ShenZhen Special Economic Zone Real Estate& Properties (Group) Co., Ltd. Interim Report 2018 (Summary) Stock Code: 000029, 200029 Stock Name: SPG, SPG-B Announcement No. :2018-065 SHENZHEN SPECIAL ECONOMIC ZONE REAL ESTATE& PROPERTIES (GROUP) CO., LTD.
INTERIM REPORT 2018 (SUMMARY)
Part I Important Notes
This Summary is based on the full text of the 2018 Interim Report of ShenZhen Special Economic Zone Real Estate& Properties (Group) Co., Ltd. (together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). In order for a full understanding of theCompany’s operating results, financial condition and future development plans, investors should carefully read the aforesaid full text, which has been disclosed together with this Summary on the media designated by the China Securities Regulatory Commission (the “CSRC”).
Objections raised by any of the directors, supervisors or senior management against any contents in this Report or its summary:
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|Name|Office title|Objection and explanation of why|

 Statement of objection:
Except for the following directors, all the other directors attended in person the Board meeting for the review of this Report and its summary.
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|-|-|-|-|
|||Reason for not attending||
|Name|Office title||Proxy|
|||meeting in person||

Independentauditor’s modified opinion:
□ Applicable√ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable√ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable√ Not applicable
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
ShenZhen Special Economic Zone Real Estate& Properties (Group) Co., Ltd. Interim Report 2018 (Summary) Part II Key Corporate Information
1. Stock Profile
||||||
|-|-|-|-|-|
|Stock name|SPG, SPG-B|Stock code||000029, 200029|
|Stock exchange for stock listing|Shenzhen Stock Exchange||||
|Contact information|Board Secretary||Securities Representative||
|Name|Tang Xiaoping||Luo Yi||
||47/F, SPG Plaza, Renmin South Road,Shenzhen, Guangdong, P.R.China||47/F, SPG Plaza, Renmin South Road,Shenzhen, Guangdong, P.R.China||
|Office address|||||
|Tel.|（86 755）82293000-4638||（86 755）82293000-4715||
|E-mail address|tangxiaoping0086@126.com||spg@163.net||

2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes√ No
|||||
|-|-|-|-|
||H1 2018|H1 2017|Change (%)|
|Operating revenue (RMB)|1,317,541,631.35|731,306,982.03|80.16%|
|Net profit attributable to the listed|329,066,084.53|137,226,601.84||
||||139.80%|
|company’s shareholders (RMB)||||
|Net profit attributable to the listed||||
|company’s shareholders before exceptional|329,143,873.10|137,080,046.11|140.11%|
|items (RMB)||||
|Net cash generated from/used in operating|594,728,129.67|-97,700,697.19||
||||708.72%|
|activities (RMB)||||
|Basic earnings per share (RMB/share)|0.3253|0.1356|139.90%|
|Diluted earnings per share (RMB/share)|0.3253|0.1356|139.90%|
|Weighted average return on equity (%)|11.00%|5.06%|5.94%|
||30 June 2018|31 December 2017|Change (%)|
|Total assets (RMB)|4,516,278,981.14|3,989,263,981.96|13.21%|
|Equity attributable to the listed company’s|3,156,821,917.54|2,828,242,120.98||
||||11.62%|
|shareholders (RMB)||||

3. Shareholders and Their Holdings at Period-End
Unit: share
||||||||
|-|-|-|-|-|-|-|
||||Number of preferred||||
|Number of ordinary shareholders|76,443||shareholders with resumed||0||
||||voting rights (if any)||||
|Top 10 shareholders|||||||
||Nature of|Shareholding||Restricted|Pledged or frozen shares||
|Name of shareholder|||Number of shares||||
||shareholder|percentage||shares|Status|Shares|
|Shenzhen Investment Holdings Co.,Ltd|State-ownedlegal person|63.55%|642,884,262||||
|Shandong Gold Financial HoldingCapital Management Co., Ltd.－Shandong Gold Financial HoldingSustaining Fund 1|Domesticnon-state-owned legalperson|1.02%|10,300,000||||
|Lu Zhigao|Domestic|0.32%|3,246,949||||

