TigerResearch/tigerbot-earning-plugin huggingface dataset:
New starts weakened and development investment continued to fall. Throughout the year, a total investment of RMB13,289.5 billion was completed, which represents a 10% year-on-year decrease. Negative growth began in April due to significant financial pressure faced by real estate companies, strict pre-sale regulations, and low willingness to commence construction. Real estate enterprises had a low willingness to start construction due to great financial pressure and stringent regulation of advance sales. In2022, the total area of new construction was 1205.87 million square meters, which indicates a year-on-year decrease of 39.4%. Since April, the monthly new construction area has been declining by more than 35% year-on-year for eight consecutive months, representing the largest drop since 2016. The national housing construction area for the year was 9049.99 million square meters, which represents a year-on-year decrease of 7.2%. Additionally, the national housing completion area was 862.22 million square meters, indicating a year-on-year decrease of 15%.
Land acquisition decelerates as supply and demand decrease to a near-decade low. Real estate companies' overall efforts to acquire land have slowed down, with the total amount of land transactions throughout the year reaching RMB916.6 billion, representing a nearly 50% year-on-year decrease. Moreover, the purchased land area decreased by 53.4% year-on-year to 100.52 million square meters. The real estate market's continuous adjustment and financial pressure on companies have resulted in differentiated market performance, with local state-owned assets bottoming out. The government's land supply and the willingness of real estate companies to acquire land are insufficient, leading to a 31.25% year-on-year decrease in transaction volume. To alleviate the land auction market's overall downturn, policies have entered a substantial easing period since April. Local governments are optimizing land auction rules and releasing high-quality land plots to increase real estate companies' participation and improve the situation of failed auctions and withdrawals. Despite these efforts, the land market sentiment remains generally low, with a premium rate of only 3.0% and a withdrawal rate of 20.3%.
Policy Support Fails to Drive Significant Financial Improvement. Meetings and notices from the China Securities Regulatory Commission, the Shenzhen Stock Exchange, and the China Banking and Insurance Regulatory Commission in May mentioned supporting reasonable financing needs of real estate enterprises. In June, the People's Bank of China and the State Administration of Foreign Exchange proposed the need to timely correct excessive risk-avoidance behavior of financial institutions and maintain stable real estate financing. Despite the acceleration of mortgage lending by banks, the uncertainty of economic recovery has negatively impacted homebuyers' confidence, resulting in individual mortgage loans amounting to RMB2.38 trillion, which represents a decrease of 26.5%. Real estate companies' sales repayments have been negatively affected to varying degrees. The funds in place for real estate development enterprises throughout the year reached RMB14,897.9 billion, representing a 25.9% year-on-year decrease according to data from the National Bureau of Statistics. Although the central government and various ministries and commissions have continuously released stabilization signals since the second half of the year, the growth rate of funds in place at the end of the year remains unsatisfactory. While the credit environment has marginally improved, it will take time for this improvement to be transmitted to the market end. The arrival of mortgage loans and development loans still requires time.
(II) Policy environment of the industry
In 2022, upholding the fundamental principle that "houses are for living in, not for speculating on". Real estate policies have entered a comprehensive easing cycle, with regulatory authorities introducing favorable policies that benefit both the demand and enterprise sides. The strength of policies has increased, allowing local governments to implement policies based on local conditions. Demand-side policies have been continuously adjusted from the beginning of the year, with several heavyweight policies implemented in the second half of the year, significantly increasing support for supply-side policies. In summary, there are three core aspects of the real estate industry policy in 2022: providing financing support to real estate enterprises to alleviate their financial pressure; supporting individual housing loans to drive market sales recovery; and ensuring timely delivery of properties to boost market sentiment and improve homebuyers' confidence.
The demand-side is primarily focused on land and financial policies. (1) To better meet the reasonable housing needs of homebuyers, several cities in China have relaxed their policies on commercial housing purchases and sales. In January, the National Development and Reform Commission issued a notice promoting consumption and supporting the commercial housing market. In response, in February, these cities implemented policies that included reducing down payment ratios, lowering mortgage rates, easing housing provident fund loan requirements, issuing housing subsidies, and relaxing "five limits" policies such as purchase and lending restrictions.(2) To prevent speculation and ensure that houses are primarily used for living, credit supervision has been strengthened, and measures to crack down on illegal funds inflow into the real estate market have been strictly enforced. This is to prevent operating loans from entering the market. (3) The sales prices of commodity homes have stabilized, with first-tier cities remaining stable month-on-month since the second quarter, and second- and third-tier cities stabilizing after reaching their lowest point. (4) The ongoing reductions in interest rates have proved to be advantageous. In May, the People's Bank of China and the China Banking and Insurance Regulatory Commission announced an adjustment in the minimum interest rate for first-time homebuyers' commercial personal housing loans, which was set no less than 20 basis points below the corresponding period's loan market quotation rate. Furthermore, at the end of September, some cities also lowered the minimum interest rate for these loans. Provident fund loans with repayment terms exceeding five years were also impacted by the interest rate cuts, resulting in a reduction to 3.1%.
