2024
2024 ANNUAL REPORT SINO-OCEAN GROUP HOLDING LIMITED
SINO-OCEAN GROUP HOLDING LIMITED 2024 ANNUAL REPORT
CONTENTS
P. 003 About Sino-Ocean
P. 004 Corporate Information
P. 006 Financial & Operation Highlights
P. 008 Chairman's Statement
P. 011 Management Discussion & Analysis P. 038 Investor Relations
P. 039 Biographies of Directors and Senior Management P. 046 Report of the Directors
P. 066 Corporate Governance Report
P. 085 Independent Auditor's Report
P. 088 Consolidated Statement of Profit or Loss
P. 089 Consolidated Statement of Comprehensive Income P. 090 Consolidated Statement of Financial Position
P. 092 Consolidated Statement of Changes in Equity P. 094 Consolidated Statement of Cash Flows
P. 096 Notes to the Consolidated Financial Statements P. 217 Five-Year Financial Summary
P. 218 Glossary
ABOUT SINO-OCEAN
Sino-Ocean Group Holding Limited has been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 28 September 2007 (Stock Code: 03377.HK), with China Life Insurance Company Limited and Dajia Life Insurance Co., Ltd. as substantial Shareholders.
With a strategic vision of becoming the "Creator of Building Health and Social Value", Sino-Ocean Group is committed to becoming a pragmatic comprehensive corporation focusing on investment and development while exploring related diversified new businesses. The core businesses of the Group include development of residential property, investment property development and operation, property services and whole-industrial chain construction services, with its scope of businesses also covering senior living service, internet data center, logistics real estate and real estate fund, etc., forming a unique advantage in the field of asset-light agent construction. The Group adheres to "Serving Users with Craftsmanship" and puts the concept of "Building·Health" into active practice, striving to create a high-quality healthy life style for users through carefully-crafted products and premium services.
Sino-Ocean Group currently owns over 240 projects in different stages in rapidly growing Chinese cities and our business regions, such as Beijing, Shijiazhuang, Taiyuan and Qinhuangdao in the Beijing Region; Tianjin, Qingdao, Jinan and Dalian in the Bohai Rim Region; Shanghai, Hangzhou, Nanjing and Suzhou in the Eastern Region; Shenzhen, Guangzhou and Fuzhou in the Southern Region; Wuhan, Zhengzhou, Hefei and Changsha in the Central Region; Chengdu, Chongqing, Xi'an and Kunming in the Western Region. As at 31 December 2024, we had a land reserve of around 31 million sq.m.
002 | CONTENTS | ABOUT SINO-OCEAN | 003 |
2024 ANNUAL REPORT SINO-OCEAN GROUP HOLDING LIMITED
CORPORATE INFORMATION
The corporate information of Sino-Ocean Group as of the date of this report was as follows:
Directors
Executive Directors
Mr. LI Ming (Chairman and CEO)
Mr. WANG Honghui
Mr. CUI Hongjie
Ms. CHAI Juan
Nomination Committee
Mr. LI Ming (Chairman of committee) Ms. WANG Manling
Mr. HAN Xiaojing Mr. JIANG Qi
Mr. CHEN Guogang
Non-executive Directors
Mr. ZHANG Zhongdang
Mr. YU Zhiqiang
Ms. SUN Jianxin
Ms. WANG Manling
Independent Non-executive Directors
Mr. HAN Xiaojing
Mr. LYU Hongbin
Mr. LIU Jingwei
Mr. JIANG Qi
Mr. CHEN Guogang
Audit Committee
Mr. LIU Jingwei (Chairman of committee) Mr. YU Zhiqiang
Ms. SUN Jianxin
Mr. LYU Hongbin Mr. CHEN Guogang
Remuneration Committee
Mr. HAN Xiaojing (Chairman of committee)
Ms. CHAI Juan
Mr. LYU Hongbin
Mr. JIANG Qi
Strategic and Investment Committee
Mr. LI Ming (Chairman of committee)
Mr. WANG Honghui
Mr. CUI Hongjie
Mr. ZHANG Zhongdang
Ms. WANG Manling
Mr. LIU Jingwei
Mr. ZHAO Jianjun
Company Secretary
Mr. SUM Pui Ying
Authorized Representatives
Mr. LI Ming
Mr. SUM Pui Ying
004 CORPORATE INFORMATION
Registered Office
Suite 601, One Pacific Place
88 Queensway Hong Kong
Principal Place of Business
31-33 Floor, Tower A
Ocean International Center
56 Dongsihuanzhonglu Chaoyang District, Beijing
PRC
Principal Bankers
(in alphabetical order) Agricultural Bank of China, Ltd. Bank of China (Hong Kong) Limited Bank of China Limited
Bank of Communications Co., Ltd. Bank of Shanghai Co., Ltd.
