Contents
Corporate Information | 1 |
Information for Shareholders | 2 |
Chairman's Statement | 3 |
Group Business Structure | 7 |
Business Review, Discussion and Analysis | 8 |
Financial Review | 31 |
Report on Review of Condensed Consolidated Financial Statements | 38 |
Condensed Consolidated Statement of Profit or Loss | 39 |
Condensed Consolidated Statement of Profit or Loss | 40 |
and Other Comprehensive Income | |
Condensed Consolidated Statement of Financial Position | 41 |
Condensed Consolidated Statement of Changes in Equity | 43 |
Condensed Consolidated Statement of Cash Flows | 46 |
Notes to the Condensed Consolidated Financial Statements | 48 |
Other Information | 63 |
Glossary of Terms | 66 |
Corporate Information
DIRECTORS | QUALIFIED ACCOUNTANT | ||
Executive Directors | Mr. Lee Kim Fung, Edward | ||
Mr. Shen Xiao Chu (Chairman) | AUTHORISED REPRESENTATIVES | ||
Mr. Zhou Jun | |||
(Vice Chairman & Chief Executive Officer) | Mr. Zhou Jun | ||
Mr. Xu Bo (Deputy CEO) | Mr. Yee Foo Hei | ||
Mr. Xu Zhan | |||
Independent Non-Executive Directors | REGISTERED OFFICE | ||
26th Floor, Harcourt House, | |||
Prof. Woo Chia-Wei | 39 Gloucester Road, Wanchai, Hong Kong | ||
Mr. Leung Pak To, Francis | Telephone | : (852) 2529 5652 | |
Mr. Cheng Hoi Chuen, Vincent | Facsimile | : (852) 2529 5067 | |
Mr. Yuen Tin Fan, Francis | : enquiry@sihl.com.hk | ||
BOARD COMMITTEES | COMPANY STOCK CODE | ||
Executive Committee | Stock Exchange | : 363 | |
Mr. Shen Xiao Chu (Committee Chairman) | Bloomberg | : 363 HK | |
Mr. Zhou Jun | Reuters | : 0363.HK | |
Mr. Xu Bo | ADR | : SGHIY | |
Audit Committee | COMPANY WEBSITE | ||
Mr. Cheng Hoi Chuen, Vincent | www.sihl.com.hk | ||
(Committee Chairman) | AUDITOR | ||
Prof. Woo Chia-Wei | |||
Mr. Leung Pak To, Francis | Deloitte Touche Tohmatsu | ||
Mr. Yuen Tin Fan, Francis | |||
Remuneration Committee | SHARE REGISTRAR | ||
Tricor Secretaries Limited | |||
Prof. Woo Chia-Wei (Committee Chairman) | 54th Floor, Hopewell Centre, | ||
Mr. Leung Pak To, Francis | 183 Queen's Road East, | ||
Mr. Cheng Hoi Chuen, Vincent | Hong Kong | ||
Mr. Yuen Tin Fan, Francis | Telephone | : (852) 2980 1333 | |
Mr. Li Han Sheng | Facsimile | : (852) 2861 1465 | |
Mr. Tang Ming | |||
Nomination Committee | ADR DEPOSITORY BANK | ||
The Bank of New York Mellon | |||
Prof. Woo Chia-Wei (Committee Chairman) | BNY Mellon Shareowner Services | ||
Mr. Leung Pak To, Francis | P.O. Box 358516, | ||
Mr. Cheng Hoi Chuen, Vincent | Pittsburgh, PA 15252-8516, USA | ||
Mr. Yuen Tin Fan, Francis | Telephone | : (1) 201 680 6825 | |
Mr. Li Han Sheng | Toll free (USA) : | (1) 888 BNY ADRS | |
Mr. Tang Ming | Website | : | www.bnymellon.com/shareowner |
: | shrrelations@bnymellon.com |
COMPANY SECRETARY
Mr. Yee Foo Hei
1 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Information for Shareholders
DIVIDEND
The Board of Directors has resolved for the year of 2020 the payment to the Shareholders whose names appear on the register of members of the Company on the Record Date (or in case of the interim special dividend, the Qualifying Shareholders) of (i) an interim cash dividend of HK22 cents per Share; and (ii) an interim special dividend in the form of distribution in specie of the SIUD Shares held by the Group, in order to reciprocate to our Shareholders and to enable them to participate more directly in the future business growth of our subsidiary, SI Urban Development, and to help increase the liquidity of the SIUD Shares in the market.
In relation to the interim special dividend, the SIUD Shares will be distributed to the Qualifying Shareholders in proportion to their respective shareholdings in the Company on the Record Date on the following basis:
for every 5 Shares held . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SIUD Share
If any calculation of a Shareholder's entitlement to the SIUD Shares would result in a fraction of a SIUD Share, such entitlement will be rounded down to the nearest whole number of the SIUD Shares. No fraction of a SIUD Share will be distributed, but such fractional shares will be sold in the market as far as practicable and the net proceeds of such sale will be retained for the benefit of the Company.
As at the date of this report, the total number of issued Shares is 1,087,211,600. For the corresponding period of last year, the Company has effected a distribution in specie to Qualifying Shareholders on the basis of 1 SIUD Share for every Share held.
The record date for the interim cash dividend and interim special dividend is Tuesday, 29 September 2020. The above cash dividend and special dividend are expected to distribute to Shareholders on or around Thursday, 22 October 2020.
In addition, in relation to the interim special dividend, subject to overseas legal and regulatory restrictions, if any, it should be noted that it may not be possible or practicable to distribute the SIUD Shares to certain overseas Shareholders. For further details of the arrangements for such overseas Shareholders and distribution of interim dividend as aforesaid, please refer to the announcement made by the Company on 8 September 2020.
CLOSURE OF REGISTER OF MEMBERS
For the purpose of determining Shareholders' entitlement to the interim cash dividend and interim special dividend, the register of members of the Company will be closed from Monday, 28 September 2020 to Tuesday, 29 September 2020, both days inclusive, during which period no transfer of Shares will be effected. As such, all transfers accompanied by the relevant share certificates must be lodged with the Company's share registrar, Tricor Secretaries Limited of 54th Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong by 4:30 p.m. on Friday, 25 September 2020.
FINANCIAL CALENDAR
2020 interim results announced | 28 August 2020 | ||
Despatch of 2020 interim report | on or about 18 | September 2020 | |
Ex-dividend date for 2020 interim cash dividend | 24 | September 2020 | |
and interim special dividend | |||
Record date for 2020 interim cash dividend and | 29 | September 2020 | |
interim special dividend | |||
Despatch of notice of 2020 interim cash dividend | on or about 22 October 2020 | ||
and SIUD Shares |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 2 |
Chairman's Statement
I would like to report to our Shareholders the Group's interim results for the period ended 30 June 2020.
During the first half of the year, global economic activity has been seriously affected by prevention-and-control measures introduced by governments of different countries in response to the COVID-19 outbreak, resulting in highly volatile capital markets, including security and bond prices, exchange rates, interest rates and other financial instruments. Responding swiftly to the adversity, the Group's Board of Directors and management firmly supported the government's control measures and safeguarded the health and safety of its employees. The Group also effectively coordinated its resources to ensure a steady operation of its core businesses while minimizing the impact and losses arising from the outbreak of the virus. The solid asset base and business structure of the Group's member companies, coupled with quality management and risk-control systems, have effectively contained adversities brought about by the epidemic. Despite the significant decline in operating results for the period, the Group has been able to maintain overall profitability, which has been regarded as satisfactory in light of the difficult external environment.
For the six months ended 30 June 2020, the Group's total revenue amounted to HK$13,211 million, representing a year-on-year decrease of 20.7%. Net profit decreased year-on-year by 60.1% to HK$803 million. These declines were largely due to the economic impact of the epidemic.
The Board of Directors has resolved for the year of 2020 the payment of (i) an interim cash dividend of HK22 cents per Share; and (ii) together with an interim special dividend in the form of distribution in specie of the SIUD Shares held by the Group in proportion to their respective shareholdings in the Company on the following basis, to Shareholders whose names appear on the register of members of the Company on the Record Date, in order to reciprocate to our Shareholders and to enable them to participate more directly in the future business growth of our subsidiary, SI Urban Development, and to help increase the liquidity of the SIUD Shares in the market:
for every 5 Shares held. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 SIUD Share
If any calculation of a Shareholder's entitlement to the SIUD Shares would result in a fraction of a SIUD Share, such entitlement will be rounded down to the nearest whole number of the SIUD Shares. No fraction of a SIUD Share will be distributed, but such fractional shares will be sold in the market as far as practicable and the net proceeds of such sale will be retained for the benefit of the Company.
As at the date of this report, the total number of issued Shares is 1,087,211,600. For the corresponding period of last year, the Company has effected a distribution in specie to the Shareholders of the Company on the basis of 1 SIUD Share for every Share held.
The record date for the interim cash dividend and interim special dividend is Tuesday, 29 September 2020. The above cash dividend and special dividend are expected to distribute to Shareholders on or around Thursday, 22 October 2020.
The Group's infrastructure and environmental protection business recorded a profit of HK$408 million for the first half of the year, representing a year-on-year decrease of 59.8%. For the water services business, the revenue and profits attributable to shareholders of SIIC Environment for the first half of 2020 amounted to RMB2,640 million and RMB281 million, representing a decrease of 9.7% and 6.3%, respectively. For the same period, General Water of China recorded revenue of HK$1,100 million, representing an increase of 8.3% over the corresponding period last year, and a net profit of HK$167 million, representing a year-on-year growth of 46.2%. During the period, the toll roads business recorded significant declines in traffic flow and toll revenue due to the Government's toll policies and measures to prevent and control the epidemic. For the solid waste business, the Group capitalized on market opportunities to steadily expand its business, laying a solid foundation for future profit growth.
3 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Chairman's Statement
The real estate business recorded a profit of HK$256 million, representing a year-on-year decrease of 53.6%, as the epidemic adversely affected marketing activities and the progress of construction. Rental income was also lower due to rent concessions given to tenants of investment properties in order to cope with the policies as called upon by the Government.
SI Urban Development recorded revenue of HK$3,173 million for the first half of 2020, representing a decrease of 31.1% over the same period last year. Profits attributable to shareholders for the period amounted to HK$151 million, representing a year-on-year decrease of 51.4%. SI Development recorded revenue of RMB4,493 million for the period, representing a year-on-year increase of 3.3%. Profits attributable to shareholders for the period amounted to RMB429 million, representing a year-on-year increase of 4.1%.
The production and operation of the consumer products business was also negatively affected by the outbreak of the epidemic. Net profit amounted to HK$360 million, a year-on-year decrease of 35.7%. Despite this, the division remained a primary source of profit and cash flow for the Group.
Steady development of infrastructure and environmental protection business and orderly growth of solid waste business
During the first half of 2020, our three toll roads and Hangzhou Bay Bridge recorded a significant decline in traffic flow and toll revenue, mainly brought about by state policies to combat the epidemic that required the waiving of tolls for toll roads nationwide, economic structural adjustments in surrounding areas, waiver of toll millage at the entry sections of all expressways nationwide, toll discounts on electronic toll collection (ETC) lanes nationwide, and unstable settlement data due to the new toll networking systems installed across the country that were at the initial stage of operation. The toll waiver policy ended on 5 May 2020, and the Government has been considering respective compensations for the toll-free policies for affected toll roads with a view to safeguarding the legitimate rights of the toll road users, creditors, investors and operators. During the period, our road operating companies responded promptly to the Government's epidemic prevention-and-control measures and maintained their service quality and management efficiency to achieve steady overall business development while safe and smooth road passage was ensured.
SIIC Environment, dually listed in both Singapore and Hong Kong, continued to steadily expand its water asset, improve asset quality and overall profitability. The company's daily water treatment capacity almost reached 12,000,000 tonnes; together with General Water of China, the daily capacity for water treatment for the Group was brought up to over 19,000,000 tonnes. While it was under the threat of the epidemic, the company's subsidiary in Wuhan not only introduced proactive prevention-and-control measures to address problems arising from shortages of local staff and production materials, but also facilitated the supply of "lifesaving water" when the government built emergency hospitals.
In the area of solid waste, SIIC Environment formed a joint venture with Baowu Environment and Canvest Environmental for the establishment of a renewable energy center project in Baoshan, representing the first innocuous domestic waste treatment facility in Shanghai. The Group also gradually increased its shareholding in Canvest Environmental to share its growth and profitability. We will continue to seek investment opportunities for other quality solid waste projects to create new sources for future profit growth.
Shanghai Galaxy and its subsidiary, Galaxy Energy, together own a total of 13 photovoltaic power generation projects nationwide and have become leading Chinese photovoltaics companies with a total asset scale of 590MW. During the period, the total amount of on-grid electricity sold hit a new high of approximately 463 million kWh, representing an increase of 5.8% over the same period last year. Through cooperation with Shanghai Galaxy and Shangtou Asset, the Group also invested in Green Energy and made its debut in offshore wind power business in Shanghai. In addition, we joined hands with Shanghai Pharmaceuticals, a subsidiary of SIIC, to invest in CIRC, a company listed on the Hong Kong Stock Exchange, as cornerstone investor to explore development potential in the radioactive drugs sector.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 4 |
Chairman's Statement
Strengthening sales and innovation, consolidating and optimizing property management services for the real estate business
The real estate business was adversely affected by the epidemic during the first half of 2020, including delays in the launching of marketing activities and the progress of construction. A lower rental income was also recorded due to concessions and exemptions extended to tenants of the Group's investment properties following calls by the Government.
While ensuring strict implementation of epidemic prevention-and-control measures, SI Development strengthened its online project promotion and advertising activities to bolster contract sales and collection of receivables. In addition, efforts were made to strengthen the company's property management platforms and further consolidate service standards.
SI Urban Development made considerable efforts to make up losses brought about by the epidemic and achieved significant progress in the acceleration of project construction. In addition, further efforts were made to accomplish better results in the area of standardization, branding, adoption of technology and capitalization in order to boost the company's core competitiveness and to add greater value to its services.
Seizing sales orders and planning for innovation to achieve new breakthroughs for the consumer products business
Since the beginning of the year, customs and ports were unprecedently shut down in a number of cities worldwide, resulting in disruptions in customs clearance of goods and significant declines in orders. The duty-free markets literally came to a halt and sales were very slow overall. Notwithstanding this difficult situation, Nanyang Tobacco continued to maintain its strategic goals of "Strengthening business growth; pursuing excellence; and ensuring healthy internal operations and external development" while adopting proactive epidemic prevention-and-control measures, and was able to ensure normal production and operation in an orderly manner. With the rapid recovery of the duty-paid market in Hong Kong and the gradual resumption of work and production on the mainland, sales volumes and turnover have rebounded.
Thanks to the unremitting efforts of the company's management team, Wing Fat Printing has safely implemented prevention-and-control measures against the epidemic, resulting in the resumption of work and production for the company in a timely manner. By resuming operation, the company has been able to win invaluable contracts from foreign companies amidst a "capacity shortage period" during the first half of the year while the epidemic was still prevalent. Additionally, the implementation of "intelligent manufacturing" enhancement earlier this year has greatly supported the company's steady performance at a critical time during this extraordinary period.
PROSPECTS
In the second half of 2020, the Group's business and production have largely resumed operations following the success of prevention-and-control measures implemented by the Government on the mainland. However, uncertainties about the epidemic still remained in Hong Kong and other countries around the world. The impact created by control measures taken by different governments worldwide on normal economic and production activities, together with geopolitical factors, international trade disputes, volatility in interest rates and currency exchanges, are set to present severe challenges to the development of the Group's businesses. Against this scenario, the Group has pledged to take proactive steps to enhance its operating and management efficiency, strengthen risk management and controls, and continue to reform and innovate while still carrying out epidemic prevention-and-control measures. Resources will be carefully planned and deployed to make up for the shortfalls in operating results for the first half of the year. In addition, the Group will continue to optimize its assets when opportunities arise in order to maximize shareholder value.
5 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Chairman's Statement
For the infrastructure and environmental protection segments, the water business and solid waste business will continue to expand the scale of their investments in an orderly manner, including the investment in the Baoshan project through SIIC Environment, as a new source of profit growth for the Group. Technological innovation will also be further strengthened and the management models of different enterprises will continue to be improved. The management team will be further streamlined to expedite business development. While maintaining operational efficiency, the toll roads business will continue to record steady growth. Through investments in new business arenas, the Group's investments in the environmental protection and green energy segment will generate new contribution to the Group.
With the resumption of business and production in different provinces of the mainland, the development of the Company's real estate business will accelerate in all aspects of its operational activities with a view to meeting and exceeding development and sales goals.
Thanks to the rapid recovery of the duty-paid market in Hong Kong and gradual resumption of business and production on the mainland, Nanyang Tobacco has begun to see a rebound both in sales volume and turnover. The prospects for the airport duty-free market, ship tobacco market and overseas markets are rather weak in the short term, but the company will proactively optimize allocation of resources, adjust its promotion plans in response to different markets and will actively deploy appropriate marketing strategies. Simultaneously, Nanyang Tobacco will continue to make progress in technological innovation, vividly adjust its marketing programs, streamline production processes, provide incentives to staff and actively plan for breakthroughs in development. The company will also seek cooperation with large PRC cigarette enterprises which aim to expand their overseas production and sales to broaden the scope of its markets and global presence. Against the difficult environment of the first half of the year, Wing Fat Printing made continuous efforts to consolidate the market competitiveness of its printing and packaging business and the moulded-fibre business, and made strategic plans for the smart-medicine packaging business. Such moves are expected to provide new performance support in the new normal of the post-epidemic environment, aimed at creating new sources of profit growth in the future. In the second half of the year, Wing Fat Printing will continue to strive for the achievement of the company's business goals for the year.
Finally, on behalf of the Board of Directors, I wish to thank our shareholders and business partners for their continued patronage and support to the Group, and extend my sincere gratitude to our management team and staff members for their dedication and contributions in the development of our business.
Shen Xiao Chu
Chairman
Hong Kong, 28 August 2020
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 6 |
Group Business Structure
As at 28 August 2020
INFRASTRUCTUREREAL
FACILITIESESTATE
TOLL | 48.60% | |
WATER | Shanghai Industrial | |
ROADS/ | ||
SERVICES | Development Co., Ltd. | |
BRIDGE | ||
(600748 SSE) | ||
47.41%
Shanghai Industrial
Urban Development | ||
100% | 48.74% | Group Limited |
(563 HKSE) | ||
Shanghai Hu-Ning | SIIC Environment | |
Expressway (Shanghai | Holdings Ltd. | |
Section) Co., Ltd. | (BHK SGX; 807 HKSE) | |
100% | 45% | |
Shanghai Luqiao | General Water of | |
Development Co., Ltd. | China Co., Ltd. | |
100% | 19.48% | |
Shanghai Shen-Yu | Canvest Environmental | |
Development Co., Ltd. | Protection Group |
CONSUMER
PRODUCTS
TOBACCO PRINTING
100% | 94.29% |
Nanyang Brothers | The Wing Fat |
Tobacco Company, | Printing Company, |
Limited | Limited |
23.0584%
Company Limited (1381 HKSE)
Ningbo Hangzhou Bay
Bridge Development
Co., Ltd.
7 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
For the six months ended 30 June 2020, the Group's unaudited revenue and profits attributable to shareholders amounted to HK$13,211 million and HK$803 million, representing a respective decrease of 20.7% and 60.1% over the same period last year. The declines were mainly due to the unfavorable business environment brought about by the novel coronavirus (COVID-19) epidemic, and the implementation of respective quarantine and community restrictive measures on the mainland, Hong Kong and overseas, resulting in a significant drop in the Group's profit, especially for the expressway, real estates and consumer products businesses. During the period, the Group implemented effective prevention and-control measures to curtail the epidemic and strictly monitored cost and expenditure resulting in overall stable operations and production for all its businesses. In addition, the Group continued to promote business transformation, innovation and upgrading, expand the scale of its assets and optimize its capital structure.
Profit contribution from the Group's core business
35.2%
Consumer Products
39.8%
Infrastructure
Facilities
25.0%
Real Estate
INFRASTRUCTURE FACILITIES
During the period, the infrastructure facilities business recorded a profit of HK$408 million, representing a decrease of 59.8% over the corresponding period last year and accounting for 39.8% of the Group's Net Business Profit. To combat the epidemic, the Group has made considerable efforts to ensure water safety and meet sewage treatment standards. In addition, it continued to upgrade and integrate existing water treatment projects, and capitalize on opportunities to further expand the scale of its solid waste business. The toll roads and bridge business will carry out plans for the implementation of prevention and control measures of the epidemic which has become a new normal, and continue to improve transportation facilities and system upgrading in order to further improve road efficiency, reduce costs and striving to safeguard corporate interests.
Toll Roads
During the period, significant declines were recorded in overall traffic flow and toll revenue of our three toll roads and Hangzhou Bay Bridge due to the following factors: (1) Epidemic prevention and control measures have restrained large-scale travel demand across the country; (2) Toll-free policy for small passenger vehicles was extended from 7 days to 16 days during the Spring Festival, and the subsequent waiving of toll tariffs nationwide commencing from 17 February 2020 till 5 May 2020, resulting in a significant decrease in the number of toll collection days; (3) Toll milleage for the entry section of all expressways nationwide would not be counted; (4) A 5% toll discount on electronic toll collection (ETC) lanes nationwide and an increased proportion of ETC transactions; (5) Unstable settlement data due to the installation of the new toll networking system nationwide following the removal of expressway toll stations on provincial borders across the country; and toll adjustments made to new vehicle classification since this year; and (6) It is expected to take a while before the traffic flow could return to normal following the gradual recovery of the PRC economy.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 8 |
Business Review, Discussion and Analysis
Our toll road project companies responded swiftly to prevention and control arrangements from respective provinces and cities as well as from the Group to curtail the epidemic. In support of the traffic police and health departments, epidemic prevention inspections were carried out on passing vehicles while transportation facilities were continued to be improved. Additionally, catering services were suspended in service areas to minimize the gathering of people. To safeguard the health conditions of the employees, anti-epidemic materials were distributed to them in a timely manner. Disinfection for public areas such as toll stations and offices were strengthened while the expressways were kept in clean, safe and smooth operation.
