Commercial Real Estate Week in Review | Financial Street: In the future, we will consider adding specialized institutions for the long-term rental apartment sector

Abstract: The management of Financial Street said that the Yuetan long-term rental apartment project was leased at the end of 2022 with a lease term of 20 years, and after a year of renovation, the renovation was completed in October last year. Through investment promotion, the occupancy rate reached more than 70% in the month.

Financial Street: In the future, we will consider adding specialized institutions for the long-term rental apartment sector

On the afternoon of May 15, Financial Street Holdings Co., Ltd. held its 2023 annual general meeting of shareholders. Some investors at the meeting revealed to Guanguan New Media that the management of Financial Street said at the meeting that the Yuetan long-term rental apartment project was leased at the end of 2022 with a lease term of 20 years, and after a year of transformation, the transformation was completed in October last year. Through investment promotion, the occupancy rate reached more than 70% in the month. The current leasing situation is better than investment accounting and better than expected, laying a good foundation for the subsequent transformation of the business. There are two main considerations for the long-term rental apartment business in the next stage, one of which is to transform some inefficient internal projects that meet the needs of long-term rental apartments and have such advantages, and digest them from the inside. Second, it will also be in the market, mainly referring to first-tier cities, core areas, and those with strong transportation advantages, these projects will actively look for some long-term rental apartments from the outside. In addition, the company's management also revealed that in the future, it will consider adding a special institution in the (long-term rental apartment) sector in management, and at the same time, strive for projects to be completed one by one. "Relevant adjustments will also be made in the operating mechanism to cooperate with its operation and development." The above-mentioned investors added.

Walmart's first-quarter revenue was $161.51 billion

On May 16, Walmart announced its first-quarter financial report, with revenue of $161.51 billion, exceeding market estimates of $159.58 billion.

Adjusted earnings per share came in at $0.60, beating the consensus of $0.53.

Walmart expects adjusted earnings per share for the second quarter to be in the range of $0.62 to $0.65.

Suning Tesco received an inquiry letter from the Shenzhen Stock Exchange for its annual report requesting a reply before May 31

On May 16, the Shenzhen Stock Exchange issued an inquiry letter on the 2023 annual report of Suning Tesco Group Co., Ltd., focusing on a number of financial indicators such as the company's ability to continue operations, cash flow status, and defaulted payables.

Suning Tesco's 2023 annual report shows that the company's operating income was 62.627 billion yuan, down 12.25% from the previous year. The net profit loss was 4.089 billion yuan, a decrease of 62.51% from the previous year. After deducting non-recurring gains and losses, the net profit loss reached 19.087 billion yuan, an increase of 74.79% year-on-year. The company's current liabilities exceeded current assets by 43.014 billion yuan, while the balance of cash and cash equivalents was 3.815 billion yuan, indicating that the company is facing greater liquidity pressure. In terms of cash flow from operating activities, Suning.com's net cash flow during the reporting period was 2.910 billion yuan, an increase of 3.54 billion yuan over the same period last year. Operating income decreased by 8.747 billion yuan from the previous year, a contrast that attracted the attention of regulators. The inquiry letter also pointed out that Suning Tesco violated the terms of the bank loan agreement, triggering an event of default, resulting in the financial institution having the right to require it to repay the loan principal and interest of 19.138 billion yuan in advance. At the same time, the company's overdue payables were about 32.944 billion yuan, and the balance of notes payable was 5.078 billion yuan, of which the balance of commercial acceptance bills was 4.848 billion yuan, and the cumulative amount that could not be repaid due was 4.654 billion yuan. In terms of customers and suppliers, Suning.com's top five customers accounted for 2.66% of the total annual sales, while the top five suppliers accounted for 31.45% of the total annual sales. The balance of inventory was 6.705 billion yuan, a decrease of 2.496 billion yuan from the beginning of the period. Accounts receivable made provision for bad debts of 2.689 billion yuan, and another 393 million yuan was fully provided for bad debts due to the cessation of operation and unrecoverable. Suning Tesco made a goodwill impairment provision of 895 million yuan for Carrefour's China business. The Shenzhen Stock Exchange requires Suning Tesco to provide a written explanation on the above issues, and submit relevant materials and disclose them to the public before May 31, 2024, so as to ensure that investors and the market can fully understand the company's financial status and operational risks.

