chairman of jianfa group: the market has not deteriorated further on the margin, and the sales volume depends on the progress of market recovery
2024-09-25
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jianfa group visual china data map
on september 23, jianfa group (600153.sh) held a 2024 semi-annual performance briefing, attended by chairman lin mao, deputy general manager and board secretary jiang guizhi, and financial director wei zhuo. at the performance meeting, the management responded to issues of greater market concern, such as asset impairment, investment in land acquisition, and market expectations.
since 2022, the company has made provisions for asset impairment of rmb 13.947 billion, reducing its net profit attributable to the parent company by rmb 6.175 billion.
in the first half of the year, the operating income of jianfa group was 319.015 billion yuan, a year-on-year decrease of 16.80%; the net profit was 1.666 billion yuan, a year-on-year decrease of 48.23%; the net profit attributable to the parent company's shareholders was 1.199 billion yuan, a year-on-year decrease of 37.67%.
perpetual bonds have affected the profits of jianfa holdings. during the period, the net profit attributable to the shareholders of the parent company included the interest of 254 million yuan attributable to the holders of perpetual bonds during the reporting period. after deducting the perpetual bond interest, the net profit attributable to the shareholders of the parent company was 945 million yuan.
on the other hand, from january to june this year, jianfa group set aside 2.409 billion yuan in provisions for impairment of various assets, which will reduce the company's "net profit attributable to shareholders of the parent company" in the consolidated financial statements from january to june by 1.298 billion yuan.
since 2022, jianfa group has made provisions for impairment of various assets of rmb 13.947 billion, reducing the company's "net profit attributable to shareholders of the parent company" by approximately rmb 6.175 billion. among them, the amount of impairment provision in 2023 was rmb 5.313 billion, and the amount in 2022 was rmb 6.225 billion; the reduction in the company's "net profit attributable to shareholders of the parent company" in 2023 and 2022 was rmb 2.427 billion and rmb 2.750 billion, respectively.
regarding the provision of 10 billion yuan in impairment provisions, an investor asked: "are all the company's existing real estate projects loss-making?" jiang guizhi said that in terms of making provisions for inventory impairment, the company has always been very strict in dealing with impairment. the company regularly conducts impairment tests on each project in accordance with accounting standards, and prudently makes provisions for inventory impairment for projects that show signs of impairment. therefore, not all projects are loss-making projects, and the provision of impairment for some projects did not result in a loss for the entire case. at present, the company has relatively few old historical inventories, and the pressure of impairment is also relatively small; in the future, the company will maintain a good inventory turnover and a reasonable inventory scale to cope with the pressure brought by market fluctuations.
if market demand is insufficient, the pace of replenishing inventory may slow down.
in terms of land reserves, in the first half of this year, jianfa group (jianfa real estate group co., ltd. and lianfa group co., ltd.) acquired 17 pieces of land, with a total land acquisition amount of approximately rmb 38.762 billion. the full-caliber value of the newly added land plots was approximately rmb 68.6 billion, of which the land acquisition amount in first- and second-tier cities accounted for 98%.
as of the end of june, the value of equity-based land reserves (unsold basis) of jianfa group in first- and second-tier cities accounted for approximately 76.85%, an increase of 3.27 percentage points from the end of last year; the value of the company's "new inventory" acquired after july 1, 2021 accounted for approximately 71%.
regarding c&d real estate's investment strategy, jiang guizhi said that c&d real estate has always had a small inventory, so it needs to replenish its inventory, and replenished a total of about 370 billion yuan in 2022 and 2023. c&d real estate's full-caliber sales amount in the first half of the year decreased by about 30% year-on-year, and the full-caliber land acquisition amount decreased by about 40% year-on-year, and the land acquisition intensity also decreased by about 17 percentage points year-on-year.
regarding whether to shrink the real estate business, which is of concern to investors, lin mao said that from january to august, the combined land acquisition intensity of subsidiaries jianfa real estate and lianfa group dropped to 37.12%. the company adheres to the land acquisition strategy of "determining expenditures based on revenue and determining investment based on sales", and will make appropriate replenishments based on market conditions and inventory size to keep risks within an acceptable range. in the second half of this year, the company will also consider market demand and replenish inventory based on sales. if market demand is insufficient, the pace of replenishing inventory may slow down.
the real estate market is in line with expectations, with no clear signs of a market recovery
in the first half of the year, jianfa group achieved contract sales of rmb 74.268 billion, of which first- and second-tier cities accounted for nearly 80% of the full-caliber sales amount, and there were nine cities with full-caliber sales exceeding rmb 2 billion.
regarding market expectations, lin mao said that the overall real estate market situation in the second half of this year is still unclear. although there were policies such as reducing down payments and interest rates in the first half of the year, the backlog in the second-hand housing market is still serious. july and august are traditionally off-seasons, and the market performance is not good. the real estate market is related to expectations. the market has not deteriorated further on the margin recently, but there is no obvious sign of market recovery.
lin mao said that the company's goal is to maintain its market share as much as possible, and the company has the resources and capabilities to form a larger business scale. however, the company's specific mid- to long-term sales scale also depends on the market's recovery progress and recovery status, and will be adjusted in real time according to market changes.
lin mao said that in the future the real estate industry is developing towards improvement-oriented demand, and the industry structure will gradually be dominated by improvement-oriented demand, which will be more continuous and stable.
the paper reporter pang jingtao
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