Comments on Annual Report

In 2020, some housing enterprises try to change their pace, from a single region to the whole country, accelerate the urbanization of low-level cities, and exchange short-term interests for opportunities to change tracks. However, for housing enterprises that have embarked on the road of high quality and high operational development, what they are considering now is the longer-term future.

In recent years, Shimao Group (8 13. HK (hereinafter referred to as "Shimao") has been galloping on the road of scale, but it has not ignored the quality of growth-Shimao took the initiative to slow down the requirements for scale, took the lead in pursuing quality growth, paid equal attention to scale and profit, and the virtuous circle of scale effect gradually appeared-in the context of slowing industry scale, narrowing profits and "three red lines".

Last year was not only the first year of Shimao's deep focus on profit, but also the fourth year of its high-quality development. While outpacing the industry in growth rate, the Group achieved double growth in revenue and profit against the trend, fully realized the "three red lines" of stable financial level, deepened the "big aircraft strategy" and cultivated long-term development capabilities.

The sales scale broke the ranking of 300 billion, leading the growth rate.

The leap in scale is the primary feature of Shimao's development in recent years.

Since 20 17 crossed the threshold of 100 billion, Shimao has surpassed the scale of 200 billion in just two years, and its sales will increase by 15.5% year-on-year to 300.3 billion yuan in 2020, exceeding the annual target and entering the 300 billion mark.

All this has benefited from Shimao's precautions. In order to keep up with the development cycle, Shimao took the initiative to slow down the scale requirement from 20 15 to 20 16, and optimized the inventory. Since then, Shimao has formulated a five-year development plan (20 17 -202 1), the core of which is to achieve rapid growth in sales scale.

Thanks to the rapid growth of scale, Shimao has won the top ten card position wars in the industry and has been growing steadily for three consecutive years. The list of industry organizations shows that Shimao's industry ranking will be promoted to eighth place in 2020.

In fact, Shimao will not be dragged down by the rankings, nor will it give itself too much growth pressure. Its sales target in recent years is more conservative than the actual growth rate. According to Xu Shitan, vice chairman and president of Shimao Group, Shimao will make progress in the industry as long as it keeps improving every year. As for the progress ranking, it is not as important as outperforming the industry growth rate.

In 20 19, compared with the average growth rate of 20% of the top 20 real estate enterprises in the benchmarking industry, Shimao pushed the growth rate to over 45%. Today, Shimao's control group has shrunk to the top ten in the industry. Faced with the larger the scale, the more difficult it is to grow. The Group once again outperformed the real estate enterprises of the same scale-with the growth rate of 65,438+05.5%, exceeding the average growth rate of 9% of the top 65,438+00 real estate enterprises, and at the same time achieving the average sales price of 65,438+07, 500 yuan/m2, exceeding the average growth rate of the top 65,438+00 real estate enterprises.

Like the steady targets set in recent years, Shimao has set the sales target of 202 1 at 330 billion yuan, with the target growth rate exceeding 10%. According to its saleable supply of 550 billion yuan, the goal can be achieved by completing 60% chemical removal rate.

Fight the "profit war" and diversified businesses will grow steadily.

With the "land dividend" era gone forever, the phenomenon of narrowing the profit margin of the real estate industry became more and more prominent last year, and high-quality growth and refined management became the high-frequency vocabulary of the performance meeting of real estate enterprises.

Shimao, after successively climbing the scale and surpassing itself, further adjusted the speed and shifted gears, and continued to consolidate the stable and sustainable competitiveness of long-term value. In Shimao's development vision, scale and profit have long been placed in the same position, and in recent years, the two levels have been balanced.

In 2020, Shimao's profitability continued to grow steadily, achieving an operating income of 654.38+035.35 billion yuan, a year-on-year increase of 265.438+0.4%; The gross profit reached 39.67 billion yuan, up 65,438+06.2% year-on-year, and the gross profit rate reached 29.3%, maintaining the leading level of the industry; The core profit increased to RMB 65,438+0,965,438+0.4 billion, a year-on-year increase of 24.9%. The core profit attributable to shareholders was 6,543.8+0.522 billion yuan (including income from the disposal of property rights and equity), up 45.2% year-on-year. The core profit growth rate exceeded 20%, and the profitability improved steadily.

It is worth mentioning that Shimao's property plate and diversified plate have overcome the adverse effects of the epidemic and steadily improved in 2020, which has become the background of its qualitative growth.

Among them, the settlement income of Shimao Property increased by 19.8% to12665438+300 million yuan, the settlement area increased by 18.3% to 8.306 million square meters, and the average settlement price was 15 187 yuan/square meter, which remained high.

Thanks to the steady progress of the "Big Aircraft Strategy", the proportion of Shimao's diversified business income has increased year by year, rising to 6.8% year-on-year. The Group achieved diversified income of 8.63 billion yuan, a year-on-year increase of 33%. Under the adverse impact of the epidemic, the completion rate of the plan still reached 99%. Among them, business and entertainment income was 65.438+0.96 billion yuan, hotel income was 65.438+0.64 billion yuan, and service income was 5.03 billion yuan.

If the growth of Shimao's scale is the basic disk of future revenue, then diversified business is the guarantee of its long-term liquidity and long-term leap.

During the year, Shimao continued to broaden its development channels, and the development of services, hotels, businesses and theme entertainment became more and more stable: Shimao Services handed over bright answers after listing, and its management area and revenue grew rapidly, and began to solve the pain points of independent and value-added services; Shimao Hotel signed 32 projects, adding new landmarks to China's hotel industry and city; In terms of business and theme entertainment, many formats have been opened in the market, accelerating the realization of Shimao's deep empowerment and taking root in the city.

All the "three red lines" meet the standards and have high operational advantages.

