On the evening of March 27, Shenzhen Holdings Co., Ltd. (hereinafter referred to as “Shenzhen Holdings” or “Company, Hong Kong Stock Exchange Listing Number: 0604.HK”), a Hong Kong listed platform owned by Shenzhen Industry Group, announced the results for the full year of 2023.

During the year, Shenzhen Holdings achieved a turnover of HK$15.83 billion, gross profit of HK$5.11 billion, and an overall gross margin of around 32%. Since most of the items sold did not meet the carry-over conditions, the removal of spot goods fell short of expectations. Combined with factors such as losses from associated companies and increased financial costs, Shenzhen Controlling Shareholders should have lost HK$260 million. Excluding the net effect of changes in fair value of investment properties and financial assets belonging to Shenzhen Holdings and the impact on the performance of joint ventures, equity shareholders of the company should account for a profit of HK$1.92 billion. The Board recommended that a final 2023 dividend of HK7.0 cents per share be paid in cash to give back to shareholders.

Focus on the main business, steady development of business in the industrial city

In 2023, Shenzhen Holdings Real Estate sales bucked the trend, achieving contract sales of about RMB 26.6 billion, an increase of 38% over the previous year, exceeding the annual target. Among them, the Yunhai Bay Project had single sales of RMB 13.3 billion, making it the double champion with the highest number of units sold and the largest transaction amount in the country in 2023. Shenzhen Holdings focuses on “double excellent” products and services, and project construction is progressing steadily. As most pre-sale properties have not yet met the carry-over conditions, carry-over sales revenue during the year was about HK$9.59 billion, a year-on-year decrease.

Shenye Yunhai Bay

During the year, Shenzhen Holdings added 450,000 square meters of land storage, increased the value of goods by 15.4 billion yuan, and further replenished high-quality land reserves. The land reserve area is about 6.74 million square meters, of which the Guangdong-Hong Kong-Macao Greater Bay Area accounts for 66%.

Focus on operations and achieve results with brand effects

In 2023, Shenzhen Holdings actively expanded its comprehensive urban operation business, achieving property management revenue of approximately HK$2.79 billion. The net operating contract area of Shenzhen Industry is about 12.19 million square meters, with a total management area of 80.47 million square meters.

In terms of urban and public construction services, two property management city projects have been renewed; 66 high-quality public construction projects such as the Shenzhen Library and Art Museum have been expanded; and Bijiashan Sports Park has been put into operation. In terms of commercial operation services, Shenye Shangcheng has more than 40 million visitors per year, with sales exceeding 5 billion yuan; the first Galeries Lafayette department store in South China was grandly opened; the Women's Building was renovated; the independent hotel brand “Jingju” was launched; Mandarin Oriental, Shenzhen won the five-star title of “Forbes Travel Guide”.

Shenye Shangcheng

At the same time, Shenzhen Holdings has taken a number of measures to promote an increase in the value of existing assets and an increase in rental income. During the year, the company achieved property investment revenue of about HK$1.42 billion, up about 19% year on year; the overall occupancy rate was 88%, showing a steady and positive trend. Hotel operating revenue achieved a historic breakthrough, achieving revenue of approximately HK$470 million, a significant increase of 62%.

Focus on innovation and continue to release development momentum

In 2023, Shenzhen Holdings actively deployed modern agriculture. The scale of the agricultural industry continued to expand, and built modern agricultural industrial parks such as Shenzhen, Nanao, and Xinfeng to a high standard, achieving agricultural operating income of about HK$510 million. Technological innovation has achieved results. Its subsidiary Jinghua Company promoted innovation in human-computer interaction technology, successfully developed color touch screen wire controllers, and achieved manufacturing and operating revenue of about HK$470 million.

Focus on empowerment to promote the sustainable development of enterprises

ESG performance is outstanding. Shenzhen Holdings maintained an A rating in the MSCI-ESG Index, scored far above the industry average on the topics of “green buildings” and “product safety and quality”, and was selected by the State Council's State-owned Assets Administration Commission's “ESG Pioneer 100 Index for Listed Companies of State-owned Enterprises”.

Financial management creates value. In the current situation where overseas financing environment for housing enterprises is difficult and costs are rising, Shenzhen Holdings is actively raising funds and signing medium- to long-term loans of HK$5 billion; strengthening loan cost management, the average comprehensive interest rate for banks and other loans is controlled at 4.4% per annum. At the same time, Shenzhen Holdings vigorously promoted asset securitization and successfully issued two types of REITs products. The total issuance scale was about RMB 2.29 billion, and the issuance interest rate was 3.6%.

The capital business is progressing in an orderly manner. Shenye Operation obtained a filing notice from the China Securities Regulatory Commission in February 2024. It is the first batch of property management companies to pass the Securities Regulatory Commission's registration since the implementation of the new filing regulations in March 2023. In the future, Shenzhen Operation will pay close attention to the capital market, take the opportunity to complete the IPO, and carry out mergers and acquisitions in the property service industry chain in due course in accordance with the capital raised use plan.

2024 Business Plan

Promote the steady development of the main real estate industry. In 2024, the annual sales value of Shenzhen Holdings will exceed RMB 30 billion. This year, liquidity will be the main consideration to accelerate turnover elimination and return capital as soon as possible. With regard to the current inventory of about 1.73 million square meters, Shenzhen Holdings will continue to promote the effective revitalization of existing assets and the release of value to achieve a balance between the scale of asset management and profit. At the same time, Shenzhen Holdings will invest accurately to accelerate the transformation of resources for urban renewal and benefit-sharing projects.

Wanshinjo

Accelerate the construction of a new development model. Shenzhen Holdings will continue to build brand capabilities, expand its business scale with asset-light operations, actively seek the concentration of high-quality state-owned resources from Shenzhen in Shenzhen operations, and strive to exceed 100 million square meters in the management scale as soon as possible and enter the first tier in the country; rely on benchmark projects such as Shenzhen Shangcheng to improve the ecological chain of the business district and obtain more commercial resources. Shenzhen Holdings will seize development opportunities and promote the transformation to a new model of asset management.

Accelerate the scaling up of innovation platforms. The high-tech agricultural sector will accelerate the construction of an industrial system integrating promotion and trade, and continue to build modern agricultural industrial parks to a high standard. The advanced manufacturing sector uses Jinghua Electronics as an entry point to promote product structure optimization and technological innovation, increase overseas market and customer development efforts, and achieve rapid expansion of overseas business. Give full play to the driving role of capital, strengthen capital operations through market-based means, accelerate the implementation of the upstream and downstream layout of the industrial chain, and cultivate an ecosystem for collaborative industrial development.

Strengthen enterprise risk prevention and control efforts. Shenzhen Holdings will attach great importance to financial security and ensure high-quality enterprise development by strengthening overall capital management, continuously optimizing the financial and debt structure, strengthening cost and expense control, formulating reasonable investment strategies, and improving the management of participating enterprises.

Facing the new situation and new tasks, Shenzhen Holdings will advance steady development, seek transformation first, and make new contributions to the high-quality transformation and development of the company with more passion, higher fighting spirit, and a more pragmatic style of work!