On the afternoon of April 24, China Merchants Group and its four Shenzhen-listed companies, China Merchants Shekou (001979. SZ), investment surplus (001914. SZ), China Merchants Port (001872. SZ), China Merchants Highway (001965. SZ), with the theme of "100 Years of Investment, Create and Share the Future", held a collective performance briefing for its Shenzhen listed companies on the Shenzhen Stock Exchange.
As an important state-owned backbone enterprise directly managed by the central government for more than 150 years, China Merchants Group has diversified its operations. The business scope of these four companies listed on the Shenzhen Stock Exchange covers real estate development, property management, port development, highways and other sectors.
In 2023, the four companies performed well in their respective fields and released outstanding results one after another. Among them, China Merchants Shekou has established itself as one of the top five in the real estate industry, China Merchants Jiyu has exceeded 15 billion yuan in revenue as a leader in the property management industry, China Merchants Port has achieved steady and improved performance through lean operation, and China Merchants Highway has reached a record high in terms of operating performance and shareholder returns.
Since the beginning of this year, the State-owned Assets Supervision and Administration Commission (SASAC) and the China Securities Regulatory Commission (CSRC) have frequently spoken out on the market value management of central enterprises, guiding listed central enterprises to pay more attention to their intrinsic value and market performance. By holding a collective performance meeting, China Merchants Group took the initiative to convey investment value and stabilize expectations to the market, which is undoubtedly fulfilling the responsibility and responsibility of a century-old central enterprise.
The business "blossomed in many places", and the performance grew steadily
In 2023, China Merchants Group's operating efficiency will be stable and improving, with operating income of RMB923.8 billion, basically stable, net profit of RMB191 billion, up 6.3% year-on-year, and total assets of about RMB13.6 trillion, up 8.9% year-on-year. The performance of its four companies listed on the Shenzhen Stock Exchange also has its own bright spots.
Specifically, China Merchants Shekou will achieve operating income of 175.008 billion yuan and net profit attributable to the parent company of 6.319 billion yuan in 2023, a year-on-year increase of 48.20%. In the adjustment cycle of the real estate industry, China Merchants Shekou still maintained a steady sales scale, with a total contracted sales amount of 293.635 billion yuan, an increase of 0.35% year-on-year, ranking fifth in the industry.
It is worth mentioning that China Merchants Shekou continued to benefit from the strategy of "regional focus and urban deep cultivation", and achieved good performance in the core cities with fierce market competition, entering the top 5 in local traffic sales in 13 cities and the top 10 in 24 cities across the country.
In terms of financial health, China Merchants Shekou has maintained a relatively stable financial position by continuously controlling the scale of its liabilities and optimizing its debt structure. As of the end of 2023, the asset-liability ratio, net debt ratio, and cash-to-short-debt ratio excluding pre-receivables were 62.41%, 54.58%, and 1.28 times, respectively, and the "three red lines" were always in the green range.
China Merchants Shekou's property listed company China Merchants Jiyu also handed in a "report card" that is better than the industry. In 2023, the investment surplus will focus on improving service quality and deepening the development of "lightweight, large-scale, technological and market-oriented", promote the continuous implementation of the "Fertile Soil Cloud Forest" business model, and achieve steady growth in major business indicators. During the reporting period, the revenue of China Merchants Surplus was about 15.627 billion yuan, a year-on-year increase of 20%, and the net profit attributable to the parent company was 736 million yuan, a year-on-year increase of 23.96%.
In 2023, there will be 2,101 projects under management, an increase of 217 from the beginning of the year, and the management area will increase to 350 million square meters, of which 210 million square meters will be managed by non-residential business. China Merchants has successively won key projects in many fields, achieved new breakthroughs in business formats, regions and paths, expanded tens of millions of high-quality projects such as the Canton Fair Complex and SMIC, and signed new contracts with major customers such as Super Fusion, forming an integrated development situation that promotes each other and complements each other's advantages.
China Merchants Port also reaped solid performance in 2023. In 2023, China Merchants Port adhered to strategic guidance, focused on endogenous growth, innovation and upgrading, significantly improved its lean operation capabilities, accelerated its global layout, and smoothly advanced various key tasks. In 2023, China Merchants Port achieved revenue of RMB 15.750 billion and net profit attributable to the parent company of RMB 3.57 billion, a year-on-year increase of 6.98%.
China Merchants Highway has hit a record high in operating performance and has become the most profitable expressway company in A-shares in 2023. In 2023, China Merchants Highway will complete a number of acquisition projects, with total assets exceeding 150 billion yuan, and the asset scale will continue to grow, further strengthening its position in the industry. The operating income for the year was 9.731 billion yuan, a year-on-year increase of 17.29%, and the net profit attributable to the parent company was 6.767 billion yuan, a year-on-year increase of 39.19%.
Up to now, the market value of China Merchants Highway is about 80 billion yuan, and the valuation has risen from 1.08 times PB (price-to-book ratio) at the beginning of the year to 1.36 times, far exceeding the market index and highway industry index in the same period, and the image of listed companies as "top students" has been further highlighted.
Fulfill the responsibility of central enterprises and actively give back to investors
On the whole, in addition to the solid performance of the four companies, another common feature is that they all send a positive signal to the market through the stable growth of the dividend ratio.
China Merchants Shekou has always attached great importance to shareholder returns, and its annual cash dividend has exceeded 40%, which will further increase to 45.88% in 2023. Since its restructuring and listing at the end of 2015, China Merchants Shekou has paid a total of 37.247 billion yuan in dividends.