China CITIC Bank Corporation Limited China Everbright Bank Co., Ltd. China Guangfa Bank Co., Ltd.
China Minsheng Bank Corp., Ltd. China Zheshang Bank Co., Ltd. CMB Wing Lung Bank Limited Hang Seng Bank Limited
Industrial and Commercial Bank of China, Ltd. Industrial Bank Co., Ltd.
Ping An Bank Co., Ltd.
Postal Savings Bank of China Co., Ltd. Shanghai Pudong Development Bank Co., Ltd. The Bank of East Asia, Limited
The Hongkong and Shanghai Banking Corporation Limited
United Overseas Bank Limited
SINO-OCEAN GROUP HOLDING LIMITED 2024 ANNUAL REPORT
Auditor
BDO Limited
Certified Public Accountants
Registered Public Interest Entity Auditor
Legal Advisor
Paul Hastings
Share Registrar
Computershare Hong Kong Investor Services Limited
Shops 1712-1716, 17th Floor, Hopewell Centre
183 Queen's Road East, Wanchai
Hong Kong
Listing Information
The Stock Exchange of Hong Kong Limited
Stock Code: 03377.HK
Company Website
www.sinooceangroup.com
Investor Relations Contact
ir@sinooceangroup.com
CORPORATE INFORMATION | 005 |
2024 ANNUAL REPORT SINO-OCEAN GROUP HOLDING LIMITED
FINANCIAL & OPERATION HIGHLIGHTS
Financial Highlights (RMB million) | 2024 | 2023 | Change |
Contracted Sales | 35,160 | 50,530 | -30% |
Revenue | 23,641 | 46,459 | -49% |
Gross (loss)/profit | -398 | 1,183 | -134% |
Loss for the year | -18,888 | -20,985 | -10% |
Loss attributable to owners of the Company | -18,624 | -21,097 | -12% |
Total assets | 181,405 | 206,172 | -12% |
Equity attributable to owners of the Company | -12,659 | 7,029 | -280% |
Cash resources1 | 4,828 | 5,022 | -4% |
Financial Information per share
2024
2023
Change
Loss per share (RMB) | |||
- Basic | -2.445 | -2.770 | -12% |
- Diluted | -2.445 | -2.770 | -12% |
Financial Ratios | 2024 | 2023 | Change |
Gross (loss)/profit margin (%) | -2% | 3% | -5 pts |
Net loss margin (%) | -80% | -45% | 35 pts |
Current ratio (times) | 0.90 | 0.95 | -5% |
Net gearing ratio (%)2 | 42,020% | 438% | 41,582 pts |
Notes:
1 Including the restricted bank deposits
2 Total borrowings minus cash resources divided by total equity
006 FINANCIAL & OPERATION HIGHLIGHTS
SINO-OCEAN GROUP HOLDING LIMITED 2024 ANNUAL REPORT
Revenue | Total Assets | ||||||||||
(RMB million) | (RMB million) | ||||||||||
2024 | 23,641 | 2024 | 181,405 | ||||||||
2023 | 46,459 | 2023 | 206,172 | ||||||||
2022 | 46,127 | 2022 | 242,966 (Restated) | ||||||||
2021 | 64,247 | 2021 | 281,252 | ||||||||
2020 | 56,511 | 2020 | 259,689 | ||||||||
0 | 16,000 | 32,000 | 48,000 | 64,000 | 80,000 | 0 | 70,000 | 140,000 | 210,000 | 280,000 | 350,000 |
Contracted Sales | Total Equity | ||||||||||
(RMB million) | (RMB million) | ||||||||||
2024 | 35,160 | 2024 | 217 | ||||||||
2023 | 50,530 | 2023 | 20,792 | ||||||||
2022 | 100,290 | 2022 | 44,780 (Restated) | ||||||||
2021 | 136,260 | 2021 | 76,447 | ||||||||
2020 | 131,040 | 2020 | 69,905 | ||||||||
0 | 36,000 | 72,000 | 108,000 | 144,000 | 180,000 | 0 | 20,000 | 40,000 | 60,000 | 80,000 | |
Saleable GFA Sold | Landbank | ||||||||||
('000 sq.m.) | ('000 sq.m.) | ||||||||||
2024 | 2,297 | 2024 | 31,072 | ||||||||
2023 | 4,289 | 2023 | 36,213 | ||||||||
2022 | 6,154 | 2022 | 42,981 | ||||||||
2021 | 7,674 | 2021 | 53,135 | ||||||||
2020 | 7,064 | 2020 | 38,043 | ||||||||
0 | 2,000 | 4,000 | 6,000 | 8,000 | 10,000 | 0 | 14,000 | 28,000 | 42,000 | 56,000 | 70,000 |
FINANCIAL & OPERATION HIGHLIGHTS | 007 |
2024 ANNUAL REPORT SINO-OCEAN GROUP HOLDING LIMITED
CHAIRMAN'S STATEMENT
On behalf of the Board, I have the pleasure in presenting the annual results of the Group for the twelve months ended 31 December 2024.
