Annual Report 2018 COMPANY PROFILE
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CONTENTS Corporate Information 2 Company Profile 3 Chairman’s Statement 4 Management Discussion and Analysis 6 Directors and Senior Management 26 Report of the Directors 33 Corporate Governance Report 45 Environmental, Social and Governance Report 56 Independent Auditor’s Report 76 Consolidated Statement of Profit or Loss 83 Consolidated Statement of Profit or Loss and Other 84 Comprehensive Income Consolidated Statement of Financial Position 85 Consolidated Statement of Changes in Equity 87 Consolidated Statement of Cash Flows 88 Notes to the Consolidated Financial Statements 90 Financial Summary 208 CORPORATE INFORMATION BOARD OF DIRECTORS PRINCIPAL BANKERS Non-executive Directors The Hongkong and Shanghai Banking Corporation Limited Shum Tin Ching (Chairman) Hang Seng Bank Limited Shen Xiaodong (appointed w.e.f. 17 February 2019) Wing Lung Bank Limited Nanyang Commercial Bank Executive Directors Chong Hing Bank Limited Zhang Yi (Vice Chairman and President) Shanghai Pudong Development Bank (appointed w.e.f. 17 February 2019) Industrial and Commercial Bank of China Limited Huang Fuqing (Vice Chairman) Cheuk Hiu Nam Banco Tai Fung Wang Jianfeng REGISTERED OFFICE Independent non-executive Directors Cricket Square, Hutchins Drive Tai Kwok Leung, Alexander PO Box 2681, Grand Cayman Cheung Wai Bun, Charles, JP KY1-1111, Cayman Islands Gu Yunchang HEADQUARTERS AUDIT COMMITTEE Room 1403, 9 Queen’s Road Central Tai Kwok Leung, Alexander (Chairman) Hong Kong Cheung Wai Bun, Charles, JP Gu Yunchang PRINCIPAL PLACE OF BUSINESS IN THE PRC REMUNERATION COMMITTEE No. 59, Gu Jia Ying Road Cheung Wai Bun, Charles, JP (Chairman) Xuanwu District Tai Kwok Leung, Alexander Nanjing Cheuk Hiu Nam China NOMINATION COMMITTEE PRINCIPAL SHARE REGISTRAR Shum Tin Ching (Chairman) Conyers Trust Company (Cayman) Limited Cheung Wai Bun, Charles, JP Cricket Square, Hutchins Drive Gu Yunchang PO Box 2681, Grand Cayman KY1-1111, Cayman Islands JOINT COMPANY SECRETARIES Cheuk Hiu Nam BRANCH SHARE REGISTRAR IN HONG KONG Wong Tak Yee, FCS, FCIS Tricor Investor Services Limited AUTHORISED REPRESENTATIVES Level 22, Hopewell Centre Cheuk Hiu Nam 183 Queen’s Road East Wong Tak Yee Hong Kong AUDITOR WEBSITE Deloitte Touche Tohmatsu www.jiayuanintl.com LEGAL ADVISERS STOCK CODE As to Hong Kong law: 2768 Mayer Brown As to PRC law: Jingtian & Gongcheng As to Cayman Islands law: Conyers Dill & Pearman 2 JIAYUAN INTERNATIONAL GROUP LIMITED Annual Report 2018 COMPANY PROFILE ABOUT JIAYUAN Jiayuan International Group Limited (the “Company” and together with its subsidiaries, collectively as the “Group”) (Stock Code: 2768) is an established property developer of large-scale residential complexes and commercial complexes in the People’s Republic of China (“PRC”). On 8 March 2016 (the “Listing Date”), the Company completed the initial public offering with its shares listed on the Main Board (the “Main Board”) of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) (the “Listing”). With over 20 years of experience in property development, the Group develops property projects through comprehensive planning, meticulous quality control, sophisticated operating systems and experienced professional teams to meet the needs of different regions and successfully consolidate the “Jiayuan” brand. As of 31 December 2018, the Group has a portfolio of 45 property projects in China, covering the cities: Nanjing, Yangzhou, Changzhou, Nantong, Taizhou, Zhenjiang, Suqian and Suzhou. Since 2016, the Group has taken the lead in entering Guangdong-Hong Kong-Macao Greater Bay Area, and has successively obtained a number of quality projects in Shenzhen, Jiangmen and Macau. In 2018, it established a joint venture company in Hong Kong to formally enter the Hong Kong real estate market; and purchased the quality properties of Shanghai from Mr. Shum Tin Ching, Chairman of the Group (“Mr. Shum”), thus enhancing its brand influence in the Yangtze River Delta Region. In addition, the Group also succeeded in expanding its business coverage to key provincial capital cities, including Guiyang and Urumqi. The Group also ventured into countries and regions along the “Belt and Road” initiative, such as acquiring fine land parcels in Cambodia. In addition, the Group is pending to acquire various projects located in major cities of Anhui province from Mr. Shum, signifying a new level in the Group’s international development. The Group’s residential and commercial complexes have been or will be developed into mixed-use community centres, which are designed to provide a high level of convenience and enjoyment to customers. In this regard, the Group strives to infuse the following key values into the developments: (i) Education value: The Group believes