Two directors of Joy City Holdings resigned, and Zhang Hongfei, Zhang Mingrui, and Wu Lipeng were by-elected to the board of directors

On May 16, Joy City Holding Group Co., Ltd. issued an announcement on the resignation of directors and by-election of directors. According to the announcement, Mr. Liu Yun and Mr. Zhu Laibin have resigned as directors of the company and members of the special committee of the board of directors due to work adjustments. Following their resignation, the two gentlemen will no longer hold any positions in the company. Joy City Holdings said that the resignation report will take effect from the date of delivery to the board of directors and will not affect the normal operation of the company's board of directors. At the same time, the two did not hold shares in the company during their tenure. In order to fill the director's vacancy, the board of directors of Joy City Holdings nominated Mr. Zhang Hongfei, Mr. Zhang Mingrui and Mr. Wu Lipeng as candidates for non-independent directors. The term of office of the candidates will be from the date of deliberation and approval of the General Meeting of Shareholders to the date of expiration of the 11th session of the Board of Directors. The nomination proposal needs to be submitted to the company's 2023 annual general meeting of shareholders for consideration.

JD.com: Optimistic about this year's 618 is expected to increase support for small and medium-sized businesses

On May 16, Jingdong Group held a performance briefing for the first quarter of 2024. At the meeting, the management said that the expectations for this year's 618 are still relatively optimistic. The management proposed that the theme of this year's JD 618 is "good and cheap", and at present, it will continue to adhere to the low-price strategy while highlighting the differentiation of JD based on the insight into the normalization of low-price homogenization in the industry. Specifically, it will increase support for small and medium-sized businesses.

The 16.2 billion shares held by Wanda Commercial Management were frozen for a period of 3 years

On May 15, Tianyancha App showed that Dalian Xindameng Commercial Management Co., Ltd. had an equity freeze. The person subject to enforcement is Dalian Wanda Commercial Management Group Co., Ltd., the amount of equity involved is about 16.2 billion yuan, the freezing period is 3 years, and the enforcement court is the Beijing Fourth Intermediate People's Court. Dalian Xindameng Commercial Management Co., Ltd. was established in January 2024, the legal representative is Xiao Guangrui, and the registered capital is about 16.207 billion yuan. The company's equity interests are held by Dalian Wanda Commercial Management Group Co., Ltd. and Dalian Wanyu Enterprise Management Co., Ltd. Previously, on March 20 this year, about 16.2 billion shares of the company held by Dalian Wanda Commercial Management Group Co., Ltd. were frozen, but then unfrozen on March 25.

Hengtai Commercial signed a cooperation agreement with Mingfa Group to jointly build Zibo Hengtai City

On May 15, Hengtai Commercial and Mingfa Group held a signing ceremony in Mingfa Fortune Center, marking the official entry of Hengtai City into Zibo. It is reported that Zibo Hengtai City is positioned as a "new city SUPER MALL" - Zibo New Town Super Shopping Center, with a total commercial construction area of 81,000 square meters and a total volume of 310,000 square meters. The main tower is 230.6 meters high and will become the tallest building in Zibo when completed. The surrounding area of the project is densely populated, with a population of more than 400,000 within 3 kilometers, 4 bus lines and a light rail station under construction, and a 20-minute drive from the high-speed rail station. The project plans 6 major business formats, integrating Zibo's intangible cultural heritage, such as Meng Jiangnu, Cowherd and Weaver Girl and other elements, aiming to create a new generation of super shopping mall with urban characteristics. It is reported that Mingfa Group takes urban operation as the core, and Hengtai Commercial is committed to building a high-quality urban complex with its professional capabilities in non-standard commercial operation and urban renewal.

Hongkong Land is building Wuhan's first ocean-themed shopping park, which is scheduled to be completed and put into use in 2027

On May 14, the Wuhan Halo Commercial Complex, located next to the Hongtu Avenue subway station on Jiangjun Road Street, Dongxihu District, Wuhan, with a total investment of about 2.3 billion yuan, is accelerating construction. The project is developed by Hongkong Land, a subsidiary of Jardine Matheson Group, a Fortune 500 company, and is scheduled to be completed and put into use in 2027, and will become a new commercial landmark in Wuhan's Dongxihu District. Wuhan Halo Commercial Complex covers an area of about 85 acres, with a total construction area of about 310,000 square meters, including shopping malls, commercial blocks, Grade A office buildings and other diversified formats. "Wuhan Halo Commercial Complex will rely on the advantages of Wuhan Polar Ocean Park to build Wuhan's first ocean-themed shopping mall

CR Vientiane Life won the bid for the commercial complex in Binjiang District, Hangzhou, with a rent of 106 million yuan in the first year

On May 13, China Resources Vientiane Life Co., Ltd. announced that it had received a notice of winning the bid and won the property lease bid with a bid price of about RMB 106 million for the first year. According to the announcement, CR Vientiane Life will lease and operate the property, which includes a commercial complex, a commercial block, an underground commercial part, and supporting parking spaces and facilities. The lessor is Hangzhou Binjiang District Reserved Land Development and Operation Co., Ltd., and the lessee is Runxin Commercial Investment (Shenzhen) Co., Ltd. Shanghai Branch, a branch of Runxin Commercial Investment (Shenzhen) Co., Ltd., an indirect wholly-owned subsidiary of China Resources Mixc Life. Pursuant to the lease agreement, CR Mixc will recognise the value of the right-of-use assets at the commencement date of the lease term of approximately RMB1,447 million (calculated on the basis of a tentative leased area of 150,000 square meters).