According to information released by Government departments, respective state departments are contemplating appropriate compensation schemes to alleviate the impact on tolls and profits brought about by the waiving of tolls due to the epidemic. The scheme is intended to safeguard the legitimate rights of toll road users, creditors, investors and operators. During the period, the Hangzhou Bay Bridge and the "two districts and one island" were in safe and orderly operation with the implementation of sound epidemic prevention-and-control measures. While full-scale operation has resumed in these areas, the project company will continue to conduct whole bridge maintenance inspections, facility and equipment repairs and toll system updates.
The key operating figures of the respective tolls roads/bridge are as follows:
Interest | Net profit | Traffic flow | |||||
attributable | attributable | (vehicle | |||||
Toll roads/bridge | to the Group | to the Group | Change | Toll revenue | Change | journey) | Change |
Jing-Hu Expressway | |||||||
(Shanghai Section) | 100% | HK$27.78 million | -87.9% | HK$119 million | -65.8% | 14.93 million | -48.3% |
Hu-Kun Expressway | |||||||
(Shanghai Section) | 100% | HK$11.78 million | -95.9% | HK$190 million | -65.3% | 28.64 million | -0.6% |
Hu-Yu Expressway | |||||||
(Shanghai Section) | 100% | HK$1.89 million | -98.5% | HK$123 million | -60.1% | 15.18 million | -28.0% |
Hangzhou Bay Bridge | 23.0584% | HK$13.71 million | -79.4% | HK$462 million | -49.4% | 8.27 million | +17.9% |
Total | HK$55.16 million | -92.2% | HK$894 million | -57.8% | 67.02 million | -21.9% | |
Since the beginning of the year, expressway toll stations on provincial borders across the country have been cancelled. In response to this, the optimization and upgrading of the new toll settlement system project and the "toll display" function of ETC toll was completed during the period, allowing fast toll collection across provinces where vehicles are not required to stop and pay tolls. Additionally, all project companies have managed to ensure smooth traffic and optimize the settlement system. Training programs and competitions were organized to improve the performance of toll collectors and to familiarize them with the operation of the new system. In the current year, our toll roads are required to undergo national inspections for the assessment of the maintenance and management performance of the expressways nationwide, which takes place every five years. To accomplish this exercise, the project companies will strictly implement a number of tasks by setting high standards and will complete environmental improvement on road surface and road area. Plans will also be made to safeguard the smooth running of the third China International Impact Expo (CIIE), further enhancing the image of our collection services on the basis of former achievements and experience, and to complete a variety of tasks with regulated and high-quality services.
In April 2020, the Company announced that its wholly-owned subsidiary, Hu-Ning Expressway, has transferred the entire 23.9719% equity interests held by it in Wufangzhai to Shanghai Galaxy, of which 45% equity interest is held by it, for a consideration of RMB419,508,055. Upon completion of the transaction, Hu-Ning Expressway no longer directly holds any equity interests in Wufangzhai, but will be indirectly held those interest through Shanghai Galaxy. In view of the current market conditions, the transaction is expected to allow Hu-Ning Expressway to gain more liquid funds and to achieve a reasonable return on its investment, thereby allowing it to concentrate its resources to its core business of toll roads, and replenish its working capital for the implementation of strategic transformation plans.
9 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Water Services
The Group will continue to streamline management in the area of water services and solid waste power generation while further upgrading its standards and expanding its capital scale in an orderly manner in order to improve its overall profitability. The results for the period also benefited from profits attributable to the gradual increase in the equity interests of Canvest Environmental in recent years.
SIIC Environment
During the period, SIIC Environment recorded a revenue of RMB2,640 million, representing a year-on-year decrease of 9.7%. The decline was mainly attributable to a reduction in construction revenue due to delays or postponement caused by the epidemic for the construction of new BOT (Build-Operate-Transfer) projects in the first half of the year. The reduction in construction revenue was partly offset by an increase in operating income due to a rising volume of sewage treatment and higher average treatment tariff. During the period, the company recorded a profit after taxation of RMB281 million, representing a year-on-year decrease of 6.3%.
SIIC Environment signed a cooperation strategic framework with its partners at the beginning of the year following the formation of a joint venture with Baowu Environment and Canvest Environmental in the preceding year for the bidding of a renewable energy center project in Baoshan, Shanghai. Under the agreement, the three parties will leverage on their respective environmental protection technology expertise for the construction of the renewable energy center project. The energy center under construction is expected to represent a local and international benchmark for waste incineration. In addition, plans are being made for the building of a number of ecological industrial parks in such cities as Nanjing, Wuhan, Maanshan, Chongqing, and to be followed by the expansion of related businesses along the Yangtze River Economic Belt and the Belt and Road.
With regard to new projects, SIIC Environment was awarded a contract during the second quarter of the year for the construction of the Wuxi Huishan economic development zone sewage treatment project. With a total planned daily capacity of 100,000 tonnes, the new treatment plant will represent one of the core projects of the company and is expected to bolster its strategic deployment along the Yangtze River Delta region. The company was offered four additional expansion and upgrading projects with a total planned daily capacity of 250,000 tonnes. A wastewater treatment project with a total planned daily capacity of 30,000 tonnes has commenced commercial operation. In terms of treatment tariff, the company's average daily sewage water treatment fees were increased to RMB1.10 per tonne from RMB1.01 per tonne, up 9% year on year.
Going forward, SIIC Environment will continue to expand and strengthen its two core areas of business, including municipal water utilities and comprehensive water environment management, while striving for more sewage water treatment upgrade projects. In line with the Government's environmental protection policy, the company will capitalize on market opportunities in the solid waste incineration business. In addition, water utilities and solid waste incineration businesses will continue to be expanded to undertake additional high-standard modern environmental protection projects and the company will look for opportunities in other environmental protection-related markets. Leveraging its own competitive advantageous, SIIC Environment is actively seeking development opportunities in the Yangtze River Delta and the Guangdong-HongKong-Macao Greater Bay Area. Meanwhile, the company will optimize its development strategies and broaden its scope of business while striving to improve its economy of scale and generate higher returns for the long term and rapid development of the company.
General Water of China
In the first half of 2020, General Water of China made significant progress on a number of projects which are intended for the protection of the Yangtze River, improvement of quality and efficiency and technological innovation. During the period, the company implemented effective measures to prevent and control the epidemic and achieved good results. Accordingly, all operating units maintained stable production while a number of water treatment projects have been put into trial operation. During the period, the company recorded a revenue of HK$1,100 million, representing a year-on-year increase of 8.3%. Net profit amounted to HK$167 million, representing an increase of 46.2% over the same period of last year. General Water of China was awarded one of the Top 10 Most Influential Enterprises in China's Water Industry for the 17th consecutive year, and was once again being ranked one of the top three companies in this area.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 10 |
Business Review, Discussion and Analysis
In April, General Water of China signed a contract with Bengbu Housing and Urban-Rural Development Bureau for the construction of the Bengbu reclaimed water reclaimed project. The project is expected to greatly improve the water ecological environment of the Huai River, a tributary of the Yangtze River, representing an important step in fulfilling its responsibility as the main platform for environment protection and controlling pollution of the Yangtze River. The total investment of the project was RMB278 million, with a planned daily capacity of 160,000 tonnes (the current daily capacity was 90,000 tonnes). In the same month, as an important part of the water environment system upgrading project of the Ming River in Guiyang, General Water of China's Guiyi reclaimed water plant was put into trial operation. By adopting a PPP (public-private partnership) model with a total planned daily capacity of 50,000 tonnes and covering a service area of 22,060 square meters, the project has become the first ultra-deep pit buried reclaimed water plant in the PRC.
In May, the company's Changfen water plant was completed on schedule and put into trial operation, overcoming construction difficulties faced during the epidemic prevention and control period. The new water treatment plant is expected to solve the drinking water safety problem of the rural population for three nearby towns, benefiting a population of 180,000. The current daily capacity and long-term daily capacity of the project are 20,000 tonnes and 40,000 tonnes respectively. In the same month, part of the Xiangtan No. 3 water plant project involving upgrading, alteration and expansion was also officially put into run. Together with the new facilities, the daily treatment capacity will reach 300,000 tonnes, which will greatly alleviate the insufficient water supply pressure during the hot weather season to supply water in the Hedong district.
Details of the water development projects under the Group as at 30 June 2020 are as follows:
Interest | ||||||
Daily | attributable | |||||
capacity | to SIIC | |||||
Province | Projects of SIIC Environment | Project type | (tonnes) | Environment | Project progress | |
Sewage treatment/reclaimed water treatment projects | ||||||
1 | Auhui | Sewage treatment project in Hefei | Sewage treatment | 30,000 | 60% | The project is in operation. |
Chemical Industrial Park | ||||||
2 | Auhui | Sewage treatment plant O&M project | Sewage treatment | 30,000 | 60% | The project is in operation. |
in Hefei Feidong County Circulation | ||||||
Park Constructed Wetland | ||||||
3 | Auhui | Phase I of sewage treatment plant | Sewage treatment | 25,000 | 46.4% | The project is in operation. |
project in southern Lingbi | ||||||
4 | Auhui | Phase II of sewage treatment plant | Sewage treatment | 25,000 | 46.4% | The project is in operation. |
project in southern Lingbi | ||||||
5 | Auhui | Phase I of reclaimed water project of | Reclaimed water | 25,000 | 46.4% | The project is yet to commence construction. |
sewage treatment plant in southern | treatment | |||||
Lingbi | ||||||
6 | Auhui | Sewage treatment plant project in | Sewage treatment | 20,000 | 46.4% | The project is in operation. |
northern Lingbi | ||||||
7 | Fujian | Phase I of sewage treatment plant BOT | Sewage treatment | 12,500 | 100% | The project is in operation. |
project in Longmen Town, Anxi | ||||||
8 | Fujian | Phase II of sewage treatment plant | Sewage treatment | 12,500 | 100% | The project is yet to commence construction. |
BOT project in Longmen Town, Anxi | ||||||
9 | Fujian | Sewage treatment plant BOT forward | Sewage treatment | 25,000 | 100% | The project is yet to commence construction. |
project in Longmen Town, Anxi | ||||||
10 | Guangdong | Sewage treatment plant project in | Sewage treatment | 100,000 | 75.5% | • The project is in operation. |
southern Songshan Lake, Dalang, | • Upgrading project is under construction by | |||||
Dongguan | government. | |||||
11 | Guangdong | Phase I of sewage treatment plant | Sewage treatment | 60,000 | 75.5% | • The project is in operation. |
project in Shayao, Shijie, Dongguan | • Upgrading project is under construction by | |||||
government. | ||||||
12 | Guangdong | Phase II of sewage treatment plant in | Sewage treatment | 50,000 | 75.5% | • The project is in operation. |
Yantian, Fenggang, Dongguan | • Upgrading project is under construction by | |||||
government. | ||||||
13 | Guangdong | Phases I and II of BOT project in | Sewage treatment | 150,000 | 35.5% | The project is in operation. |
Sanzhou, Changan, Dongguan | ||||||
14 | Guangdong | Phase I of water purification centre | Sewage treatment | 100,000 | 100% | The project is in operation. |
project in Meihu, Huizhou |
11 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
Projects of SIIC Environment | capacity | to SIIC | ||||
Province | (continued) | Project type | (tonnes) | Environment | Project progress | |
15 | Guangdong | Phase II of water purification centre | Sewage treatment | 100,000 | 100% | The project is in operation. |
project in Meihu, Huizhou | ||||||
16 | Guangdong | Phases I and II of water purification | Sewage treatment | 200,000 | 100% | • The project is in operation. |
centre advance treatment project in | • Upgrading project is under construction. | |||||
Meihu, Huizhou | ||||||
17 | Guangdong | Phase III of water purification centre | Sewage treatment | 100,000 | 100% | • The project is in operation. |
project in Meihu, Huizhou | • Upgrading project is under construction. | |||||
18 | Guangdong | Sewage treatment plant project in | Sewage treatment | 25,000 | 100% | • The project is in operation. |
Pinghu, Shenzhen | • Upgrading project is under debugging stage. | |||||
19 | Guangdong | Sewage treatment plant expansion | Sewage treatment | 55,000 | 100% | • The project is in operation. |
project in Pinghu, Shenzen | • Upgrading project is under debugging stage. | |||||
20 | Guangdong | Sewage treatment plant project in | Sewage treatment | 50,000 | 100% | • The project is in operation. |
Pudixia, Shenzhen | • Upgrading project is under debugging stage. | |||||
21 | Guangdong | Sewage treatment plant project in | Sewage treatment | 50,000 | 100% | • The project is in operation. |
Egongling, Shenzhen | • Upgrading project is under debugging stage. | |||||
22 | Guangdong | Phase II of sewage treatment plant | Sewage treatment | 100,000 | 100% | • The project is in operation. |
project in Henggang, Shenzhen | • Upgrading project is yet to commence | |||||
operation. | ||||||
23 | Guangdong | Reclaimed water plant project in | Reclaimed water | 50,000 | 100% | The project is yet to commence operation. |
Henggang, Shenzhen | treatment | |||||
24 | Guangdong | Sewage treatment plant project in | Sewage treatment | 200,000 | 60% | The project is in operation. |
Guanlan, Shenzhen | ||||||
25 | Guangdong | Phase II of water purification plant | Sewage treatment | 40,000 | 60% | The project is in operation. |
upgrading and expansion project in | ||||||
Guanlan, Shenzhen | ||||||
26 | Guangdong | Sewage treatment plant project in | Sewage treatment | 40,000 | 100% | • The project is in operation. |
Wuchuan | • Upgrading project is under construction. | |||||
27 | Guangxi | Sewage treatment plant project in | Sewage treatment | 200,000 | 55% | The project is in operation. |
Hongkan, Beihai | ||||||
28 | Guangxi | Sewage treatment plant project in | Sewage treatment | 20,000 | 55% | The project is yet to commence operation. |
Daguansha, Beihai | ||||||
29 | Guangxi | Phase I of urban sewage treatment | Sewage treatment | 40,000 | 100% | The project is in operation. |
plant project in Beiliu | ||||||
30 | Guangxi | City sewage treatment plant upgrading | Sewage treatment | 40,000 | 100% | The project is in operation. |
and expansion project in Beiliu | ||||||
31 | Heilongjiang | City sewage treatment plant and | Sewage treatment | 45,000 | 58% | • The project is in operation. |
reclaimed water plant project in Anda | • Upgrading project is yet to commence | |||||
construction. | ||||||
32 | Heilongjiang | Sewage treatment plant TOT project in | Sewage treatment | 20,000 | 58% | The project is in operation. |
Anda Development Zone | ||||||
33 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 20,000 | 58% | The project is in operation. |
Baoqing | ||||||
34 | Heilongjiang | City municipal sewage treatment plant | Sewage treatment | 35,000 | 58% | The project is in operation. |
no. 2 project in Fujin | ||||||
35 | Heilongjiang | Sewage treatment plant project in Fujin | Sewage treatment | 15,000 | 58% | The project is in operation. |
36 | Heilongjiang | Phase I of sewage treatment plant | Sewage treatment | 50,000 | 58% | The project is in operation. |
project in Acheng, Harbin | ||||||
37 | Heilongjiang | Phase II of sewage treatment plant | Sewage treatment | 50,000 | 58% | The project is in operation. |
project in Acheng, Harbin | ||||||
38 | Heilongjiang | Sewage treatment plant O&M project | Sewage treatment | 20,000 | 58% | The project is in operation. |
in old town, Hulan, Harbin | ||||||
39 | Heilongjiang | Second plant of sewage treatment plant | Sewage treatment | 30,000 | 58% | The project is in operation. |
no. 2 project in old town, Hulan, Harbin | ||||||
40 | Heilongjiang | Sewage treatment plant O&M project | Sewage treatment | 50,000 | 58% | The project is yet to commence operation. |
in Limin, Hulan, Harbin |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 12 |
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
Projects of SIIC Environment | capacity | to SIIC | ||||
Province | (continued) | Project type | (tonnes) | Environment | Project progress | |
41 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 150,000 | 58% | The project is in operation. |
Pingfang, Harbin | ||||||
42 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 325,000 | 58% | The project is in operation. |
Taiping, Harbin | ||||||
43 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 325,000 | 58% | The project is in operation. |
Wenchang, Harbin | ||||||
44 | Heilongjiang | Sewage treatment plant upgrading | Sewage treatment | 650,000 | 58% | • The project is in operation. |
project in Wenchang, Harbin | • Upgrading project is under construction. | |||||
45 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 100,000 | 58% | • The project is in operation. |
Xinyigou, Harbin | • Upgrading project is under construction. | |||||
46 | Heilongjiang | Phase I of sewage treatment plant | Sewage treatment | 25,000 | 58% | • The project is in operation. |
project in Heihe | • Upgrading project is yet to commence | |||||
construction. | ||||||
47 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 2,200 | 58% | The project is yet in operation. |
eastern Wudalianchi Scenic Area | ||||||
48 | Heilongjiang | Sewage treatment plant project in new | Sewage treatment | 3,000 | 58% | The project is in operation. |
district of Wudalianchi Scenic Area | ||||||
49 | Heilongjiang | Sewage treatment plant project in Aihui | Sewage treatment | 200 | 58% | The project is yet to commence operation. |
Town | ||||||
50 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 500 | 58% | The project is yet to commence operation. |
Handaqi | ||||||
51 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 30,000 | 58% | The project is yet to commence operation. |
Nenjiang Town, Nenjiang | ||||||
52 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 200 | 58% | The project is yet to commence operation. |
Duobaoshan Town, Nenjiang | ||||||
53 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 200 | 58% | The project is yet to commence operation. |
Xigangzi | ||||||
54 | Heilongjiang | Phase I of sewage treatment project in | Sewage treatment | 50,000 | 58% | The project is in operation. |
Jiguan District, Jixi | ||||||
55 | Heilongjiang | Phase II of sewage treatment plant | Sewage treatment | 50,000 | 58% | The project is in operation. |
project in Jiguan District, Jixi | ||||||
56 | Heilongjiang | Phases I and II of sewage treatment | Sewage treatment | 100,000 | 58% | The project is in operation. |
plant advance treatment project in | ||||||
Jiguan District, Jixi | ||||||
57 | Heilongjiang | Reclaimed water project in Jixi | Reclaimed water | 5,000 | 58% | The project is under construction |
treatment | ||||||
58 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 100,000 | 58% | • The project is in operation. |
eastern Jiamusi | • Upgrading project is under debugging stage. | |||||
59 | Heilongjiang | Phase I of sewage treatment plant | Sewage treatment | 50,000 | 58% | The project is in operation. |
project in western Jiamus | ||||||
60 | Heilongjiang | Phase II of sewage treatment plant | Sewage treatment | 50,000 | 58% | The project is yet to commence operation. |
