Securities code: Tianjin Realty Development (Group) Co.Ltd(600322) securities abbreviation: Tianjin Realty Development (Group) Co.Ltd(600322) Announcement No.: 2022016 Tianjin real estate development (Group) Co., Ltd
Reply to the 2021 performance forecast of Shanghai Stock Exchange
Announcement of regulatory work letter
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
(1) At the end of 2021, the company made further provision for price decline of relevant real estate projects, mainly due to the repeated covid-19 epidemic, the tightening of financing policies, and the increase of project sales pressure caused by the intensification of competition in the region where the company is located.
(2) In 2021, the company’s operating revenue carried forward increased year-on-year, and the company achieved an operating revenue of 4.665 billion yuan, a year-on-year increase of 69.47%. It is different from the description in the announcement of the company’s annual performance in 2021, which is mainly caused by the income carried forward by the Tianjin Bay project at the end of the year. There is no trend difference between the change of the company’s operating income and the overall situation of the real estate industry; The year-on-year increase of the company’s sales and financial expenses in the reporting period resulted in the decrease of the current profit. The sales expenses in the reporting period were 234 million yuan, a year-on-year increase of 114.83%, and the financial expenses were 178 million yuan, a year-on-year increase of 111.71%.
(3) The company has suffered large losses for two consecutive fiscal years. At the end of 2021, the net assets attributable to the shareholders of the listed company were 490 million yuan. Large losses and low net assets for two consecutive years will have a certain impact on the company’s daily production and operation. The board of directors of the company solemnly reminds investors to pay attention to investment risks.
Recently, Tianjin real estate development (Group) Co., Ltd. (hereinafter referred to as the “company” or ” Tianjin Realty Development (Group) Co.Ltd(600322) “) received the supervision letter on matters related to the performance forecast of Tianjin real estate development (Group) Co., Ltd. (szgh [2022] No. 0104) (hereinafter referred to as the “supervision letter”) issued by Shanghai Stock Exchange. The board of directors of the company attaches great importance to it and actively organizes relevant personnel to implement the contents of the letter item by item according to the requirements of the supervision letter. The relevant questions are replied as follows:
Question 1. The announcement shows that the company plans to withdraw inventory falling price reserves for Suzhou Meiyu Huating, Meiyu Lanting and other projects, and the amount to be withdrawn has an impact on the net profit attributable to the parent company of about – 1.6 billion yuan. In 2020, the company has withdrawn 2.75 billion yuan of falling price reserves for inventories including the above items. The company is requested to: (1) supplement and disclose the basis and specific calculation process for the impairment of each project in combination with the completion time of the project, early-stage investment, specific location, changes in the selling price of comparable buildings around and the de capitalization of sales, and analyze the specific time point of impairment of relevant projects on this basis, and whether there is any situation that the early-stage provision is not timely and insufficient; (2) Conduct a comprehensive self-examination of the company’s inventory, construction in progress, contract assets and other relevant conditions to verify whether there are signs of impairment. If so, please further prompt relevant risks.
Company reply:
(1) Combined with the completion time of the project, early-stage investment, specific location, changes in the selling price of comparable buildings around and the de commercialization of sales, supplement and disclose the basis and specific calculation process for the impairment of each project, and analyze the specific time point of impairment of relevant projects on this basis, and whether there is any situation that the early-stage provision is not timely and sufficient
The company’s depreciation provision method:
On the balance sheet date, the provision for inventory falling price shall be withdrawn according to a single inventory item.
After a comprehensive inventory of inventories is conducted on the balance sheet date, the inventory falling price reserves shall be withdrawn or adjusted according to the lower of the inventory cost and net realizable value.
For the development products for sale, in the normal production and operation process, the net realizable value is determined by the amount of the estimated selling price of the inventory minus the estimated selling expenses and relevant taxes; During the normal production and operation of the project under construction, the net realizable value of the project is determined by the estimated selling price of the developed products after completion minus the estimated cost to be incurred at the time of completion, the estimated selling expenses and relevant taxes.
