In the first half of this year, Shirong Zhaoye's operating income reached 660 million yuan, a year-on-year decrease of 42.03%; net profit attributable to shareholders of listed companies was 241 million yuan, a year-on-year decrease of 39.59%
"Investment Times" researcher Dong Lin
"Overall Plan for the Construction of Hengqin Guangdong-Macao Deep Cooperation Zone" marks a new blueprint for the construction of Hengqin Guangdong-Macao Deep Cooperation Zone, and also brings new opportunities to Zhuhai's urban development.
. Guangdong Shirong Zhaoye Co., Ltd. (hereinafter referred to as Shirong Zhaoye, 002016.SZ), as one of the "Three Musketeers of Zhuhai Real Estate", is known as Zhuhai Real Estate and Huafa Co., Ltd. (hereinafter referred to as Shirong Zhaoye, 002016.SZ), has recently attracted market attention due to a lawsuit announcement.
html At the end of September, Shirong Zhaoye issued the "Announcement on Litigation against Shareholders". The announcement showed that on August 16, 2021, the company filed a lawsuit against its second largest shareholder, actual controller, and former chairman Liang Jiarong, who violated his obligations of loyalty and diligence, and breached his trust and harmed the interests of the company. The subject of the lawsuit was 650 million yuan.In addition to the above litigation disputes, Shirong Zhaoye's performance in the first half of this year was also difficult to satisfy investors. Data shows that in the first half of this year, the company's operating income reached 660 million yuan, a year-on-year decrease of 42.03%; net profit attributable to shareholders of listed companies was 241 million yuan, a year-on-year decrease of 39.59%; net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 229 million yuan, a year-on-year decrease of 40.44%.
's poor performance is also reflected in the company's stock price. According to Wind data, since May 2018, Shirong Zhaoye's stock price has shown a downward trend overall. As of the closing on October 22, 2021, the company's stock price closed at 5.45 yuan per share, with a total market value of 4.41 billion yuan.
Researchers from the Investment Times noticed that the capital market’s view of Shirong Zhaoye is not unreasonable. Due to frequent replacement of senior management, the company's operating performance and net cash flow generated by operations have fluctuated significantly in recent years. In addition, Shirong Zhaoye, whose real estate business revenue accounts for more than 90% of the total revenue, added zero new land reserve projects in the first half of this year.
Regarding whether the above-mentioned litigation incident will have a negative impact on the company's operating performance and whether the current land reserves are sufficient to support the company's sustainable development, a researcher from the "Investment Times" emailed the outline to relevant departments of Shirong Zhaoye. As of press time, no reply from the company has been received.
Shirong Zhaoye's main accounting data for the first half of 2021 (yuan)
Data source: Company financial report
Five years of replacement of multiple presidents
data shows that Shirong Zhaoye's predecessor was Guangdong Weier Medical Technology Co., Ltd., which was listed on the Shenzhen Stock Exchange in 2004, and its main business is the production and sales of medical devices. In 2008, the company completed a major asset restructuring with Shirong Industrial and was renamed Shirong Zhaoye, and its main business also transformed from medical device business to real estate development and operation.
2016 was the year when the company's senior turmoil began. After experiencing personnel adjustments in which seven senior executives resigned, Liang Jiarong, the actual controller who has been behind the scenes, finally came to the forefront and served as the company's president. However, only one month after taking office, Liang Jiarong was placed under the designated residence surveillance by the public security organs for reasons. This incident had a great impact on Shirong Zhaoye and also provided prerequisites for frequent replacement of senior executives of the company.
From the timeline, in July 2016, Liang Jiarong was the company's president, and his son Liang Weihao took over as president in June 2018; in July 2019, Liang Weihao resigned, and Liang Xiaojin replaced the president; in December 2019, Shirong Zhaoye issued an announcement stating that Liang Jiarong applied to resign from the position of director and chairman for personal reasons, and also resigned from the position of chairman of the board of directors' strategic committee. After resigning, Liang Jiarong did not hold any position in the company and was succeeded by Zhou Zexin.
In March 2020, Liang Xiaojin resigned from his position as president, and Chen Yindong performed his duties as president; in just half a year, in September 2020, Chen Yindong announced his resignation. On September 30, the company's 7th board of directors reviewed and approved the appointment of Li Xupeng as the company's president.
This resolution was directly sued in court.Liang Shezeng (Liang Jiarong's father), who holds 53.57% of Shirong Zhaoye's shares, asked the court to revoke the company's board of directors' resolution and file a lawsuit with the Doumen District People's Court of Zhuhai City as Shirong's controlling shareholder.