project in western Jiamusi | ||||||
61 | Heilongjiang | City sewage treatment plant project in | Sewage treatment | 100,000 | 58% | The project is in operation. |
Mudanjiang | ||||||
62 | Heilongjiang | Phase II of sewage treatment plant | Sewage treatment | 100,000 | 58% | The project is in operation. |
project in Mudanjiang | ||||||
63 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 20,000 | 58% | • The project is in operation. |
Ningan | • Upgrading project is in trial operation. | |||||
64 | Heilongjiang | Sewage treatment plant reconstruction | Sewage treatment | 15,000 | 58% | The project is in trail operation. |
and expansion project in Ningan | ||||||
65 | Heilongjiang | Sewage treatment plant franchise | Sewage treatment | 40,000 | 58% | The project is in operation. |
project in Shangzhi | ||||||
66 | Heilongjiang | Phase I of city sewage treatment plant | Sewage treatment | 50,000 | 58% | The project is in operation. |
project in Shuangyashan | ||||||
67 | Heilongjiang | Phase II of city sewage treatment plant | Sewage treatment | 50,000 | 58% | The project is in operation. |
project in Shuangyashan |
13 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
Projects of SIIC Environment | capacity | to SIIC | ||||
Province | (continued) | Project type | (tonnes) | Environment | Project progress | |
68 | Heilongjiang | Sewage treatment plant in Youyi, | Sewage treatment | 10,000 | 58% | • The project is in operation. |
Shuangyashan | • The upgrading project is under construction. | |||||
69 | Heilongjiang | City sewage treatment and reclaimed | Reclaimed water | 40,000 | 29.6% | The project is under construction. |
water project in Anbang River Basin, | treatment | |||||
Shuangyashan | ||||||
70 | Heilongjiang | Phases I and II of city sewage | Sewage treatment | 50,000 | 58% | The project is in operation. |
treatment plant project in Zhaodong | ||||||
71 | Heilongjiang | Sewage treatment plant no. 2 project in | Sewage treatment | 50,000 | 58% | • 20,000 tonnes are in operation. |
Zhaodong | • Planned 30,000 tonnes are under | |||||
construction. | ||||||
72 | Heilongjiang | Phase I of sewage treatment and | Sewage treatment | 30,000 | 58% | • The project is in operation. |
reclaimed water project in eastern | • Upgrading project is yet to commence | |||||
Hegang | construction. | |||||
73 | Heilongjiang | Phase II of sewage treatment and | Sewage treatment | 30,000 | 58% | The project is yet to commence construction. |
reclaimed water project in eastern | ||||||
Hegang | ||||||
74 | Heilongjiang | Phase I of sewage treatment and | Sewage treatment | 50,000 | 58% | • The project is in operation. |
reclaimed water project in western | • Upgrading project is yet to commence | |||||
Hegang | construction. | |||||
75 | Heilongjiang | Phase II of sewage treatment and | Sewage treatment | 50,000 | 58% | The project is yet to commence construction. |
reclaimed water project in western | ||||||
Hegang | ||||||
76 | Heilongjiang | Sewage treatment expansion project in | Sewage treatment | 30,000 | 58% | The project is under construction. |
western Hegang | ||||||
77 | Heilongjiang | Sewage treatment and reclaimed water | Reclaimed water | 30,000 | 58% | The project is yet to commence operation. |
project in Hegang | treatment | |||||
78 | Heilongjiang | Sewage treatment plant and sludge | Sewage treatment | 10,000 | 58% | • The project is in operation. |
disposal project in Fuyuan | • Upgrading project is under construction by | |||||
government | ||||||
79 | Heilongjiang | Sewage treatment plant project in | Sewage treatment | 10,000 | 58% | The project is in operation. |
Xinglong, Bayan | ||||||
80 | Heilongjiang | Sewage treatment plant expansion | Sewage treatment | 30,000 | 58% | The project is yet to commence construction. |
project in Xinglong, Bayan | ||||||
81 | Henan | Phase I of sewage treatment plant | Sewage treatment | 30,000 | 69.1% | The project is in trial operation. |
no. 3 project in Xiping | ||||||
82 | Henan | Phase II of sewage treatment plant | Sewage treatment | 20,000 | 69.1% | The project is yet to commence construction. |
no. 3 project in Xiping | ||||||
83 | Henan | Phase I of sewage treatment plant | Sewage treatment | 20,000 | 75.5% | • The project is in operation. |
project in Dongcheng, Luohe | • Upgrading project is yet to commence | |||||
construction. | ||||||
84 | Henan | Phase II of sewage treatment plant | Sewage treatment | 30,000 | 75.5% | • The project is in operation. |
expansion project in Dongcheng, Luohe | • Upgrading project is yet to commence | |||||
construction. | ||||||
85 | Henan | Sewage treatment plant project in | Sewage treatment | 100,000 | 69.1% | The project is in operation. |
southern Baihe, Nanyang | ||||||
86 | Henan | Sewage treatment plant no.1 project in | Sewage treatment | 30,000 | 69.1% | The project is in operation. |
Suiping | ||||||
87 | Henan | Sewage treatment plant no.2 project in | Sewage treatment | 10,000 | 69.1% | The project is in operation. |
Suiping | ||||||
88 | Hubei | Phase II of sewage treatment plant | Sewage treatment | 125,000 | 75.3% | The project is in operation. |
project in Cihu, Huangshi | ||||||
89 | Hubei | Sewage treatment plant project in | Sewage treatment | 340,000 | 80% | The project is in operation. |
Hanxi, Wuhan | ||||||
90 | Hubei | Sewage treatment plant expansion | Sewage treatment | 260,000 | 80% | The project is in operation. |
project in Hanxi, Wuhan (including | ||||||
Hanxi sludge treatment project) |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 14 |
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
Projects of SIIC Environment | capacity | to SIIC | ||||
Province | (continued) | Project type | (tonnes) | Environment | Project progress | |
91 | Hubei | Phase I of sewage treatment plant | Sewage treatment | 30,000 | 100% | The project is in operation. |
project in Qianchuan, Huangpi, Wuhan | ||||||
92 | Hubei | Phase I of sewage treatment plant | Sewage treatment | 22,500 | 100% | The project is in operation. |
project in Panlong, Huangpi, Wuhan | ||||||
93 | Hubei | Sewage treatment plant continued | Sewage treatment | 22,500 | 100% | The project is in operation. |
construction project in Panlong, | ||||||
Huangpi, Wuhan | ||||||
94 | Hubei | Phase I of sewage treatment plant | Sewage treatment | 25,000 | 100% | The project is in operation. |
project in Wuhu, Huangpi, Wuhan | ||||||
95 | Hubei | Phase I of sewage treatment plant | Sewage treatment | 60,000 | 100% | The project is in operation. |
project in Wuhan Economic and | ||||||
Technology Development Zone | ||||||
96 | Hubei | Phase I of sewage treatment plant | Sewage treatment | 50,000 | 92.2% | The project is in operation. |
project in southern Suizhou | ||||||
97 | Hunan | Sewage treatment BOT project in | Sewage treatment | 10,000 | 20% | The project is in operation. |
Linwu, Chenzhou | ||||||
98 | Hunan | Phase I of sewage treatment plant | Sewage treatment | 80,000 | 100% | • The project is in operation. |
project in Chenzhou | • Upgrading project is under construction. | |||||
99 | Hunan | Phase I of sewage treatment expansion | Sewage treatment | 40,000 | 100% | • The project is in operation. |
plant project in Chenzhou | • Upgrading project is under construction. | |||||
100 | Hunan | Sewage treatment project in | Sewage treatment | 20,000 | 75.5% | The project is in operation. |
Taohuajiang, Taojiang | ||||||
101 | Hunan | Sewage treatment plant no. 1 upgrading | Sewage treatment | 10,000 | 75.5% | The project is in operation. |
and expansion project in Taohuajiang, | ||||||
Taojiang | ||||||
102 | Hunan | Sewage treatment plant project in the | Sewage treatment | 30,000 | 75.5% | The project is in operation. |
new district of eastern Gaoxin, Yiyang | ||||||
103 | Hunan | Sewage treatment plant BOT project in | Sewage treatment | 40,000 | 75.5% | The project is in operation. |
northern Yiyang | ||||||
104 | Hunan | Phase II of sewage treatment | Sewage treatment | 40,000 | 75.5% | The project is in operation. |
plant expansion, upgrading and | ||||||
reconstruction projects in northern | ||||||
Yiyang | ||||||
105 | Inner Mongolia | Sewage treatment BOT project in | Sewage treatment | 3,500 | 58% | The project is under construction. |
Dazhuangyuan Meat Processing Plant, | ||||||
Xilinhot | ||||||
106 | Inner Mongolia | Sewage treatment plant BOT project in | Sewage treatment | 40,000 | 58% | • The project is in operation. |
Xilinhot | • Upgrading project is under construction. | |||||
107 | Jiangsu | Phase I of sewage treatment plant | Sewage treatment | 20,000 | 100% | The project is in operation. |
project at Xingang Park, Jingjiang | ||||||
108 | Jiangsu | Phase II of sewage treatment plant | Sewage treatment | 20,000 | 100% | The project is yet to commence construction. |
project at Xingang Park, Jingjiang | ||||||
109 | Jiangsu | Phase III of sewage treatment plant | Sewage treatment | 40,000 | 100% | The project is yet to commence construction. |
project at Xingang Park, Jingjiang | ||||||
110 | Jiangsu | Phase I of sewage treatment plant | Sewage treatment | 30,000 | 100% | The project is in operation. |
project in southern Shuyang | ||||||
111 | Jiangsu | Phase II of sewage treatment plant | Sewage treatment | 30,000 | 100% | The project is in operation. |
project in southern Shuyang | ||||||
112 | Jiangsu | Phase I of sewage treatment plant | Sewage treatment | 25,000 | 92.2% | The project is in operation. |
project in Guanyinshan, Nantong | ||||||
113 | Jiangsu | Phase II of sewage treatment plant | Sewage treatment | 48,000 | 92.2% | The project is in operation. |
project in Guanyinshan, Nantong | ||||||
114 | Jiangsu | Phase I of sewage treatment plant | Sewage treatment | 25,000 | 100% | The project is in operation. |
project in Huangqiao, Taixing | ||||||
115 | Jiangsu | Phase II of sewage treatment plant | Sewage treatment | 25,000 | 100% | The project is yet to commence construction. |
project in Huangqiao, Taixing |
15 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
Projects of SIIC Environment | capacity | to SIIC | ||||
Province | (continued) | Project type | (tonnes) | Environment | Project progress | |
116 | Jiangsu | Phase I of sewage treatment plant | Sewage treatment | 10,000 | 100% | The project is in operation. |
project in Huangqiao Industrial Park, | ||||||
Taixing | ||||||
117 | Jiangsu | Phase II of sewage treatment plant | Sewage treatment | 10,000 | 100% | The project is yet to commence construction. |
project in Huangqiao Industrial Park, | ||||||
Taixing | ||||||
118 | Jiangsu | Phase I of sewage treatment plant with | Reclaimed water | 3,000 | 100% | The project is in operation. |
reclaimed water treatment project in | treatment | |||||
Huangqiao Industrial Park, Taixing | ||||||
119 | Jiangsu | Phase II of sewage treatment plant | Reclaimed water | 3,000 | 100% | The project is yet to commence construction. |
with reclaimed water treatment project | treatment | |||||
in Huangqiao Industrial Park, Taixing | ||||||
120 | Jiangsu | Sewage treatment project in Huishan | Sewage treatment | 100,000 | 50.8% | The project is in operation. |
Economic and Development Zone, | ||||||
Wuxi | ||||||
121 | Jiangxi | Phase I of sewage treatment plant | Sewage treatment | 10,000 | 60% | The project is in operation. |
project in Chongren Industrial Park | ||||||
122 | Jiangxi | Phase I of sewage treatment plant | Sewage treatment | 5,000 | 60% | • The project is in operation. |
project in Yihuang Industrial Park | • Upgrading project is yet to commence | |||||
construction. | ||||||
123 | Jiangxi | Phase II of sewage treatment plant | Sewage treatment | 10,000 | 60% | • The project is in trial operation. |
project in Yihuang Industrial Park | • Upgrading project is yet to commence | |||||
construction. | ||||||
124 | Jiangxi | Phases I and II of sewage treatment | Sewage treatment | 15,000 | 60% | The project is yet to commence construction. |
plant advance treatment project in | ||||||
Yihuang Industrial Park | ||||||
125 | Jiangxi | Phase I of comprehensive sewage | Sewage treatment | 10,000 | 60% | The project is in operation. |
treatment plant project in Yongxin | ||||||
Industrial and Development Zone | ||||||
126 | Jiangxi | Phase I of sewage treatment plant | Sewage treatment | 25,000 | 60% | • The project is in operation. |
project in Xiaolan Economic and | • Upgrading project is under construction. | |||||
Development Zone, Nanchang | ||||||
127 | Jiangxi | Phase II of sewage treatment plant | Sewage treatment | 50,000 | 60% | • The project is in operation. |
project in Xiaolan Economic and | • Upgrading project is yet to commence | |||||
Development Zone, Nanchang | construction. | |||||
128 | Jiangxi | Phase I of sewage treatment plant | Sewage treatment | 5,000 | 60% | • The project is in operation. |
project in Wanzai Industrial Park | • Upgrading project is yet to commence | |||||
operation. | ||||||
129 | Jiangxi | Sewage treatment plant expansion | Sewage treatment | 7,500 | 60% | • The project is in operation. |
project in Wanzai Industrial Park | • Upgrading project is yet to commence | |||||
operation. | ||||||
130 | Jiangxi | Phase I of sewage treatment plant | Sewage treatment | 10,000 | 60% | The project is in operation. |
project in Yongfeng Industrial Park | ||||||
131 | Jiangxi | Sewage treatment plant in Fengxin | Sewage treatment | 34,000 | 60% | • 25,000 tonnes are in operation. |
Industrial Park | • 7,000 tonnes are under debugging stage. | |||||
• 2,000 tonnes are yet to commence | ||||||
construction. | ||||||
• Upgrading project is under construction. | ||||||
132 | Jilin | Sewage treatment plant project in | Sewage treatment | 15,000 | 58% | The project is in operation. |
Yingcheng, Jiutai, Changchun | ||||||
133 | Jilin | Sewage treatment plant project in | Sewage treatment | 25,000 | 58% | The project is in operation. |
Kalun, Jiutai Development Zone, | ||||||
Changchun | ||||||
134 | Jilin | Sewage treatment plant project in | Sewage treatment | 10,000 | 58% | The project is in operation. |
Panshi Industrial and Development | ||||||
Zone |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 16 |
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
Projects of SIIC Environment | capacity | to SIIC | ||||
Province | (continued) | Project type | (tonnes) | Environment | Project progress | |
135 | Jilin | Sewage treatment plant project in | Sewage treatment | 2,500 | 58% | The project is in operation. |
Mincheng Economic and Development | ||||||
Zone | ||||||
136 | Jilin | Phases I and II of sewage treatment | Sewage treatment | 25,000 | 58% | The project is in operation. |
plant project in Jiaohe | ||||||
137 | Jilin | Phase III of city sewage treatment plant | Sewage treatment | 15,000 | 58% | The project is in operation. |
expansion O&M project in Jiaohe | ||||||
138 | Jilin | Sewage treatment plant project in Fuyu | Sewage treatment | 30,000 | 58% | The project is in operation. |
139 | Liaoning | Phase I of sewage treatment plant | Sewage treatment | 20,000 | 92.7% | The project is in operation. |
project in Sanshilipu, Puwan New Zone, | ||||||
Dalian | ||||||
140 | Liaoning | Sewage treatment plant project in | Sewage treatment | 20,000 | 92.7% | The project is in operation. |
Houhai, Puwan New Zone, Dalian | ||||||
141 | Liaoning | Sewage treatment plant project in | Sewage treatment | 40,000 | 75.5% | The project is in operation. |
Dalian Bay | ||||||
142 | Liaoning | Phase II of sewage treatment plant | Sewage treatment | 105,000 | 75.5% | The project is in operation. |
project in Quanshui River, Dalian | ||||||
143 | Liaoning | Sewage treatment plant in northern | Sewage treatment | 30,000 | 60% | The project is in operation. |
Yingkou Economic and Technological | ||||||
Development Zone | ||||||
144 | Liaoning | Sewage treatment plant project in | Sewage treatment | 60,000 | 86.5% | The project is in operation. |
Lingshui River, Dalian | ||||||
145 | Liaoning | Sewage treatment plant upgrading and | Sewage treatment | 20,000 | 86.5% | The project is in operation. |
expansion project in Lingshui River, | ||||||
Dalian | ||||||
146 | Liaoning | Sewage treatment plant project in Tiger | Sewage treatment | 80,000 | 75.5% | The project is in operation. |
Beach, Dalian | ||||||
147 | Liaoning | Sewage treatment plant upgrading and | Sewage treatment | 10,000 | 75.5% | The project is in operation. |
expansion project in Tiger Beach, Dalian | ||||||
148 | Ningxia Hui | Phase I of sewage treatment plant no. | Sewage treatment | 50,000 | 100% | The project is in operation. |
Autonomous | 5 project in Yinchuan | |||||
Region | ||||||
149 | Ningxia Hui | Phase II of sewage treatment plant | Sewage treatment | 50,000 | 100% | The project is in operation. |
Autonomous | no. 5 expansion, upgrading and | |||||
Region | reconstruction project in Yinchuan | |||||
150 | Ningxia Hui | O&M project for reclaimed water | Reclaimed water | 50,000 | 100% | The project is in operation. |
Autonomous | treatment plant no. 5 of Yinchuan | treatment | ||||
Region | Sewage Treatment Co., Ltd. | |||||
151 | Ningxia Hui | Sewage treatment plant project in Suyin | Sewage treatment | 50,000 | 100% | • The project is in operation. |
Autonomous | Industrial Park, Yinchuan | • 25,000 tonnes modification are under | ||||
Region | construction. | |||||
152 | Ningxia Hui | Sewage treatment plant project in Suyin | Sewage treatment | 100,000 | 100% | The project is yet to commence construction. |
Autonomous | Industrial Park, Yinchuan | |||||
Region | ||||||
153 | Shandong | Sewage treatment plant project in | Sewage treatment | 100,000 | 75.5% | • The project is in operation. |
Dezhou | • Upgrading project is under construction. | |||||
154 | Shandong | Sewage treatment plant project in | Sewage treatment | 40,000 | 75.5% | The project is in operation. |
western Weifang | ||||||
155 | Shandong | Phase I of sewage treatment plant | Sewage treatment | 50,000 | 75.5% | The project is in operation. |
project in Weifang High Technology | ||||||
Industrial Development Zone | ||||||
156 | Shandong | Sewage treatment plant with reclaimed | Reclaimed water | 38,500 | 75.5% | The project is in operation. |
water treatment project in Weifang | treatment | |||||
157 | Shandong | Sewage treatment plant expansion | Sewage treatment | 200,000 | 75.5% | The project is in operation. |
project in Weifang |
17 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
Projects of SIIC Environment | capacity | to SIIC | ||||
Province | (continued) | Project type | (tonnes) | Environment | Project progress | |
158 | Shandong | Phase I of sewage treatment plant | Sewage treatment | 60,000 | 75.5% | The project is in operation. |
resumption and upgrading project in | ||||||
Shawo, Weifang | ||||||
159 | Shandong | Phase II of sewage treatment plant | Sewage treatment | 40,000 | 75.5% | The project is yet to commence construction. |
resumption and upgrading project in | ||||||
Shawo, Weifang | ||||||
160 | Shandong | Sewage treatment centre project in | Sewage treatment | 20,000 | 75.5% | The project is in operation. |
Shanting, Zaozhuang | ||||||
161 | Shandong | Phase I of sewage treatment centre | Sewage treatment | 20,000 | 75.5% | The project is in operation. |
project in Yicheng, Zaozhuang | ||||||
162 | Shandong | Phase II of sewage treatment centre | Sewage treatment | 20,000 | 75.5% | The project is in operation. |
project in Yicheng, Zaozhuang | ||||||
163 | Shanghai | Phase I of sewage treatment plant no. | Sewage treatment | 15,000 | 87.8% | The project is in operation. |
2 project in Qingpu | ||||||
164 | Shanghai | Phase II of sewage treatment plant no. | Sewage treatment | 45,000 | 87.8% | The project is in operation. |
2 project in Qingpu | ||||||
165 | Shanghai | Phase III of sewage treatment plant no. | Sewage treatment | 60,000 | 87.8% | The project is in operation. |
2 project in Qingpu | ||||||
166 | Shanghai | Phase IV of sewage treatment plant no. | Sewage treatment | 60,000 | 87.8% | The project is in operation. |
2 expansion project in Qingpu | ||||||
167 | Shanghai | Sewage treatment plant no. 2 | Sewage treatment | 60,000 | 87.8% | The project is yet to commence construction. |
expansion project in Qingpu | ||||||
168 | Shanghai | Sewage treatment plant project in | Sewage treatment | 100,000 | 73.7% | The project is in operation. |
western Fengxian | ||||||
169 | Shanghai | Phase II of sewage treatment plant | Sewage treatment | 50,000 | 73.7% | The project is in operation. |
expansion project in western Fengxian | ||||||
170 | Shanghai | Phase III of sewage treatment plant | Sewage treatment | 50,000 | 73.7% | The project is in operation. |
expansion project in western Fengxian | ||||||
171 | Zhejiang | Phase I of sewage treatment plant with | Sewage treatment | 12,500 | 100% | The project is in operation. |
pipe network ancillary facilities project | ||||||
in Zhejiang Chemical Raw Material Site | ||||||
Linhai Park | ||||||
172 | Zhejiang | Phase I of sewage treatment plant | Sewage treatment | 12,500 | 100% | The project is in operation. |
with pipe network ancillary facilities | ||||||
expansion project in Zhejiang Chemical | ||||||
Raw Material Site Linhai Park | ||||||
173 | Zhejiang | Sewage treatment plant with pipe | Sewage treatment | 25,000 | 100% | The project is yet to commence construction. |
network ancillary facilities expansion | ||||||
project in Zhejiang Chemical Raw | ||||||
Material Base Linhai Park | ||||||