ShenZhen Special Economic Zone Real Estate& Properties (Group) Co., Ltd. Interim Report 2018 (Summary)
|||||
|-|-|-|-|
||natural person|||
|Tan Shiqing|Domesticnatural person|0.13%|1,286,701|
|Yang Shuilian|Domesticnatural person|0.13%|1,273,700|
|Yang Jianxiong|Domesticnatural person|0.12%|1,255,750|
|Central Huijin Asset ManagementCo., Ltd.|State-ownedlegal person|0.12%|1,165,500|
|Peng Wei|Domesticnatural person|0.11%|1,129,082|
|Wu Haoyuan|Foreignnatural person|0.11%|1,109,300|
|Guotai Junan Securities (HongKong) Limited|Foreign legalperson|0.10%|1,015,683|
|||The Company has found no related parties or acting-in-concert parties as||
|Related or acting-in-concert parties among||||
|||defined in the Administrative Measures for Shareholding Changes in Listed||
|shareholders above||||
|||Companies among the shareholders above.||
|||The fourth shareholder holds all his shares in the Company in his accounts of||
|Shareholders conducting margin trading (if any)||collateral securities for margin trading. And the third shareholder holds some||
|||of his shares in the Company in such accounts.||

4. Change of Controlling Shareholder or Actual Controller in Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable√ Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable√ Not applicable
The actual controller remained the same in the Reporting Period.
5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable√ Not applicable
No preferred shareholders in the Reporting Period.
6. Corporate bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were undue before the date of thisReport’s approval or were due but could not be redeemed in full?
No.
Part III Operating Performance Discussion and Analysis
1. Business Overview of Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
ShenZhen Special Economic Zone Real Estate& Properties (Group) Co., Ltd. Interim Report 2018 (Summary) (1) Operating Results of Reporting Period
2018 marks the first year for the nationwide practice of the Spirit of the
19th
National Congress of the Communist Party of China, an important year for theCompany’s
13th
five-year plan for development, as well as a key year for theCompany’s major assets restructuring programme. The focus ofChina’s economic growth is shifting from high speed to high quality. In the first half of the year, great international economic uncertainty, stricter financial regulation and continued domestic government controls weighed on the real estate sector. Under such circumstances, in addition to carrying forward its major assets restructuring programme, the Company adhered to the thinking of “Carefully Draw up Development Strategies, Particularly Focus on Core Business, Strictly Control Costs and Continuously Improve Management Capability” and put greater efforts into promoting project construction and marketing, so as to achieve stable development.
In the Reporting Period, the Company made a concerted effort to overcome difficulties and steadily promote project construction. As a result, for this period, the Company achieved operating revenue of RMB1,318 million, up80.16% compared to the same period of last year; profit before taxation of RMB440 million, representing a year-on-year growth of138.76%; and net profit attributable to the listedcompany’s shareholders of RMB329 million, increasing139.80% from a year earlier. As at 30 June 2018, net assets attributable to the listedcompany’s shareholders were equal to RMB3,157 million, an11.62% rise compared to the end of last year.
A. Focused on residential property development, the Company has been building a professional and high-quality development team, as well as improving the management mechanism and processes for project development. As a result, the operational capability in the core business of real estate keeps increasing, along with the core competitiveness. During the Reporting Period, the key projects of the Company were mostly located in Shenzhen and Shantou. The Company paid close attention to product quality and progress, and adjusted marketing strategies in a timely manner. As a result, project development and sales progress basically met expectations, and the core business was in good order and health.
B. TheCompany’s main real estate projects under construction and available for sale during the Reporting Period included the Shenzhen-based Cuilinyuan, Chuanqi Jingyuan, and Chuanqi Donghu Mingyuan projects, as well as the Shantou-located Tianyuewan project, etc., with details as follows:
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|-|-|-|-|-|-|-|-|-|-|
|||||The||Floor area|Completed|Expected total|Accumulated|
||Locati||||Site area|||||
|Project||Usage|Status|Company||with plot|floor area|investment|investment|
||on||||（㎡）|||||
|||||’s stake||ratio （㎡）|（㎡）|(RMB’0,000)|(RMB’0,000)|
|Cuilinyuan|Shenzhen|Residential|Availablefor sale|100%|16,424.29|60,450|60,450|57,000|47,777|
|ChuanqiJingyuan|Shenzhen|Rental|Underconstruction|49%|4,243.34|42,412|42,412|24,865|17,904|
|TianyuewanPhase I|Shantou|Residential|Availablefor sale|100%|31,167.50|153,578.51|153,578.51|79,801|81,047|
|ChuanqiDonghuMingyuan|Shenzhen|Residential|Underconstruction|100%|5,889.7|34,072.60|0|51,000|22,621|