that education is of paramount importance to customers as parents. Therefore, the Group focuses on selecting locations with relatively mature school net. In addition, the Group has participated in the construction of five schools in our developed property projects, aiming at building an excellent school net; (ii) Leisure value: It is the Group’s general practice to space a large portion of its site area for the construction of classical landmarks, European or Japanese theme parks and plazas, aiming at enhancing the visual attraction of properties and bringing leisure enjoyment to our customers; and (iii) Commercial value: The residential properties under the Group also develop retail stores and shopping malls, providing a “one-station” shopping experience to our customers and taking care of the daily needs of residents and citizens nearby. Therefore, the Group believes that the quality property development projects under the Group are or will be well received in the locations in which the Group operates or plans to expand operation. Annual Report 2018 JIAYUAN INTERNATIONAL GROUP LIMITED 3 CHAIRMAN’S STATEMENT Dear Shareholders, by leveraging our precise judgement on the demands of regional markets where we operate, adjustment to our In 2018, under the regulatory keynote of “property is for product portfolio to cater sales trend, adherence to our living but not for speculation” of the central government, core value of “Quality is an unyielding principle” and the growth of the national property market maintained a reputation and premium arising from our focus on cities stable trend. Market expectation became more rational. where we operate for years. In addition, by adopting With respect to commodity housing, the growth rate of a strategy of expansionary development and prudent both sales area and sales amount weakened, whereas the investment continuously during the year, the Group focused absolute value of both sales area and sales amount still on deploying in cities with strong market potential and reached record high. robust investment returns within metropolitan circles such as Yangtze River Delta region and the Guangdong-Hong Amid the rapidly changing market environment, the Kong-Macao Greater Bay Area, being centered at first-tier Group was well prepared and demonstrated its proactive and second-tier cities. The Group acquired 13 premium responsiveness. Under the city-specific adjustment and projects with an additional total gross floor area (“GFA”) control measures, the Group achieved excellent operating of approximately 3.9 million sq.m. and ventured into new results with an increase in both contracted sales volume and regions, including Hong Kong, Shanghai, Guangdong, selling price: contracted sales and selling price amounted Guizhou, Xinjiang and Cambodia, through tender and to RMB20.18 billion and RMB11,292 per square meter bidding, acquisition and merger, joint development and so (“sq.m.”) for the year respectively, representing a substantial on, in order to drive its performance growth in the future. increase of 94.6% and 28.1% respectively year-on-year, 4 JIAYUAN INTERNATIONAL GROUP LIMITED Annual Report 2018 Chairman’sChairman Statement The Outline Development Plan for the Guangdong-Hong Looking forward to 2019, the Group will face common Kong-Macao Greater Bay Area was officially promulgated on problems of long-term mechanism of regulatory and 18 February 2019. With comprehensive plans for strategic control measures, complex financial market environment positioning, space layouts and development goals, the and contiguous industry competition. Under the strategic Guangdong-Hong Kong-Macao Greater Bay Area will be a goal of “expansion and strengthening”, the Group will first-class bay area at international level. The Group, having adapt to changing situations and control risks with prudent planned for the strategic layout of the Guangdong-Hong judgment while actively taking opportunities for project Kong-Macao Greater Bay Area since 2016, now has land merger and acquisition to increase its premium land reserves of approximately 1.4 million sq.m. in the Greater reserves in a diversified manner and fully enhance its core Bay Area. The Group will take the initiative to participate competitiveness in each segment of the property value in construction of the Greater Bay Area in line with the chain. The Group will continue to pursue the core value of national development strategy and embrace opportunities “Quality is an unyielding principle” with a view to create and missions bestowed by this era. shareholders’ value. Jiayuan International Group Limited Shum Tin Ching Chairman Annual Report 2018 JIAYUAN INTERNATIONAL GROUP LIMITED 5 MANAGEMENT DISCUSSION AND ANALYSIS 6 JIAYUAN INTERNATIONAL GROUP LIMITED Annual Report 2018 MANAGEMENT DISCUSSION