The supply side focused on land and financial control. (1) In terms of land, the completion rate of the 2022 land supply plan is relatively low. To attract real estate companies to bid, local governments are actively optimizing and adjusting land auction rules and land supply structures, with central and state-owned enterprises becoming the mainstream in land acquisition. Additionally, local urban investment platforms are continuing to emerge, while private enterprises are limited by credit challenges and financial pressures, leading to a pause in their investments.(2)In early November, the People's Bank of China and the China Banking and Insurance Regulatory Commission issued a notice on "Ensuring the Stable and Healthy Development of the Real EstateMarket" in terms of policies. This notice includes 16 specific measures such as maintaining stable and orderly real estate financing, actively providing financial services for "building payment upon completion," cooperating in the risk disposal of distressed real estate enterprises, protecting the legitimate rights and interests of housing finance consumers in accordance with the law, adjusting some financial management policies in phases, and increasing financial support for housing rental. At the end of November, the China Securities Regulatory Commission outlined five measures aimed at adjusting and optimizing equity financing for listed real estate companies. These measures include restoring mergers and acquisitions, restructuring, and supporting financing for real estate- related listed companies, as well as restoring refinancing for listed real estate enterprises and real estate-related listed companies. In contrast, financial regulatory authorities such as the China Banking and Insurance Regulatory Commission primarily relaxed regulations throughout the year. Meanwhile, local governments and housing construction departments strengthened their supervision to ensure property developers deliver homes on schedule.
In 2022, provinces and cities across China issued over a thousand real estate control policies, reaching a peak in recent years. The regulation of the real estate market continues to improve and upgrade, with the pace and intensity of policy tightening significantly increasing since April. Looking ahead to 2023, the central government will continue to adhere to the general principle of "housing is for living, not for speculation" and strive to achieve the "three stability" targets. As the tide of real estate market correction surges onward, one cannot help but ponder the scope for policy refinement in the top-tier cities. Additionally, it is not unreasonable to anticipate a more streamlined financing apparatus for real estate enterprises. The concept of "completion guarantee" - an assurance that properties will be finished prior to remuneration - continues to hold the attention of industry insiders. As such, a rekindling of the real estate market appears to be on the horizon.
(III) Regional market landscape
From the perspective of regional markets, Shenzhen's economy held steadfast in its fortitude in 2022, even while imposing stringent real estate regulations. Boosting market confidence were accompanying factors, such as "completion guarantee" and a dip in the first-home mortgage interest rate. As the year dawned, Shenzhen unfurled the "14th Five-Year Plan for Housing Development in Shenzhen," which maps out a five-year blueprint to supply 350,000 units of commercial housing and 540,000 units of public housing. During the "Golden September and Silver October" interlude, the number of newly sold residential units in Shenzhen eclipsed 3,000 units for two consecutive months, outpacing the average level registered in the first half of the year. Toward the fag end of October, the Ministry of Finance released the "Implementation Opinions on Supporting Shenzhen to Explore and Innovate Its Financial Policy System and Management System," underscoring the central government's bolstered support to alleviate Shenzhen's housing supply and demand imbalance. As a vanguard of China's reform and opening-up policy, Shenzhen continues to play a pivotal role in the real estate industry's major strategic metamorphosis decision-making process.
(IV) The situation and tasks facing the Company
From the perspective of SZPRD, many of the difficulties, pain points and blockage points of the projects under construction have basically been cleared, and the conditions are in place for the Group to make great progress. The tight situation of large investment and low output in the current period is expected to continue until the second half or even the end of 2023. Therefore, project construction, sales payment collection and capital amplification will become the most important tasks in 2023, and the ability to execute projects, turnaround capacity and operation and management capabilities will continue to be decisive factors in the Group's medium to long-term development.