C. Land bank for future development by the end of the Reporting Period:
|||||
|-|-|-|-|
|Project|Location|Land area（㎡）|Floor area with plot ratio （㎡）|
|Tianyuewan Phase II|Shantou|33,362|127,661|
|Xinfeng Building|Shantou|5,920|26,640|
|Total||39,282|154,301|

ShenZhen Special Economic Zone Real Estate& Properties (Group) Co., Ltd. Interim Report 2018 (Summary) Note: The Company's real estate projects do not involve primary land development.
(2) Operation Review for H1 2018
A. TheCompany’s fundamentals remain positive with a reasonable debt structure and a healthy financial condition. During the Reporting Period, macro-economy was facing downward pressure, and real estate control continued. The Company's real estate development and sales mainly concentrate in Shenzhen and Shantou. The sales revenue and profits in the region of Shenzhen, where overall sales are good, accounted for more than90%. Thus, the future destocking pressure mainly lies in the Shantou region.
B. The major property developments proceed smoothly. The Company has further improved the development and management system, attached importance to construction safety and tightened cost control. During the Reporting Period, the overall progress of theCompany’s property developments was in line with the schedule.
a. The Chuanqi Shanglin project was sold out, and the Cuilinyuan project has finished filing of completion and acceptance, as well as move-in formalities.
b. The Chuanqi Jingyuan project (formerly known as the “Tianju Jingtian Apartment Block” project) has finished filing of completion, is currently being fully furbished and is expected to be ready for sale by the end of this year.
c. The Chuanqi Donghu Mingyuan project has the main frame of its Tower A completed to the 27th floor and Tower B roofed. The project is expected to be ready for sale by the end of this year. d. The Shantou-based Tianyuewan Phase I project has finished filing of completion, with homebuyers moving in and the road to the north of the project expected to be completed by the local government at the end of this year.
C. Real estate sales basically met expectations. The Company kept an eye on policy and market dynamics, and adjusted marketing strategies based on regulatory policies and market changes. Project sales basically met the expectations. The Chuanqishan project has been almost sold out; the Chuanqi Shanglin project has been sold out; approximately70% of the Cuilinyuan project has been sold; and the Tianyuewan Phase I project has sold about20% of its residential units.
a. Sales of major real estate projects carried forward to the Reporting Period:
Unit:RMB’0,000
|||||||
|-|-|-|-|-|-|
|||Operating|||Gross profit margin|
||Location||Cost of sales|Gross profit margin||
|||revenue|||(%)|
|Cuilinyuan|Shenzhen|102,558|28,856|73,702|71.86|
|Tianyuewan PhaseI|Shenzhen|1,224|978|246|20.10|
|Yuejing Dongfang|Shantou|465|288|177|38.06|
|Jinyedao|Shantou|381|212|169|44.36|
|Total||104,628|30,334|74,294|71.01|

 b. Real Estate sales during the Reporting Period:
Unit: square meters
|||||||||
|-|-|-|-|-|-|-|-|
||||||Floor area|||
||||The|||Area actually||
||||||available for||Settled area in|
|No.|Project|Open time|Company’s|Location||sold in Current||
||||||sale at||Current Period|
||||stake|||Period||
||||||year-beginning|||
|1|Cuilinyuan|June 2017|100%|Shenzhen|37,148|21,113|30,475|
|2|Tianyuewan|October 2016|100%|Shantou|137,508|9,779|2,232|
||Phase I|||||||
|3|Yuejing|December 2013|100%|Shantou|980|51|621|
||Dongfang|||||||

ShenZhen Special Economic Zone Real Estate& Properties (Group) Co., Ltd. Interim Report 2018 (Summary)
|||||||||
|-|-|-|-|-|-|-|-|
|4|Jinyedao|July 1996|100%|Shantou|2,794|26|427|
|Total|||||178,430|30,969|33,755|