At present, the introduction of policies such as "three red lines" and "two concentrations" is forcing housing enterprises to seek new paths for long-term development in the era of "management bonus". The most important indicators are debt and liquidity.

For Shimao, who has implemented a prudent financial policy for a long time, strict adjustment in advance laid a sufficient foundation for it before the policy was introduced, leaving enough time and space for its immediate and long-term development.

In 2020, Shimao continued its previous excellent level, and its net debt ratio decreased by 7. 1 percentage point year-on-year to 50.3%, which has remained below 60% for nine consecutive years. Realize the asset-liability ratio (excluding accounts received in advance) 68.1%; The ratio of short-term cash debt (excluding pre-sale supervision funds) reached 1. 16 times, which successfully changed from "yellow file" to "green file", and all financial risk indicators were controlled within the safety line.

Tang Fei, executive director of Shimao Group and head of the financial management center, said at the performance meeting that Shimao has internalized the "three red lines" indicators into internal control, and has been conducting steady financial control even without external policies. Under the situation of refined management of real estate enterprises, the group's high operational advantages will continue to be highlighted.

At the same time, Shimao's debt structure has been continuously optimized, and the liquidity of the Group has been fully supported by excellent internal and external financing levels. Among them, Shimao 1 year accounts for only 25%, 1-5 years accounts for 66%, and more than 5 years accounts for 9%. The structure of long-term and short-term debts is reasonable. In terms of debt types, Shimao Bank loans and others accounted for 57%, and open market bonds accounted for 43%, and the financing structure was healthy.

Endogenous, during the Shimao period, it paid 225.2 billion yuan, a year-on-year increase of15.5%; Cash and bank deposits reached 68.47 billion yuan, up 14.8% year-on-year.

In terms of external financing, Shimao maintained smooth channels, and cooperated steadily with about 60 financial institutions at home and abroad during the year, and the scope of cooperative banks continued to expand. At the end of the year, about 70 billion yuan of the financing quota of financial institutions was unused. Benefiting from the diversified financing methods of the Group, Shimao's financing cost remained low. In 2020, the financing cost will be about 5.6%, which is less than 6% for four consecutive years. The fixed interest rate debt exceeds 63%, and the future interest rate level will continue to be stable.

Strict financial internal control management also brought the rating agencies' affirmation of Shimao, and Fitch maintained the "BBB- stable" investment-grade rating; Moody's is Ba 1, and Standard & Poor's is BB+, which was upgraded from "stable" to "positive" during the year, and then to investment grade. The domestic rating of each subject is the highest AAA.

Forward-looking layout of the core area of the soil storage dividend accelerated cash

With the support of good debt structure and abundant liquidity, Shimao has been able to replenish the granary in recent years, paving the way for long-term development.

In 2020, Shimao added 100 cases of land, with a total land price of about 90.8 billion yuan before equity and an added value of 286 billion yuan. Among the newly added153.5 million cubic meters of soil storage, the value of first-,second-,third-and fourth-tier cities accounted for 86%.

By the end of 2020, Shimao's pre-equity land reserve was about 8,654.38+0.75 million square meters, with a value of about 65.438+0.38 billion yuan, a year-on-year increase of 6%, covering more than 65,438+000 core cities and 434 projects. In the distribution of commodity value, the commodity value of first-and second-tier cities and strong third-and fourth-tier cities accounts for 90%. Among them, the value of goods in Greater Bay Area is 395 billion yuan, the Yangtze River Delta is 345 billion yuan, North China is 250 billion yuan, and Fujian is 240 billion yuan.

It is not difficult to find that Shimao relies on forward-looking strategic thinking, focuses on accurate investment promotion, and deeply cultivates high-dynamic economic regions and core urban agglomerations, which provides an effective guarantee for sales transformation and profit margins.

Thanks to the outstanding production capacity of the core urban agglomeration, the performance contribution of Shimao first-and second-tier cities and strong third-and fourth-tier cities will reach 90% in 2020, an increase of 3% compared with 20 19. The production capacity of strategic urban agglomerations in the three major countries has grown strongly, with the Yangtze River Delta exceeding 90 billion yuan, Greater Bay Area exceeding 45 billion yuan and Beijing-Tianjin-Hebei exceeding 33 billion yuan. Fuzhou, Beijing, Guangzhou and other TOP 10 core hotspot cities contributed production capacity of150 billion yuan, which effectively guaranteed the steady development of the group with high quality.

Shimao's forward-looking optimized soil storage dividend will be realized in 202 1, and it is estimated that the saleable value will exceed 550 billion yuan during the year, of which the value distribution of core urban agglomerations will reach 390 billion yuan.

At the same time, in the face of the centralized land supply policy launched this year, Shimao has also reserved sufficient funds to actively participate. Shimao management believes that in terms of layout, cities with centralized land supply policies overlap with Shimao deep-ploughing areas; In terms of cost, it is expected that the policy will bring down the low prices in popular areas; In terms of capital, the Group has been actively managing the cash flow in the region and reasonably arranging the investment budget.

On the other hand, Shimao plans to further focus on refined management sinking, inject new vitality into the team through the incubation and integration of regional companies, and turn the core indicators into the driving force for sustained performance growth.

Xu Shitan said at the performance meeting: "20021,entering the fifth year of high-quality growth, Shimao will further enhance capital control, strengthen operational strength, consolidate product brand strength, promote the' big aircraft strategy' as a whole, and realize the comprehensive upgrading of urban empowerment and the steady realization of long-term value."

In the future, Shimao will, as always, adhere to the main theme of "stability", diligently practice internal strength, bravely seize opportunities, empower enterprises, industries and cities to develop steadily, and be a participant in the times, an enterprising person in the industry and a responsible person.