(V) Industry position of the Company
SZPRD arises together with Shenzhen's reform and opening up and devotes itself to real estate, property management and other fields for nearly four decades. It has achieved gradual improvements in its comprehensive capacity, brand influence and industry position and won many honors and awards over the years. During the Reporting Period, the Company won the title of "2022 Shenzhen Top 500 Enterprises" and ranked 187th on the list. ITC Property Management, a subsidiary of the Company, won the following awards: "2022 Leading State-owned Enterprises in Property Management for Industrial Parks in China", "2022 Top 100 China Property Service Enterprises in Comprehensive Strength", "2022 Top 50 China State-owned Property Service Enterprises in Comprehensive Strength", and "2022 China Property Service Brand Characteristic Enterprise - A World-leading Property Management Ecological Operator". The Shenzhen International Trade Center Building was listed in the first group of Shenzhen historical buildings announced by the People's Government of Shenzhen Municipality. The historical exhibition of Shenzhen International Trade Center was selected as a case for the development and utilization of national economic and technological archives resources in 2021 by the National Archives Administration of China. These awards and honors demonstrated the Company's comprehensive strength and reflected the high recognition of the Company's comprehensive strength by the industry, customers and government departments.
During the Reporting Period, despite the changes in the real estate industry, the Company gained a comparative advantage with stable operation status and good financial position, seized the opportunities of the land market. The Company has triumphed in its partnership with Yangzhou Tourism Development Property Co., Ltd., securing the first and second land parcels in the Yangzhou Shouxihu Science and Technology Innovation City initiative. This landmark achievement not only marks the Group's foray into the"urban-rural integration" terrain beyond its headquarters but also acts as a potent assurance of its expansion plans in the Yangtze River Delta area. The victory also paves the way for the Group to augment its land reserves and propel sustainable development in consonance with the "14th Five-Year Plan" phase.
(I) Core Business Overview
Established in 1982, the Company was originally known as "Luohu Engineering and Construction Headquarters" and renamed"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. in 1990. The stock of the group company (stock name: SZPRD,A/B; stock code: 000011, 200011) was officially listed in Shenzhen Stock Exchange inMarch 1992.
The Company contracted and built Shenzhen International Trade Center Building as Party A and created, planned, and organized the world-famous "Shenzhen Speed". The building was the place where Chairman Deng Xiaoping gave talks in his inspection to the south. SZPRD came into being because of the building and has risen amid the Reform and Opening up campaign. Emerging and growing together with Shenzhen, a city of miracles, the Company has been “a loyal practitioner of the spirit of the ox”and overcome difficulties in proposing new services in the new era. SZPRD employees have manifested the enterprise spirit of "going ahead and reforming" and centered on the functional positioning as state assets of "serving national economic and social development, the city, the industry, and the people". The Company has adhered to the original aspiration and striven ahead to be a pioneer. Therefore, it has made remarkable achievements in development speed and quality. So far, the Company has grown into a large comprehensive industrial group from the project company that built Shenzhen International Trade Center Building. In the new era, the Company sizes up the situation, seizes the momentum and forges ahead toward the goal and vision of becoming a "leading smart operator of industry-city space in China".
As 2022 heralds the 40th anniversary since its inception and the 30th anniversary since its listing, SZPRD traverses down memory lane, recollecting its varied journey punctuated with challenges and triumphs. Witnessing the meteoric rise of Shenzhen city, the Group has transitioned from its former "Shenzhen speed" avatar to its current iteration of "Shenzhen quality." Additionally, 2022 inaugurates the first year for the Group's periodic performance adjustment phase. During the Reporting Period, facing the deep regulation and control in real estate, the Company faced up to the difficulties and continued to make efforts in four business sectors, including industry-city space development, property management services, industrial ecosystem operation, and main business ecosystem investment in its main business. The Company endeavored to further consolidate and highlight its advantages of industry-city integration and the whole industry chain through expanding the main business and making breakthroughs in other businesses.
1. Industrial & urban space development
In terms of the space development segment, the Company is specialized in developing the residence, the hi-end apartment, the office building, and the industrial park and has developed a batch of brand projects, including Shenzhen International Trade Center Building, Huanggang Port, Tian'an International Building, Qianhai Gangwan Garden, and Golden Collar Holiday. Based on its present real estate development business, the Company will improve its existing portfolio and plan for new businesses. It will engage a number of subsidiaries in property development and urban renewals, including Huangcheng Real Estate, Rongyao Real Estate, and the Urban Renewal Company, strengthen capital operation via the listing platform, and make a reasonable layout of the city space development segment. In the Reporting Period, SZPRD made greater efforts for land acquisition in this segment. For instance, it steadily advanced the development projects inside and outside Shenzhen, accelerated the sales of projects in Xuzhou and Yangzhou, and sped up cash inflow. Moreover, it focused on the development and construction of industry-city complexes and accelerated to create an integrated and co-existing model for the development of boutique urban residences and high-end industry space.
