On March 23, Shui On Land (00272.HK) announced its 2022 annual performance report. The annual report shows that Shui On Land will record a net profit of RMB 1.475 billion in 2022, and the profit attributable to shareholders will be RMB 906 million. As of the end of the reporting period, the Group’s net asset-liability ratio remained at a stable level of 45%, and its cash and bank deposits reached RMB 13.368 billion.
The board of directors recommends the payment of a final dividend of HK$0.064 per share for 2022. Together with the interim dividend of HK$0.036 per share, the full year dividend for 2022 is HK$0.1 per share.
Mr. Luo Kangrui, chairman of Shui On Land, said at the performance briefing: “The market environment in 2022 is extremely difficult. The new crown epidemic has brought great challenges to the entire business environment in many cities in China. Nevertheless, I am very pleased that the Group’s 2022 performance has shown Looking forward, we will continue to maintain prudent financial management and achieve a balance between profit and growth. With the optimization and adjustment of epidemic prevention and control measures, China has begun to focus on promoting economic recovery. We believe that the prudent capital of the group Management and a strong balance sheet will position us well to capture growth opportunities arising from market corrections.”
Various businesses show good resilience in 2022
Despite the impact of residential construction and delivery delays in 2022, the first- and second-tier cities in which Shui On Land has invested have shown good resilience, achieving steady property sales in a challenging environment. The revenue in 2022 is RMB 15.565 billion. As of December 31, 2022, the Group (including joint ventures and associated companies) has locked in a total sales of RMB 40.9 billion, which will be delivered and confirmed in fiscal year 2023 and beyond.
In 2022, Shui On Land’s newly launched residential projects Shanghai Ruihong New City·Zhenting and Wuhan Tiandi Yunting Phase III were sold out on the first day of launch, especially Panlong Tiandi located in Qingpu, Shanghai, with a subscription ratio of more than 3.5 times. A record of over 3,000 subscriptions and close to full points. Panlong Tiandi and Taipingqiao Cuihu Five Collections contributed more than 10 billion yuan in sales.
In addition, relying on its core advantages and excellent track record in urban renewal, Shui On Land will cooperate with Shanghai Yangshupu Real Estate Co., Ltd. at the end of 2022 to successfully bid for the land development rights of a historic residential complex located in the Binjiang area of Yangpu, Shanghai. Shui On said that it is confident to use highly innovative solutions, give full play to its advantages and practical experience in urban renewal and cultural conservation, respect its historical and cultural value, and build it into a modern high-quality residential community.
The commercial asset portfolio has also demonstrated good resilience and anti-risk capabilities, generating recurring rental income for the Group. The new crown epidemic in 2022 will have a negative impact on the overall retail industry. As of December 31, 2022, the average occupancy rate of the Group’s retail property portfolio is 89%. Due to the market downturn, the renewal rent of retail shops has dropped slightly. However, with the optimization and adjustment of epidemic prevention and control measures, the sales and customer flow of retail properties in the first two months of 2023 have recovered to more than 90% of the same period in 2022; The performance of office properties was relatively stable. The average occupancy rate of the entire office property portfolio remained at 89%, among which the average occupancy rate of office properties in Shanghai reached 92%.
Luo Baoyu, executive director of Shui On Land, said: “Currently, the performance of first-tier and strong second-tier cities is still stable, and the demand is stable, especially in the high-end residential market in Shanghai, which continues to show relatively strong demand. High-quality shopping malls perform well and occupy a larger market. Share. For Grade A office buildings in core areas, especially in combination with sustainable office space and high-quality services, the demand has increased. In the future, the Group will adopt a prudent growth strategy, manage capital prudently, maintain strong liquidity and funds, and utilize strong With the brand advantage and high-quality market positioning as the goal, consider expanding new investment portfolios in Shanghai and first-tier cities.”
Healthy balance sheet and stable financial performance
Mr. Sun Xihao, Managing Director, Chief Financial Officer and Chief Investment Officer of Shui On Land, revealed at the performance meeting: “Despite the large fluctuations in the capital market and the real estate industry, the Group still maintains a healthy balance sheet and a solid financial position. We are actively fulfilling financial It has redeemed 6.40% of the senior permanent capital securities of US$600 million, and repaid or refinanced a total of RMB 6.797 billion in loans this year, demonstrating the Group’s effective financial planning and cash flow management capabilities.”
Based on the above reasons, Shui On Group’s net asset-liability ratio in 2022 will increase by 13%, but it will still remain at a stable level of 45%.
The management disclosed that at the beginning of 2022, the board of directors approved a share repurchase plan of up to HK$500 million to increase earnings per share and return on overall activities, and the group has repurchased a total of 35 million shares during the year. In addition, cash and bank deposits remained stable at RMB 13.368 billion, and the balance sheet will continue to be managed prudently.
Continue to uphold the values of sustainable development
In the first half of 2022, as a participant of the “Science-Based Targets Initiative” (“SBTi”), Shui On Land raised its commitment to reduce emissions to keep global temperature rise below 1.5ºC. Wuhan Tiandi Yifang South Pavilion and Enterprise Tiandi No. 1 have obtained carbon neutral certification, and are currently actively promoting the realization of carbon neutrality in Shanghai Xintiandi.
Shui On said that sustainable development has always been the value of the group, and the group has formulated a 5C sustainable development strategy, which is regularly reviewed. In the second half of 2022, in order to further strengthen the practice of sustainable development, the Group, in cooperation with tenants and suppliers, took the lead in signing the “Dark Green Lease” agreement with the US Green Building Council (USGBC), and signed the “Green Lease” agreement with 100 supply partners. Convention” to create a green ecosystem.
In 2022, Shui On Land has received multiple international recognitions for its sustainability efforts. Relevant awards include: Best Corporate Governance and ESG Awards 2022-ESG Awards 2022-Non-Hang Seng Index Constituent Stocks (Mid Cap) Jury Commendation; Bloomberg Businessweek 2022 ESG Leading Enterprise Awards; The Asset Magazine 2021 ESG Awards Platinum Award; “Asia Weekly” ESG Awards. In addition, the Shanghai Ruihong New City project won the 2022 Asia Pacific Excellence Award issued by the Urban Land Institute, which is the ninth ULI Excellence Award for the company; the company was also included in the 2022 Bloomberg Gender Equality Index (GEI), Among the 414 global companies selected, Shui On Land is one of only three Chinese companies. Notably, companies continue to be included in the Bloomberg Gender-Equality Index in 2023 with higher scores than the previous year.
(This article does not constitute any investment advice, and the content of information disclosure is subject to the company’s announcement. Investors operate accordingly and at their own risk.)