174 | Zhejiang | Batch 1 of phase I of water purification | Sewage treatment | 60,000 | 69.1% | The project is in operation. |
plant project in Xiaocaoe, Yuyao | ||||||
175 | Zhejiang | Batch 2 of phase I of water purification | Sewage treatment | 60,000 | 69.1% | The project is in operation. |
plant project in Xiaocaoe, Yuyao | ||||||
176 | Zhejiang | City sewage treatment plant upgrading | Sewage treatment | 30,000 | 69.1% | The project is in operation. |
and expansion project in Xiaocaoe, | ||||||
Yuyao | ||||||
177 | Zhejiang | Phase III of city sewage treatment plant | Sewage treatment | 75,000 | 69.1% | The project is in operation. |
upgrading and reconstruction project in | ||||||
Xiaocaoe, Yuyao | ||||||
178 | Zhejiang | Phase III of city sewage treatment plant | Sewage treatment | 75,000 | 69.1% | The project is yet to commence construction. |
upgrading and expansion project in | ||||||
Xiaocaoe, Yuyao | ||||||
179 | Zhejiang | Preserved pickle preprocess treatment | Sewage treatment | 3,000 | 69.1% | The project is in operation. |
plant project in Yuyao |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 18 |
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
Projects of SIIC Environment | capacity | to SIIC | ||||
Province | (continued) | Project type | (tonnes) | Environment | Project progress | |
180 | Zhejiang | Sewage treatment plant upgrading | Sewage treatment | 30,000 | 64.5% | The project is in operation. |
and reconstruction project in Binhai, | ||||||
Huangjiabu, Ningbo | ||||||
181 | Zhejiang | Phase I of sewage treatment plant | Sewage treatment | 90,000 | 64.5% | The project is in operation. |
expansion project in Hangzhou Bay | ||||||
New Zone, Ningbo | ||||||
182 | Zhejiang | Sewage treatment plant and artificial | Sewage treatment | 100,000 | 59.9% | The project is in operation. |
wetland O&M project in northern Cixi | ||||||
183 | Zhejiang | Phase I of sewage treatment plant | Sewage treatment | 40,000 | 64.5% | The project is yet to commence operation. |
O&M project in Zhouxiang, Cixi | ||||||
184 | Zhejiang | Phase I of sewage treatment plant | Sewage treatment | 40,000 | 92.2% | The project is in operation. |
project in eastern Pinghu | ||||||
185 | Zhejiang | Phase II of sewage treatment plant | Sewage treatment | 45,000 | 92.2% | The project is in operation. |
expansion project in eastern Pinghu | ||||||
186 | Zhejiang | Phase III of sewage treatment plant | Sewage treatment | 135,000 | 92.2% | The project is yet to commence construction. |
expansion project in eastern Pinghu | ||||||
Total | 9,849,300 | |||||
19 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
capacity | to SIIC | |||||
Province | Projects of SIIC Environment | Project type | (tonnes) | Environment | Project progress | |
Water supply projects | ||||||
1 | Heilongjiang | Water supply plant no. 1 project in | Water supply | 80,000 | 58% | The project is in operation. |
Mudanjiang | ||||||
2 | Heilongjiang | Water supply plant no. 2 project in | Reclaimed water | 50,000 | 58% | The project is yet to commence operation. |
Mudanjiang | treatment | |||||
3 | Heilongjiang | Water supply plant no. 4 project in | Water supply | 170,000 | 58% | The project is in operation. |
Mudanjiang | ||||||
4 | Heilongjiang | City water supply TOT project in | Water supply | 160,000 | 58% | The project is in operation. |
Jiamusi (Xijiao water resource water | ||||||
supply project) | ||||||
5 | Heilongjiang | City water supply TOT project in | Water supply | 200,000 | 58% | The project is in operation. |
Jiamusi (Jiangbei water plant) | ||||||
6 | Henan | Water supply plant no. 1 project in | Water supply | 30,000 | 69.1% | The project is in operation. |
Suiping | ||||||
7 | Henan | Water supply plant no. 2 project in | Water supply | 10,000 | 69.1% | The project is in operation. |
Suiping | ||||||
8 | Hubei | Water supply plant expansion project in | Water supply | 40,000 | 100% | The project is in operation. |
Qianchuan, Huangpi, Wuhan | ||||||
9 | Hubei | Water supply plant reserve O&M | Water supply | 80,000 | 100% | The project is in operation. |
project in Qianchuan, Huangpi, Wuhan | ||||||
10 | Hubei | Phase V of water supply plant | Water supply | 60,000 | 100% | The project is under construction. |
reconstruction and expansion project in | ||||||
Qianchuan, Huangpi, Wuhan | ||||||
11 | Hubei | Phase I of new Wuhu water supply | Water supply | 100,000 | 100% | The project is in operation. |
plant project in Huangpi, Wuhan | ||||||
12 | Hubei | Phase II of New Wuhu water supply | Water supply | 150,000 | 100% | The project is yet to commence construction. |
plant project in Huangpi, Wuhan | ||||||
13 | Hunan | Huilongshan water supply plant city | Water supply | 120,000 | 90% | The project is in operation. |
water supply project in Yiyang | ||||||
14 | Hunan | Phase I of water supply plant no. 3 city | Water supply | 100,000 | 90% | The project is in operation. |
municipal water supply project in Yiyang | ||||||
15 | Hunan | Phase II of water supply plant no. 3 | Water supply | 100,000 | 90% | The project is in operation. |
city municipal water supply expansion | ||||||
project in Yiyang | ||||||
16 | Hunan | Water supply plant no. 4 city municipal | Water supply | 200,000 | 90% | The project is under construction. |
water supply project in Yiyang | ||||||
17 | Shandong | Water supply project in Hanting, | Water supply | 60,000 | 26.2% | The project is in operation. |
Weifang | ||||||
18 | Shandong | City municipal water supply project in | Water supply | 120,000 | 51.3% | The project is in operation. |
Weifang (Bailanghe water supply plant | ||||||
project) | ||||||
19 | Shandong | City municipal water supply project | Water supply | 200,000 | 51.3% | The project is in operation. |
in Weifang (Gaoxin water distribution | ||||||
plant project) | ||||||
20 | Shandong | Fangzi Water Supply Holding Co. | Water supply | 40,000 | 26.2% | The project is in operation. |
project in Weifang | ||||||
21 | Shanxi | Water diversion project from Wenshui | Water supply | 55,000 | 100% | The project is in operation. |
to Pingchuan (southern line) | ||||||
Total | 2,125,000 | |||||
Total for water projects | 11,974,300 | |||||
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 20 |
Business Review, Discussion and Analysis
Interest | ||||||
Daily | attributable | |||||
capacity | to SIIC | |||||
Province | Projects of SIIC Environment | Project type | (tonnes) | Environment | Project progress | |
Waste incineration projects | ||||||
1 | Shandong | Phase I of household waste incineration | Waste incineration | 300 | 82.9% | The project is in trial operation. |
power generation project in Wulian | ||||||
2 | Shandong | Phase II of household waste | Waste incineration | 300 | 82.9% | The project is yet to commence construction. |
incineration power generation project in | ||||||
Wulian | ||||||
3 | Shandong | Waste incineration thermal power | Waste incineration | 1,200 | 47.5% | The project is yet to commence construction. |
generation project in Shen County | ||||||
4 | Shanghai | Waste incineration power generation | Waste incineration | 1,050 | 50% | The project is in operation. |
project in Pucheng | ||||||
5 | Shanghai | Renewable energy utilization center | Waste incineration | 3,800 | 42% | The project is under construction. |
project in Baoshan | ||||||
6 | Sichuan | Stage 1 of city municipal household | Waste incineration | 700 | 100% | The project is in operation. |
waste incineration power generation | ||||||
project in Dazhou | ||||||
7 | Sichuan | Stage 2 of city municipal household | Waste incineration | 350 | 100% | The project is yet to commence construction. |
waste incineration power generation | ||||||
project in Dazhou | ||||||
8 | Zhejiang | Waste incineration power generation | Waste incineration | 1,100 | 50% | The project is in operation. |
project in Wenling | ||||||
Total | 8,800 | |||||
Interest | ||||||
Daily | attributable | |||||
capacity | to SIIC | |||||
Province | Projects of SIIC Environment | Project type | (tonnes) | Environment | Project progress | |
Sludge treatment projects | ||||||
1 | Heilongjiang | Phase I of sewage treatment plant | Sludge treatment | 650 | 58% | The project is in operation. |
sludge disposal project in Harbin | ||||||
2 | Heilongjiang | Phase II of sewage treatment plant | Sludge treatment | 350 | 58% | The project is in operation. |
sludge disposal project in Harbin | ||||||
3 | Heilongjiang | Sludge disposal project in Heihe | Sludge treatment | 40 | 58% | The project is in operation. |
4 | Heilongjiang | Sewage treatment plant sludge disposal | Sludge treatment | 100 | 58% | The project is in operation. |
project in Jiamusi | ||||||
5 | Heilongjiang | Sewage treatment plant sludge disposal | Sludge treatment | 150 | 58% | The project is in operation. |
project in Mudanjiang | ||||||
6 | Heilongjiang | Sludge disposal plant project in Ningan | Sludge treatment | 40 | 58% | The project is in operation. |
7 | Henan | Sludge disposal project in Xinxiang | Sludge treatment | 300 | 69.1% | The project is in operation. |
8 | Henan | Phase I of sewage treatment plant | Sludge treatment | 200 | 69.1% | The project is in operation. |
sludge disposal project in Nanyang | ||||||
9 | Henan | Phase II of sewage treatment plant | Sludge treatment | 100 | 69.1% | The project is yet to commence construction. |
sludge disposal project in Nanyang | ||||||
10 | Hubei | Sludge disposal project in Hanxi, Wuhan | Sludge treatment | 325 | 80% | The project is under renovation. |
Total | 2,255 | |||||
21 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Interest | ||||||
attributable | ||||||
Daily | to General | |||||
capacity | Water of | |||||
Province | Projects of General Water of China | Project type | (tonnes) | China | Project progress | |
Sewage treatment/reclaimed water treatment projects | ||||||
1 | Auhui | Sewage treatment plant nos. 2, 3 and 4 | Sewage treatment | 350,000 | 100% | The project is in operation. |
project in Bengbu | ||||||
2 | Auhui | Reclaimed water project in Bengbu | Reclaimed water | 160,000 | 70% | The project is in operation. |
treatment | ||||||
3 | Auhui | Sewage treatment project in Suzhou | Sewage treatment | 100,000 | 80% | The project is under construction. |
4 | Auhui | Guzhen GWC Sewage Treatment Co., | Sewage treatment | 50,000 | 100% | The project is in operation. |
Ltd. project | ||||||
5 | Fujian | Sewage treatment project in Xiamen | Sewage treatment | 1,202,500 | 55% | The project is in operation. |
6 | Guangdong | Sewage treatment plant project in | Sewage treatment | 150,000 | 90% | The project is in operation. |
Longhua, Shenzhen | ||||||
7 | Heilongjiang | City sewage treatment project in | Sewage treatment | 20,000 | 100% | The project is in operation. |
Suifenhe | ||||||
8 | Hunan | Sewage treatment project in Hedong, | Sewage treatment | 150,000 | 100% | The project is in operation. |
Xiangtan | ||||||
9 | Zhejiang | Sewage treatment project in new zone | Sewage treatment | 50,000 | 81.16% | The project is in operation. |
of eastern Huzhou | ||||||
10 | Zhejiang | Sewage treatment project in Huzhou | Sewage treatment | 25,000 | 100% | The project is in operation. |
11 | Zhejiang | Sewage treatment plant upgrading | Sewage treatment | 50,000 | N/A | The project is in operation. |
entrustment project in new zone of | ||||||
eastern Wenzhou | ||||||
12 | Zhejiang | Sewage treatment project in eastern | Sewage treatment | 150,000 | 100% | The project is in operation. |
Wenzhou | ||||||
13 | Zhejiang | Sewage treatment project in central | Sewage treatment | 200,000 | 70% | The project is in operation. |
Wenzhou | ||||||
Total | 2,657,500 | |||||
Interest | ||||||
attributable | ||||||
Daily | to General | |||||
capacity | Water of | |||||
Province | Projects of General Water of China | Project type | (tonnes) | China | Project progress | |
Water supply/water generation projects | ||||||
1 | Auhui | Water supply project in Bengbu | Water supply | 705,000 | 60% | The project is in operation. |
2 | Auhui | Water supply project in Guzhen | Water supply | 100,000 | 46.15% | The project is in operation. |
3 | Auhui | Water supply project in Huaiyuan | Water supply | 157,000 | 60% | The project is in operation. |
4 | Fujian | Water generation project in Xiamen | Water generation | 1,565,000 | 45% | The project is in operation. |
5 | Heilongjiang | Wuhua mountain reservoir project and | Water supply | 305,000 | 100% | The project is in operation. |
water supply project in Suifenhe | ||||||
6 | Hubei | Water supply project in Xiangyang | Water supply | 953,000 | 50% | The project is in operation. |
7 | Hunan | Water supply project in Xiangtan | Water supply | 485,000 | 70% | The project is in operation. |
8 | Zhejiang | Reservoir and water induction project in | Water supply | 200,000 | 100% | The project is in operation. |
Tiger Lake, Huzhou | ||||||
9 | Zhejiang | GWC sewage treatment (water supply | Water supply | 19,500 | 100% | The project is in operation. |
plant) project in Huzhou | ||||||
Total | 4,489,500 | |||||
Total for water projects | 7,147,000 | |||||
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 22 |
Business Review, Discussion and Analysis
NEW BUSINESS ARENA
As at the end of June 2020, the photovoltaic assets capacity of Shanghai Galaxy in which the Group holds 45% equity interest and Galaxy Energy, a subsidiary held by it, reached 590MW. The total amount of on-grid electricity sold from the 13 photovoltaic power stations was approximately 463 million kWh, representing an increase of 5.8% over the same period of last year. During the period, the photovoltaic team continued to strengthen studies on macro policies, industry dynamics and the capital market, as well as project acquisition related work.
During the period, the National Energy Administration Bureau issued a notice to clarify the conditions for renewable energy projects to be included in the first financial subsidy list. The projects of Shanghai Galaxy and Galaxy Energy are well prepared for the application of subsidy in the next round. In April of this year, the Government issued the 2020 photovoltaic power generation on-grid tariff policy, which will help the industry to affirm its expectations, provide guidance for the industry to make appropriate plans for their investment and construction, and promote the healthy and orderly development of the photovoltaic industry. In May, the National Energy Administration Bureau also issued a consultation paper, aiming to promote the establishment of a sound long-term mechanism for clean energy industry consumption, so as to set reasonable targets for clean energy utilization rates, and steadily increase the proportion of clean energy electricity in energy consumption, helping to promote orderly development of the industry.
REAL ESTATE
In the first half of 2020, the real estate business recorded a profit of HK$256 million, representing a year- on-year decrease of 53.6% and accounting for 25.0% of the Group's Net Business Profit. The decline was mainly due to delays in marketing and construction activities caused by the epidemic in January and February of this year which once brought our real estate business to a standstill. In addition, a lower rental income was recorded as rent concessions were extended to tenants due to the epidemic following calls by the Government. As the epidemic began to subside, a number of provinces and cities have resumed work and markets were re-opened accordingly. The Group's real estate business has been fully restored with the acceleration of its production and sales activities. The Group will continue to focus on the integration of the Yangtze River Delta to promote the long-term development of our business.
SI Development
During the period, SI Development recorded a revenue of RMB4,493 million, representing a year-on-year increase of 3.3%. The rise in revenue was mainly attributable to the year-on-year increase of the company's booked income from projects delivered during the period and rise in construction income. Net profit was RMB429 million, representing a year-on-year increase of 4.1%. While ensuring the implementation of epidemic control measures, SI Development has made considerable efforts in seeking new contracts and in the collection of receivables. The company also broadened its customer base through strengthening the promotion and marketing of its projects online. As a result, contract sales of real estate projects reached RMB1,079 million, with a gross floor area of 68,000 square meters, including such projects as Shanghai Bay (Phase 4) in Qingpu, Shanghai, Territory Shanghai in Jing'an, Shanghai, A New Era in Jiading, Shanghai, Sea Palace in Quanzhou, Hi-Shanghai (Phase 2) in Hangzhou, SIIC Tianlan Bay in Huzhou and SIIC Yungjing Bay in Huzhou. Rental income for the period amounted to HK$199 million. During the period, the gross floor area of properties delivered was approximately 156,000 square meters, which mainly included Hi-Shanghai (Phase 2) in Hangzhou, A New Era in the city in Jiading, Shanghai and Sea Palace in Quanzhou.
In the first half of 2020, a total of 9 projects were under construction, covering an area of 1,920,000 square meters. To compensate for delays in construction due to suspension of work and production caused by the epidemic, SI Development has stepped up the pace of its construction of projects to make up for losses caused by the epidemic. In the area of property management, SI Development is planning to integrate the resources of its existing office and commercial projects to establish a common platform for the sharing of resources through multiple channels while adding value to its services in order to enhancing the core competitiveness of its business. In addition, the company will continue to explore its development potential in terms of scale, branding, technology and capital. Established for over 10 years, the Qingdao International Beer City has been successfully upgraded to Qingdao International Financial City and Qingdao International Wealth Management Financial Center, setting a new model for the integration of business and city building.
23 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
In addition, the company has further introduced high-end hotel brands to the super high-rise buildings T1 and T2 projects which were under construction. The Shanghai Investment Industrial Centre, the all-in-one building featuring finance, commerce, hotels, culture and entertainment under one roof, will foster the upgrading and transformation of the financial and cultural temperament of the project.
SI Urban Development
SI Urban Development recorded a revenue of HK$3,173 million for the first half of 2020, representing a decrease of 31.1% over the same period of last year, which was mainly due to lower booked income from properties delivered during the period and the impact of the epidemic on rental income. Profits attributable to shareholders for the period amounted to HK$151 million, representing a year-on-year decrease of 51.4%, which was mainly due to the decrease in revenue and relatively lower gross profit margins of most of the projects completed and delivered. Entering the second quarter, SI Urban Development successfully surpassed its semi-annual sales target while focusing on "Seizing sales orders, business opportunities and market shares", and achieved a contract amount of RMB3,706 million for a total gross floor area of 64,000 square meters, which mainly included Contemporary Splendour Villa in Shanghai, Urban Cradle in Shanghai, West Diaoyutai • Emperor Seal in Beijing and Contemporary Art Villas in Shanghai. Properties delivered during the period mainly included Urban Cradle in Shanghai, Originally in Xi'an and Contemporary Art Villas in Shanghai, with a gross floor area of approximately 110,260 square meters. Rental income for the period was approximately HK$290 million.
In conjunction with its 50%-owned joint venture and Aerospace Corporation, SI Urban Development took part in the bidding of the Guilin Road land project located in the southwest of Xuhui District, Shanghai in January 2020, with a total capital commitment of approximately RMB1,527.50 million, in which SI Urban Development holds approximately 32.5% beneficial interest. The transaction was completed in May 2020. With a prime location adjacent to the intersection of the existing Metro Line 9 and the future Metro Line 15 in Shanghai, the project is expected to support future rental returns and its property value is expected to be further enhanced upon completion.
In the same month, SI Urban Development announced that it would inject RMB407,942,343 in cash into SIIC Financial Leasing for the subscription of 20% of the company's capital upon completion of the capital increase. The equity of the company's existing shareholder, Shanghai Galaxy will be diluted to 28.95% accordingly following the completion of the capital increase. The remaining shareholders are independent third parties. As an integrated credit provider based in Shanghai, SIIC Financial Leasing is mainly engaged in the business of financing regional governments and its platform companies to fund their projects in local infrastructure, water supply and construction of rail transportation. The transaction is pending the approval of independent shareholders at the extraordinary general meeting. With this project, SI Urban Development is expected to further deepen the integration of finance into business and create synergy between the two areas.
