Chairman's Statement
DEAR SHAREHOLDERS,
On behalf of the board of directors (the “Board”) of Beijing Capital Grand Limited (“Capital Grand” or the “Company”, together with its subsidiaries, the “Group”), I am pleased to present the interim results of the Group for the period ended 30 June 2024.
During the first half of 2024, the complexity, severity and uncertainty of the external environment increased, while domestic structural adjustments continued to deepen. The effects of macroeconomic policies continued to be released, external demand showed signs of recovery, and new quality productive forces accelerated its development, all of which formed new supports. During the period, the national economy continued to recover and improve, with GDP reaching approximately RMB61.7 trillion, representing an increase of 5.0% over the same period last year at constant prices, higher than the average level of the world’s major economies, and China’s economy has strong resilience and vitality.
During the period, with the effects of various pro-consumption policies, the potential of China’s domestic demand market continued to be released. The total retail sales of consumer goods reached RMB23.6 trillion, representing an increase of 3.7% over the same period last year. Among which, the retail sales of services increased by 7.5% year on year, higher than the 3.2% year-on-year growth rate of retail sales of goods. In terms of the product categories, the retail sales of food products increased by 9.2% year on year, higher than the 1.3% for clothing and 2.3% for daily necessities. The demand for holiday travel is strong, and the consumption of catering, transportation, cultural tourism and other related services has grown well, of which the number of domestic tourists and trips during the “May Day” and Dragon Boat Festival holidays increased by 7.6% and 6.3% respectively over the same period last year, and the total travel expenditure increased by 12.7% and 8.1% respectively over the same period last year. China’s consumption structure is changing, and the consumption of basic life, experience and services is growing rapidly.
During the period, although the consumer market maintained an overall growth trend, it should be noted that consumer expectations are becoming more cautious, and the foundation for the recovery of the consumer market still needs to be consolidated. Against the backdrop of a fluctuating downward consumer confidence index, the Group proactively responded by closely following consumer trend changes. The Group introduced cinemas, RV camps, and other experiential business formats into some of its outlet projects to meet the emotional consumption needs of customers. The Group has created online celebrity landmarks, introduced online celebrity business formats, thus injecting new vitality into the business. In alignment with the new consumer trends, the Group has exerted efforts in both private and public domains, fully unlocking the consumption potential of over a thousand private WeChat groups. By leveraging social media platforms such as Tiktok and Xiaohongshu, we have comprehensively stimulated consumers’ desire to visit stores. In the meantime, by strengthening brand-specific activities and creating a shopping atmosphere of more purchases with more discounts, the Group has provided consumers with an ultimate cost-effective consumption experience, thus achieving a win-win consumption transformation for all parties involved. During the period, the outlet business of the Group achieved a turnover of RMB5.18 billion, representing a decrease of approximately 2% as compared to the corresponding period last year, with a customer traffic of 27.44 million, representing an increase of approximately 1% as compared to the corresponding period last year.
During the period, the “Huaxia Capital Outlets REIT (華夏首創奧萊REIT)”, with Wuhan Capital Outlets and Jinan Capital Outlets as the underlying assets was officially approved on 28 June 2024, becoming the first approved domestic consumer type real estate listed REITs with outlet properties as the underlying assets. The Group will serve as the operation managerfor “Huaxia Capital Outlets REIT”. This arrangement could not only enhance the market image of the Group and expand the brand influence of “Capital Outlets”, but also boosted our revenue and profitability levels through our business management capabilities and the export of brand resources, and promoted the talent development, management improvement, and asset-light business transformation.
During the review period, the Group achieved operating revenue of approximately RMB746 million, representing an increase of 19.43% as compared to the corresponding period last year. The net loss attributable to owners of the Company was approximately RMB151 million. The Board has resolved not to declare interim dividend for the six months ended 30 June 2024.
During the second half of 2024, the Group will keep pace with changes in consumption structure and demand, continuously enhance the scale of its top brands, and improve the international fashion atmosphere in the retail space. In the meantime, the Group will strengthen inventory management, continuously enhance the advantages of merchandise and price, and provide consumers with a more value-for-money shopping experience. In the second half of the year, the Group will accelerate the deployment of the online shopping mall, improve the level of member services and enhance member stickiness. We will strengthen the innovation in marketing methods and activity planning, and enhance the operation ability of new media. The Group will enhance the efficiency of product selection and inventory turnover in proprietary businesses, continue to promote the construction of digitalization, and enhance the support capabilities in terms of business insight, operational services, standard implementation, and management oversight.
On behalf of the Board, I would like to express our sincere gratitude to all our shareholders, partners and clients for their care and strong support to Capital Grand. The Group will continue to promote the spirit of “striving hard (拼到拼命)”, seek high-quality development through capacity building and structural adjustment, and carry out the management reform of “strengthening and consolidating the foundation (強基固本)”, by strengthening the construction of the operation system, improving the ability of lease promotion and operation, enhancing the service level of tenants, continuously improving the profitability of the project, and making unremitting efforts to “become the most valuable outlet operator in China which provides excellent experience for consumers”.