Doumen Court held a trial of the next case on July 30, 2021. On August 23, Doumen Court delivered the "Civil Judgment" to the company, and ruled to reject the plaintiff Liang Shezeng's lawsuit request, and the plaintiff shall bear the case acceptance fee.
It is worth mentioning that all 74.09% of Shirong Zhaoye's shares held by Liang Shezeng, Liang Jiarong and Shigatse Shirong Investment Management Co., Ltd., as joint actors, have been frozen until April 26, 2022. In response to this, Shirong Zhaoye responded that the freezing of the controlling shareholder and the joint actors' shares will not affect the daily operating performance.
Performance fluctuations are obvious
As one of the earliest listed real estate companies, despite the support of Guangdong Province's excellent financing conditions and hot real estate market advantages, Shirong Zhaoye's development speed has been relatively slow. From 2008 to 2016, the company's non-net profit never exceeded 100 million yuan.
Shirong Zhaoye's "roller coaster" performance data in the past five years also shows the instability under the turmoil of the company's senior management. From 2016 to 2020, Shirong Zhaoye achieved revenues of 1.433 billion yuan, 3.105 billion yuan, 2.353 billion yuan, 2.753 billion yuan and 2.948 billion yuan respectively. During the ups and downs, the growth rate fell significantly, with year-on-year growth of 6.22%, 116.70%, -24.21%, 16.97%, and 7.07% respectively in each year.
According to the 2021 semi-annual report recently disclosed by the company, the company achieved operating income of 660 million yuan in the first half of the year, a year-on-year decrease of 42.03%; a net profit attributable to shareholders of listed companies of 241 million yuan, a year-on-year decrease of 39.59%; a net profit attributable to shareholders of listed companies of 229 million yuan, a year-on-year decrease of 40.44%.
It is reported that most of the land developed by Shirong Zhaoye was obtained by Liang Jiarong at a low price in 1995. This part of the low land cost was also the key to the company's early gains in Zhuhai. However, with the ten years since Shirong Zhaoye went public, the competitive landscape of the domestic real estate industry has also undergone tremendous changes. Just as many real estate companies accelerate their expansion and compete for more market share to gain more opportunities for the future, Shirong Zhaoye is still reaping his "old capital".
At the same time, the company's "big health" business of Hengqin, which is highly anticipated, quietly stopped in 2017; the equity of Weihai and Beijing projects has also been sold; Shirong Zhaoye's early low-cost land reserves are still the core competitiveness that the company relies on for its current survival.
Researchers from the Investment Times noticed that Shirong Zhaoye, which has been deeply involved in the real estate market in Doumen District, Zhuhai for more than ten years, is not satisfactory in terms of company transformation and layout, or based on the real estate business itself to accelerate project development and actively acquire land.
Compared with other real estate companies who let the land auction in Zhuhai, the company has not increased its land reserves for many years, nor has it issued any announcements to bid for land auctions.
The company's 2020 semi-annual report shows that as of the end of June 2020, Shirong Zhaoye's land reserves were all located in Doumen District, Zhuhai City, with a total cumulative land reserves covering a total area of 820,000 square meters and a total land reserves of 1.79 million square meters; as of the end of June this year, Shirong Zhaoye has 790,000 square meters of land reserves in Doumen District, with a total construction area of 1.73 million square meters, with almost no changes.
In addition, Shirong Zhaoye's sales area has also declined significantly compared with before. In 2019, the company achieved real estate sales (pre-sale) area of 270,600 square meters. As of the end of 2019, the company had a cumulative remaining saleable building area of 232,000 square meters; in 2020, the company achieved real estate sales (pre-sale) area of 89,000 square meters; in the first half of 2021, the company achieved real estate sales area of 46,700 square meters, and as of June 30, 2021, the area of its real estate available for sale was only 192,800 square meters.
In the past five years, Shirong Zhaoye's net operating cash flow has also experienced ups and downs. In 2016, the company's net operating cash flow increased significantly to 2.539 billion yuan; immediately afterwards, its operating cash flow was RMB 30.3824 million and -287,200 yuan, respectively, a sharp drop of 98.80% and 100.95% year-on-year; after the net operating cash flow reached RMB 2.453 billion in 2019, the company's data fell again 72.55% to RMB 673 million in 2020.As of June 30, 2021, the net cash flow generated by Shirong Zhaoye's operating activities was -270 million yuan.
Shirong Zhaoye as of the end of June 2021 new land reserves and cumulative land reserves
Data source: Company financial report