Set out below is a summary of the major property development projects of the Group as at 30 June 2020:
Major Development Properties
Pre-sold | |||||||||
Interest | Approximate | Planned | during the | Total | |||||
attributable | site area | total GFA | period | GFA sold | Expected | ||||
Projects of | Type of | to SI | (square | (square | (square | (square | date of | ||
City | SI Development | property | Development | meters) | meters) | meters) | meters) | completion | |
1 | Kaifu District, | Fengsheng Building | Residential and | 90% | 5,468 | 70,566 | 525 | 32,454 | Completed |
Changsha | commercial | ||||||||
2 | Chenghua District, | Hi-Shanghai | Residential and | 100% | 61,506 | 254,885 | 2,221 | 196,827 | Completed |
Chengdu | commercial | ||||||||
3 | Beibei District, | Hi-Shanghai | Residential and | 100% | 30,845 | 74,935 | 260 | 58,194 | Completed |
Chongqing | commercial | ||||||||
4 | Yuhang District, | Hi-Shanghai | Residential and | 85% | 74,864 | 230,484 | 962 | 148,798 | Completed |
Hangzhou | (Phase I) | commercial | |||||||
5 | Yuhang District, | Hi-Shanghai | Residential and | 85% | 59,640 | 198,203 | 5,426 | 128,297 | Completed |
Hangzhou | (Phase II) | commercial | |||||||
6 | Wuxing District, | SIIC Garden Hotel | Hotel and | 100% | 116,458 | 47,177 | - | - | Completed |
Huzhou | commercial |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 24 |
Business Review, Discussion and Analysis
Pre-sold | |||||||||
Interest | Approximate | Planned | during the | Total | |||||
Projects of | attributable | site area | total GFA | period | GFA sold | Expected | |||
SI Development | Type of | to SI | (square | (square | (square | (square | date of | ||
City | (continued) | property | Development | meters) | meters) | meters) | meters) | completion | |
7 | Wuxing District, | Hurun Commercial | Commercial | 100% | 13,661 | 27,322 | - | - | Under |
Huzhou | Plaza | planning | |||||||
8 | Wuxing District, | SIIC Tianlan Bay | Residential and | 100% | 115,647 | 193,292 | 8,707 | 19,861 | Completed |
Huzhou | commercial | ||||||||
9 | Wuxing District, | SIIC Yungjing Bay | Residential | 100% | 68,471 | 207,906 | 4,083 | - | 2020 |
Huzhou | |||||||||
10 | Shilaoren National | International Beer City | Composite | 100% | 227,675 | 806,339 | - | 327,831 | 2014 to 2022, |
Tourist Resort, | in phases | ||||||||
Qingdao | |||||||||
11 | Fengze District, | Sea Palace | Residential and | 100% | 170,133 | 1,064,099 | 39,422 | 164,183 | 2017 to 2021, |
Quanzhou | commercial | in phases | |||||||
12 | Baoshan District, | Gucun Large | Residential | 100% | 26,600 | 73,798 | - | - | 2022 |
Shanghai | Residential Community | ||||||||
Unit BSPO-0104, | |||||||||
Lot 0421-01 | |||||||||
13 | Baoshan District, | Gucun Large | Residential | 100% | 32,130 | 86,692 | - | - | 2022 |
Shanghai | Residential Community | ||||||||
Unit BSPO-0104, | |||||||||
Lot 0423-01 | |||||||||
14 | Hongkou District, | North Bund Project | Commercial and | 90% | 23,037 | 230,568 | - | - | 2021 |
Shanghai | office | ||||||||
15 | Jiading District, | A New Era in the city | Residential and | 100% | 58,949 | 163,351 | 2,408 | 79,492 | Completed |
Shanghai | commercial | ||||||||
16 | Jiading District, | Essence of Shanghai | Residential and | 100% | 32,991 | 75,559 | - | 39,695 | Completed |
Shanghai | commercial | ||||||||
17 | Jingan District, | Territory Shanghai | Residential | 100% | 32,512 | 114,737 | 727 | 76,768 | 2020 |
Shanghai | |||||||||
18 | Jinshan District, | Flos Granti | Residential | 100% | 135,144 | 214,143 | - | 195,597 | Completed |
Shanghai | |||||||||
19 | Qingpu District, | Belle Rive | Villa | 51% | 315,073 | 59,577 | - | 25,985 | Completed |
Shanghai | |||||||||
20 | Qingpu District, | Shanghai Bay | Residential | 51% | 808,572 | 631,199 | 3,213 | 213,301 | 2011 to 2021, |
Shanghai | in phases | ||||||||
21 | Qingpu District, | He Villa/ | Residential | 51% | 162,708 | 121,683 | - | 84,627 | Completed |
Shanghai | Sea County | ||||||||
22 | Qingpu District, | Shanghai International | Composite | 100% | 194,956 | 120,363 | - | 96,673 | Completed |
Shanghai | Art Centre | ||||||||
23 | Wuzhong District, | Sudi Lot 2017-WG-10 | Residential | 100% | 40,817 | 126,881 | - | - | 2020 |
Suzhou | |||||||||
Sub-total | 2,807,857 | 5,193,759 |
25 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Pre-sold | |||||||||
Interest | Approximate | Planned | during the | Total | |||||
Projects of | attributable | site area | total GFA | period | GFA sold | Expected | |||
SI Urban | Type of | to SI Urban | (square | (square | (square | (square | date of | ||
City | Development | property | Development | meters) | meters) | meters) | meters) | completion | |
1 | Chaoyang District, | American Rock | Residential and | 100% | 121,499 | 523,833 | - | 454,610 | Completed |
Beijing | commercial | ||||||||
2 | Chaoyang District, | Youngman Point | Residential and | 100% | 112,700 | 348,664 | - | 258,814 | 2007 to 2021, |
Beijing | commercial | in phases | |||||||
3 | Haidian District, | West Diaoyutai • | Residential | 90% | 42,541 | 250,930 | 8,726 | 196,753 | 2007 to 2021, |
Beijing | Emperor Seal | in phases | |||||||
4 | Wancheng District, | Forest Sea | Residential and | 67% | 679,620 | 1,032,534 | 119 | 305,008 | 2007 to 2025, |
Changsha | commercial | in phases | |||||||
5 | Jiulongpo District, | Top City | Residential, | 100% | 120,014 | 786,233 | - | 376,095 | Completed |
Chongqing | commercial and | ||||||||
office | |||||||||
6 | Huaqiao Town, | Yoooou.net | Commercial and | 30.7% | 34,223 | 129,498 | - | 63,021 | Completed |
Kunshan | office | ||||||||
7 | Zhoushi Town, | Royal Villa | Residential | 53.1% | 205,017 | 267,701 | - | 222,666 | Completed |
Kushan | |||||||||
8 | Baoshan District, | Shangtou Baoxu | Residential | 100% | 118,880 | 306,167 | 5,860 | 104,109 | 2020 to 2021, |
Shanghai | in phases | ||||||||
9 | Minhang District, | Urban Cradle | Residential and | 53.1% | 943,000 | 1,226,298 | 6,256 | 818,727 | 2007 to 2022, |
Shanghai | commercial | in phases | |||||||
10 | Minhang District, | Shanghai Jing City | Residential and | 59% | 301,908 | 772,885 | - | 560,409 | Completed |
Shanghai | commercial | ||||||||
11 | Minhang District, | TODTOWN | Residential, | 20.7% | 117,825 | 605,000 | - | 56,205 | 2020 to 2022, |
Shanghai | commercial, | in phases | |||||||
hotel, office and | |||||||||
apartment office | |||||||||
12 | Minhang District, | Contemporary Art | Residential | 100% | 116,308 | 83,622 | 6,120 | 67,803 | 2018 to 2022, |
Shanghai | Villa (Jade Villa) | in phases | |||||||
13 | Minhang District, | Contemporary | Residential | 100% | 120,512 | 191,636 | 23,148 | 26,288 | 2020 to 2022, |
Shanghai | Splendour Villa | in phases | |||||||
(Courtyard Villa) | |||||||||
14 | Minhang District, | Shangtou Xinhong | Residential | 90% | 69,495 | 212,347 | - | - | 2021 |
Shanghai | |||||||||
15 | Minhang District, | Chenghang Project | Commercial and | 80% | 20,572 | 60,195 | - | - | 2021 |
Shanghai | office | ||||||||
16 | Minhang District, | Shenzhicheng Project | Rental housing | 29.5% | 47,435 | 128,075 | - | - | 2022 |
Shanghai | |||||||||
17 | Minhang District, | Chenglong Project | Rental housing | 59% | 47,383 | 118,458 | - | - | 2023 |
Shanghai | |||||||||
18 | Songjiang District, | Shanghai Youth City | Commercial and | 100% | 57,944 | 212,130 | - | 139,840 | Completed |
Shanghai | office | ||||||||
19 | Xuhui District, | Jingxiang Project | Rental housing | 59% | 17,161 | 48,050 | - | - | 2022 |
Shanghai | |||||||||
20 | Xuhui Binjiang, | Binjiang U Center | Office and | 35.4% | 77,371 | 525,888 | - | - | 2020 to 2022, |
Shanghai | commercial | in phases | |||||||
21 | Heping District, | Shenyang U Centre | Commercial, | 80% | 22,651 | 228,768 | - | 71,660 | Completed |
Shenyang | office and | ||||||||
serviced | |||||||||
apartment | |||||||||
22 | Futian District, | China Phoenix Tower | Residential, | 91% | 11,038 | 106,190 | - | 78,343 | Completed |
Shenzhen | commercial and | ||||||||
office | |||||||||
23 | Nankai District, | Laochengxiang | Residential, | 100% | 244,252 | 752,883 | - | 582,478 | Completed |
Tianjian | commercial and | ||||||||
office |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 26 |
Business Review, Discussion and Analysis
Pre-sold | |||||||||
Projects of | Interest | Approximate | Planned | during the | Total | ||||
SI Urban | attributable | site area | total GFA | period | GFA sold | Expected | |||
Development | Type of | to SI Urban | (square | (square | (square | (square | date of | ||
City | (continued) | property | Development | meters) | meters) | meters) | meters) | completion | |
24 | Binghu District, | Urban Development | Commercial, | 59% | 24,041 | 193,368 | - | 41,900 | Completed |
Wuxi | International Center | hotel, office | |||||||
and serviced | |||||||||
apartment | |||||||||
25 | Chanba Ecotope, | Originally | Residential, | 71.5% | 2,101,967 | 3,899,867 | 13,639 | 2,456,442 | 2008 to 2022, |
Xi'an | commercial and | in phases | |||||||
hotel | |||||||||
26 | Yantai | Yantai Project | Residential and | 100% | 77,681 | 159,100 | - | - | 2022 to 2023, |
commercial | in phases | ||||||||
Sub-total | 5,853,038 | 13,170,320 | |||||||
Pre-sold | |||||||||
Interest | Approximate | Planned | during | Total | |||||
attributable | site area | total GFA | the period | GPA sold | Expected | ||||
Projects of | Type of | to the | (square | (square | (square | (square | date of | ||
City | the Company | property | Company | meters) | meters) | meters) | meters) | completion | |
1 | Qingpu District, | Belle Rive | Villa | 49% | 315,073 | 59,577 | - | 25,985 | Completed |
Shanghai | |||||||||
2 | Qingpu District, | Shanghai Bay | Residential | 49% | 808,572 | 631,199 | 3,213 | 213,301 | 2011 to 2021, |
Shanghai | in phases | ||||||||
3 | Qingpu District, | He Villa/Sea County | Residential | 49% | 162,708 | 121,683 | - | 84,627 | Completed |
Shanghai | |||||||||
Sub-total | 1,286,3531 | 812,4591 | |||||||
Total | 9,947,2481 | 19,176,5381 | |||||||
Major Future Development Projects
Interest | Approximate | Planned | |||||
attributable | site area | total GFA | Expected | ||||
Projects of | to SI | (square | (square | date of | |||
City | SI Development | Project type | Development | meters) | meters) | completion | |
1 | Qingpu District, Shanghai | Zhujiajiao Lot D2 | Residential and | 51% | 349,168 | 177,954 | 2020 |
commercial | |||||||
2 | Minhang District, Shanghai | Huacao Town Unit | Rental housing | 30% | 19,822 | 52,923 | 2023 |
MHPO-1403, Lot 30-01 | |||||||
3 | Qingpu District, Shanghai | Guanglai Road North, | Rental housing | 49% | 32,521 | 45,639 | 2023 |
Hongqiao West, Lot 04-33 | |||||||
Sub-total | 401,511 | 276,516 | |||||
27 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
Interest | Approximate | Planned | |||||
attributable | site area | total GFA | Expected | ||||
Projects of | to the | (square | (square | date of | |||
City | the Company | Project type | Company | meters) | meters) | completion | |
1 | Qingpu District, Shanghai | Zhujiajiao Lot D2 | Residential and | 49% | 349,168 | 177,954 | 2020 |
commercial | |||||||
2 | Qingpu District, Shanghai | Shanghai Lot F | Villa | 10% | 350,533 | 175,267 | Under planning |
3 | Qingpu District, Shanghai | Shanghai Lot G | Villa | 10% | 401,274 | 200,637 | Under planning |
Sub-total | 1,100,9751 | 553,8581 | |||||
Total | 1,502,4861 | 830,3741 | |||||
Major Investment Projects
Total GPA for | |||||
Interest | investment | ||||
attributable to | properties | ||||
City | Projects of SI Development | Project type | SI Development | (square meters) | |
1 | Wenjiang District, Chengdu | Orchard Forest | Commercial | 100% | 769 |
2 | Qingdao Economic Development Zone | Dali Plaza | Commercial | 76% | 21,495 |
3 | Laoshan District, Qingdao | Shanghai Industrial Investment Centre | Office | 100% | 26,669 |
4 | Fengze District, Quanzhou | Sea Palace (Phase I of Linghai Yuan) | Commercial | 100% | 1,478 |
5 | Changning District, Shanghai | Super Ocean Finance Center | Office | 100% | 2,321 |
6 | Changning District, Shanghai | United 88 | Office | 100% | 50,560 |
Commercial | 100% | 38,923 | |||
Parking lot | 100% | 28,457 | |||
7 | Hongkou District, Shanghai | Gao Yang Commercial Centre | Office | 100% | 22,187 |
8 | Hongkou District, Shanghai | Gao Yang Hotel | Office | 100% | 3,313 |
9 | Huangpu District, Shanghai | Golden Bell Plaza | Office | 100% | 9,801 |
Office | 90% | 40,186 | |||
Parking lot | 90% | 4,870 | |||
10 | Huangpu District, Shanghai | Huangpu Estate | Commercial | 100% | 20,918 |
11 | Huangpu District, Shanghai | No. 108 Haichao Road | Commercial | 100% | 474 |
12 | Jiading District, Shanghai | Essence of Shanghai | Commercial | 100% | 37,998 |
13 | Jing'an District, Shanghai | Territory Shanghai | Commercial | 100% | 1,559 |
Parking lot | 100% | 3,952 | |||
14 | Pudong New District, Shanghai | No. 1111 Shangchuan Road | Industrial | 100% | 40,208 |
15 | Pudong New District, Shanghai | Huashen Building | Office | 100% | 344 |
16 | Xuhui District, Shanghai | Shanghai Industrial Investment Building | Office | 100% | 10,089 |
Office | 74% | 14,130 | |||
Parking lot | 74% | 8,692 | |||
17 | Xuhui District, Shanghai | Yonglong Building | Office | 100% | 798 |
18 | Yangpu District, Shanghai | Hi-Shanghai | Commercial | 100% | 22,027 |
Parking lot | 100% | 22,000 | |||
19 | Zhabei District, Shanghai | No. 235 Zhongshan Road North (portion) | Office | 100% | 1,434 |
20 | Yuecheng, Shaoxing, Zhejiang | International Chinese City | Commercial | 100% | 26,479 |
21 | Xiqing District, Tianjin | Rhine Town | Commercial | 100% | 5,961 |
Sub-total | 468,092 | ||||
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 28 |
Business Review, Discussion and Analysis
Interest | Total GPA for | ||||
attributable | investment | ||||
to SI Urban | properties | ||||
City | Projects of SI Urban Development | Project type | Development | (square meters) | |
1 | Chaoyang District, Beijing | Youngman Point | Commercial | 100% | 19,7682 |
2 | Jiulongpo District, Chongqing | Top City | Commercial, office building and | 100% | 285,2642 |
parking lot | |||||
3 | Changning District, Shanghai | ShanghaiMart | Exhibition, transaction market, | 51% | 284,651 |
office building and parking lot | |||||
4 | Songjiang District, Shanghai | Shanghai Youth City | Commercial | 100% | 16,3492 |
5 | Xuhui District, Shanghai | Urban Development International Tower | Office building | 59% | 45,239 |
6 | Xuhui District, Shanghai | YOYO Tower | Commercial | 59% | 13,839 |
7 | Xuhui District, Shanghai | Binjiang U Center | Office building | 35.4% | 25,8452 |
8 | Futian District, Shenzhen | China Phoenix Tower | Office building | 91% | 1,0482 |
9 | Shenyang | Shenyang U Centre | Commercial and office building | 80% | 30,332 |
10 | Shanghai, Tianjin and Kunshan | Others | Commercial, office building | 59% | 93,196 |
and parking lot | |||||
Sub-total | 815,531 | ||||
Total | 1,283,683 | ||||
Notes:
- There are duplicate figures in the GPA of Belle Rive, Shanghai Bay and He Villa/Sea County in Shanghai and Zhujiajiao Lot D2.
- Such total GFAs are duplicate figures, which have been included in the Major Development Properties table.
CONSUMER PRODUCTS
For the first half of 2020, the consumer products business made a profit contribution of HK$360 million to the Group, representing a decrease of 35.7% over the corresponding period of last year and accounting for approximately 35.2% of the Group's Net Business Profit. Due to the COVID-19 epidemic and its impact on travelling and transportation around the world, the operating results of Nanyang Tobacco were affected to a certain extent. During the period, Nanyang Tobacco implemented the upgrade of core technologies and continued to promote overseas production and sales cooperation projects to enhance the company's overall competitiveness and seek growth drivers for future business. Against the impact of the epidemic, Wing Fat Printing's management remained calm and cautious, and leveraging the time window of production capacity shortages in the industry during the first half of the year, it was able to seize limited orders in the market while cautiously implementing the resumption of work and production in order to achieve the best operating results for the company.
Tobacco
Since the beginning of this year, the global epidemic and resultant customs-closure measures have brought about many uncertainties and challenges to Nanyang Tobacco's operations and production. Sales at duty-free shops have fallen sharply, and the export and ship tobacco business have also been affected. For the first half of the year, the turnover and profit of the company after tax were HK$1,123 million and HK$274 million respectively, representing a decline of 32.0% and 44.9% over the corresponding period last year. In response to the epidemic, Nanyang Tobacco firmly adhered to its business goals of "strengthening our existing business and pursuing for excellence; and ensuring a healthy internal operation and external development". The company has worked diligently to combat the epidemic, ensuring production and operation, and implementing a variety of prevention-and-control measures to ensure the orderly and normal operation of its business.
In terms of sales for the company's major markets, with the rapid recovery of the Hong Kong duty-paid market, Nanyang Tobacco launched a series of promotional activities in the second quarter for the three major categories of cigarettes in the Hong Kong market, including traditional cigarettes, cigarettes distributed from China and blended cigarettes, and further penetrating the blended cigarette market with "value-for-money" capsule cigarettes. The new strategies have achieved unprecedented results for the company, registering a year-on-year sales increase of more than 30% in the Hong Kong and Macau duty-paid markets. In the first two months of the year, the China market was greatly affected by the epidemic, but with the subsequent resumption of work and production on the mainland, the company achieved growth both in sales volume
29 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Business Review, Discussion and Analysis
and turnover. Capitalizing on the opportunities, the company concluded a series of sales contracts and made considerable efforts to speed up the sourcing of materials to ease production and inventory pressures. In addition, Nanyang Tobacco achieved a significant increase in the proportion of mid-to-high-end products in the product mix that was higher than the overall growth rate in such proportion in the product structure of China Tobacco.
The duty-free markets for China, Hong Kong and Macau, were basically inactive while major exhibitions during the period were cancelled. Duty-free operators at airports are generally not optimistic about the short-term recovery of the industry. The duty-free ship supply and ship tobacco markets were also hit by the slowdown in shipping activity, and orders fell sharply. In the overseas markets, due to the closure of selected destination ports, customs clearance of goods has been delayed significantly, resulting in a substantial increase in dealers' inventory and slower sales. During the period, the company has focused on product reserves and modified its strategies in a timely manner, to increase its effort in the development of new products for markets that have been less affected by the epidemic. The company is also making an effort to develop new brands for its long- term strategy, shifting to the development of new product reserves and laying the foundation for the future enrichment of the company's new range of products. The company has also actively optimized the allocation of its resources, adjusting its promotion strategy in response to the needs of different markets, and closely monitoring market conditions in the second half of the year with the active deployment of new marketing strategies.
Emphasizing technological innovation, Nanyang Tobacco made good progress in the expansion of the regular size tobacco project during the period, which is expected to effectively increase the production capacity of mid-to-high-end products to meet rising market demands for innovative cigarettes. It also continued to promote the construction of composite production capacity, introduced advanced technology from all over the world, and successfully completed the installation of new cigarette machines and the upstream and downstream connection operation of the regular size cigarette machine expansion lines. The first batch of the entire line was completed in mid-July to establish self-supporting facilities for heterotypic tobacco with distinctive filter rods. In-depth research on innovative tobacco will be carried out during the period, and preparations will be made to build a new product-manufacturing technology and processing plant for nano-size products with Nanyang characteristics in response to the actual operating environment and where feasible. Phase progress has been achieved. In addition, the heterotypic canned processing line quality improvement project implemented this year will further consolidate and develop characteristic canned products and maintain the leading position of Nanyang Tobacco in the canned industry.
In terms of business cooperation, the overseas sales and production cooperation project between Nanyang Tobacco and a large mainland cigarette company has entered a substantive stage of development. It will seek to promote the medium-andlong-term goals of strategic development through business cooperation in different areas.
Printing
Wing Fat Printing recorded a turnover of HK$738 million during the period, a decrease of 2.2% over the same period last year, mainly due to the continued and widespread impact of the new epidemic. The net profit achieved during the period was HK$94.05 million, an increase of 41.7% over the same period last year. The increase was mainly due to the calm response and unremitting efforts of the company's management team in tackling issues arising from the epidemic. Since the outbreak of the epidemic, the company has actively implemented safety and epidemic-prevention measures. With the introduction of such measures to protect the safety of its employees, the company's management made astute judgements to determine timely schedules for the resumption of work and production. As a result, the company successfully won valuable orders during the "capacity shortage" period on the mainland in the beginning of the year and achieved stable results for the period. Since taking office, the company's new management team has actively advocated "intelligent manufacturing" enhancement to boost production efficiency, resulting in significant improvements in profit margins as well as overall profitability and competitiveness over the same period last year. The company's moulded-fibre business, in particular, has made a significant contribution to its extraordinary performance. The company also benefited from appreciation of currencies in the settlement of accounts over the period.
Under the impact of the global epidemic, tensions over international trade disputes and the rapid deterioration | |
of the economy, Wing Fat Printing's management has overcome such adversity with energy and | |
determination, achieving satisfactory progress results during this difficult period. The strategic deployment of | |
the smart-medicine packaging business has also contributed to the company's encouraging performance. As | |
the epidemic gradually becomes a new normal, the company will strive to establish a new support level for its | |
business and to ensure the stability of its performance. | |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 30 |
Financial Review
KEY FIGURES
2020 | 2019 | Change | |
unaudited | % | ||
Six months ended 30 June | |||
Results | |||
Revenue (HK$'000) | 13,210,952 | 16,661,951 | -20.7 |
Profit attributable to owners of the Company (HK$'000) | 802,702 | 2,009,628 | -60.1 |
Earnings per share - basic (HK$) | 0.725 | 1.848 | -60.8 |
Dividend per share - interim cash (HK cents) | 22 | - | |
- interim shares in specie | |||
(HK cents) Note | - | 101 | |
Special interim dividend per share - shares in specie | Note | - | |
Dividend payout ratio (note (a)) | Note | 54.7% | |
Interest cover (note (b)) | 5.8 times | 7.2 times | |
unaudited | audited | Change | |
30 June | 31 December | % | |
Financial Position | |||
Total assets (HK$'000) | 170,464,589 | 174,942,290 | -2.6 |
Equity attributable to owners of the Company (HK$'000) | 39,770,285 | 40,239,812 | -1.2 |
Net assets per share (HK$) | 36.58 | 37.01 | -1.2 |
Net debt ratio (note (c)) | 72.01% | 62.45% | |
Gearing ratio (note (d)) | 42.45% | 42.79% | |
Number of shares in issue (shares) | 1,087,211,600 | 1,087,211,600 |
Note (a) : (cash dividend per share + fair value of distributed share in specie per share)/earnings per share
Note (b) : (profit before taxation, interest expenses, depreciation and amortisation)/interest expenses
Note (c) : (interest-bearingloans-cash)/equity attributable to owners of the Company
Note (d) : interest-bearing loans/(equity attributable to owners of the Company + non-controlling interests + interest-bearing loans)
Note: The Board of Directors of the Company has resolved to declare to the shareholders of the Company, for the year of 2020, an interim cash dividend of HK22 cents per share and an interim special dividend in the form of distribution in specie of 1 SIUD Share for every 5 shares of the Company held.
The Company has paid an interim dividend for 2019 in the form of distribution in specie to shareholders of the Company on the basis of 1 SIUD Share for every 1 share of the Company held. Based on the closing price of SIUD on 18 October 2019 (the date of despatch of the SIUD Shares), the interim dividend was HK$1.01 per share.
31 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Financial Review
I ANALYSIS OF FINANCIAL RESULTS
1 Profit attributable to owners of the
Company
For the six months ended 30 June 2020, the Group recorded a profit attributable to owners of the Company of HK$802.70 million, a decrease of HK$1,206.93 million or approximately 60.1% as compared to the same period of 2019.
HK$ million | ||||
3,500 | ||||
3,000 | ||||
2,500 | ||||
2,000 | ||||
1,500 | ||||
1,000 | ||||
500 | ||||
0 | ||||
2016 | 2017 | 2018 | 2019 | 2020 |
Prot for the second half of the year
Prot for the rst half of the year
2 Profit Contribution from Each Business
The profit contributed by each business in the Group for the first half of 2020 and the comparative figures of the same period last year was summarized as follows:
2020 | 2019 | Change | ||
Unaudited | % | |||
Six months ended 30 June | ||||
HK$'000 | HK$'000 | |||
Infrastructure Facilities | 408,424 | 1,016,055 | -59.8 | |
Real Estate | 256,355 | 552,396 | -53.6 | |
Consumer Products | 360,315 | 560,614 | -35.7 | |
1,025,094 | 2,129,065 | -51.9 | ||
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 32 |
Financial Review
1H2020 | 1H2019 | |||||||
35.2% | 26.3% | |||||||
Consumer | Consumer | 47.7% | ||||||
Products | Products | |||||||
39.8% | Infrastructure | |||||||
Facilities | ||||||||
Infrastructure | ||||||||
Facilities | ||||||||
25.0% | 26.0% | |||||||
Real Estate | Real Estate | |||||||
Net profit from the infrastructure facilities business for the period amounted to approximately HK$408.42 million, accounting for 39.8% of Net Business Profit, and representing a year-on-year decrease of 59.8%.
Due to the outbreak of the COVID-19 epidemic, the Ministry of Transport introduced nationwide toll fee exemption during the disease prevention and control period for toll roads and bridges, coupled with the implementation of a 5% discount on tolls for ETC lanes, and the impact of the RMB depreciation of approximately 4.5% year-on-year, revenue and profit contributions from toll roads and bridge business decreased significantly.
The impact brought by the COVID-19 epidemic on our water services and waste-to-energy business was relatively small, an increase in profit of 14.1% was recorded. The approximately 2% increase in equity stake of Canvest Environment during the period has increased its profit contribution to the Group.
The real estate business recorded a profit of approximately HK$256.36 million, accounting for 25.0% of the Net Business Profit, and representing a decrease of HK$296.04 million over the same period in 2019. The decrease was mainly due to the decrease in the delivery and settlement of properties, the decrease in rental income and hotel revenue resulting from the epidemic, and the profit sharing percentage in SI Urban Development was reduced from 69.96% to 47.41% after the distribution of share in SI Urban Development as interim dividend last year.
The consumer products business recorded a net profit of HK$360.32 million for the period, accounting for 35.2% of Net Business Profit, and representing a year-on-year decrease of 35.7%. Profit from Nanyang Tobacco decreased by HK$223.31 million or 44.9% as its duty free and export sales were affected by the epidemic. Wing Fat Printing's profit contribution increased by 36.5% as its moulded- fibre business with a higher gross profit margin increased, and a gain on the disposal of 100% equity in Sichuan Kemei Paper Co., Ltd. ("Sichuan Kemei") was recorded during the period.
