Tributes paid to a new eraof striving, plans launched for a new journey of development. Yuexiu Group's 2019 Annual Economic Work Conference and General Meeting of Employee Representatives were jointly held in the conference center on the fifth floor of the podium complex of Guangzhou International Finance Center on the morning of February 1. During the conference, the General Manager's 2019 Work Report titled "Reform and Innovation to Greater Ability, Transformation and Upgrading to Higher Level" was delivered; and Secretary of the Party Committee and Chairman of the Board of Directors Zhang Zhaoxing gave a speech titled "Restart of Reform, Acceleration of Transformation", reviewing the work achieved by the Group in 2018, analysing theopportunities and challengesto its reform and development, and outlining the work of 2019 and the years to come. Chen Haotian, Director of the State-owned Assets Supervision and Administration Commission of Guangzhou Municipal Government ("Guangzhou SASAC"), was invited to the conference and addressed the attendees.
Although in face of mounting pressure of economic downturn, strong financial supervision, and strict real estate market regulation in 2018, the Group successfully fulfilled its annual operational objectives, withstanding pressures and tackling difficulties through proactive measures, under the firm leadership ofthe municipal party committee and the municipal governmentand under the guidance of Guangzhou SASAC and other departments. The Group'stotal assets amounted to about RMB 600 billion, up 22% year on year, while its revenue reached RMB 48.3 billion, up 15% year on year, and its total profit achieved RMB 12.9 billion, up 16% year on year. The double-digit growths of the main operating indicators and the total profits which have exceeded RMB 10 billion for three consecutive years indicate the Group's new level of quality and efficiency of development.
Director Chen Haotian: Full Recognition of Yuexiu's Contributions, a Step Forward to New Achievements
Director Chen Haotian fully recognized the work accomplished by the Group in 2018. He pointed out that (1) the Group made a significant overall contribution to the city in 2018, with its revenue taking up 6%, and its profit 12%, of all municipality-level state-owned enterprises'; (2) the Group made impressive achievements in key areas of work, with rapid development of fresh business models including "Property + Metro", "Banking + Metro" and pension industry, as well as solid work in simplifying and rationalizing organization structure and property improvement; and (3) all members of the Group showed a good mindset, rolling up their sleeves and focusing on making further development.
For the year of 2019, Director Chen put forward the "4 One Step Forward" requirements. First, take a step forward in serving the greater picture, seize opportunities such as the development of the Guangdong-Hong Kong-Macao Greater Bay Area, utilize resources inside and outside the Chinese mainland, and make contributions to Guangzhou's steady growth, vitalization as an ancient city, and function as one of the core engines for the Greater Bay Area. Second, take a step forward in innovation and reform, courageously carry out mixed ownership reform, professional manager pilot program and other tasks, and provide experience to the Group's peers. Third, take a step forward in preventing and defusing major risks, firmly grow risk awareness and bottom-line thinking, constantly improve risk management systems, mechanisms and measures, and facilitate healthy growth of the enterprises. Lastly, take a step forward in party building, let party members play a pioneering and exemplary role, study and implement the Central Committee's spirits, decisions and arrangements, provide all cadres and workers with a sound work environment; and fulfill the Party's rigorous governance, strengthen clean governance, and prevent corruption risks.
Chairman Zhang Zhaoxing: Restart of Reform, Acceleration of Transformation
For all of the work accomplished by the Group in 2018, Chairman Zhang Zhaoxing gave a summary that there were "highlights in operation and breakthroughs in work" and the "achievements were hard-earned". He added that in the past year, (1) the Group strengthened its drive for operation and steadily improved its quality and efficiency of development; (2) risks were effectively managed to ensure stable operation and liquidity; (3) transformation and upgrading continued, with constant optimization of the business structure; and (4) reform and innovation were deepened to form strong support for the Group's development.
As to the challenges and opportunities faced by the Group at present, Chairman Zhang also gave an objective and comprehensive analysis. He stressed that it is important to "calmly observe the big picture and make careful plans" and to "enhance a sense of urgency, crisis and responsibility for further development". Chairman Zhang mentioned the challenges existed in today's macro-environment, adding that the world is experiencing unprecedented changes not seen in the past hundred years and the external environment is complicated and challenging, and apart from that, there are challenges arising from within the Group and all sectors, specifically in quality and efficiency, defusing of risks, front-end development, and human resources. He emphasized, however, that the opportunities accompanying such challenges are invaluable and it would be wise to seize (1) policy opportunities highly in line with the Group's conditions, demand and direction of development, and (2) market development opportunities presented by the new round of transformation and upgrading, with the Group currently being in the midst of an important period of strategic opportunities when it should and is able to make even greater achievements. He urged every one of the Group to have a sense of urgency, crisis and responsibility where no one could afford to "wait, be slow or sit still", and to fulfill all plans and arrangements set out for 2019.
For 2019 and the years ahead, Chairman Zhang raised a general requirement of "restart of reform and acceleration of transformation" towards "entering a new chapter of high-quality development of the Group", putting forward specific requirements of "5 Aspects of Furthering". First, further the improvement of development quality, diligently realize the operating indicators for 2019, and devote more efforts to indicators reflecting high-quality development. Second, further the optimization of development pattern, grasp major policy opportunities including the development of the Greater Bay Area, and make progress on matters including integration of municipality-level state-owned enterprises and industrial transformation. Third, further reform and innovation, facilitate mixed ownership reform and professional manager pilot program, explore implementation of partnership, and accelerate innovation in new business and new models. Fourth, further the building and concreting of supportive systems, ensure management of strategies, finance, human resources, customers, branding and other related aspects, guarantee stability of risk control, compliance and liquidity, and uplift the level of information technology. Lastly, further the leadership of the Party and enterprise cultural advancement, improve political standing, strengthen building of primary-level Party units, and foster clean governance. He also encouraged all employees to put into practice the core value of "continuously surpassing expectations and being more outstanding" and to have "faith, trust, confidence and integrity".