On behalf of the board of directors (the “Board”) of Beijing Capital Grand Limited (“Capital Grand” or the “Company”, together with its subsidiaries, the “Group”), I am pleased to present the interim results of the Group for the period ended 30 June 2024.
During the first half of 2024, the complexity, severity and uncertainty of the external environment increased, while domestic structural adjustments continued to deepen. The effects of macroeconomic policies continued to be released, external demand showed signs of recovery, and new quality productive forces accelerated its development, all of which formed new supports. During the period, the national economy continued to recover and improve, with GDP reaching approximately RMB61.7 trillion, representing an increase of 5.0% over the same period last year at constant prices, higher than the average level of the world’s major economies, and China’s economy has strong resilience and vitality.
During the period, with the effects of various pro-consumption policies, the potential of China’s domestic demand market continued to be released. The total retail sales of consumer goods reached RMB23.6 trillion, representing an increase of 3.7% over the same period last year. Among which, the retail sales of services increased by 7.5% year on year, higher than the 3.2% year-on-year growth rate of retail sales of goods. In terms of the product categories, the retail sales of food products increased by 9.2% year on year, higher than the 1.3% for clothing and 2.3% for daily necessities. The demand for holiday travel is strong, and the consumption of catering, transportation, cultural tourism and other related services has grown well, of which the number of domestic tourists and trips during the “May Day” and Dragon Boat Festival holidays increased by 7.6% and 6.3% respectively over the same period last year, and the total travel expenditure increased by 12.7% and 8.1% respectively over the same period last year. China’s consumption structure is changing, and the consumption of basic life, experience and services is growing rapidly.
During the period, although the consumer market maintained an overall growth trend, it should be noted that consumer expectations are becoming more cautious, and the foundation for the recovery of the consumer market still needs to be consolidated. Against the backdrop of a fluctuating downward consumer confidence index, the Group proactively responded by closely following consumer trend changes. The Group introduced cinemas, RV camps, and other experiential business formats into some of its outlet projects to meet the emotional consumption needs of customers. The Group has created online celebrity landmarks, introduced online celebrity business formats, thus injecting new vitality into the business. In alignment with the new consumer trends, the Group has exerted efforts in both private and public domains, fully unlocking the consumption potential of over a thousand private WeChat groups. By leveraging social media platforms such as Tiktok and Xiaohongshu, we have comprehensively stimulated consumers’ desire to visit stores. In the meantime, by strengthening brand-specific activities and creating a shopping atmosphere of more purchases with more discounts, the Group has provided consumers with an ultimate cost-effective consumption experience, thus achieving a win-win consumption transformation for all parties involved. During the period, the outlet business of the Group achieved a turnover of RMB5.18 billion, representing a decrease of approximately 2% as compared to the corresponding period last year, with a customer traffic of 27.44 million, representing an increase of approximately 1% as compared to the corresponding period last year.
During the period, the “Huaxia Capital Outlets REIT (華夏首創奧萊REIT)”, with Wuhan Capital Outlets and Jinan Capital Outlets as the underlying assets was officially approved on 28 June 2024, becoming the first approved domestic consumer type real estate listed REITs with outlet properties as the underlying assets. The Group will serve as the operation managerfor “Huaxia Capital Outlets REIT”. This arrangement could not only enhance the market image of the Group and expand the brand influence of “Capital Outlets”, but also boosted our revenue and profitability levels through our business management capabilities and the export of brand resources, and promoted the talent development, management improvement, and asset-light business transformation.
During the review period, the Group achieved operating revenue of approximately RMB746 million, representing an increase of 19.43% as compared to the corresponding period last year. The net loss attributable to owners of the Company was approximately RMB151 million. The Board has resolved not to declare interim dividend for the six months ended 30 June 2024.
During the second half of 2024, the Group will keep pace with changes in consumption structure and demand, continuously enhance the scale of its top brands, and improve the international fashion atmosphere in the retail space. In the meantime, the Group will strengthen inventory management, continuously enhance the advantages of merchandise and price, and provide consumers with a more value-for-money shopping experience. In the second half of the year, the Group will accelerate the deployment of the online shopping mall, improve the level of member services and enhance member stickiness. We will strengthen the innovation in marketing methods and activity planning, and enhance the operation ability of new media. The Group will enhance the efficiency of product selection and inventory turnover in proprietary businesses, continue to promote the construction of digitalization, and enhance the support capabilities in terms of business insight, operational services, standard implementation, and management oversight.
On behalf of the Board, I would like to express our sincere gratitude to all our shareholders, partners and clients for their care and strong support to Capital Grand. The Group will continue to promote the spirit of “striving hard (拼到拼命)”, seek high-quality development through capacity building and structural adjustment, and carry out the management reform of “strengthening and consolidating the foundation (強基固本)”, by strengthening the construction of the operation system, improving the ability of lease promotion and operation, enhancing the service level of tenants, continuously improving the profitability of the project, and making unremitting efforts to “become the most valuable outlet operator in China which provides excellent experience for consumers”.
Mr. Fan Shubin
Chairman
Beijing, 22 August 2024