Continuing the pace of economic recovery last year. Since this year, along with the introduction of a series of loose macroeconomic policies, China's overall macroeconomic environment has continued to pick up, social and economic activities have become more active, and corporate economic vitality has increased markedly. In a favorable macroeconomic environment, as a leading infrastructure asset service company in China, Shoucheng Holdings (697.HK) released its quarterly report results today, showing that for the three months ending March 31, 2024, the company recorded revenue of approximately HK$351 million, up 9.0% from the same period last year. The company owner's estimated profit for the period was approximately HK$118 million, up 7.0% from the same period last year.
The first-quarter results fully demonstrated the hard power of Shoucheng Holdings to expand rapidly in a positive macro environment, showing the company's solid business chassis and steady fundamentals. Although the past year was plagued by poor macroeconomic conditions and unsatisfactory performance, the company insisted on continuously optimizing the organizational structure from the inside out and continuing to expand steadily around the core strategy, which ushered in outstanding performance in the first quarter. The company's asset management and asset financing business went hand in hand, and achieved significant strategic breakthroughs during the period.
Asset operations continued to break through and increase significantly by 42.2%
In terms of asset operator business, the company's overall asset management scale has been growing steadily, and operational efficiency has gradually increased. During the period, the company continued to refine its business around parking business and industrial parks. In terms of parking business, the company continues to adhere to the strategy of “core city transportation hub” and successfully obtained the Guangzhou Baiyun International Building Parking Management Project during the period, marking a key strategic breakthrough for the company to enter the parking business of airports and other asset classes in other cities in the Pearl River Delta in the future. The airport project has further strengthened the company's position as the leading airport parking project; in addition, the company has obtained the right to operate parking lot projects at Beijing Fengtai Railway Station. So far, Shoucheng Holdings has obtained the right to operate parking building projects in many core cities and high-speed rail stations across the country, and has achieved the right to operate parking building projects in many core cities across the country Full coverage of superior parking resources. In the past year, borders were opened, and domestic commercial passenger traffic continued to grow. The data showed that in the first quarter of 2024, Guangzhou Baiyun Airport carried nearly 20 million passengers, up 43% year on year. The country's civil aviation completed a total of 180 million passenger traffic during the same period, the highest passenger traffic in the first quarter of the year, up 37.7% year on year, up 10.2% from the same period in 2019. National railways sent more than 1 billion passengers, an average of 11.147 million passengers per day, up 28.5 year on year %
Relying on specialized, digital intelligence, and standardized asset operation capabilities and rich parking management experience, Shoucheng Holdings perfectly handled the strong growth in domestic business travel demand in the first quarter, and led to a strong rise in the company's revenue and profit.
At the same time, Shoucheng Holdings also continuously optimizes organizational efficiency through continuous upgrading of its business structure, and has achieved more advantageous parking resources by establishing a strategic customer management service system. During the period, the company carried out an overall service cooperation layout in the southeast region in the first quarter. As of April 2024, two large-scale shopping center parking lot projects were signed in Hangzhou. Continued acquisition of parking space resources in the core business district will help increase the company's gross profit margin, strengthen revenue and profitability, and ultimately translate into a continuous rise in performance. In the second quarter of 2024, the company will continue to rely on this strategic service system and continue to lay out high-density parking lot projects around large shopping malls in key cities such as Shanghai, Nanjing, and Suzhou to continuously improve the quality and operational efficiency of parking assets.
In terms of industrial park operation, Shoucheng Holdings relied on rich industrial resources and rich experience in park operation and management, with the development idea of building an urban ecological and cultural conservation landmark. By focusing on new consumption, new technology, and new services, all of its park projects showed a booming trend during the period. Among them, the industrial contract rate and commercial vitality of the Beijing Liugonghui Project currently in operation have been further enhanced. Currently, it has attracted Chinese high-tech enterprises, listed companies, central enterprises, state-owned enterprises and foreign enterprises to settle in. Currently, the overall occupancy rate has exceeded 95%. The project has also won the title of “Low Carbon Innovation” characteristic industrial park and “Beijing characteristic consumer district”; in addition, the company's first customized service project, the Ideal Automobile Headquarters Phase II project, is now fully put into use.
