Image source: Seazen Holdings
In the face of changes in the market environment of the real estate industry, Seazen Holdings (601155.SH) continued to reduce leverage and the overall debt scale decreased.
On the afternoon of September 2, Liang Zhicheng, director and president of Seazen Holdings, said in response to investors’ questions: “The company’s open market debt is due 12.6 billion yuan in 2022, and 10.3 billion yuan has been repaid or repaid in advance from January to August.”
The 2022 interim financial report recently released by Seazen Holdings shows that as of the end of the first half of the year, interest-bearing liabilities were 82.2 billion yuan, a year-on-year decrease of 19.160 billion yuan, a drop of 7.667 billion yuan from the end of 2021; operating cash flow was 11.503 billion yuan, while the previous In the same period of the year, it was -7.572 billion yuan; the cash balance on hand was about 44.782 billion yuan.
This means that, in order to prevent risks, Seazen Holdings has made great efforts to reduce debt in the past year, and the “three red lines” indicators all meet the green level requirements. As of the end of the first half of the year, the asset-liability ratio of Xincheng Holdings after excluding the accounts received in advance was 67.06%, the net debt ratio was 48.37%, and the cash-to-short-term debt ratio was 1.06.
In terms of financing, Seazen Holdings has issued bonds both at home and abroad in the first half of the year. In May of this year, Seazen Holdings completed the issuance of a 1 billion yuan medium-term note, while its overseas subsidiary Seacity Global also successfully issued a green senior note of 100 million U.S. dollars.
Behind the optimization of the debt structure is the restraint of Seazen Holdings in investing in land.
When answering questions from investors, Guan Youdong, senior vice president and financial officer of Seazen Holdings, said that in the first half of 2022, the company will reduce the scale of land acquisition, and the prepaid land payment will be reduced to about 533 million.
According to the management of Seazen Holdings, as of the end of the first half of the year, the company has a total land reserve of 131 million square meters nationwide, which can meet the needs of development and operation in the next 2-3 years. Among them, first- and second-tier cities account for about 37.05% of the total land reserve, and third- and fourth-tier cities in the Yangtze River Delta region account for about 29.46% of the total land reserve.
Affected by the industry environment, in the first half of this year, Seazen Holdings achieved revenue of 42.803 billion yuan; net profit attributable to the parent was 3.009 billion yuan; gross profit margin increased by 2.29 percentage points to 21.90% compared with the same period last year.
Looking at the financial reports of real estate companies in the first half of this year, most real estate companies have turned from profit to loss, and gross profit margins have declined. In contrast, the overall revenue and profit of Seazen Holdings are better than the industry average.
The main business of Seazen Holdings is real estate development and business management, and the revenue in the first half of the year also mainly comes from these two major businesses.
In terms of development business, in the first half of the year, the contracted sales amount of Xincheng Holdings was 65.160 billion yuan; the contracted sales area was 6.572 million square meters; the full-caliber capital recovery rate was 117%, reaching 76.030 billion yuan.
In addition to the real estate development business, the contribution of business management of Seazen Holdings to the performance is gradually increasing. In the past six months, the total commercial operation income of Xincheng Holdings was 4.718 billion yuan, a year-on-year increase of 19.8%; the rental income of Wuyue Plaza was 4.396 billion yuan, a year-on-year increase of 16.57%.
Regarding the development goal of the commercial sector, Qu Dejun, director and co-president of Seazen Holdings, said that in the second half of the year, the operation of the plaza will continue to be promoted, and strive to achieve the annual total commercial operation revenue target of 10.5 billion yuan.
As of the end of the first half of the year, Seazen Holdings had deployed 189 mixed-use projects in 135 cities, and 131 Wuyue Plazas had been opened or under entrusted management , with an opening area of 11.8906 million square meters and an overall occupancy rate of 96.01%.
Under the new challenges faced by the industry, Seazen Holdings’ business direction tends to be stable. According to the management, in 2022, the company has put forward the management objectives with “three guarantees” as the core, namely “guaranteing delivery, first opening, and opening”, of which “guaranteeing delivery” is the top priority of the company’s operation and management.
According to the data in the semi-annual report, Seazen Holdings has organized the delivery of nearly 40,000 properties in the first half of the year, and plans to complete 148 sub-projects in the second half of the year, achieving a completed area of 17.628 million square meters, including 9.5116 million square meters for residential projects and 8.1164 million square meters for commercial complex projects. .
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