On May 5, Shanghai Construction Engineering (600170.SH) held a 2021 performance briefing.
At the performance meeting, some investors asked about a number of lawsuits involving Evergrande Group in the company’s engineering field. Xu Zheng, chairman of Shanghai Construction Engineering, said that the engineering field Accounts receivable disputes are common to a certain extent. Shanghai Construction Engineering has always paid attention to the financial status of cooperative enterprises, and continued to control the business scale of related enterprises.
Regarding the breach of contract by high-risk real estate companies, the company adheres to the principle of “responding to all claims”, adopts legal means to collect the disputed funds, claims the priority of compensation, and preserves the corresponding Assets ensure the safety of claims. In addition to litigation, the company is also studying and negotiating to improve the receivables recovery rate through debt-for-equity swaps, bulk asset repayment and other means without expanding the existing debt risk exposure.
Shanghai Construction Engineering’s 2021 annual report data shows that the company will achieve operating income of 281.055 billion yuan in 2021, a year-on-year increase of 21.5%; net profit of 3.769 billion yuan, a year-on-year increase of 12.47% ; Basic earnings per share was 0.36 yuan. The company’s operating cost was 254.56 billion yuan, a year-on-year increase of 21.8%, higher than the 21.5% growth rate of operating income, resulting in a 0.2% drop in gross profit margin. The period expense ratio was 7.2%, little changed from 2020. Operating cash flow rose sharply by 3181.2% to 10.37 billion yuan.
Shanghai Construction Engineering Chief Accountant Yin Keding said that during the reporting period, Shanghai Construction Engineering has signed a total of 442.506 billion new contracts, completing the annual target of new contracts.
When talking about the company’s participation in the construction of affordable rental housing, Xu Zheng said that Shanghai Construction Engineering actively responded to the government’s decision to accelerate the development of affordable rental housing, and The investment and development of affordable housing are included in the business field. In 2021, the company will undertake the construction of affordable rental housing with a construction area of nearly 2.43 million square meters and a cost of nearly 16 billion yuan. The scale of construction business will increase by 35% year-on-year.
In addition, Xu Zheng said that during the fight against the epidemic in Shanghai, the company participated in the construction and renovation of the New International Expo Center, the temporary isolation and centralized treatment point, the Expo makeshift hospital, There are more than 50 epidemic prevention and emergency projects such as Jinshan Fangcai Hospital, with a total construction/renovation area of over 2 million square meters and a total of more than 80,000 beds.
Regarding the progress of the company’s projects, Xu Zheng said that the company is now making every effort to resume work and production, and has arranged for 170 projects in Shanghai to resume work in the near future.. In the follow-up, the resources of all parties will be reasonably allocated, the production schedule will be planned, and the adverse effects of the epidemic will be reduced.
Li Sheng, secretary of the board of directors of Shanghai Construction Engineering, explained the reasons for the company’s loss in the first quarter at the performance meeting.
Shanghai Construction Engineering’s 2022 first quarter report shows that as of March 31, the company’s main income was 53.025 billion yuan, down 16.28% year-on-year; net profit attributable to the parent was -178 million Yuan, a year-on-year decrease of 227.18%; deducted non-net profit of 74.8398 million yuan, a year-on-year decrease of 81.33%. Liabilities totaled 277.5 billion yuan.
Li Sheng explained that the year-on-year decline in operating income and main profit in the first quarter of 2022 was due to the impact of the epidemic, and the business in the Shanghai market has been significantly impacted since mid-March. Some projects were passively shut down due to limited supply of raw materials and personnel flow. Similar to the impact of the epidemic in the first quarter of 2020. In addition, due to the decline in the fair value of the company’s/subsidiary’s financial assets in hand in the first quarter, the change was included in the current profit and loss, resulting in a non-recurring loss of 383 million yuan, resulting in a net loss of the company in the first quarter.
Regarding the resumption of work and production, Li Sheng said that the Shanghai Municipal Commission of Housing and Urban-Rural Development has recently released the first batch of whitelists for the resumption of work and production of major construction sites. The company has started to resume work and production. When logistics, transportation, personnel flow, and supply of raw materials return to normal, the company’s production and operations will return to normal.
As of the close at noon, Shanghai Construction Engineering reported 3.15 yuan per share, down 2.78%.