The dividend ratio of China Merchants Port is also steadily increasing. From 2021 to 2023, the annual dividend ratios will be 30.8%, 33.7%, and 40.6% respectively. According to the latest 2023 dividend plan, it is proposed to distribute a cash dividend of 5.8 yuan (tax included) for every 10 shares, totaling 1.45 billion yuan.
While China Merchants Highway achieved the highest performance in history, its total cash dividends also hit a record high, sharing the company's development dividends with shareholders. In 2023, China Merchants Highway plans to distribute a cash dividend of 5.31 yuan to all shareholders for every 10 shares, with a dividend ratio of 53.52%. Since its listing six years ago, it has distributed a total of 14.065 billion yuan in cash dividends to shareholders.
In contrast, although the cash dividend ratio of China Merchants is less than 30%, it has still achieved a steady increase in the dividend ratio from 21.4% in 2022 to 24.5% in 2023 against the backdrop of many challenges faced by the property management industry in which it is located, such as declining growth rate and intensified competition.
In fact, in the context of the State-owned Assets Supervision and Administration Commission (SASAC) and the China Securities Regulatory Commission (CSRC) intensively "pointing" market value management and incorporating it into the internal and external assessment of enterprises, it has become an important measure for listed central enterprises to strengthen market value management. At the performance meeting, Li Bai'an, deputy general manager of China Merchants Group, also gave the "answer" of China Merchants on how to do a good job in market value management.
Li Bai'an said that for listed companies, the primary task is to practice internal skills, with the goal of effectively improving the quality of development, and taking into account the two dimensions of value creation and value realization. "China Merchants Group has always emphasized that its subordinate listed companies should pay attention to market value while strengthening their main business, continuously strengthen communication between management and investors, fully display the company's internal strength and achievements, and actively listen to the opinions and suggestions of the capital market, attach importance to the interests of small and medium-sized shareholders, and promote intrinsic value and market value go hand in hand. ”
Specific measures include: In terms of business, China Merchants Group encourages listed companies to carry out sound operation and professional integration, promote the continuous growth of business scale and continuous improvement of core competitiveness. In particular, the professional integration of internal and external has created a strong impetus for the intrinsic value enhancement of listed companies.
In terms of finance, China Merchants Group encourages listed companies to actively optimize their financial structure through various capital operations, continuously improve the level of earnings per share, so as to maximize the interests of shareholders, and continuously improve the ability to pay cash dividends according to the strategic development needs of listed companies. At the same time, the asset-liability ratio should be scientifically controlled, and the sustainable operation ability of the enterprise should be enhanced, as well as the ability to go through the cycle in different environments.
Li Bai'an believes that while repairing internal strength, the listed companies under China Merchants should strengthen communication and exchanges with investors, so that more investors and market participants can understand the operation and management of listed companies under China Merchants, so as to recognize the value of China Merchants Group.
Seize the opportunity to repair internal strength, and strive to break through
At present, the industries in which the four companies are located are still facing various challenges, and under the changing situation, each company has also made strategic plans for future development.
Zhu Wenkai, director and general manager of China Merchants Shekou, believes that in view of the current pressure on the overall capital of real estate enterprises, stabilizing the main body of the market is one of the important tasks of the industry this year. For China Merchants Shekou, the most important thing for China Merchants Shekou to develop business in 2024 is to stabilize the fundamentals and stabilize cash flow.
In terms of specific strategies, the first is to carefully select and engage in development, the core is investment, choose the right time and land, focus on core resources, and pay attention to core cities and high-quality projects. The second is to improve quality, the core is in products and services, continue to benchmark internal and external excellent works, carry forward the spirit of ingenuity, and continuously improve product quality. The third is to cooperate sincerely to promote decentralization, the core is marketing, pull together marketing professional capabilities, increase marketing support, and take multiple measures to accelerate sales decentralization. Fourth, we should carefully calculate and control costs, continuously optimize the debt structure, and ensure the safety of liquidity.
Yang Xudong, director and general manager of China Merchants Expressway, believes that the development of China Merchants Highway to today's scale and volume has largely benefited from the country's large-scale layout and construction of expressways in the past, but now such dividends no longer exist. In this context, it is necessary to accurately grasp the trend of the integration and development of the transportation industry and various industries, promote the lean operation of expressways with "boundary-breaking thinking", and integrate and develop the upstream and downstream and forward-backward integration of the industrial chain such as new energy, logistics and warehousing, digital economy, and new materials.
Regarding the business strategy for 2024, Xu Song, Vice Chairman and CEO of China Merchants Port, said that the first is to adhere to strategic guidance and promote the construction of a strong port, the second is to deepen lean management and promote endogenous growth, the third is to continue to deepen reform and promote high-quality development, the fourth is to adhere to innovation-driven and empower industrial upgrading, and the fifth is to explore the global layout and open up development space.
Li Bai'an said that at present, China Merchants Group is actively grasping the tide of the times, comprehensively accelerating the "third entrepreneurship", actively creating the "smile curve" and "Malik curve", promoting the transformation and upgrading of traditional industries, actively cultivating strategic emerging industries, and continuously improving the ability of each business line to pass through the industry cycle. In the future, China Merchants Group will continue to thoroughly implement the spirit of the Central Committee, take multiple measures to guide listed companies to improve their operational quality, operational efficiency and profitability, enhance the transparency and governance level of listed companies, promote high-quality development and increase investment value, actively safeguard shareholders' rights and interests, and reward shareholders and investors with better performance.