Reported by a journalist from Huaxia Times
Real estate has ultimately become a stumbling block for performance. On October 22, Zhuhai Zhumian Group Co., Ltd. (600185.SH) announced that it intends to transfer its 100% stake in Zhuhai Gree Real Estate Co., Ltd. to Zhuhai Tojie Holdings Co., Ltd. By the end of December 2024, Zhumian Group indicated that it would gradually complete the disposal of its existing real estate business within five years and would cease operations in the real estate sector thereafter.
As of now, the transaction price has yet to be determined. Should this deal be completed, the capital market will see the exit of another player in the real estate sector. Zhumian Group stated that it would focus on its main business in the duty-free sector and strive to turn losses into profits as soon as possible. On October 24, following Zhumian Group's request, the journalist sent an interview outline, but no response had been received by press time. The journalist will continue to follow Zhumian Group's developments.
Accelerating Real Estate Exit Zhumian Group's predecessor is actually Gree Real Estate. In May of this year, Gree Real Estate changed its stock abbreviation to "Zhumian Group."
The relationship between Gree Real Estate and Zhumian Group began five years ago. In May 2020, Gree Real Estate announced that it intended to acquire 100% of Zhumian Group. At that time, the duty-free business was highly sought after, and the acquisition announcement drove Gree Real Estate's stock price higher. However, the acquisition process was quite challenging. Over these five years, Gree Real Estate faced numerous issues, including an investigation of its chairman, and the acquisition was paused. In December 2022, following a leadership change, Gree Real Estate resumed the acquisition plans.
By the end of December 2024, Gree Real Estate completed a major asset swap, divesting 100% stakes in five real estate subsidiaries outside of Zhuhai, while acquiring 51% of Zhumian Group. At that time, Gree Real Estate committed to gradually completing the disposal of its existing real estate business within five years. Once this process was completed, the company would fully exit the real estate sector.
It is reported that this transaction is expected to be conducted in cash, with the current price still undetermined. Zhumian Group indicated that this transaction is anticipated to involve significant asset restructuring but will not result in changes to the company's controlling shareholder or actual controller. Publicly available data shows that the counterparty, Tojie Holdings, is 100% indirectly held by the State-owned Assets Supervision and Administration Commission of Zhuhai City.
Zhumian Group stated that before this transaction, its main business included a duty-free-centered consumer business and real estate. Through this transaction, the company will accelerate its complete exit from the real estate sector and focus more on its core duty-free business. In the future, the company aims to anchor its large consumption strategy, striving to establish a large consumption industrial group based in the Guangdong-Hong Kong-Macao Greater Bay Area, radiating nationwide and facing international markets, to enter a phase of high-quality development.
Furthermore, Zhumian Group mentioned that if the transaction goes smoothly, it is expected to reduce the company’s debt-to-asset ratio, optimize asset structure, and enhance operational efficiency.
Duty-Free Business as a Performance Pillar According to data, in the first half of this year, Zhumian Group's revenue was 1.74 billion yuan, a decline of 45.62% year-on-year, while net profit attributable to shareholders was -274 million yuan. Zhumian Group stated that the drop in revenue compared to the same period in 2024 was mainly due to the completion of major asset exchanges and decreased income from real estate projects. The loss was attributed to declines in both income and gross profit compared to the previous year, along with high expense spending.
Public records indicate that the real estate sector significantly dragged down Zhumian Group’s performance. In the first half of this year, the revenue from Zhumian Group's real estate operations was approximately 425 million yuan, a year-on-year decrease of over 70%. The duty-free business has become the ballast for Zhumian Group. Data shows that in the first half of this year, the company’s duty-free business achieved revenue of 1.131 billion yuan, net profit of 391 million yuan, and a net cash flow from operating activities of 456 million yuan, effectively improving the company's overall financial status and operational results.
In fact, signals of a real estate exit had emerged as early as April of this year. At that time, Gree Real Estate announced that Zhuhai State-owned Assets Supervision and Administration Commission would transfer its 100% stake in Zhuhai Investment Holdings Co., Ltd. to Huafa Group without compensation. After the transfer was completed, Gree Real Estate became a third-level subsidiary of Huafa Group.
“Gree Real Estate’s existing inventory projects will enter a phase of optimization, and they can also collaborate with existing projects of Huafa Group to facilitate the digestion of inventory projects,” said Yan Yuejin, deputy director of the Shanghai E-House Real Estate Research Institute.
Based on the investor relations activity record disclosed by Zhumian Group for September, the company’s existing real estate operations are mainly in the Zhuhai area, including Gree Coast, Pingsha No. 9, and Gree Plaza. As of the first half of this year, Zhumian Group's real estate-related inventory was valued at approximately 7.8 billion yuan.
Multiple Companies Shedding Real Estate Businesses In the past two years, as the real estate industry undergoes significant adjustments, the sector is no longer as desirable as before. Many companies are choosing to divest from real estate operations in search of new profit growth points.
Recently, Nanjing Public Development Co., Ltd. (000421.SZ) announced that its wholly-owned subsidiary, Nanjing Zhongbei Shengye Real Estate Development Co., Ltd., plans to publicly list its 51% stake in Nanjing Zhongbei Jinjigu Real Estate Development Co., Ltd. with a listing price of approximately 34 million yuan. Nanjing Public indicated that this move aims to optimize resource allocation and improve asset operation efficiency.
Simultaneously, Hong Kong China Travel International Investment Co., Ltd. (0308.HK) also announced plans for an internal restructuring to incorporate its tourism real estate business into a private group company by distributing shares in kind. After the transaction is completed, Hong Kong China Travel will continue to focus on its core culture and tourism business while maintaining its listed status.
Overall, companies generally focus on emerging sectors after divesting real estate businesses. Zhumian Group noted that following the free transfer of its controlling shareholder's equity to Huafa Group, the company has embarked on a new chapter of resource synergy. It will leverage Huafa Group's strong industrial ecosystem to accelerate optimization and adjustment of its strategic operational system, constructing an ecosystem around "duty-free + commercial management + trade" and continuously enhance profitability through a series of measures, striving for an early turnaround to profitability.
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