Event: Shimao Group released three delayed financial reports, namely, the 2021 fiscal year, the first half of 2022 and the 2022 fiscal year. After announcing all delayed financial results and complying with a number of guidelines issued by the Hong Kong Stock Exchange, the company complied with the guidelines for resuming trading and resumed trading on July 31 after a 16-month suspension, when the closing price fell 65.6% to HK $1.52.
Losses were recorded in 2021 and 2022. Shimao's annual contract sales in 2022 is 86.52 billion yuan (RMB, the same below), with a contract sales area of 5.374 million square meters. Revenue was about 63.04 billion yuan, down about 41.5 percent from the same period last year (2021: 107.797 billion yuan). In 2022, gross profit increased to about 5.281 billion yuan, an increase of about 101.7% over the same period last year, and gross profit margin also rose to 8.4% from 2.4% in 2021. The loss attributable to shareholders in the core business is about 12.825 billion yuan, which is about 10.426 billion yuan lower than in 2021, and 44.8 percent lower than the same period last year. The loss was mainly due to the continued provision of discounts on property sales to speed up payback, the settlement of low-margin projects with a high proportion of land prices, and high material and labor costs.
Business operation and property management are relatively stable. Shimao's service revenue in 2022 was 8.64 billion yuan, up 3.5% from the same period last year. The construction area in the tube / contract is 261.6 million square meters, up 8.8% and 10.8% respectively over the same period last year. The gross profit of property management is 1.943 billion yuan, and the gross profit margin is 22.5%, which is similar to that of the industry.
The operating income of the hotel fell by about 17.5% from 2.116 billion yuan in 2021 to 1.746 billion yuan in 2022, mainly due to the repeated epidemic of COVID-19 and the sale of the Hyatt Hotel on the Bund and Shimao Royal Rongwu Holiday Wine in early 2022. In addition, business operating income fell by about 7.1% from 2.033 billion yuan in 2021 to 1.889 billion yuan in 2022. With the addition of hotel operation, commercial operation, property management and other businesses, the total revenue of non-real estate development business was 12.78 billion yuan, a slight decrease of 4.0% from the same period last year.
The financial ratio has deteriorated. Shimao's net debt ratio at the end of 2022 was about 302.2% (end of 2021: 156.0%), while excluding prepaid payments, the asset-liability ratio was about 83.8% (end of 2021: 77.4%). The cash balance decreased to 33.7 billion yuan from 57.9 billion yuan at the end of 2021. However, after deducting the pre-sale supervision funds in 2022, cash and cash equivalents are only about 17.19 billion yuan. divided by short-term loans, the cash-to-debt ratio is 0.03 (end of 2021: 0.21).
Progress in debt rollover. The announcement also mentioned that two domestic long-term debt rollovers were completed in March June 2023, namely, the total outstanding amount of Shanghai Shimao 4.55 billion yuan and Shimao Construction outstanding total amount of 14.35 billion yuan, up to 2026pm 2028. At the same time, Shimao also continues to promote the restructuring of overseas debt.