2. Property management services
The Company's property management segment takes ITC Property Management as its platform. As China’s first batch of first-class qualified enterprises in property management, ITC Property Management, after more than 30 years of development, has become a domestic first-class property service provider with diversified business capabilities and technological strength, and has been awarded"Top 100 National Property Management Enterprises" and "Excellent Enterprise of Property Management in China's Industrial Parks" for many years in a row. The projects under its management are all over the country, and its business radiates to various regions in China, such as South China, Southwest China, East China and North China, as well as the China-Vietnam Cooperation Zone in Vietnam. The Company's existing business has covered industrial parks, cultural tourism scenic spots, government agencies, rail transportation, housing, hospitals, schools, hotels and other various business models, and is planning to develop the business of grassroots social governance. The Company collaborated with the government to create a safe, harmonious, civilized and orderly urban environment, basically forming a pattern of integrated development of multiple business models. There are more than 20 subsidiaries under ITC PropertyManagement, and with the functional departments of the headquarters as the platform, it has actively built three centers of "market, empowerment and supervision", and formed three business centers and profit centers of specialized business model companies, specialized companies and companies in other regions, so as to continuously and effectively realize the new pattern of coordinated development of "1+1>2". Amidst the Reporting Period, ITC Property Management augmented its realm through self-reliant development and mergers and acquisitions, culminating in the administration of a 35 million square meters of property. The segment dedicated to industrial parks outstripped expectations, surpassing 10 million square meters. Notably, the scale of operational management for high-end industrial parks is predicted to retain its exalted status among domestic industrial park operations.
3. Industrial ecosystem operation
With respect to the industrial ecosystem operation segment, the Company gave full play to its foundation in the three basic industries, namely, real estate development, property management, and leasing and the advantage of the whole industry chain, focused on the two major strategies of “value-added operation of existing assets”and “light-asset operation output”, and deepened internal and external strategic cooperation. It is committed to creating a closed loop of the whole industrial ecosystem, covering project development services, park operation services, and supporting rental operations, and keeping improving the space service and rental ecosystem in the industrial park. A unique and mature business development model has been put in place with the capability and experience of the whole chain of planning, dismantling, construction control, business invitation, operation, and on-site management with respect to various assets. The Company is expediting the stock taking and assessment of its properties in stock and strengthening the management over them. In the future, it will gradually expand the scope of leasing and raise the development capability of property rental. Moreover, the Company gradually shifts the focus of industrial ecosystem operation to sci-tech parks, provides supporting services covering the whole value chain, such as the import of industrial ecosystem, project development services, and park operation services, and serves the role of "space service provider" centering on sci-tech parks.
4. Other business
In the Reporting Period, the Company's businesses also included catering service and project supervision service. The catering service is operated by Shenzhen Guomao Catering Co., Ltd. Guomao Catering Co., Ltd., established in 1986, became famous at home and abroad, as it was the place where President Deng Xiaoping gave talks during his inspection to the south in 1992. Since its establishment, it has received more than 600 country leaders, famous people, and numerous domestic and overseas guests, with its reputation spreading all over the world. The project supervision service is handled by the subordinated supervision company of the Group. The company has the Grade A supervision qualification of building works of the Ministry of Housing and Urban-Rural Development (MOHURD). It was originally known as Shenzhen Property Engineering Management Department, and takes part in the construction and management work of Shenzhen International Trade Center Building. It is a witness of the whole process of"Shenzhen speed", and mainly serves for the development project of the Group.
(II) Business Review for the Company in 2022
As a crucial year for the "14th Five-Year Plan" and the Group's 40th anniversary since its establishment and 30th anniversary since listing, 2022 holds significant importance. The Company concentrates on implementing key work deployments established at the beginning of the year and promotes long-term sustainable development by enhancing overall efficiency, guided by the principle of"long-term targets, medium-term expectations and short-term results". The Real Estate Company took expansion as the goal, and made efforts to seek a breakthrough in project expansion. The Property Management Company took strategic transformation as the guide to enhance the empowerment value and brand value. The Commercial Operation Company aimed at improving quality and efficiency, and continued to innovate the operation and management mode, and each business segment has maintained a stable and healthy development trend. As at the end of the Reporting Period, the total assets of the Group stood at approximately RMB15.8 billion. During the year, the Group recorded operating revenue of more than RMB3.7 billion and a gross profit of more than RMB750 million, successfully achieving the major economic indicators for the year.