On April 15, Shaanxi SDIC A (000563.SZ) announced the results report for the first quarter of 2024. In the first quarter of 2024, the company achieved operating income of 717 million yuan, an increase of 18.80% over the previous year; net profit to mother was 368 million yuan, an increase of 10.03% over the previous year.
On the same day, Shaanxi SDIC A issued an announcement stating that according to the estimated credit loss estimates, the company made financial asset impairment reserves of 121.6738 million yuan for the 2023 audit adjustments and the first quarter of 2024. These include an impairment provision of $17,700 for accounts receivable, $270,103 million for bad debts for other receivables, $50.386 million for loan losses and impairment provision for accrued interest, $954.153 million for debt investments and accrued interest impairment provisions, and an estimated debt of $2,8651 million.
In response, Shaanxi SDIC A stated that the main reason was the increase in the impairment accrual ratio for projects classified as concerned, and Chuangyuan 39 calculated impairment reserves of 29.1288 million yuan. Related projects are being disposed of (pledged) assets, etc., and the revenue obtained will be promptly washed back to prepare for impairment and increase the company's profit for the period.
In terms of calculating the impact of impairment preparations on the company's finances, Shaanxi SDIC A stated that after excluding the impact of mergers and structuring entities and deducting corporate income tax, the company's net profit for the fiscal year 2023 and the first quarter of 2024 will be reduced by 39.0408 million yuan. It was also emphasized that after depreciation preparation, the company's financial management and business operations were more stable. According to the first-quarter results report, Shaanxi SDIC A achieved net profit of 367.597 million yuan after preparing for asset impairment in the first quarter, an increase of 10.03% over the previous year.
During the reporting period, the size of the Shaanxi SDIC A management trust increased to 555.927 billion yuan. Shaanxi SDIC A said that the main reason is that the company's main trust business is operating smoothly and has achieved new results in transformation, stability and safety, and improved quality and efficiency. At the same time, the company's own business operations are effective and the benefits are good.
Last year, the “Notice on Regulating Trust Business Classification of Trust Companies” was issued and implemented, clearly regulating the business categories, definitions, and boundaries of the trust industry. Asset management trusts and asset service trusts are the two major types of business. At the performance meeting held on April 3, Shaanxi SDIC A stated that after the issuance of the new “three categories” regulations, the company stepped up the implementation of standard trust business. In 2023, the scale of asset management trusts exceeded 200 billion yuan, and the scale of service trusts increased dramatically, reaching 300%.
According to statistics, in recent years, the share of trust assets distributed by Shaanxi SDIC A in the real estate industry has decreased year by year. From 2020 to 2022, the share of trust assets distributed by Shaanxi SDIC in the real estate industry was 8.44%, 10.88%, and 7.53%, respectively. In 2023, the share of trust assets in the real estate sector of Shaanxi SDIC A has dropped to 3.7%.
China's trust industry has entered a period of pressure from kinetic energy conversion. Shaanxi SDIC A said that under the general environment of industry transformation and innovation, traditional financing businesses have been further compressed, and innovative businesses such as standard product investment and asset service trusts have invested heavily in the early stages, and the profit model is not yet fully mature. In the process of drastic changes in the trust industry, the company has cultivated capital strength, stabilized risk defense, and stabilized the first tier of the industry with comprehensive strength.