China Economic Net: Oceanwide Holdings Releases Semi-Annual Financial Report Where Financial Business Revenue Exceeds Real Estate Revenue for the Frist Time
China Economic Net, Beijing, August 30 | Oceanwide Holdings (000046.SZ) released its 2017 semi-annual financial report this evening, showing that despite tightening real estate regulation and financial regulatory policies in the past six months, Oceanwide Holdings still achieved substantial growth in its financial and strategic investment business segments, and the financial business revenue exceeded the real estate revenue for the first time.
According to the semi-annual financial report, Oceanwide Holdings' net profit amounted to RMB904 million, down 0.74% over the same period last year. In terms of the revenue of Oceanwide Holdings' main business, because of strict restrictions on sales in first-tier cities, the real estate revenue amounted to about RMB2.23 billion in the first half of 2017, down about 76% over the same period last year; the financial business revenue reached about RMB3.11 billion, an increase of about 31% over the same period last year. This is also the first time the financial business revenue exceeded the real estate revenue as indicated in the semi-annual financial report since the comprehensive transformation proposed by Oceanwide Holdings in 2015.
With regard to the financial subsidiaries of Oceanwide Holdings, Minsheng Trust has actively expanded its wealth management business under the guidance of its innovative business strategies such as active management and investment banking, and basically formed wealth management expansion channels covering the first- and second-tier cities in the country. During the reporting period, the profitability of Minsheng Trust increased substantially. Its net profit amounted to RMB516 million in the first half of 2017, an increase of 124% over the same period last year.
Minsheng Securities has put effort into the investment banking business which achieved the net revenue of RMB331 million in the reporting period, a substantial increase of 44.63%, driving its revenue and profit to noticeably improve.
In addition, Asia-Pacific Property & Casualty Insurance (formerly Min An Property & Casualty Insurance), which had suffered losses for many years before being merged into Oceanwide Holdings, showed a good momentum of growth in the first half of 2017. Its key indicators such as premium income, net profit and combined ratio were better than expected, and the second quarter saw a slight profit.
In terms of the real estate business, the projects of Oceanwide Holdings are now mainly concentrated in Beijing and Wuhan. Due to the local market environment, and the tightening regulatory policies such as the restriction on purchase and the restriction on loans, the real estate revenue of Oceanwide Holdings decreased significantly compared with the same period last year.
According to the semi-annual report, Oceanwide Holdings' real estate projects under construction now include Beijing Oceanwide International Residential Area, Wuhan Central Business District, and Shanghai Oceanwide International Apartment. According to the data recently released by the Beijing Municipal Commission of Housing and Urban-Rural Development, the sales area of commercial housing registered a year-on-year decrease of 40.9% in Beijing from January to July. Wuhan, another key city which is home to Oceanwide Holdings' real estate business, implemented housing regulation policies in the first half of 2017 by imposing restrictions on purchase, loans, pricing and refined decoration, resulting in a great impact on the revenue of Oceanwide Holdings' real estate business.
In addition to finance and real estate, strategic investment became an "unexpected driving force" in the first half of 2017, boosting Oceanwide Holdings' overall performance.
According to the semi-annual report, Oceanwide Holdings' strategic investment business focused on industries and fields such as finance, big data, real estate, smart home, mixed ownership reform of state-owned enterprise, and digital marketing. Oceanwide Holdings actively looked for investment projects and enriched project reserves. It completed the transfer of share in partnership in Yunfeng Capital and participated in the Series-B round of investment in BAIC BJEV. In addition, Oceanwide Holdings took into account factors such as the law of industrial development and the strategy of enterprise resource allocation and achieved the withdrawal of several projects at the right time, with a return on investment of RMB576 million.
It is worth noting that because of the current tightening regulatory policies on overseas investment by domestic enterprises, Oceanwide Holdings put forward the combination of risk prevention and control of overseas investment with domestic industries as the focus of future work.
Oceanwide Holdings has made clear the next step of development. According to the semi-annual report, Oceanwide Holdings needs to return to the original mission of serving the real economy in term of its financial business, and to strengthen innovation and business development under the precondition of effective risk prevention and control so as to achieve steady operation and rapid growth. Oceanwide Holdings will conscientiously implement the guiding opinions of relevant state departments on overseas investment, carefully select the regions, industries and projects for overseas expansion, and conduct full investigation for rational investment. It will also strengthen full-process risk control to ensure that the risks for overseas development are controllable.
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