 D. Real estate rental of the Company is stable with steadily rising rental prices as well as good occupancy rates and rent collection rates. The major properties for rental are as follows:
Unit: square meters
|||||||||
|-|-|-|-|-|-|-|-|
|||||Occupan||Land||
|Location|Name of building|Rentable area|Rented area||Usage||The Company’s stake|
|||||cy rate||ownership||
|Shenzhen|Real EstateMansion|3,413.88|3,413.88|100%|Commercial|The Company|100%|
|Shenzhen|North Block ofGuoshangMansion|4,819.71|4819.71|100%|Commercial|The Company|100%|
|Shenzhen|Petrel Building|22,475.47|22,475.47|100%|Commercial|The Company|100%|
|Shenzhen|SPG Plaza|61,005.94|52348.14|89.3%|Office|The Company|100%|
||SPG PlazaPodium|19,913.30|19913.30|100%|Commercial|The Company|100%|
|Shenzhen|Wenjin Garden|3,531.60|3,531.60|100%|Commercial|The Company|100%|
|Total||115,159.90|106,502.10|||||

E. The assets restructuring programme has been carried forward.
TheCompany’s major assets restructuring plan is subject to further communications and improvements with the regulators. Due diligence material update, additional audit and assessment, etc. are underway.
F. The talent team has been enhanced.
With great importance attached to building a professional team, the Company has promoted certain young talent as middle management and brought in a group of professionals and university graduates. These moves have ensured a stable talent team during the assets restructuring.
(3) Risks Facing the Company and Countermeasures
A. Risks Facing the Company:
a. Risks from macroeconomic environment. Since this year, Chinese government has been adhering to the general principle of seeking progress while maintaining stability, implementing new development concepts, practicing the requirement of high-quality development and focusing on the supply-side structural reform. Against this background, the economy in the first half of the year maintained an overall stable trend with good momentum. However, given that the Sino-US trading dispute is still going on, and that the global economic situation remains complicated and severe, the downward pressure on the economy is difficult to relieve in a short term.
b. Risks from policy on real estate industry. Against the convening of the
19th
National Congress of the Communist Party of China, the Chinese government shows a clear attitude that “Houses are for living in, not for speculating on”. The continuous implementation of real estate macro-control policy curbspeople’s investment demands at a large degree, and potential customers are increasingly taking a wait-and-see attitude, which generates a certain impact on the development and sales of main business of the Company.
c. Risks from development and operation of main business. At present the Company holds limited land reserve for not increasing its land reserve for a long time, which is influenced by the major
assets restructuring. Moreover, there is a lag in the sales progress of Shantou Tianyuewan Phase I.
d. Potential risks from assets restructuring. The major assets restructuring of the Company is a
significant and unprecedented event with complex trading structure for involved in the Shenzhen
ShenZhen Special Economic Zone Real Estate& Properties (Group) Co., Ltd. Interim Report 2018 (Summary) State-owned Enterprise Reform and with large-scale assets since the underlying assets it plans to purchase are industrial leading assets. Thus, the trading of its shares has been suspended for almost two years since its start of trading on 14 September 2016. At present, matters such as the renewal of diligence materials in restructuring and supplementary audit as well as evaluation are carried out simultaneously. For the uncertainty of related events, investors are reminded of the investment risks.
B. Countermeasures
Firstly, the Company will unremittingly pay attention to international and domestic macroeconomic situation and the industrial trend, and then formulate flexible coping strategies.
Secondly, the Company will further strengthen its ability to develop main business, raise its management level and make efforts to reinforce the marketing so as to stabilize the fundamental of the Company.
Thirdly, the Company will increase its land reserve timely and in an appropriate way to maintain the sustainable development of the Company in the future.
Fourthly, the Company will enhance the communication with regulators together with parties involved in the restructuring and make full efforts to promote the process of major assets restructuring.
2. Matters Related to Financial Reporting
(1) Changes in Accounting Policies, Accounting Estimates or Measurement Methods Compared to Last Accounting Period
□ Applicable√ Not applicable
No such changes.
(2) Retrospective Restatements due to Correction of Material Accounting Errors in Reporting Period□ Applicable√ Not applicable
No such cases.
(3) Changes in Scope of Consolidated Financial Statements Compared to Last Accounting Period
□ Applicable√ Not applicable
No such changes.