33 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Financial Review
3 Revenue
The Group's revenue by principal businesses for the first half of 2020 and the comparatives of the same period last year was summarized as follows:
2020 | 2019 | Change | |
Unaudited | % | ||
Six months ended 30 June | |||
HK$'000 | HK$'000 | ||
Infrastructure Facilities | 3,344,469 | 4,580,305 | -27.0 |
Real Estate | 8,130,621 | 9,861,697 | -17.6 |
Consumer Products | 1,735,862 | 2,219,949 | -21.8 |
13,210,952 | 16,661,951 | -20.7 | |
1H2020 | 1H2019 | |||||
13.1% | 13.3% | |||||
Consumer | Consumer | 27.5% | ||||
Products | Products | |||||
25.3% | Infrastructure | |||||
Facilities | ||||||
Infrastructure | ||||||
61.6% | Facilities | 59.2% | ||||
Real Estate | Real Estate |
In the first half of 2020, revenue of the Group amounted to approximately HK$13,210.95 million, representing a year-on-year decrease of 20.7%, mainly due to the operation of each business segment was affected by the epidemic to varying extents.
Revenue of the infrastructure facilities business fell due to the impact of the toll free measures for toll roads during the disease prevention and control period, the impacts of various measures that brought by the request of cancellation of provincial toll stations, as well as the lower construction revenue of SIIC Environment.
The decrease in the delivery and settlement of properties, coupled with the drop in rental income and revenue from hotel business during the epidemic caused the decrease in revenue of the real estate business.
The revenue from consumer products business decreased due to a decline in duty free and export cigarette sales.
4 Profit before Taxation
-
Gross profit margin
Compared to the first half of 2019, gross profit margin remained stable. Although negative gross profit margin was recorded for toll roads business due to the toll free measures during the period, the increase in operating revenue with relatively higher profit margin from water services help offsetting the decline.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 34 |
Financial Review
-
Gain on disposal of subsidiaries/interests in associates
Gain for the period was mainly attributable to the disposal of 100% equity interest in a subsidiary, Sichuan Kemei and an approximately 23.97% equity interest in an associate, Wufangzhai.
5 Dividend
The Board of Directors of the Company has resolved to declare to the shareholders of the Company whose names appear on the register of members of the Company on the Record Date, for the year of 2020, an interim cash dividend of HK22 cents per share and an interim special dividend in the form of distribution in specie of the SIUD Shares held by the Group in proportion to their respective shareholdings in the Company on the following basis:
for every 5 shares of the Company held . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 SIUD Share
If the calculation results in the distribution of fragmented SIUD Shares to Qualifying Shareholders, the distributing number of SIUD Shares will be rounded down to the nearest whole number of the SIUD Shares. Fragmented SIUD Shares will not be distributed, but it will be sold in the market when practicable and the net proceeds from such sale will be retained for the benefit of the Company.
For same period last year, the Company has paid an interim dividend in the form of distribution in specie to shareholders of the Company on the basis of 1 SIUD Share for every 1 share of the Company held.
II FINANCIAL POSITION OF THE GROUP
-
Capital and Equity attributable to owners
of the Company
The Company had a total of 1,087,211,600 shares in issue as at 30 June 2020. There is no change compared with 1,087,211,600 shares as at the end of 2019.
Equity attributable to owners of the Company reached HK$39,770.29 million as at 30 June 2020, it was attributable to the net profit for the first half of the year after deducting the dividend actually paid during the period. - Indebtedness
-
Borrowings
SIHL Finance Limited, a wholly-owned subsidiary of the Company, signed a HK$2.1 billion or US dollar equivalent dual-currency club loan for a term of 5 years in March 2020.
As at 30 June 2020, the total borrowings of the Group including bank borrowings and other borrowings amounted to approximately HK$53,831.77 million (31 December 2019: HK$54,456.57 million), of which 67.0% (31 December 2019: 68.5%) was unsecured credit facilities. The proportions of US dollars, Renminbi and HK dollars of total borrowings were 3%, 84% and 13% (31 December 2019: 3%, 83% and 14%) respectively.
HK$ billion
45 | ||||
40 | ||||
35 | ||||
30 | ||||
25 | ||||
20 | ||||
15 | ||||
10 | ||||
5 | ||||
0 | ||||
2016 | 2017 | 2018 | 2019 | 2020 |
Equity attributable to owners of the Company
35 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Financial Review
-
Pledge of assets
The following assets were pledged by the Group to banks to secure banking facilities granted by these banks to the Group: - investment properties with an aggregate carrying value of HK$11,371,220,000 (31 December 2019: HK$9,792,486,000);
- leasehold land and buildings with an aggregate carrying value of HK$13,959,000 (31 December 2019: HK$123,539,000);
- plant and machineries with an aggregate carrying value of HK$22,590,000 as at 31 December 2019 (30 June 2020: Nil);
-
one (30 June 2020: Nil) toll road operating right with a carrying value of HK$1,884,742,000 as at 31
December 2019 (30 June 2020: Nil); - receivables under service concession arrangements with an aggregate carrying value of HK$14,307,313,000 (31 December 2019: HK$14,419,408,000);
- properties under development held for sale with an aggregate carrying value of HK$15,100,452,000 (31 December 2019: HK$2,869,155,000);
- properties held for sale with an aggregate carrying value of HK$270,667,000 (31 December 2019: 645,466,000);
- trade receivables with an aggregate carrying value of HK$204,813,000 (31 December 2019: HK$172,688,000); and
- bank deposits with an aggregate carrying value of HK$721,749,000 (31 December 2019: HK$1,292,335,000).
-
Contingent liabilities
As at 30 June 2020, the guarantees given to banks by the Group in respect of banking facilities utilised by property buyers and associates amounted to approximately HK$6,732.32 million and HK$1,979.58 million (31 December 2019: HK$7,107.92 million and HK$2,018.77 million) respectively.
- Capital Commitments
As at 30 June 2020, the Group had capital commitments mainly contracted for business development and investments in fixed assets of HK$15,561.27 million (31 December 2019: HK$15,814.20 million). The Group had sufficient internal resources and/or through loan markets to finance its capital expenditures. - Bank Balances and Short-term Investments
As at 30 June 2020, bank balances and short-term investments held by the Group amounted to HK$25,193.48 million (31 December 2019: HK$29,325.48 million) and HK$673.08 million (31 December 2019: HK$810.73 million) respectively. The proportions of US dollars and other currencies, Renminbi and HK dollars of bank balances were 4%, 82% and 14% (31 December 2019: 3%, 78% and 19%) respectively. Short-term investments mainly consisted of investments such as bonds, Hong Kong and PRC listed shares.
While having sufficient working capital and a healthy interest cover, the Group is monitoring the market situation and respective funding requirements on a regular basis for business development, and will seek opportunities to optimise its capital structure should the need arises.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 36 |
Financial Review
III MANAGEMENT POLICIES FOR FINANCIAL RISK
-
Currency Risk
The Group mainly operates in China and the Hong Kong Special Administrative Region and the exposure in exchange rate risks mainly arise from fluctuations in the US dollar, Singapore dollar, HK dollar and Renminbi exchange rates. The management monitors foreign currency exposure and will consider hedging significant foreign currency exposures and adopting suitable measures when necessary. - Interest Rate Risk
The Group's fair value and cash flow interest rate risks mainly relate to fixed and variable rates borrowings. In order to exercise prudent management against interest rates risks, the Group continues to review market trends against its business operations and financial position in order to arrange the most effective interest rate risk management tools. - Price Risk
The Group's price risks are mainly concentrated on equity instruments quoted in the HKSE and the Shanghai Stock Exchange. The management strictly monitors this exposure by maintaining a portfolio of investments with different levels of risks. In addition, a special team has been appointed by the management to monitor price risks and hedging against such risk exposures will be made should the need arises. - Credit Risk
The Group's principal financial assets are receivables under service concession arrangements, contract assets, pledged bank deposits, short-term bank deposits, bank balances and cash, securities and debt investments and trade and other receivables. The Group's credit risk is primarily attributable to its trade and other receivables. The amounts presented in the condensed consolidated statement of financial position are net of allowances for doubtful receivables and expected credit loss. An allowance for impairment and expected credit loss are made according to the Group's accounting policy or where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of cash flows.
With respect to the credit risk of the Group's treasury operations, all bank balances and cash, securities and debt investments of the Group must be placed and entered into with sound and reputable financial institutions. Strict requirements and restrictions in relation to the outstanding amount and credit ratings on securities and debt investments to be held are followed in order to minimise the Group's credit risk exposures.
37 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Report on Review of Condensed Consolidated Financial Statements
TO THE BOARD OF DIRECTORS OF SHANGHAI INDUSTRIAL HOLDINGS LIMITED (incorporated in Hong Kong with limited liability)
INTRODUCTION
We have reviewed the condensed consolidated financial statements of Shanghai Industrial Holdings Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") set out on pages 39 to 62 which comprise the condensed consolidated statement of financial position as of 30 June 2020, and the related condensed consolidated statement of profit or loss, statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the six-month period then ended, and certain explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and Hong Kong Accounting Standard 34 "Interim Financial Reporting" ("HKAS 34") issued by the Hong Kong Institute of Certified Public Accountants. The directors of the Company are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with HKAS 34. Our responsibility is to express a conclusion on these condensed consolidated financial statements based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
SCOPE OF REVIEW
We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants. A review of these condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
28 August 2020
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 38 |
Condensed Consolidated Statement of Profit or Loss
For the six months ended 30 June 2020
Six months ended 30 June | |||
NOTES | 2020 | 2019 | |
HK$'000 | HK$'000 | ||
(unaudited) | (unaudited) | ||
Revenue | 3 | 13,210,952 | 16,661,951 |
Cost of sales | (8,345,795) | (10,542,180) | |
Gross profit | 4,865,157 | 6,119,771 | |
Net investment income | 223,949 | 318,651 | |
Other income, gains and losses | 381,824 | 480,045 | |
Selling and distribution costs | (502,260) | (516,985) | |
Administrative and other expenses | (1,052,878) | (973,822) | |
Finance costs | (865,909) | (911,247) | |
Share of results of joint ventures | 94,566 | 83,011 | |
Share of results of associates | 121,241 | 203,655 | |
Gain on disposal of subsidiaries/interests | |||
in associates | 17 | 87,015 | - |
Profit before taxation | 3,352,705 | 4,803,079 | |
Income tax expense | 4 | (1,663,584) | (1,628,852) |
Profit for the period | 5 | 1,689,121 | 3,174,227 |
Profit for the period attributable to | |||
- Owners of the Company | 802,702 | 2,009,628 | |
- Non-controlling interests | 886,419 | 1,164,599 | |
1,689,121 | 3,174,227 | ||
Earnings per share | 7 | ||
HK$ | HK$ | ||
- Basic | 0.725 | 1.848 | |
- Diluted | 0.725 | 1.848 | |
39 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the six months ended 30 June 2020 | ||
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Profit for the period | 1,689,121 | 3,174,227 |
Other comprehensive income (expense) | ||
Item that will not be reclassified to profit or loss | ||
Fair value change on equity instruments at fair value | ||
through other comprehensive income held by subsidiaries, | ||
net of tax | 18,228 | 12,773 |
Items that may be subsequently reclassified to profit or loss | ||
Exchange differences arising on translation of foreign | ||
operations | ||
- subsidiaries | (1,327,033) | (71,894) |
- joint ventures | (67,886) | (2,935) |
- associates | (62,261) | (2,918) |
Other comprehensive expense for the period | (1,438,952) | (64,974) |
Total comprehensive income for the period | 250,169 | 3,109,253 |
Total comprehensive income for the period attributable to | ||
- Owners of the Company | 47,881 | 1,971,850 |
- Non-controlling interests | 202,288 | 1,137,403 |
250,169 | 3,109,253 | |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 40 |
Condensed Consolidated Statement of Financial Position
At 30 June 2020
30 June | 31 December | ||
NOTES | 2020 | 2019 | |
HK$'000 | HK$'000 | ||
(unaudited) | (audited) | ||
Non-Current Assets | |||
Investment properties | 8 | 23,956,856 | 22,844,587 |
Property, plant and equipment | 8 | 5,623,814 | 5,617,784 |
Right-of-use assets | 492,353 | 407,482 | |
Toll road operating rights | 8 | 7,065,115 | 7,480,543 |
Goodwill | 732,351 | 771,093 | |
Other intangible assets | 8 | 7,388,159 | 7,628,528 |
Interests in joint ventures | 9 | 4,960,433 | 3,252,546 |
Interests in associates | 6,082,178 | 6,416,054 | |
Investments | 10 | 686,845 | 696,027 |
Receivables under service concession | |||
arrangements - non-current portion | 20,068,295 | 19,456,025 | |
Deposits paid on acquisition of investment | |||
properties/property, plant and equipment/ | |||
intangible assets/a subsidiary | 1,350,109 | 1,584,289 | |
Other non-current receivables | 9,239 | 9,239 | |
Deferred tax assets | 410,235 | 502,829 | |
78,825,982 | 76,667,026 | ||
Current Assets | |||
Inventories | 11 | 53,721,860 | 56,706,001 |
Trade and other receivables | 12 | 9,978,657 | 9,446,194 |
Contract assets | 540,531 | 600,758 | |
Investments | 10 | 673,084 | 810,732 |
Receivables under service concession | |||
arrangements - current portion | 543,120 | 547,535 | |
Prepaid taxation | 761,103 | 612,444 | |
Pledged bank deposits | 721,749 | 1,292,335 | |
Short-term bank deposits | 303,469 | 128,365 | |
Bank balances and cash | 24,168,257 | 27,904,781 | |
91,411,830 | 98,049,145 | ||
Assets classified as held for sale | 16 | 226,777 | 226,119 |
91,638,607 | 98,275,264 | ||
41 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Condensed Consolidated Statement of Financial Position
At 30 June 2020
30 June | 31 December | ||
NOTES | 2020 | 2019 | |
HK$'000 | HK$'000 | ||
(unaudited) | (audited) | ||
Current Liabilities | |||
Trade and other payables | 13 | 17,396,475 | 19,503,774 |
Lease liabilities - current portion | 99,865 | 100,762 | |
Contract liabilities | 14 | 13,827,093 | 14,803,392 |
Taxation payable | 3,468,622 | 4,335,119 | |
Bank and other borrowings | 15 | 16,248,114 | 19,443,750 |
51,040,169 | 58,186,797 | ||
Liabilities associated with assets classified | |||
as held for sale | 16 | 165,714 | 174,715 |
51,205,883 | 58,361,512 | ||
Net Current Assets | 40,432,724 | 39,913,752 | |
Total Assets less Current Liabilities | 119,258,706 | 116,580,778 | |
Capital and Reserves | |||
Share capital | 13,649,839 | 13,649,839 | |
Reserves | 26,120,446 | 26,589,973 | |
Equity attributable to owners of the Company | 39,770,285 | 40,239,812 | |
Non-controlling interests | 33,209,950 | 32,564,748 | |
Total Equity | 72,980,235 | 72,804,560 | |
Non-Current Liabilities | |||
Provision for major overhauls | 81,902 | 84,263 | |
Bank and other borrowings | 15 | 37,544,733 | 34,983,838 |
Lease liabilities - non-current portion | 339,975 | 262,030 | |
Deferred tax liabilities | 8,311,861 | 8,446,087 | |
46,278,471 | 43,776,218 | ||
Total Equity and Non-Current Liabilities | 119,258,706 | 116,580,778 | |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 42 |
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2020
Attributable to owners of the Company | Attributable to non-controlling interests | |||||||||||||
Share | ||||||||||||||
options | Share | |||||||||||||
Other | Investment | PRC | reserve | of net | ||||||||||
Share | revaluation | Other | Merger | revaluation | Translation | statutory | Retained | of listed | assets of | |||||
capital | reserve | reserve | reserve | reserve | reserves | reserve | profits | Sub-total | subsidiaries | subsidiaries | Sub-total | Total | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||
(Note i) | (Note ii) | (Note iii) | (Note iv) | |||||||||||
At 1 January 2019 (audited) | 13,649,839 | 54,855 | 1,688,171 | (5,912,547) | 262,408 | (17,396) | 2,202,256 | 29,347,710 | 41,275,296 | 31,892 | 28,195,780 | 28,227,672 | 69,502,968 | |
Profit for the period | - | - | - | - | - | - | - | 2,009,628 | 2,009,628 | - | 1,164,599 | 1,164,599 | 3,174,227 | |
Fair value change on equity | ||||||||||||||
investments at fair value | ||||||||||||||
through other comprehensive | ||||||||||||||
income held by subsidiaries, | ||||||||||||||
net of tax | - | - | - | - | 5,086 | - | - | - | 5,086 | - | 7,687 | 7,687 | 12,773 | |
Exchange differences arising on | ||||||||||||||
translation of foreign operations | ||||||||||||||
- subsidiaries | - | - | - | - | - | (37,011) | - | - | (37,011) | - | (34,883) | (34,883) | (71,894) | |
- joint ventures | - | - | - | - | - | (2,935) | - | - | (2,935) | - | - | - | (2,935) | |
- associates | - | - | - | - | - | (2,918) | - | - | (2,918) | - | - | - | (2,918) | |
Total comprehensive income | ||||||||||||||
(expense) for the period | - | - | - | - | 5,086 | (42,864) | - | 2,009,628 | 1,971,850 | - | 1,137,403 | 1,137,403 | 3,109,253 | |
Transfers | - | - | - | - | - | - | 67,471 | (67,471) | - | - | - | - | - | |
Reduction of share capital | ||||||||||||||
of a subsidiary | - | - | - | - | - | - | - | - | - | - | (18,911) | (18,911) | (18,911) | |
Acquisition of additional interest | ||||||||||||||
in a subsidiary | - | - | - | - | - | - | - | - | - | - | (5,360) | (5,360) | (5,360) | |
Acquisition of additional interest | ||||||||||||||
in a listed subsidiary | - | - | 38,394 | - | - | - | - | - | 38,394 | - | (91,436) | (91,436) | (53,042) | |
Dividends paid (note 6) | - | - | - | - | - | - | - | (565,350) | (565,350) | - | - | - | (565,350) | |
Dividends paid to | ||||||||||||||
non-controlling interests | - | - | - | - | - | - | - | - | - | - | (397,979) | (397,979) | (397,979) | |
At 30 June 2019 (unaudited) | 13,649,839 | 54,855 | 1,726,565 | (5,912,547) | 267,494 | (60,260) | 2,269,727 | 30,724,517 | 42,720,190 | 31,892 | 28,819,497 | 28,851,389 | 71,571,579 | |
43 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2020
AttributabletoownersoftheCompany | Attributabletonon-controllinginterests | ||||||||||||||
Share | |||||||||||||||
options | Share | ||||||||||||||
Other | Investment | PRC | reserve | ofnet | |||||||||||
Share | revaluation | Other | Merger | revaluation | Translation | statutory | Retained | Perpetual | oflisted | assetsof | |||||
capital | reserve | reserve | reserve | reserve | reserve | reserves | profits | Sub-total | bond | subsidiaries | subsidiaries | Sub-total | Total | ||
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | ||
(Notei) | (Noteii) | (Noteiii) | (Noteiv) | (Notev) | |||||||||||
At 1 January 2020 (audited) | 13,649,839 | 54,855 | (324,293) | (5,912,547) | 257,987 | (725,875) | 2,460,543 | 30,779,303 | 40,239,812 | - | 31,892 | 32,532,856 | 32,564,748 | 72,804,560 | |
Profit for the period | - | - | - | - | - | - | - | 802,702 | 802,702 | - | - | 886,419 | 886,419 | 1,689,121 | |
Fair value change on equity | |||||||||||||||
investments at fair value through | |||||||||||||||
other comprehensive income | |||||||||||||||
held by subsidiaries, net of tax | - | - | - | - | 4,537 | - | - | - | 4,537 | - | - | 13,691 | 13,691 | 18,228 | |
Exchange differences arising on | |||||||||||||||
translation of foreign operations | |||||||||||||||
- subsidiaries | - | - | - | - | - | (629,211) | - | - | (629,211) | - | - | (697,822) | (697,822) | (1,327,033) | |
- joint ventures | - | - | - | - | - | (67,886) | - | - | (67,886) | - | - | - | - | (67,886) | |
- associates | - | - | - | - | - | (62,261) | - | - | (62,261) | - | - | - | - | (62,261) | |
Total comprehensive income | |||||||||||||||
(expense) for the period | - | - | - | - | 4,537 | (759,358) | - | 802,702 | 47,881 | - | - | 202,288 | 202,288 | 250,169 | |
Transfers | - | - | - | - | - | - | 29,977 | (29,977) | - | - | - | - | - | - | |
Acquisition of additional interest in | |||||||||||||||
a listed subsidiary | - | - | 62,481 | - | - | - | - | - | 62,481 | - | - | (95,458) | (95,458) | (32,977) | |
Contribution from non-controlling | |||||||||||||||
interests upon additional capital | |||||||||||||||
injection into a subsidiary | - | - | - | - | - | - | - | - | - | - | - | 35,478 | 35,478 | 35,478 | |
Release upon liquidation of a subsidiary | - | - | - | - | - | - | (1,287) | 759 | (528) | - | - | 528 | 528 | - | |
Release upon disposal of a subsidiary | - | - | - | - | - | - | - | - | - | - | - | (1,630) | (1,630) | (1,630) | |
Issue of perpetual bond | - | - | - | - | - | - | - | - | - | 1,096,852 | - | - | 1,096,852 | 1,096,852 | |
Accrual of interest to holders of | |||||||||||||||
perpetual bond | - | - | - | - | - | - | - | (14,011) | (14,011) | 28,829 | - | (14,818) | 14,011 | - | |
Interest paid to holder of perpetual bond | - | - | - | - | - | - | - | - | - | (28,829) | - | - | (28,829) | (28,829) | |
Dividends paid (note 6) | - | - | - | - | - | - | - | (565,350) | (565,350) | - | - | - | - | (565,350) | |
Dividends paid to non-controlling interests | - | - | - | - | - | - | - | - | - | - | - | (578,038) | (578,038) | (578,038) | |
At 30 June 2020 (unaudited) | 13,649,839 | 54,855 | (261,812) | (5,912,547) | 262,524 | (1,485,233) | 2,489,233 | 30,973,426 | 39,770,285 | 1,096,852 | 31,892 | 32,081,206 | 33,209,950 | 72,980,235 | |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 44 |
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2020
Notes:
- Other revaluation reserve is comprised of fair value adjustments on acquisition of subsidiaries relating to interests previously held by the Company and its subsidiaries (collectively referred to as the "Group") as associates/joint ventures and fair value adjustments arising upon the transfer of property, plant and equipment to investment properties in prior years.