The General Manager's Work Report titled "Reform and Innovation to Greater Ability, Transformation and Upgrading to Higher Level" was delivered. As to the work accomplished in 2018, he made a summary from three perspectives.
Manifest effects have been obtained in terms of the drive for operation and quality and efficiency. First, the volume and quality of business performance grew, making a solid basis for realizing the 13thFive-Year Plan. In addition to the double-digit growths of the main operating indicators and the over fulfillment of the business plans and assessment tasks, the quality of operation was further enhanced. Second, there were focuses and highlights in the main business investment, with even greater motivation for industrial development. The investment made in 2018 amounted to RMB 44.5 billion, up 35% year on year. The function of the headquarters' role of making subrogating investment was well played, where quality land reserve in the real estate sector effectively increased and capital in the financial sector was further secured. Third, there were innovative moves and breakthroughs in financing and a hard battle was fought to ensure "security of capital and stability of liquidity". A total of RMB 157.6 billion was raised through the year of 2018, where the leverage was stable but with a certain degree of decrease, the structure was continuously bettered, and the costs of financing remained in a low level.
Reform and innovation as well as integration of resources yielded fruitful results, and the development pattern of the Group in its entirety and its main sectors gained steady progress. First, the Group officially initiated a new round of transformation of development, furthering reform in more difficult areas. The "debt-for-equity" program was approved and the Group's active participation in the strategic restructuring of municipality-level state-owned enterprises obtained preliminary achievements. Second, on the basis of openness and win-win, the strategic cooperation between the Group and its peers presented a new face of "all-round, multi-level and wide-ranging" vision. With constant expansion of business, cooperation between the Group and other state-owned enterprises in "rail transport + property", "banking + metro", purchase of highway asset package and other areas further deepened, in which case communication among Guangzhou, Hong Kong and Macau was facilitated. Third, the foundation of the Group was strengthened, where "innovation, transformation, collaborative development" of the main business was furthered. The comprehensive capabilities of operation of the financial sector was effectively enhanced, the new business of the real estate sector developed rapidly, and further progress was made in the combination of industry and finance, as well as financialization of real estate .
Progress was made in pooling resources and optimizing management of resources, and the headquarters' role of value creating was brought into full play. First, the headquarters' capabilities of obtaining and allocating resources were further enhanced. Second, a new organizational control system was finally established. Third, the risk control system was becoming more effective. Fourth, building of the team, system and mechanism of talents continued to advance. Fifth, customer resources and collaborative management were deepened. Sixth, information technology projects were implemented. Lastly, other managerial and special work was promoted comprehensively.
"Reform and Innovation to Greater Ability, Transformation and Upgrading to Higher Level" were set as the theme of the operation for 2019, while raising the "3 Higher Levels" requirements.
Reach a higher level of quality and efficiency by seeking progress while maintaining stability and upgrading operation. Conduct intense andmeticulouswork and broaden the source of income and economize expenditure to ensure stronger operating indicators; make correct assessment of the situation and precise devoting to guarantee new motivation for main business investment; and enhance coordination and efficiency to gain new breakthroughs in innovative financing.
Reach a higher level of business development by seizing opportunities and upgrading the development pattern. Grasp the historic opportunity rendered by the construction of the Greater Bay Area and build a new platform; take the strategic opportunity rendered by the integration and restructuring of municipality-level state-owned enterprises and uplift the level of development; and grasp industrial development opportunities and policy windows to accelerate new allocation of business.
Reach a higher level of system and mechanism and of reinforcement of headquarters' control by deepening reform and upgrading management. Use the Group-level mixed ownership reform and professional manager pilot program as a point of penetration to activate new engines for development; make optimization of strategic control and allocation and management of resources key points of work and strengthen investment guidelines; improve the headquarters' capabilities in newindustrial incubationand synergy function and foster new engines for growth; enhance the system of comprehensive risk control and compliance management to safeguard business; enforce the 195 information technology project and recreation of procedures to learn new management means; and raise the level of basic management to demonstrate deeper values of management and control.
The conference called on everyone in the Group to closely unite around the Party's Central Committee with Comrade Xi Jinping as the core and to uphold Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. Remain trueto our original aspiration, keep in mind our goals, be diligent and self-disciplined, work hard regardless of challenges and difficulties,surmountall obstacles, andadvance resolutely. Firmly seize the opportunity brought by the development of the Greater Bay Area and make our enterprises bigger, stronger in a new era. Show the municipal party committee and the municipal government satisfying results of our work.
At the conference, general managers of the real estate sector, Guangzhou Yuexiu Financial Holdings, Hong Kong Chong Hing Bank, the transport sector, the paper sector, the development sector, and the property security sector all gave reports on the operation work of 2018 and on the key points of plans for 2019.
Deputy General ManagerTan Sima led the conference, and more than 500 employee representatives from headquarters and all other sectors attended the conference.
