Sunday, April 8th.
Nine o'clock in the morning, Henglong Group Main Meeting Room.
Board of Directors members are all here.
Shen Jue is sitting opposite Zhao Chen. Three Independent Director Wu Hongyuan, Sun Zhengping and Xu Yong are sitting on both sides. Su Wantang and Chen Wei are in attendance.
Liu Mingyu presided over the meeting, with three topics listed on the agenda:
Review the 2017 annual report and the first quarter financial report of 2018;
Establishment of a wholly-owned subsidiary "Henglong Capital" and business spin-off plan;
Personnel appointments.
Liu Mingyu looked around and cleared his throat.
"Dear directors, Henglong Group 2018 Second Temporary Board Meeting begins now.
The first item on the agenda is to review the 2017 annual report and the first quarter financial report of 2018.
Please report Finance Director Chen Qiming."
Chen Qiming stood up, walked to Projection Screen, and opened the laptop.
The first slide is the Henglong Group 2017 Consolidated Balance Sheet.
His voice was much calmer than a year ago, and the data was reported one after another.
"As of December 31, 2017, Henglong Group had consolidated total assets of 22.85 billion yuan, total liabilities of 11.2 billion yuan, and Off-Balance Sheet Liabilities was zero.
Net assets are 11.65 billion yuan, and the asset-liability ratio is 49%. It successfully completed the debt reduction target set at the beginning of the year."
He switched to the second slide, which was a chart of revenue and profit trends.
"For the whole year of 2017, Henglong Real Estate's main business revenue was 8.5 billion yuan, including 4.8 billion in the first half and 3.7 billion in the second half.
The full-year net profit was 550 million yuan, a decrease from 2016, mainly due to Strategic Contraction, fewer sales in the second half of the year, and National Day discount promotions."
Shen Jue flipped through the annual report summary in his hand and asked:
"Haoyu Construction has been consolidated since October. How much has it contributed?"
Chen Qiming said:
"Haoyu Construction's consolidated revenue from October to December was approximately 650 million yuan, and its net profit was approximately 30 million yuan.
Haoyu Construction suffered a loss throughout the year, but the consolidated part made a slight profit.
Mainly because we cleaned up Off-Balance Sheet Liabilities after the acquisition and disposed of non-Core Assets, which generated some one-time gains."
Sun Zhengping pushed up his glasses.
"Off-Balance Sheet Liabilities cleared, this is done solidly.
3 billion Off-Balance Sheet Liabilities, a 100 million impairment occurred during the liquidation process, which is reasonable."
Chen Qiming Switch to the third slide, which is Financial Data for the first quarter of 2018.
"In the first quarter, Henglong Real Estate's main business revenue was approximately 2.2 billion yuan, a decrease of approximately 15% compared with the same period last year.
The main reason is that the pace of market launch has slowed down and the company has actively contracted. The net profit is about 120 million yuan, and the profit margin is basically stable."
He paused and added:
"Haoyu Construction had a project completed and delivered in the first quarter, contributing revenue of approximately 350 million yuan and net profit of approximately 20 million yuan.
At the consolidated level, total revenue in the first quarter was approximately 2.55 billion yuan and net profit was approximately 140 million yuan.
The asset-liability ratio further dropped from 49% to about 48%."
Wu Hongyuan asked, "How should Shunxin Agriculture's investment be handled in accounting?"
Chen Qiming said:
"Shunxin Agriculture's position is currently included in 'trading financial assets'.
Based on the closing price of 18.5 yuan on March 31, the market value is approximately 525 million yuan, slightly higher than the cost of 517 million yuan, with a small floating profit.
The first quarter report has not yet been reflected, because position building mainly occurs in early April."
Zhao Chen leaned on the back of the chair and added:
"Shunxin Agriculture's investment only started in April and is not covered in the first quarter report. It will be reflected in the second quarter report."
The three Independent Director exchanged glances, and no one asked any more questions.
Liu Mingyu said:
"The following is a vote to review the 2017 annual report and the first quarter financial report of 2018."