- The Group accounts for acquisitions of associates, joint ventures or investee companies from its ultimate parent, Shanghai Industrial Investment (Holdings) Company Limited ("SIIC"), as equity transactions and any difference between the consideration paid and the fair value of the interest acquired is recorded in other reserve. In addition, the Group accounts for changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over those subsidiaries as equity transactions and any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recorded in other reserve.
- Merger reserve mainly represents the difference in the fair value of the consideration paid to SIIC for the acquisition of subsidiaries/ businesses controlled by SIIC and the share capital of the acquired subsidiaries.
- The statutory reserves are reserves required by the relevant laws in the People's Republic of China (the "PRC") applicable to the Group's PRC subsidiaries, joint ventures and associates.
-
On 2 January 2020, Shanghai Industrial Development Co., Ltd. ("SI Development"), a non-wholly owned listed subsidiary of the Group issued a 5.5% perpetual bond with par value of RMB1 billion (equivalent to approximately HK$1,096,852,000) to an independent third party (the "perpetual bondholder").
The perpetual bondholder is entitled to an interest of 5.5% per annum in the first 1.5 years (the "initial investment period") after issuance. Upon the end of the initial investment period, SI Development can elect to extend repayment of the principal for another year once every year indefinitely and the interest rate will be reset with reference to People's Bank of China Benchmark Lending Rate upon each deferral of interest payment and capped at 9%. The interest payments fall due quarterly. Unless SI Development declares dividend to shareholders or reduces the registered capital within 12 months before the interest due date, SI Development can elect to defer the payment of all current or deferred interests to the next payment date.
According to the above-mentioned terms, the issued perpetual bond has no maturity date. SI Development has the right to defer interest payment and the option for redemption of perpetual bond. SI Development has no obligation to deliver cash or another financial asset to another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the issuer, so the perpetual bond is classified as an equity instrument.
45 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2020
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Net cash used in operating activities | (1,385,540) | (2,818,840) |
Net cash used in investing activities: | ||
Investments in joint ventures | (1,681,207) | - |
Advance to associates | (567,391) | (23,751) |
Purchase of property, plant and equipment | (414,854) | (131,175) |
Acquisition of addition interest in an associate | (167,540) | - |
Development costs paid for investment properties | (85,673) | (39,035) |
Addition of service concession rights | (84,338) | (280,352) |
Deposits paid for acquisition of property, plant and | ||
equipment/intangible assets | (62,217) | (130,110) |
Purchase of financial assets at fair value through | ||
profit or loss ("FVTPL") | (458) | (242,718) |
Proceeds from disposal of interests in associates | 467,521 | - |
Decrease (increase) in pledged/short-term bank deposits | 370,286 | (594,840) |
Interest received | 226,897 | 256,789 |
Dividend income received from associates | 163,151 | 179,116 |
Proceeds from disposal of investments | 129,744 | 66,903 |
Proceeds from disposal of subsidiaries | 29,350 | - |
Proceeds from disposal of an equity investment at fair | ||
value through other comprehensive income ("FVTOCI") | 3,531 | - |
Dividend income received from investments | 2,761 | 3,393 |
Capital refund from an equity investment at FVTOCI | - | 30,859 |
Advance from a fellow subsidiary | - | 401 |
Other investing cash flows | 10,090 | 4,396 |
(1,660,347) | (900,124) | |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 46 |
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2020
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Net cash (used in) from financing activities: | ||
Repayment of bank and other borrowings | (17,501,736) | (6,963,034) |
Interest paid | (874,766) | (906,939) |
Dividends paid | (458,696) | (565,350) |
Dividends paid to non-controlling interests | (578,038) | (397,979) |
Repayment of lease liabilities | (53,947) | (47,531) |
Acquisition of additional interest in a listed subsidiary | (32,977) | (53,042) |
Interest paid to holder of perpetual bond | (28,829) | - |
Repayment to related parties | (18,159) | (227,987) |
Bank and other borrowings raised | 18,196,684 | 12,966,413 |
Proceeds from issuance of perpetual bond | 1,096,852 | - |
Contribution from non-controlling interests upon | ||
additional capital injection of a subsidiary | 35,478 | - |
Distribution to a non-controlling shareholder after | ||
reduction of share capital of a subsidiary | - | (18,911) |
Acquisition of additional interests in a subsidiary | - | (5,360) |
(218,134) | 3,780,280 | |
Net (decrease) increase in cash and cash equivalents | (3,264,021) | 61,316 |
Cash and cash equivalents at beginning of the period | 27,904,781 | 25,132,470 |
Effect of foreign exchange rate changes | (472,503) | (44,935) |
Cash and cash equivalents at ending of the period | ||
represented by Bank balances and cash | 24,168,257 | 25,148,851 |
47 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
1. BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA") as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
The financial information relating to the year ended 31 December 2019 that is included in these condensed consolidated financial statements as comparative information does not constitute the Company's statutory annual consolidated financial statements for that year but is derived from those financial statements. Further information relating to these statutory financial statements is as follows:
The Company has delivered the financial statements for the year ended 31 December 2019 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Hong Kong Companies Ordinance.
The Company's auditor has reported on the financial statements for the year ended 31 December 2019. The auditor's report was unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under sections 406(2), 407(2) or 407(3) of the Hong Kong Companies Ordinance.
1A. SIGNIFICANT EVENT IN THE CURRENT INTERIM PERIOD
Due to the adverse market conditions brought about by the outbreak of the Coronavirus Epidemic (the "Epidemic") and associated quarantine and social protective measures put in place in the PRC, Hong Kong and overseas, the operations of the Group were both directly and indirectly affected. The implementation of the toll-free policy during the period of prevention and control of the Epidemic has caused a decrease in the revenue of toll road business of the Group. Since toll revenue constitutes one of the primary sources of revenue and also attributable profit to the Group, the operating results and financial position of the Group were negatively affected. Since the second quarter of 2020, the Chinese economy showed a positive trend of gradual recovery, which should be conducive to normal business resumption of the Group.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 48 |
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
2. PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the historical cost basis except for certain properties and financial instruments, which are measured at fair values, as appropriate.
Other than additional accounting policies resulting from application of amendments to Hong Kong Financial Reporting Standards ("HKFRSs") and the application of certain accounting policies which became relevant to the Group, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2020 are the same as those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2019.
Application of amendments to HKFRSs
In the current interim period, the Group has applied the Amendments to Reference to the Conceptual Framework in HKFRS Standards and the following amendments to HKFRSs issued by the HKICPA, for the first time, which are mandatorily effective for the annual period beginning on or after 1 January 2020 for the preparation of the Group's condensed consolidated financial statements:
Amendments to HKAS 1 and HKAS 8 | Definition of Material | |
Amendments to HKFRS | 3 | Definition of a Business |
Amendments to HKFRS | 9, HKAS 39 and HKFRS 7 | Interest Rate Benchmark Reform |
Except as described below, the application of the amendments to HKFRSs and Amendments to Reference to the Conceptual Framework in HKFRS Standards in the current period has had no material impact on the Group's financial positions and performance and for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.
-
Impacts of application on Amendments to HKAS 1 and HKAS 8 "Definition of Material"
The amendments provide a new definition of material that states "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity." The amendments also clarify that materiality depends on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements taken as a whole.
The application of the amendments in the current period had no impact on the condensed consolidated financial statements. Changes in presentation and disclosure on the application of the amendments, if any, will be reflected on the consolidated financial statements for the year ending 31 December 2020. - Accounting policies newly applied by the Group
In addition, the Group has applied the following accounting policies which became relevant to the Group in the current interim period.
Perpetual bonds
Perpetual bonds issued by the Group are classified as equity instrument as they include no contractual obligation: (i) to deliver cash or another financial asset to another entity; or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the issuer.
Except for the perpetual bonds as stated above which can be classified as equity, all other perpetual bonds issued by the Group are classified as financial liabilities.
The interest expenses of perpetual bonds classified as equity instruments are treated as profit distribution of the Group. The repurchase or cancellation of these instruments is treated as change in equity. The related transaction costs are deducted from equity.
49 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
3. REVENUE AND SEGMENT INFORMATION
The Group's operating segments, based on information reported to the chief operating decision maker (i.e. the board of directors of the Company) for the purposes of resource allocation and performance assessment, are as follows:
Infrastructure facilities | - | investment in toll road projects and water-related business |
Real estate | - | property development and investment and hotel operation |
Consumer products | - | manufacture and sale of cigarettes, packaging materials and printed |
products |
The above operating segments also represent the Group's reportable segments.
Disaggregation of Revenue
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Sales of goods and services | ||
Sales of properties | 6,452,214 | 8,064,584 |
Sales of goods | 1,735,862 | 2,219,949 |
Income from infrastructure facilities, | ||
other than financial income from service | ||
concession arrangements | ||
- toll road operation | 431,606 | 1,202,916 |
- water-related service | ||
- construction income from construction | ||
contracts | 972,095 | 1,478,687 |
- operating and maintenance income | 1,392,126 | 1,353,292 |
Property services and management income | 1,131,139 | 1,011,152 |
Income from hotel operations | 57,626 | 138,242 |
Revenue from goods and services | 12,172,668 | 15,468,822 |
Financial income from service concession | ||
arrangements | 548,642 | 545,410 |
Rental income | 489,642 | 647,719 |
13,210,952 | 16,661,951 | |
Timing of revenue recognition of revenue from | ||
goods and services | ||
A point in time | 9,580,202 | 11,637,825 |
Overtime | 2,592,466 | 3,830,997 |
12,172,668 | 15,468,822 | |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 50 |
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
3. REVENUE AND SEGMENT INFORMATION (continued)
Segment revenue and results
The following is an analysis of the Group's revenue and results by operating segments:
Six months ended 30 June 2020 (unaudited)
Infrastructure | Real | Consumer | |||
facilities | estate | products | Unallocated | Consolidated | |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
REVENUE | |||||
Segment revenue - external sales | 3,344,469 | 8,130,621 | 1,735,862 | - | 13,210,952 |
Segment operating profit (loss) | 868,770 | 2,717,280 | 425,055 | (95,313) | 3,915,792 |
Finance costs | (373,947) | (425,904) | (803) | (65,255) | (865,909) |
Share results of joint ventures | 94,448 | 118 | - | - | 94,566 |
Share of results of associates | 130,784 | (14,135) | 4,592 | - | 121,241 |
Gain on disposal of subsidiaries/ | |||||
interests in associates | 71,218 | - | 15,797 | - | 87,015 |
Segment profit (loss) before taxation | 791,273 | 2,277,359 | 444,641 | (160,568) | 3,352,705 |
Income tax expense | (150,087) | (1,379,383) | (72,290) | (61,824) | (1,663,584) |
Segment profit (loss) after taxation | 641,186 | 897,976 | 372,351 | (222,392) | 1,689,121 |
Less: profit attributable to | |||||
non-controlling interests | (232,762) | (641,621) | (12,036) | - | (886,419) |
Segment profit (loss) after taxation | |||||
attributable to owners of the | |||||
Company | 408,424 | 256,355 | 360,315 | (222,392) | 802,702 |
Six months ended 30 June 2019 (unaudited)
Infrastructure | Real | Consumer | |||
facilities | estate | products | Unallocated | Consolidated | |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
REVENUE | |||||
Segment revenue - external sales | 4,580,305 | 9,861,697 | 2,219,949 | - | 16,661,951 |
Segment operating profit | 1,605,685 | 3,054,160 | 683,331 | 84,484 | 5,427,660 |
Finance costs | (362,657) | (462,865) | (1,318) | (84,407) | (911,247) |
Share of results of joint ventures | 83,011 | - | - | - | 83,011 |
Share of results of associates | 213,891 | (11,925) | 1,689 | - | 203,655 |
Segment profit before taxation | 1,539,930 | 2,579,370 | 683,702 | 77 | 4,803,079 |
Income tax expense | (297,799) | (1,093,289) | (118,250) | (119,514) | (1,628,852) |
Segment profit (loss) after taxation | 1,242,131 | 1,486,081 | 565,452 | (119,437) | 3,174,227 |
Less: profit attributable to | |||||
non-controlling interests | (226,076) | (933,685) | (4,838) | - | (1,164,599) |
Segment profit (loss) after taxation | |||||
attributable to owners of the | |||||
Company | 1,016,055 | 552,396 | 560,614 | (119,437) | 2,009,628 |
51 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
3. REVENUE AND SEGMENT INFORMATION (continued)
Segment assets and liabilities
The following is an analysis of the Group's assets and liabilities by operating segments:
At 30 June 2020 (unaudited) | |||||
Infrastructure | Real | Consumer | |||
facilities | estate | products | Unallocated | Consolidated | |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
Segment assets | 52,905,463 | 106,706,657 | 7,143,829 | 3,708,640 | 170,464,589 |
Segment liabilities | 21,150,818 | 65,559,056 | 735,346 | 10,039,134 | 97,484,354 |
At 31 December 2019 (audited) | |||||
Infrastructure | Real | Consumer | |||
facilities | estate | products | Unallocated | Consolidated | |
HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
Segment assets | 53,703,214 | 108,171,141 | 8,144,709 | 4,923,226 | 174,942,290 |
Segment liabilities | 22,148,064 | 68,115,143 | 1,019,031 | 10,855,492 | 102,137,730 |
4. INCOME TAX EXPENSE
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Current tax | ||
- Hong Kong | 54,653 | 101,806 |
- PRC Land Appreciation Tax ("LAT") | 714,941 | 797,636 |
- PRC Enterprise income tax ("EIT") (including | ||
PRC withholding tax of HK$18,608,000 | ||
(six months ended 30 June 2019: HK$57,929,000)) | 693,012 | 1,047,319 |
1,462,606 | 1,946,761 | |
(Over)underprovision in prior periods | ||
- Hong Kong | (78) | - |
- PRC LAT | 129,444 | (58,967) |
- PRC EIT (including an overprovision of PRC withholding tax of HK$3,009,000 (six months
ended 30 June 2019: HK$14,870,000)) | (16,657) | (55,491) |
112,709 | (114,458) | |
Deferred taxation for the current period | 88,269 | (203,451) |
1,663,584 | 1,628,852 | |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 52 |
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
4. INCOME TAX EXPENSE (continued)
Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profit for both periods.
The Group's subsidiaries in the PRC are subject to PRC EIT at a rate of 25% for both periods, except for (i) certain PRC subsidiaries which are qualified as a High New Technology Enterprise and enjoy a preferential tax rate of 15% for both periods (the preferential tax rate is applicable for a consecutive three years from the date of grant and subject to approval for renewal); and (ii) certain PRC subsidiaries, engaging in public infrastructure projects, are entitled to full exemption from PRC EIT for the first three years and a 50% reduction in PRC EIT for the next three years from the first year of generating operating income.
PRC LAT is levied at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sale of properties less deductible expenditures including cost of land use rights, borrowing costs and all qualified property development expenditures.
5. PROFIT FOR THE PERIOD
Six months ended 30 June
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Profit for the period has been arrived at after charging | ||
(crediting) the following items: | ||
Amortisation of toll road operating rights | ||
(included in cost of sales) | 271,805 | 394,913 |
Amortisation of other intangible assets | ||
(included in cost of sales) | 172,263 | 172,242 |
Depreciation of property, plant and equipment | 312,471 | 231,861 |
Depreciation of right-of-use assets | 42,416 | 28,638 |
Interest expenses for lease liabilities | 10,597 | 4,308 |
Net increase in fair value of investment properties | ||
(included in other income, gains and losses) | (136,866) | (221,324) |
Dividend income from investments (included in net | ||
investment income) | (2,761) | (3,393) |
Net gain on disposal of property, plant and equipment | ||
(included in other income, gains and losses) | (4,474) | (1,910) |
Interest income (included in net investment income) | (226,897) | (254,984) |
Decrease (increase) in fair value of financial assets at | ||
FVTPL (included in net investment income) | 9,530 | (58,447) |
Net foreign exchange loss (included in other income, | ||
gains and losses) | 32,996 | 1,209 |
Share of PRC EIT of joint ventures (included in | ||
share of results of joint ventures) | 36,402 | 41,128 |
Share of PRC EIT of associates (included in share | ||
of results of associates) | 32,256 | 61,985 |
53 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
6. DIVIDENDS
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
2019 final dividend paid of HK52 cents | ||
(six months ended 30 June 2019: 2018 final | ||
dividend paid of HK52 cents) per share | 565,350 | 565,350 |
Subsequent to the end of the current interim period, the directors have determined that interim dividend of HK22 cents per share (six months ended 30 June 2019: Nil) and a distribution in specie of 217,442,320 shares (six months ended 30 June 2019: 1,087,211,600 shares) of SI Urban Development held by the Company to the shareholders of the Company whose names appearing on the Company's register of members on 29 September 2020 in proportion to their then respective shareholdings in the Company on the basis of one SI Urban Development share for every five shares (six months ended 30 June 2019: for every one share) held by the shareholders of the Company.
7. EARNINGS PER SHARE
The calculations of the basic and diluted earnings per share attributable to owners of the Company are based on the following data:
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Earnings: | ||
Profit for the period attributable to owners | ||
of the Company | 802,702 | 2,009,628 |
Interest to holders of perpetual bond | (14,011) | - |
Earnings for the purpose of basic and diluted | ||
earnings per share | 788,691 | 2,009,628 |
Number of shares: | ||
Weighted average number of ordinary shares for the | ||
purpose of basic and diluted earnings per share | 1,087,211,600 | 1,087,211,600 |
The computation of diluted earnings per share does not assume:
- the exercise of options issued by SI Urban Development, a listed subsidiary of the Group, because the exercise price of those options was higher than the average market price for the corresponding period; and
- the exercise of options issued by Canvest Environmental Protection Group Company Limited, a listed associate of the Group, because the exercise price of those options was higher than the average market price for the corresponding period.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 54 |
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
8. TOLL ROAD OPERATING RIGHTS/MOVEMENTS IN INVESTMENT PROPERTIES/
PROPERTY, PLANT AND EQUIPMENT AND OTHER INTANGIBLE ASSETS
The Group's investment properties at the end of the reporting period were fair-valued by Cushman & Wakefield Limited ("C&W"). C&W is a member of the Institute of Valuers and a firm of independent qualified professional valuers not connected with the Group. The valuations were arrived at by reference to market evidence of transaction prices for similar properties in similar locations and conditions, or on the basis of investment approach, where appropriate. During the current interim period, the Group recognised a net increase in fair value of investment properties of approximately HK$137 million in profit or loss (six months ended 30 June 2019: HK$221 million).
During the six months ended 30 June 2020, the management of the Group changed the intention from selling the apartments and commercial units of several residential property projects to lease them out for rentals. Accordingly, properties held for sale with an aggregate carrying amount of approximately HK$1,343 million were transferred to investment properties upon inception of lease agreements with the tenants during the period. A fair value gain of approximately HK$253 million in respect of these properties is recognised in the profit or loss during the period.
During the current interim period, the Group incurred costs for construction in progress of approximately HK$56 million (six months ended 30 June 2019: HK$41 million) and acquired other property, plant and equipment at an aggregate cost of approximately HK$369 million (six months ended 30 June 2019: HK$90 million) for the purpose of expanding the Group's operations and businesses.
In addition, the Group acquired other intangible assets of approximately HK$84 million (six months ended 30 June 2019: HK$280 million).
Impairment assessment of toll road operating rights
During the current interim period, revenue from toll road operations decreased significantly, which is primarily resulted from the decrease in traffic flow volume and the waiver of toll fees according to "The Notice on Toll Roads going Toll-Free During the Period of Precautionary and Control in relation to the outbreak of Coronavirus Epidemic" issued by the Ministry of Transport of the PRC, as well as the recent changes of governmental policies in relation to the toll road operations in the PRC.
Based on the above situation, the Group performed impairment assessment on respective toll road operating rights, with assumptions including (i) the impact on toll road operations due to the Epidemic and the relevant supporting protective policies to be studied and issued by the PRC government as published by the Ministry of Transport; (ii) the standardisation of starting point of toll charging around the city and the corresponding compensation; (iii) the national implementation of new toll fee charging schemes, under which the classification of vehicles and tariff multiplier have been changed; and (iv) the discount on using ETC cards for toll payment is increased to 5%. The management of the Group considered the carrying amount of the toll road operating rights would not exceed its recoverable amount.
9. INTERESTS IN JOINT VENTURES
During the six months ended 30 June 2020, the Group injected capitals with an aggregate amount of
RMB1,527,500,000 (equivalent to approximately HK$1,680,104,000) into joint ventures, namely 上海諾 卓企業管理有限公司 ("Shanghai Nuozhuo") and 上海天宇實宏企業發展有限公司 ("Shanghai Tianyu"). The
Group holds 5% equity interest in Shanghai Tianyu directly and 27.5% equity interest in Shanghai Tianyu indirectly through Shanghai Nuozhuo. Shanghai Tianyu is the project company for the acquisition of a parcel of land situated at Xuhui District in Shanghai in the PRC at a consideration of RMB4,628,000,000 during the period.
55 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
10. INVESTMENTS
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Equity instruments at FVTPL | ||
Listed equity securities | 471,195 | 477,590 |
Unlisted equity securities | 31,365 | 31,375 |
502,560 | 508,965 | |
Financial assets at FVTPL | ||
Corporate bonds | 149,859 | 258,965 |
Funds | 52,030 | 74,178 |
201,889 | 333,143 | |
Equity instruments at FVTOCI | ||
Listed equity securities | 139,441 | 116,736 |
Unlisted equity securities | 516,039 | 547,915 |
655,480 | 664,651 | |
Total investments | 1,359,929 | 1,506,759 |
Analysed for reporting purposes as: | ||
Current portion | 673,084 | 810,732 |
Non-current portion | 686,845 | 696,027 |
1,359,929 | 1,506,759 | |
11. INVENTORIES
Inventories mainly represent properties under development held for sale. Included in the amount is HK$36,652,652,000 (31 December 2019: HK$42,802,007,000) which is not expected to be realised within one year.