At present, Shoucheng Holdings has established a closed loop infrastructure management business ecosystem adapted to the Chinese economic environment around infrastructure fields such as parking and travel and industrial parks. While making significant contributions to the company's overall performance, it also provides rich and high-quality project reserves for its asset financing business to issue REITs funds in the future.
Public REITsFavorable policies support a recovery in asset financing
During the first quarter, Shoucheng Holdings' asset financing business continued to comprehensively promote the “fund-raising-investment-management-exit” ecological closed-loop development strategy through public REITS as the cornerstone. Public REITs are an important tool for the country to revitalize existing assets and revitalize market activities. Since implementation for 2 years, the country has continued to release favorable policy support. Recently, the country has continued to issue “Guidelines for the Application of Regulatory Rules 1: Accounting Class 4” and the State Council's proposal to include eligible REITs from the Mainland and Hong Kong in relevant policies such as Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect goals to support REITs development, etc., bringing more investor attention and capital inflow to the company to assist customers in preparing for issuance and expansion of REITS consulting projects. At present, China Aviation E-Commerce Logistics REIT and Jingneng Photovoltaic REIT to assist in the issuance and expansion of the company have been successfully submitted to the Shanghai Stock Exchange for acceptance.
After experiencing a deep correction in 2023, the public REITs market continued to pick up in the first quarter, and the rise in public REITs prices directly led to a rise in Shoucheng Holdings' asset financing business performance. During the period, the company's asset finance business revenue was about HK$148 million, and losses narrowed sharply.
The company's investment business has also continued to break through. The Beijing Robotics Industry Development Investment Fund, which was established earlier with a target size of RMB 10 billion, invested in various robot segments covering intelligence, brain-computer interfaces, bionic robots, medical robots, etc.; in addition, the Sunshine First Journey City Development Fund, which is also worth 10 billion yuan, has also searched for multiple reserve projects. At the same time, in related fields such as guaranteed housing and community commercial infrastructure, the operation and project reserves of the Urban Development Fund under Shoucheng Holdings have been actively optimized and expanded to achieve efficient allocation of assets and improved operational quality and efficiency, thereby promoting the continuous addition of infrastructure assets and increasing the overall return on investment. In the past year, the company participated in the launch of 2 10 billion yuan city development funds and several billion yuan dedicated and comprehensive funds. In the future, it will also form alliances with leading industry and investment institutions to issue funds, based on its leading advantages in asset management and asset finance, give full play to the industry's resource advantages, explore high-quality enterprises, grow with the real industry and empower them for a long time, and help build a new engine of new quality productivity in the capital Beijing and China.
The continuous innovation and optimization of the organization is the driving force for enterprise development. Focusing on the above two core businesses of asset operation and asset financing, the company continues to upgrade its business model, forming a company-level network format expansion model of “strategic account manager+product manager+rapid support for large and medium offices”, establishing a core city regional service business group, and fully collaborating with existing resources to rapidly expand the business. Through establishing deep cooperation with large central state-owned enterprises, local governments and their platform companies, the company has carried out in-depth cooperation and revitalization in the fields of infrastructure asset revitalization, REITS fund investment and operation, park collaboration, parking business, etc. Infrastructure assets, and further expand cooperation in fields including investment and financing of strategic industries vigorously promoted by the country, smart mobility, and urban ecological operation.
As expectations of US interest rate cuts heat up this year, in a favorable environment where China's macroeconomic data continues to improve, it is expected that Shoucheng Holdings will also step up the pace of development, adhere to the two-wheel drive of the two major businesses of asset financing and asset operation, implement the closed-loop development strategy of infrastructure asset management ecology, and move forward firmly towards the goal of becoming a leading infrastructure asset service provider in China.