reform of "specialization and verticalization" of holding business, and the trading ability of the four major formats of commerce, office buildings, apartments and hotels has been enhanced to varying degrees.
Centralized business is the main business track that China Merchants Shekou focuses on building. As of the end of the reporting period, China Merchants Shekou had a total of 29 commercial projects in operation, distributed in 16 cities including Shanghai, Shenzhen, Nanjing, Suzhou, Chengdu and Chongqing. It is worth mentioning that thanks to the superior regional location, accurate project positioning and strong business combination, Changshu's first Binhu cultural and commercial tourism complex - Changshu Qinhu Xili investment rate reached 100%, the opening rate reached 91%, the first day of opening passenger flow exceeded 150,000 people, operating efficiency and brand influence continued to improve.
The office building projects operated and managed by China Merchants Shekou are mainly laid out in Shenzhen, Shanghai, Wuhan and other cities. In the first half of this year, China Merchants Commercial Real Estate Trust acquired the Beijing China Merchants Hanghua Science and Trade Center project held by China Merchants Shekou, laying out core office assets outside the Greater Bay Area for the first time. For China Merchants Shekou, it has further improved the whole life cycle development model of "investment, financing, construction, management and retirement" of the holding business.
In terms of apartments, China Merchants Shekou continues to build three major brand product systems such as "One Stack" Talent Apartment, "One Room" Boutique Apartment, and "One Tang/CM+" Serviced Apartment. As of the end of the first half of the year, China Merchants Shekou's long-term rental apartments (including unopened projects) were deployed in a total of 21 cities across the country, with about 37,000 units.
In terms of hotels, during the reporting period, China Merchants Shekou's first overseas self-owned brand hotel, Iton Rexuan International Hotel, Djibouti, has held an unveiling ceremony and is expected to officially open for business within the year. As of the end of the reporting period, there were 14 hotels under the operation and management of China Merchants Shekou, including 12 in China and 2 abroad.
The park business is also an important part of the high-quality comprehensive development of China Merchants Shekou, and has been laid out in important areas such as the Hainan Free Trade Port, the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta and the countries along the "Belt and Road". As of the end of the reporting period, the main operation and management of the industrial park project of China Merchants Shekou covers the three major brand series of Wanggu, Yiku and Smart City, and the park also has an innovation incubation base - China Merchants Chuangku, with 7 projects in the current operation period and a construction area of 22,500 square meters.
Property income increased by 18.16%
In addition, in the field of property services, the accumulated surplus of China Merchants Shekou Holdings has formed a "1+1+N" universal business service standard system framework. In the first half of this year, whether in terms of scale or quality of operation, the surplus of investment has been greatly improved.
According to the data, in the first half of this year, the accumulated surplus of China Merchants achieved operating income of 5.646 billion yuan, an increase of 18.16% over the same period of the previous year, and the net profit attributable to it was 330 million yuan, an increase of 33.49% year-on-year. The net profit margin was 5.88%, up 1.49 percentage points year-on-year.
The property management industry is in the golden age of development, the boundaries and connotations of the industry are being reshaped, the types of services are constantly extended, the service methods are constantly renewed, in addition, the industry's mergers and acquisitions are frequent, the integration speed is accelerated, and the market concentration will be further improved.
According to the data of the Middle Finger Institute, at the end of 2021, the average management area of the top 100 property enterprises was 56.93 million square meters, an increase of 16.69% year-on-year. The market share increased to 52.31%, an increase of 2.6 percentage points over the previous year.
As of the end of the first half of the year, China Merchants had accumulated 1,803 projects under management, with a management area of 301 million square meters and a newly signed annual contract amount of 1.595 billion yuan, an increase of 17% year-on-year. The management scale of the accumulated investment is five times the industry average, and there are obvious advantages.
It is worth noting that in the first half of this year, the professional value-added business accumulated by China Merchants achieved operating income of 830 million yuan, an increase of 8.9% year-on-year, of which the total operating income of case site co-sales and real estate brokerage, facility management services, construction technology services and other businesses accounted for more than 80%, and the liquidity ability achieved remarkable results.
In terms of mergers and acquisitions, China Merchants also made gains, completed the delivery of huiqin property merger and acquisition project in the first half of the year, and successfully delisted 67% of the equity of Xinzhong Property, which laid a solid foundation for its expansion of the financial property track.