Impairment test process of the company in 2021
At the end of 2021, the company conducted impairment test on the existing Meiyu Lanting, Meiyu Huating and shengwenjiayuan projects. The completion time, initial investment and specific location of each project are as follows:
Project name, business type, specific location, planned completion time (RMB 100 million) and impairment provision (RMB 100 million) accrued in the current period
Meiyu Lanting high-rise, dieshu and garage, Xiangcheng District, Suzhou, 40.91 4.65 in the second quarter of 2022
Meiyu Huating high-rise, xiaogaodiei, gaodiei and garage in Xiangcheng District, Suzhou 57.78 2.43 in the third quarter of 2023
Shengwenjiayuan high-rise, small high-rise, commercial and garage in Hebei District, Tianjin 33.43 5.22 at the end of 2024
17.69 high-rise garage in Tianjin Dongli District and Dongli District at the end of 2022
2017021
Small high-rise and garage in Shuanggang 118 plot, Jinnan District, Tianjin 6.69 0.89 in the second quarter of 2023
Meiyu Lanting project is located in Xiangcheng District, Suzhou City, with a land area of 7335360 m2, a total construction area of 21266580 m2, a saleable area of 15104195 m2 and a floor area ratio of 1.999. The business type is divided into high-rise buildings, stacked villas and garages. The estimated average sales price is 2503226 yuan (tax included), and the impairment amount accrued in 2021 is 465 million yuan.
Meiyu Huating project is located in Xiangcheng District, Suzhou City, with a land area of 8388130 m2, a total construction area of Client Service International Inc(300663) 88 m2, a saleable area of 20204169 m2 and a floor area ratio of 2.499. The business is divided into high-rise, small high stack, high stack and garage. The average sales price is expected to be 2575250 yuan (tax included), and the impairment amount accrued in 2021 is 243 million yuan.
Shengwenjiayuan project is located in Hebei District, Tianjin, with a land area of 2482380 m2, a total construction area of 65500 m2, a saleable area of 6412837 m2 and a floor area ratio of 2.6386. The business type is divided into high-rise, small high-rise, commercial and garage. As of December 31, 2021, the project has not been opened. The company estimates that the average sales price of shengwenjiayuan project is about 33500 yuan (including tax), and the impairment amount accrued in 2021 is 522 million yuan.
Jindongli (hang) 2017021 land project is located in Dongli District, Tianjin, close to Binhai New Area, with a land area of 2848620 m2, a total construction area of 79960 m2, a saleable area of 51655 m2 and a plot ratio of 2.5. The business type is divided into residential and commercial. As of December 31, 2021, the project has not been opened. The company estimates that the average sales price of jindongli (hang) 2017021 land project is about 22000 yuan (tax included), and the impairment amount accrued in 2021 is 269 million yuan.
Shuanggang plot 118 project is located in Shuanggang xinjiayuan, Jinnan District, with xinjiayuan road in the East, planned bus station in the south, planned Branch Road 12 in the West and Jingrong road in the north. The project covers an area of 972129 mu, with a construction area of 9.4374 square meters, a saleable area of 8302728 square meters and a floor area ratio of 1.27. The business type is divided into residential and garage. The average sales price is expected to be 1480000 yuan (including tax), and the amount of impairment provision in 2021 is 89 million yuan.
The company strictly abides by the relevant requirements of the accounting standards and conducts impairment test on the inventory with signs of impairment on each balance sheet date with reference to the record price of items on sale, the sales price of surrounding comparable items and the company’s sales strategy. The provision for inventory falling price in 2020 is mainly concentrated in Suzhou. In 2021, the covid-19 epidemic was repeated, the financing policy was tightened, the competition in the region where the company is located was intensified, and the project sales pressure increased. Therefore, the company further made provision for the falling price of relevant real estate projects at the end of 2021.