Vote.
Passed unanimously.
Liu Mingyu Open the agenda book.
"The second agenda item is the establishment of a wholly-owned subsidiary 'Henglong Capital' and the business spin-off plan. Please explain Zhao Zong."
Zhao Chen stood up, walked to the whiteboard, picked up the pen and wrote two lines:
Real Estate main business--Chen Wei is responsible
Foreign investment--Chen Xi is responsible
"Dear directors, the future of Henglong can no longer rely solely on Real Estate.
From now on, the business will be divided into two parts. The first part is the main business of Real Estate.
The original Henglong Real Estate business was merged with Haoyu Construction, and Chen Wei was responsible for it.
Including the delivery of projects under construction, inventory reduction, asset sales, and debt reduction.
The goal is to reduce the asset-liability ratio to below 20% within the year and then maintain it at this level without further expansion."
He drew a line under "Real Estate Main Business", and then also drew a line under "Foreign Investment".
"The second piece is foreign investment.
Established a wholly-owned subsidiary 'Henglong Capital' with a registered capital of 500 million yuan, specializing in foreign investment business.
Investment direction - consumption, technology, medicine.
Chen Xi serves as General Manager of Henglong Capital and is fully responsible for the investment business."
Shen Jue asked, "Does the investment scope of Henglong Capital include Listed Company stocks?"
Zhao Chen nodded."
Including. Secondary Market stocks, primary market equity, and private equity fund shares.
For a single transaction of less than 50 million, Chen Xi can make its own decision and report to Board of Directors afterwards.
Above 50 million, Board of Directors approval is required."
Sun Zhengping asked, "The registered capital is 500 million, where does the money come from?"
Zhao Chen said:
"Henglong Headquarters's own funds. Currently, there are more than 2 billion available cash on the account. Spending 500 million will not affect the debt reduction plan."
Wu Hongyuan asked again, "How is Chen Xi's salary determined?"
Zhao Chen said:
"Basic salary plus performance. Basic salary refers to positions at the same level in the industry, and performance is linked to investment performance.
The specific number is determined by Compensation Committee."
Shen Jue nodded and did not ask any more questions.
Liu Mingyu looked around. "Directors, if there are no other questions, let's vote now."
Vote.
Passed unanimously.
Liu Mingyu Open the agenda book.
"The third agenda item is personnel appointments.
Nominate Chen Wei as the vice president of Henglong Group, in charge of the main business of Real Estate.
Nominate Chen Xi as General Manager of Henglong Capital. Please review by all directors."
Chen Wei stood up and bowed slightly to the directors.
"Dear directors, I have worked at Haoyu Construction for more than ten years, and I have received full trust and support after joining Henglong.
Real Estate's main business is Henglong's fundamentals. I will do my best to reduce the debt and complete the project."
Chen Xi also stood up, and his voice was steadier than usual.
"Dear directors, I have been working at Henglong for more than a year. From Chairman assistant to General Manager of Henglong Capital, every step is inseparable from the company's trust.
The investment business is the future of Henglong, and I will let my performance speak for itself."
Shen Jue looked at Chen Xi and suddenly said:
"Chen Xi, you are Zhao Chen's assistant. Now you are in charge of investments. Do you feel any pressure?"
Chen Xi said:
"There is pressure. But pressure is not a bad thing. Zhao Zong trust me and I can handle it."
Shen Jue smiled and didn't ask again.
Liu Mingyu said, "The vote will now take place."
Vote.
Passed unanimously.
Zhao Chen stood up, walked to Chen Wei and Chen Xi, and stretched out his hand. "Congratulations."
Chen Wei took his hand and squeezed it hard.
Chen Xi held his hand, her palms were a little sweaty, but her eyes were bright.
After Board of Directors ended, Zhao Chen left senior executives such as Chen Wei and Chen Xi to continue discussing follow-up work.
Today's Board of Directors is just a procedural cut scene for Zhao Chen. The Executive Meeting discussion other than Board of Directors is the decision-making center of Henglong.