RESULTS OF 2024
Due to the continuous downturn in the overall real estate market in the PRC, for the twelve months ended 31 December 2024, the Group recorded RMB23,641 million in revenue, representing a YoY decrease of approximately 49%; gross loss was RMB398 million (2023: gross profit of RMB1,183 million) and the gross loss margin was 2% (2023: gross profit margin of 3%). Loss attributable to owners of the Company and loss per share (basic and diluted) were RMB18,624 million and RMB2.445, respectively.
MARKET REVIEW AND OUTLOOK
In 2024, the real estate market in China continued to be sluggish. At the end of the third quarter of the year, the Central Political Bureau Conference proposed to "actively halt the decline of the real estate market and bring it back to stability". The Central and local governments continued to roll out a series of policy measures to stabilize the market. These included down payment requirement for the first two residential units and mortgage interest rate were reduced to historic lows; all restrictions on purchase were largely lifted; acquisition of residences and land plots, adjustment on land usage and land return were encouraged. These policies produced positive results, and the market was stabilizing in stages in the fourth quarter. In 2024, GFA of newly-built commodity housing sold was 973.85 million sq.m., a drop of 12.9% YoY, of which GFA of residential housing sold decreased by 14.1%; revenue of newly-built commodity housing was RMB9,675 billion, 17.1% lower YoY, of which revenue of residential housing dropped by 17.6%.
The real estate industry in China has been through three and a half years of deep adjustments. As the balance between supply and demand improves and the continuous implementation of supportive policies, the market is expected to stabilize and halt its decline. However, net assets of property enterprises have suffered grave losses due to fallen prices, the journey of clearing various risks is long and business transformation is inevitable.
PERFORMANCE REVIEW AND STRATEGY
In 2024, despite the enormous pressure from the market conditions and our own operation, the Group still adhered to the principle of 'Serving users with craftsmanship' and persevered with focusing on sustainable operation, committing to high quality delivery, actively solving debt-related risks and exploring asset-light businesses.
Steadfast in high-quality delivery to maintain the Top 10 position
The Group has always regarded guaranteed delivery as the primary goal of operations and attaches significant importance to product delivery. In 2024, the Group overcame massive challenges and put in maximum efforts to complete high quality delivery of approximately 42,000 residential units in some 40 cities including Tianjin, Shanghai, Suzhou, Xiamen, Jinan, Zhengzhou and Guangzhou. At the same time, the Group exercised stringent management on delivery quality. Third party data¹ indicated that the Group ranked Top 10 among major property enterprises in terms of overall delivery quality. Our interior decoration and landscape gardening ranked Top 5 in the industry. The continued leading position in delivery quality won recognition from property owners and the market, confirmed the Group's fulfillment of social responsibilities and demonstrated our corporate commitment.
Note 1: According to statistics provided by Shenzhen Ruijie Technology Co., Ltd
008 CHAIRMAN'S STATEMENT
SINO-OCEAN GROUP HOLDING LIMITED 2024 ANNUAL REPORT
Pushed forward debt management in an orderly manner to resolve debt risks actively
In the past few years, asset prices of the real estate industry persistently fell and turnaround time continually lengthened, causing assets of property enterprises to shrink significantly, resulting in serious damage to their balance sheets. As the industry is still slowly bottoming out and recovery needs time, the continued resolution of risks has become an inevitable trend. Under these circumstances, the Group pushed forward resolutions of various debts through numerous measures and made substantial progress in onshore and offshore debt management.
Thanks to offshore creditors' extensive support and trust, the Group successfully completed all procedures for offshore debt restructuring. The offshore debt restructuring will become effective on 27 March 2025. This restructuring reduced the Group's leverage by approximately USD4 billion, significantly improved its asset-liability structure and greatly alleviating offshore liquidity pressures. During the restructuring, the corporate governance structure and equity structure remained stable, providing a strong assurance for our long-term and stable development. The success of offshore debt restructuring not only created favorable conditions for the stable operation of the Group's offshore entities but also a good foundation for the speedy recovery of our entire business.
At the same time, however, Sino-Ocean Holding still face huge pressure from debts. Sino-Ocean Holding is the primary onshore property development operating entity of Sino-Ocean Group, which is with the largest onshore assets and liabilities, as well as the issuer of onshore open market debts and the guarantor for the majority of onshore debts. In the first half of 2024, Sino- Ocean Holding completed the work for the extension of approximately RMB18 billion onshore corporate bonds, effectively easing the short-term funding pressure of debt repayment. From the first quarter of 2025, the extended onshore corporate bonds have to be repaid both in principal and interest in stages. However, the real estate market is currently bottoming out, Sino- Ocean Holding's operation recovery is not what was expected, refinancing capability is yet to be regained, cash flow is still under enormous pressure and falling short in repaying the principal and interest that are due soon. Therefore, repayment arrangements of the principal and interest of onshore corporate bonds have to be further adjusted. Sino-Ocean Holding will diligently make subsequent repayment arrangements, put in our best efforts to maintain the overall stability of the onshore capital market and gain time for subsequent effective resolution of onshore debt risks.