The impairment test method and process adopted by the company for inventories have been consistent over the years, in line with the relevant provisions of the accounting standards, and there is no case of careless and untimely provision for early inventory falling price reserves.
(2) Conduct a comprehensive self-examination of the company’s inventory, construction in progress, contract assets and other relevant conditions to verify whether there are signs of impairment. If so, please further prompt relevant risks.
The company conducted a comprehensive self inspection on inventory, construction in progress, contract assets and other relevant information. As of the reply date of this letter, in combination with the obtained project sales record price, sales contract, sales price of surrounding comparable buildings, project cost and relevant forecasts, the company has not found any other situation in which the variable net value of inventory is lower than the book cost, except for the items described in “(1)” of Meiyu Lanting, Meiyu Huating, etc. During the period after the balance sheet date, the company continued to pay attention to the changes in the sales price of inventory, investment real estate and other assets, and found that some investment real estate had signs of impairment. The company accrued asset impairment losses in accordance with the relevant requirements of the accounting standards for business enterprises. For details, see Tianjin Realty Development (Group) Co.Ltd(600322) the announcement on the provision for asset impairment in 2021.
Question 2. The announcement shows that one of the reasons for the company’s loss in advance during the reporting period is that the commencement, construction and sales of some projects are less than expected, resulting in a decline in revenue and profits. The company is requested to: (1) supplement and disclose the specific commencement, construction and sales of main projects, and analyze the specific reasons why the progress is less than expected; (2) In combination with the above problems and the situation of comparable companies in the same industry, explain in detail the reasons and rationality of the sharp decline in operating revenue, and analyze whether there is a trend and risk of further decline.
Company reply:
(1) Supplement and disclose the specific commencement, construction and sales of main projects, and analyze the specific reasons why the progress is less than expected;
The company’s main projects that meet the conditions for carrying forward income in 2021 include Shengting garden project in Tianjin, Meian Yingjun project, Tianjin Bay project and liufengya hospital in Suzhou. The details are as follows:
Available for sale area 20212021 regional project name business type project status (M2) planned sales area actual sales area (M2) (M2)
Tianjin Shengting Garden commercial housing and commercial housing have been completed and delivered, with 106700, 26800 and 20700
The business has not yet started
Tianjin Meian Yingjun commercial housing has been completed and delivered 53800, 8400 and 4900
The completion of commercial housing and commercial part in Tianjin Bay is 214400, 3900 and 55100
Suzhou liufengyayuan commercial house has been completed and delivered 2940015400 14300
The above projects were completed and occupied within the year. At present, efforts are being made to promote the sales and payment collection of the remaining houses. The company’s construction and sales were not as expected, mainly due to the following reasons:
The situation of the real estate industry is still grim
In 2021, under the positioning of “housing, housing and non speculation”, the financing and credit environment of real estate enterprises was tightened in the first half of the year. In the second half of the year, as the market continued to turn cold, the real estate credit policy was still strict, and the market and financial environment faced by the company was still not optimistic, which affected the company’s project sales and failed to reach the expected income level.
The sales price of the project decreased
Under the intensive real estate regulation and control policy, the sales price of each city fluctuates violently. From the perspective of project reserve structure, the company’s projects are all distributed in Tianjin and Suzhou. Due to the price regulation policies adopted by Suzhou and Tianjin, the speed and price of project sales have been affected to a certain extent, and the filing prices of regional projects generally fail to meet the expectations. In 2021, under the dual influence of policy and epidemic situation, the market situation continued to decline. In order to speed up the cash collection of the project, the company increased the promotion in 2021 and reduced the selling price of products on sale in Suzhou and Tianjin, which had an impact on the expected contract revenue.
Adjustment of construction plan of some projects
In 2021, the company actively promoted the construction of the project. Under a certain debt repayment pressure, the company ensured the steady construction of the project under construction by means of financing, capital turnover and reasonable arrangement of construction cycle. However, affected by the overall situation and epidemic situation of the real estate industry, as well as the change of project nature, planning adjustment and other special factors