Huaxia China Resources Commercial REIT announced an income distribution plan with an amount of 51.22 million yuan

On May 12, China Asset Management Co., Ltd. issued an announcement on the income distribution of China Resources Commercial Assets Closed-end Infrastructure Securities Investment Fund. According to the announcement, the effective date of the contract of the fund is February 7, 2024, with China Asset Management Co., Ltd. as the fund manager and China Merchants Bank Co., Ltd. as the fund custodian. According to the announcement, the base date for income distribution of Huaxia China Resources Commercial REIT is March 31, 2024, the amount available for distribution on the base date is 51.2219 million yuan, the dividend ratio is as high as 99.9963%, the amount to be distributed is 51.22 million yuan, and the dividend plan is 0.5122 yuan for every 10 public REITs shares. The record date is set for May 15, 2024, with an ex-dividend date of 16 May 2024 and 15 May 2024 for the OTC and 15 May 2024 for the OTC cash dividend. This dividend is open to all fund unit holders on the record date, and the cash dividend is adopted, and the dividend reinvestment is not supported. In terms of taxation, no income tax is levied on fund profits. In terms of fees, this dividend is exempt from the dividend handling fee. At the same time, the fund manager reminds investors that there is no guarantee of profit or minimum return, and the investment risk needs to be borne by themselves. The announcement also mentioned that during the equity distribution period, the cross-system transfer custody business will be suspended, the fund will be suspended for one hour, and the share transfer business of the fund pass platform will be suspended for one hour. Received a premium of 2.5 times to increase the capital of the old supermarket Lianhua Supermarket aimed at business transformation.

Suning Tesco accelerates offline expansion during the 618 period, and plans to open 20 large stores

On May 11, Suning Tesco announced that it would open more than 20 large stores in more than 10 cities including Chongqing, Hefei and Wuhan during the 618 Shopping Festival, including brands such as Suning E-Home Max and Suning Tesco Pro. Previously, on the eve of May Day, Suning Tesco has landed 17 large stores in 13 cities including Fuzhou, Nanjing, and Beijing, with an additional commercial area of 250,000 square meters. This move reflects Suning.com's strategic layout in expanding the offline retail market, aiming to enhance the shopping experience of consumers by increasing the number of large stores, and further consolidate its leading position in the domestic home appliance retail market. Suning.com's large store model focuses on providing diversified products and services to meet consumers' needs for a high-quality shopping environment.

Bailian Group intends to subscribe for no more than 360 million new domestic shares of Lianhua Supermarket in cash

On May 12, Shanghai Bailian Group Co., Ltd. disclosed that Bailian Group Co., Ltd. subscribed for new domestic shares of Lianhua Supermarket and related party transactions, and revealed the specific content of Lianhua Supermarket's capital increase to its subsidiaries. It is reported that Bailian Group Co., Ltd., the controlling shareholder of Bailian Co., Ltd., intends to sign a "Share Subscription Agreement" with Lianhua Supermarket Co., Ltd., a holding subsidiary of the company, and Bailian Group will subscribe for no more than 360 million new domestic shares of Lianhua Supermarket in cash at RMB 1.00 per new domestic share. After the completion of the issuance of new domestic shares by Lianhua Supermarket, the company's direct shareholding in Lianhua Supermarket will be reduced from 20.03% to 15.15%. In addition, according to the "Escrow Agreement" signed between the Company and Bailian Group in 2015, the 18.04% placement equity of Lianhua Supermarket obtained by Bailian Group will be entrusted to the Company. The issuance of new domestic shares by Lianhua Supermarket will not lead to a change in the scope of the company's consolidated financial statements. It is also reported that Lianhua Supermarket and its wholly-owned subsidiary, Shanghai Century Lianhua Supermarket Development Co., Ltd., plan to increase the capital of some wholly-owned subsidiaries, and the base date of the capital increase is December 31, 2023, and the capital increase has been deliberated and approved by the 35th meeting of the ninth board of directors of the company, including a capital increase of 1.85 billion yuan to Lianhua Supermarket (Jiangsu) Co., Ltd., and a capital increase of 665 million yuan to Anhui Century Lianhua Development Co., Ltd., with a total capital increase of 3.085 billion yuan.