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JRJ.COM: Annual Report of Oceanwide Holdings released with outstanding performanc


Oceanwide Holdings (000046.SZ) released its 2018 Annual Report on the evening of April 16. According to the Annual Report, Oceanwide Holdings achieved an operating revenue of RMB12.4 billion, a net profit of RMB930 million attributable to the shareholders of the listed company, and a net operating cash flow of RMB9.2 billion.

In 2018, despite the decline in operating income and net profit due to various adverse factors, Oceanwide Holdings still achieved a net profit of RMB930 million thanks to its continuous strategic transformation in recent years. Earlier, Oceanwide Holdings released an announcement of expected growth for the first quarter of 2019. Q1 net profit is expected to RMB1.85 billion to RMB2.35 billion, a year-on-year increase of 21.82-54.75%, indicating that Oceanwide Holdings may have begun to rebound.

Profitability: Revenue diversification

It can be found from the operational track of Oceanwide Holdings in 2018 that further focusing on financial business and reducing the impact of external factors on real estate performance are important factors for Oceanwide Holdings to achieve profitability.

Among the financial subsidiaries of Oceanwide Holdings, Minsheng Trust secured RMB196.9 billion in asset management by the end of 2018 by optimizing the product structure and strengthening the ability to raise funds, among which active management accounted for nearly 80%. Minsheng Securities strengthened the reserve of investment banking projects and increased the contribution of fixed income in the downturn of the market. With the A-share market boomed at the beginning of the year, Minsheng Securities is expected to experience a rebound in performance. In 2018, the annual premium income and net profit of Asia-Pacific Property & Casualty Insurance increased by 19.85% and 150.78% year on year, respectively, exhibiting a rising trend of stable profits.

In terms of the real estate business, the new construction area of various projects under Oceanwide reached 543,300 square meters in the whole year, and the focus of work in the year was "promoting sales and collecting proceeds", contributing nearly 40% of the operating income to the listed company. Meanwhile, the scale of Oceanwide Property has been increasing year by year. Commercial, hotel, office building and other operational properties also contributed to the company's stable income.

In addition, Oceanwide Holdings has developed its strategic investment business with a good momentum in recent years. In 2018, it actively arranged the private equity fund business and established several funds in cooperation with central enterprises, local industry guidance funds, family funds and institutional investors, expanding the company's revenue and profit sources.

In fact, before and after the release of the Oceanwide Annual Report, the expectations of the outside world on the company have been reflected in the secondary market. Oceanwide Holdings reached an intraday high of RMB8.54 on April 9, a record high for three consecutive trading days.

The path to successful transformation: Continuous structural optimization

Since the beginning of 2014, Oceanwide Holdings has begun to carry out strategic transformation. Over the past five years, Oceanwide Holdings has continuously optimized its industrial structure, asset and liability structure and management structure, as part of its efforts to adjust its structure and promote its transformation.

According to Oceanwide Holdings in its annual report: "In 2018, the company's industrial structure and asset and liability structure have been further adjusted and optimized, mainly reflected in the following aspects: First, the company further focused on the development of financial business. Important financial subsidiaries built corresponding capacity to serve the real economy and enhanced their driving role in the company's sustainable development. Second, by accelerating the sales of real estate projects, introducing strategic investors at the subsidiary level, and optimizing the distribution of assets, the company reduced its leverage ratio as soon as possible to fundamentally ensure the financial stability of the company. Third, all business sectors, especially the financial sector, fully understood the inseparable and mutually encouraging symbiosis between stable development and risk prevention, and balanced the relationship between the two."

By early 2019, Oceanwide Holdings basically accomplished the three tasks.

In real estate, Oceanwide Holdings sold lots in Beijing and Shanghai in early 2019, and the share of traditional real estate in the company's revenue is expected to decline further. However, the "super market" of Wuhan CBD of Oceanwide still has great potential to be tapped, and Oceanwide Holdings can also take this project as an opportunity to realize the transformation and upgrading of the business model from "development-oriented" to "operation-oriented", thus promoting the upgrading of real estate business. Moreover, due to its own characteristics and geographical advantages, Wuhan CBD can promote the synergy and interaction of the company's its finance, strategic investment, real estate operation and asset management, thus boosting the in-depth transformation of the company into an integrated holding company composed of diversified business forms.

After the 2019 Spring Festival, Oceanwide Holdings changed its board, and a younger, leaner management team of directors, supervisors and executives is conductive improving decision-making efficiency and responding to changes in the market environment. "Oceanwide Holdings' big adjustment of the management team is not the first step of optimization, but the latest round of management structure optimization after the optimization of industrial structure and liability structure at the beginning of the year." Some media comments pointed out.

"Any enterprise only has a periodic successful transformation, and there is no successful transformation once and for all," said Lu Zhiqiang, the head of Oceanwide. Therefore, Oceanwide Holdings still needs to make breakthroughs through optimization and improvement in many aspects, so as to continue the sound trend of successful transformation since 2014.