Operation progressed steadily, asset-light agent construction work gained major breakthrough
In 2024, the Group achieved the contracted sales of approximately RMB35.16 billion. Against the backdrop of the industry's prolonged sluggish situation, the Group's contracted sales ranked 28² in the 'China Property Enterprises Sales Ranking', and were in the forefront in Tianjin, Wenzhou and Xi'an. The Group also actively revitalized assets by completing the sale of INDIGO II in Beijing under extremely challenging market conditions. In addition, the Group's high quality investment properties in core first and second-tier cities still maintained stable operating performance, with occupancy rate at relative high level in core projects.
Faced with a changing industry, the Group on the one hand promoted existing businesses steadily, and planned and transformed to asset-light business such as agent construction business on the other. In 2024, the Group's comprehensive capabilities across all businesses and whole industry chain were widely recognized by clients from various segments, including residential, commercial, office, hotel, tourism, healthcare, logistics park and medical industrial park. Asset-light businesses such as agent construction by governments and financial institutions, full-process agent construction, sales agency management, post- investment management, and senior living projects management were blossoming. Third-party dataᵌ indicated that GFA of the Group's newly signed contracted agent construction in the year ranked TOP 20.
In-depth implementation of sustainable development , ESG performance continued to be in the lead
In 2024, the Group's continued outstanding performance in sustainable development was again recognized by the capital market rating agencies. As at 31 Dec 2024, the Group's ratings by the Global Real Estate Sustainability Benchmark ("GRESB"), S&P Global Corporate Sustainability Assessment ("CSA"), and Carbon Disclosure Project ("CDP") climate change rating were the highest among China's property enterprises. In March 2024, the CBD Plot Z6 project in Beijing successfully passed the 'Net Carbon Building Evaluation System' review. It was China's first super-high office block to be awarded the 'Net Zero Carbon Excellence Certification', filling the void in this area in the country.
Note 2: According to TOP 200 ranking of China Real Estate Developers by Total Sales 2024 (CRIC)
Note 3: According to 2024 China Real Estate Agent Construction Companies Newly Added Scale Ranking (China Index Academy)
CHAIRMAN'S STATEMENT | 009 |
2024 ANNUAL REPORT SINO-OCEAN GROUP HOLDING LIMITED
At the same time, the Group continued to implement the 'Building · Health' concept, revolve round users' needs, and intensify the application and implementation of the Sino-Ocean's Healthy Building Series 2.0 in development projects. As at the end of 2024, all the new self-developed complete projects in the year implemented the Sino-Ocean Healthy Building Series which has already been applied to 150 projects in 51 cities throughout the country, covering approximately 28 million sq.m.
2025 COMPANY STRATEGIES
2025 is a turning point for the Group's development journey. We will soldier on, persevere in high quality delivery, spare no efforts in sustainable operation, strive to expand new businesses, explore and practice sustainable development in this industry's new stage, to be 'reborn after a long struggle'.
Persevere in high-qualitydelivery. Adhere to the Group's long-standing concept of 'Serving users with craftsmanship', perfect smooth delivery of all products and services, fulfill commitments to customers, craft high quality products and enhance customer satisfaction.
Strive to succeed in sustainable operation. Steadily work on resolving Sino-Ocean Holding's debt risks to reduce the respective negative impacts and enable the Group's stable operation and sustainable development. Accelerate cash collection, increase efforts in asset disposal, exhaust all means to revitalize projects. Stabilize, expand and increase income, remain steadfast with 'one project one policy', 'one company one policy', maintain the robust operation of underlying assets, raise their quality and prices.
Maximize efforts in new business expansion. Release restrictions on mechanisms, invigorate the team, leverage on our principal business of property development, capitalize on the Group's advantage in multi-business and whole industry chain, actively expand new businesses such as asset-light agent construction, urban renewal and non-performing assets, raise the ratio of new businesses in stages, consolidate and enhance the Group's capabilities in sustainable operation and expansion.
APPRECIATION
On behalf of the Board, I would like to extend my deepest gratitude to all Shareholders, investors, local authorities, business partners and customers who have been most supportive; also to Directors, management and the entire staff for their dedicated hard work. Our sustainable and stable development could not be achieved without their unreserved support.
LI Ming
Chairman
Hong Kong, 26 March 2025
010 CHAIRMAN'S STATEMENT