12. TRADE AND OTHER RECEIVABLES
The following is an aged analysis of trade receivables, net of allowance for credit loss, presented based on the invoice or contract date, which approximates the respective revenue recognition dates:
30 June | 31 December | ||||
2020 | 2019 | ||||
HK$'000 | HK$'000 | ||||
(unaudited) | (audited) | ||||
Within 30 days | 964,194 | 947,290 | |||
Within 31-60 days | 385,601 | 417,446 | |||
Within 61-90 days | 256,579 | 385,387 | |||
Within 91-180 days | 295,142 | 418,638 | |||
Within 181-365 days | 904,149 | 344,534 | |||
Over 365 days | 715,417 | 524,391 | |||
3,521,082 | 3,037,686 | ||||
Included in other receivables as at 30 June 2020 were (i) unsecured amounts of HK$2,053,065,000 | |||||
(31 December 2019: HK$1,485,674,000) due from certain associates of which HK$1,686,834,000 | |||||
(31 December 2019: HK$1,273,146,000) carried fixed interest at prevailing market interest rates; (ii) | |||||
an amount of HK$Nil (31 December 2019: HK$112,045,000) due from a fellow subsidiary which is | |||||
unsecured and interest-free; and (iii) amounts of HK$11,000 (31 December 2019: HK$413,694,000) due | |||||
from certain joint ventures which are unsecured and interest-free. | |||||
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 56 |
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
13. TRADE AND OTHER PAYABLES
The following is an aged analysis of trade payables, presented based on the invoice date:
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Within 30 days | 1,494,813 | 1,463,519 |
Within 31-60 days | 345,525 | 449,638 |
Within 61-90 days | 271,122 | 434,901 |
Within 91-180 days | 467,590 | 525,328 |
Within 181-365 days | 1,200,596 | 1,520,820 |
Over 365 days | 1,402,882 | 1,130,835 |
5,182,528 | 5,525,041 | |
Included in other payables as at 30 June 2020 were (a) amounts of HK$436,963,000 (31 December 2019: HK$444,319,000) due to State-owned Assets Supervision and Administration Commission of Shanghai Xuhui District (the "Xuhui SASAC") and entities controlled by the Xuhui SASAC, (b) amounts of HK$1,337,000 (31 December 2019: HK$1,363,000) due to certain fellow subsidiaries, which are unsecured, non-interest bearing and have no fixed terms of repayment and (c) accrued expenditure on properties under development of HK$2,435,916,000 (31 December 2019: HK$2,595,930,000).
14. CONTRACT LIABILITIES
The amount mainly represents proceeds received on property sales that have not been recognised as revenue in accordance with the Group's revenue recognition policy.
15. BANK AND OTHER BORROWINGS
During the current interim period, the Group (i) obtained new borrowings in the amount of approximately HK$18,197 million (six months ended 30 June 2019: HK$12,966 million) and (ii) repaid borrowings of approximately HK$17,502 million (six months ended 30 June 2019: HK$6,963 million). The borrowings carry interest at market rates.
16. ASSETS CLASSIFIED AS HELD FOR SALES
On 31 December 2018, the directors of SIIC Environment Holdings Ltd resolved to dispose of one of its subsidiaries. Negotiations with several interested parties have subsequently taken place. The assets and liabilities attributable to the subsidiary, which are expected to be sold within twelve months, were classified as a disposal group held for sale in accordance with HKFRS 5 "Non-current Assets Held for Sale and Discontinued Operations", and are presented separately in the condensed consolidated statement of financial position since 31 December 2018.
During the year ended 31 December 2019, the disposal was not completed as the Group was in the process of finalising the payment plan. The Group entered into a supplementary agreement with the third party on top of the previously signed sales and purchase agreement to extend the expected completion date of the disposal to January 2020 due to renegotiation of consideration payment terms. Due to the outbreak of the Epidemic, a further negotiation on the payment plan has been taking place and the Group expect to complete the disposal in the second half of 2020. Therefore, the assets and liabilities attributable to the subsidiary are still presented separately in the condensed consolidated statement of financial position as at 30 June 2020.
57 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
16. ASSETS CLASSIFIED AS HELD FOR SALES (continued)
The proceeds of the disposal is expected to exceed the net carrying amount of the relevant assets and liabilities and accordingly, no impairment loss has been recognised.
The major classes of assets and liabilities comprising the disposal group classified as held for sale are as follows:
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Trade and other receivables | 23,456 | 17,327 |
Receivables under service concession arrangements | 202,948 | 208,433 |
Prepayments | 184 | 36 |
Inventories | 189 | 323 |
Total assets classified as held for sale | 226,777 | 226,119 |
Trade and other payables, and total liabilities | ||
associated with assets classified as held for sale | (165,714) | (174,715) |
17. DISPOSAL OF AN ASSOCIATE
On 21 April 2020, Shanghai Hu-Ning Expressway (Shanghai Section) Co. Ltd. ("Hu-Ning Expressway"), an indirectly wholly owned subsidiary of the Group entered into a share transfer agreement with Shanghai Galaxy Investment Co., Ltd., an associate of the Group, to dispose of Hu-Ning Expressway's entire 24% equity interest in an associate, namely Zhejiang Wufangzhai Industrial Co. Ltd. ("Wufangzhai") at a cash consideration of RMB419,508,000 (equivalent to HK$462,931,000). Wufangzhai is principally engaged in the production and sale of glutinous rice dumplings, chain food services and the rice industry. This transaction has resulted in the Group recognising a gain of HK$68,424,000 in profit or loss for the current interim period.
18. CAPITAL COMMITMENTS
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Capital expenditure contracted for but not provided | ||
in these condensed consolidated financial | ||
statements in respect of | ||
- acquisition of property, plant and equipment and | ||
intangible assets | 92,407 | 88,489 |
- additions in construction in progress | 1,056,415 | 1,137,001 |
- additions in properties under development held | ||
for sale | 14,277,216 | 12,741,072 |
- investment in an associate | 52,649 | 53,691 |
- investments in joint ventures | 68,005 | 1,779,083 |
- other | 14,573 | 14,862 |
15,561,265 | 15,814,198 | |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 58 |
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
19. CONTINGENT LIABILITIES
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Guarantees given to banks in respect of banking | ||
facilities utilised by | ||
- property buyers | 6,732,316 | 7,107,918 |
- associates | 1,979,581 | 2,018,774 |
8,711,897 | 9,126,692 | |
20. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation technique(s) and inputs used), as well as the level of the fair value hierarchy into which the fair value measurements are categorised (Levels 1 to 3) based on the degree to which the inputs to the fair value measurements is observable.
- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active market for identical assets or liabilities;
- Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Fair value | Fair value | ||||
as at | as at | Valuation | Significant | ||
30 June | 31 December | Fair value | techniques | unobservable | |
Financial assets | 2020 | 2019 | hierarchy | and key inputs | input(s) |
HK$'000 | HK$'000 | ||||
(unaudited) | (audited) | ||||
Financial assets at FVTPL | |||||
Listed equity securities | 471,195 | 477,590 | Level 1 | Quoted bid prices in | N/A |
an active market | |||||
Corporate bonds | 149,859 | 258,965 | Level 2 | Quoted prices in the | N/A |
over-the-counter | |||||
markets | |||||
Funds | 52,030 | 74,178 | Level 2 | Quoted prices in the | N/A |
over-the-counter | |||||
markets | |||||
Unlisted equity securities | 31,365 | 31,375 | Level 3 | Adjusted net asset | Discount factor |
value method under | of lack of control, | ||||
cost approach | the higher the | ||||
discount factor, | |||||
the lower the fair | |||||
value | |||||
Financial assets at FVTOCI | |||||
Listed equity securities | 139,441 | 116,736 | Level 1 | Quoted bid prices in | N/A |
an active market | |||||
Unlisted equity securities | 516,039 | 547,915 | Level 3 | Adjusted net asset | Discount factor |
value method under | of lack of control, | ||||
cost approach | the higher the | ||||
discount factor, | |||||
the lower the fair | |||||
value | |||||
There was no transfer amongst Levels 1, 2 and 3 in both periods.
59 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
20. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (continued)
Reconciliation of Level 3 fair value measurements of financial assets
Unlisted | Unlisted | ||
equity | equity | ||
instruments | instruments | ||
at FVTPL | at FVTOCI | Total | |
HK$'000 | HK$'000 | HK$'000 | |
At 1 January 2019 | 31,386 | 572,430 | 603,816 |
Additions | - | 3,468 | 3,468 |
Capital refund from an equity investment | |||
at FVTOCI | - | (30,859) | (30,859) |
Exchange losses | - | 185 | 185 |
At 30 June 2019 | 31,386 | 545,224 | 576,610 |
At 1 January 2020 | 31,375 | 547,915 | 579,290 |
Disposal | - | (2,642) | (2,642) |
Exchange losses | - | (29,234) | (29,234) |
Unrealised loss recognised in profit or loss | (10) | - | (10) |
At 30 June 2020 | 31,365 | 516,039 | 547,404 |
Fair value measurements and valuation processes
The directors of the Company have closely monitored and determined the appropriate valuation techniques and inputs for fair value measurements.
In estimating the fair value of an asset, the Group uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Group engages third party qualified valuers to perform the valuation. Management of the Group works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model on a regular basis, or when needs arise and will report the significant results and findings to the board of directors of the Company. The Group uses valuation techniques that include inputs that are not based on observable market data to estimate the fair value of certain types of financial instruments.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 60 |
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
21. RELATED PARTY TRANSACTIONS AND BALANCES
- During the current interim period, save as disclosed elsewhere in these condensed consolidated financial statements, the Group had the following significant transactions with related parties:
Six months ended 30 June | |||
Related party | Nature of transactions | 2020 | 2019 |
HK$'000 | HK$'000 | ||
(unaudited) | (unaudited) | ||
Fellow subsidiaries | Rentals and management fee | ||
paid by the Group on land | |||
and buildings | 26,707 | 26,833 | |
Rentals received by the Group on | |||
land and buildings | 5,820 | 6,039 | |
Interest income received by the | |||
Group | 2,866 | 3,214 | |
Associates | Interest income received by | ||
the Group | 42,485 | 20,291 | |
Rentals received by the Group on | |||
land and buildings | 4,391 | 4,600 | |
Property agency fee paid by the | |||
Group | 10,956 | 15,688 | |
Non-controlling | Interest paid by the Group | 3,132 | 8,803 |
shareholders of | Management fee paid by the Group | - | 3,462 |
subsidiaries | |||
Fellow subsidiaries | Loan provided by the Group | - | 113,792 |
Furthermore, the Group has entered into several banking facility agreements amounted to HK$8,469 million (31 December 2019: HK$9,379 million) and pursuant to the terms of the agreements, loans principal together with accrued interests and any other amounts accrued under the agreements may become immediately due and payable if (i) SIIC ceases to hold directly and indirectly at least 35% ultimate beneficial interest of and in the voting share capital of the Company or ceases to have management control over the Company; or (ii) the Shanghai Municipal People's Government, the controlling shareholder of SIIC, ceases to hold directly or indirectly at least 51% beneficial interest of and in the voting share capital of SIIC or SIIC ceases to remain under the administrative leadership of the Shanghai Municipal People's Government. The relevant facility agreements will mature in various dates up to 20 March 2022. As at 30 June 2020, the extent of utilisation of such bank facilities amounted to approximately HK$8,469 million (31 December 2019: HK$9,379 million).
61 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Notes to the Condensed Consolidated Financial Statements
For the six months ended 30 June 2020
21. RELATED PARTY TRANSACTIONS (continued)
-
Compensation of key management personnel
The remuneration of directors and other members of key management during the period was as follows:
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Directors' fee and committee remuneration | 1,066 | 1,066 |
Basic salaries and allowance | 6,852 | 6,790 |
Bonuses | 3,004 | 3,004 |
Retirement benefits scheme contributions | 263 | 281 |
11,185 | 11,141 | |
The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.
-
Transactions with other PRC government entities
The Group itself is part of a larger group of companies under SIIC, which is controlled by the PRC government. The directors consider that the Company is ultimately controlled by the PRC government and the Group operates in an economic environment currently predenominated by entities controlled, jointly controlled or significantly influenced by the PRC government. Apart from the transactions with SIIC, other connected persons and related parties disclosed as above, the Group also conducts business with other government related entities in the ordinary course of business. In the opinion of the directors of the Company, these transactions are considered as individually and collectively insignificant to the operations of the Group. The directors consider these government-related entities are independent third parties so far as the Group's business transactions with them are concerned.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 62 |
Other Information
DIRECTORS' INTERESTS IN SHARES, UNDERLYING SHARES AND DEBENTURES
As at 30 June 2020, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO), as recorded in the register maintained by the Company pursuant to section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code, were as follows:
- Interests in shares and underlying shares of the Company
Approximate | ||||
Number | percentage | |||
Nature of | of issued | of the issued | ||
Name of Director | Capacity | interests | Shares held | Shares |
Zhou Jun | Beneficial owner | Personal | 300,000 | 0.03% |
Note: All interests stated above represent long positions.
-
Interests in shares and underlying shares of associated corporations
SI Urban Development
Number | Approximate | |||
of issued | percentage | |||
Nature of | SIUD | of the issued | ||
Name of Director | Capacity | interests | Shares held | SIUD Shares |
Zhou Jun | Beneficial owner | Personal | 300,000 | 0.01% |
Note: All interests stated above represent long positions.
Save as disclosed above, none of the Directors, chief executives nor their associates of the Company had any other interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as at 30 June 2020.
SHARE OPTIONS
-
SIHL Scheme
The SIHL Scheme shall be valid and effective for a period of 10 years commencing the date of adoption of the scheme. During the period, no options were granted under the SIHL Scheme.
- SI Urban Development Scheme
The SI Urban Development Scheme was valid and effective for a period of 10 years commencing the date of its adoption and expired on 11 December 2012. During the period, the movements in the share options to subscribe for the SI Urban Development's shares under the SI Urban Development Scheme were as follows:
Number of shares issuable | |||||||
under the share options | |||||||
Exercise | Lapsed | ||||||
Date of | price | Outstanding | during | Outstanding | |||
grant | per share | at 1.1 2020 | the period | at 30.6 2020 | |||
HK$ | |||||||
Category 1: Directors of | |||||||
SI Urban Development | 24.9.2010 | 2.98 | 21,000,000 | (6,000,000) | 15,000,000 | ||
Category 2: Employees of | |||||||
SI Urban Development | 24.9.2010 | 2.98 | 6,750,000 | - | 6,750,000 | ||
Total for all categories | 27,750,000 | (6,000,000) | 21,750,000 | ||||
63 | |||||||
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 |
Other Information
Share options are exercisable during the period from 24 September 2010 to 23 September 2020 in three batches, being:
- 24 September 2010 to 23 September 2011 (up to 40% of the share options granted are exercisable)
- 24 September 2011 to 23 September 2012 (up to 70% of the share options granted are exercisable)
- 24 September 2012 to 23 September 2020 (all share options granted are exercisable)
-
SI Urban Development New Scheme
The SI Urban Development New Scheme shall be valid and effective for a period of 10 years commencing the date of adoption of the scheme. During the period, no options were granted under the SI Urban Development New Scheme.
(IV) SIIC Environment Scheme
The SIIC Environment Scheme shall be valid and effective for a period of 10 years commencing the date of adoption of the scheme. During the period, no options were granted under the SIIC Environment Scheme.
ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES OF THE COMPANY
Save as disclosed under the section of Share Options above, at no time during the period was the Company or any of its holding companies or any of its subsidiaries or fellow subsidiaries, a party to any arrangements to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
SUBSTANTIAL SHAREHOLDERS
As at 30 June 2020, the interests and short positions of the substantial shareholders of the Company and other persons, in the Shares and underlying Shares of the Company as recorded in the register required to be kept under Section 336 of the SFO, were as follows:
Approximate | ||||
Number of | percentage | |||
Name of | Nature of | issued Shares | of the issued | |
shareholder | Capacity | interests | beneficially held | Shares |
SIIC | Interests held by controlled | Corporate | 678,434,748 | 62.40% |
corporations | (Notes 1 and 2) |
Notes:
- SIIC through its subsidiaries, namely Shanghai Investment Holdings Limited, SIIC Capital (B.V.I.) Limited, Shanghai Industrial Financial Holdings (Hong Kong) Company Limited, SIIC Trading Company Limited and SIIC CM Development Limited held 519,409,748 Shares, 80,000,000 Shares, 52,908,000 Shares, 26,107,000 Shares and 10,000 Shares respectively, and was accordingly deemed to be interested in the respective Shares held by the aforementioned companies.
- All interests stated above represented long positions.
Save as disclosed above, no other persons had any interests or short positions in the shares or underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO as at 30 June 2020.
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 64 |
Other Information
DISCLOSURE UNDER RULE 13.51B(1) OF THE LISTING RULES
Change in Directors' information since the date of the annual report 2019 up to the date of this report is set out below:
Mr. Xu Zhan
• resigned as an executive director of SIIC Environment with effect from 13 May 2020.
Mr. Cheng Hoi Chuen
• resigned as an independent non-executive director of CLP Holdings Limited with effect from 8 May 2020.
EMPLOYEES AND REMUNERATION POLICIES
During the six months ended 30 June 2020, the number of employees is 19,544. The Group appraises staff remuneration with reference to the operating results of the enterprises, individual performance and industry average. With a strong commitment to staff relationship and training, the Group also encourages employees to continue their education, adding value both for themselves and for the Group.
REVIEW OF REPORT
The Audit Committee has reviewed the Company's interim report for the six months ended 30 June 2020.
CORPORATE GOVERNANCE
The Company has complied with all the code provisions set out in the Corporate Governance Code contained in Appendix 14 to the Listing Rules.
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS
The Company has established its own Code for Securities Transactions by Directors or Relevant Employees, which was set on terms no less exacting than the required standards set out in the Model Code. Having made enquiries with all Directors and the relevant employees of the Company, each of them has confirmed that they have fully complied with the requirements of the Model Code and the code of the Company during the six months ended 30 June 2020.
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES
Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of its listed securities during the six months ended 30 June 2020.
65 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
Glossary of Terms
Term used | Brief description |
Aerospace Corporation | China Aerospace Science and Technology Corporation |
Baowu Environment | BAOWU Group Environmental Resources Technology Co., Ltd. |
Canvest Environmental | Canvest Environmental Protection Group Company Limited (HKSE stock |
code: 1381) | |
CIRC | China Isotope & Radiation Corporation (HKSE stock code: 1763) |
Companies Ordinance | Companies Ordinance (Chapter 622) of the laws of Hong Kong |
Company | Shanghai Industrial Holdings Limited (HKSE stock code: 363) |
Director(s) | director(s) of the Company |
Distribution in Specie | the distribution of an interim special dividend by the Company in the from |
of a distribution in specie of the SIUD Shares held by the Group to the | |
Qualifying Shareholders in proportion to their respective shareholdings in | |
the Company on the basis of an entitlement to 1 SIUD Share for every 5 | |
Shares held by each Qualifying Shareholder as at the Record Date. | |
Galaxy Energy | SIIC Aerospace Galaxy Energy (Shanghai) Co., Ltd. |
General Water of China | General Water of China Co., Ltd. |
Green Energy | Shanghai Green Energy Co., Ltd. |
Group | the Company and its subsidiaries |
Hu-Ning Expressway | Shanghai Hu-Ning Expressway (Shanghai Section) Co., Ltd. |
Listing Rules | Rules Governing the Listing of Securities on the Stock Exchange |
Model Code | Model Code for Securities Transactions by Directors of Listed Issuers of |
the Listing Rules | |
Nanyang Tobacco | Nanyang Brothers Tobacco Company, Limited |
Net Business Profit | Net profit excluding net corporate expenses |
Non-Qualifying Shareholder(s) | Shareholder(s) whose (respective) address as shown on the register of |
members of the Company on the Record Date is in a place outside Hong | |
Kong (if any), and whom is excluded from receiving the SIUD Shares in | |
the Distribution in Specie on account of the relevant legal or regulatory | |
requirements or restrictions by the Board out of necessity or expediency | |
PRC | The People's Republic of China |
Qualifying Shareholder(s) | Shareholder(s) whose name(s) appear(s) on the register of members |
of the Company on the Record Date, other than the Non-Qualifying | |
Shareholder(s) | |
Record Date | Tuesday, 29 September 2020 |
SFO | Securities and Futures Ordinance (Chapter 571)of the laws of Hong Kong |
SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020 | 66 |
Glossary of Terms
Term used | Brief description |
SGX | Singapore Stock Exchange |
Shanghai Galaxy | Shanghai Galaxy Investment Co., Ltd. |
Shanghai Pharmaceuticals | Shanghai Pharmaceuticals Holding Co., Ltd. (SSE stock code: 601607; |
HKSE stock code: 2607) | |
Shangtou Assets | Shanghai Shangtou Asset Operations Co., Ltd. |
Share(s) | ordinary share(s) of the Company |
Shareholder(s) | shareholder(s) of the Company |
SI Development | Shanghai Industrial Development Co., Ltd. (SSE stock code: 600748) |
SI Urban Development or SIUD | Shanghai Industrial Urban Development Group Limited (HKSE stock code: |
563) | |
SI Urban Development Scheme | A share option scheme adopted by SI Urban Development at the |
extraordinary general meeting held on 12 December 2002. Such scheme | |
was expired on 11 December 2012 | |
SI Urban Development | A new share option scheme adopted by SI Urban Development at the |
New Scheme | annual general meeting held on 16 May 2013 |
Sichuan Kemei | Sichuan Kemei Paper Co., Ltd. |
SIHL Scheme | A new share option scheme adopted by the Company at the extraordinary |
general meeting held on 25 May 2012 | |
SIIC | Shanghai Industrial Investment (Holdings) Company Limited |
SIIC Environment | SIIC Environment Holdings Ltd. (SGX stock code: BHK; HKSE stock code: |
807) | |
SIIC Environment Scheme | A share option scheme adopted by SIIC Environment at the extraordinary |
general meeting held on 27 April 2012 | |
SIIC Financial Leasing | SIIC Financial Leasing Co., Ltd. |
SIUD Share(s) | ordinary share(s) of SI Urban Development |
SSE | Shanghai Stock Exchange |
Stock Exchange or HKSE | The Stock Exchange of Hong Kong Limited |
Wing Fat Printing | The Wing Fat Printing Company, Limited |
Wufangzhai | Zhejiang Wufangzhai Industrial Co., Ltd. |
67 SHANGHAI INDUSTRIAL HOLDINGS LIMITED INTERIM REPORT 2020
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SIHL - Shanghai Industrial Holdings Ltd. published this content on 17 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 September 2020 04:49:03 UTC