In year 2022, under the influence of complex environments such as the impact of the epidemic, high inflation, interest rate hikes by the Federal Reserve, and international turmoil, the global real estate market faces unprecedented challenges and differentiation.
 
China’s real estate has also experienced an extremely bleak year in history. The market as a whole continues the downward pressure since last year, the industry confidence is at a low level, and the market demand and purchasing power are insufficient. Affected by superimposed epidemic factors, market demand and transactions continued to be weak, and the sales of major companies in the industry fell sharply compared with previous years. The "high turnover" model formed by fierce competition in the market suffered from the bottom line due to the sharp drop in sales, and the superimposed financing institutions generally avoided the industry’s financing needs, which made matters worse. The liquidity risk continued to worsen and spread. Most private real estate companies have encountered liquidity difficulties one after another. Guaranteeing the delivery of properties and resolving liquidity risks has become the top priority in the industry.
 
Although steady development has always been the Group's priority strategy, the Group was not immune to the unprecedent difficulties affected by the industry generally. In year 2022, the Group recorded a total contracted sales of RMB1.5 billion, a decrease of 86% compared to last year; the turnover of properties delivered was RMB2.1 billion, a decrease of 73% compared with last year; the loss attributable to shareholders was approximately RMB3.49 billion, an increase of approximately 11.3 times year-on-year. And since late June 2022, after failing to repay certain due loans and notes, the Group has also encountered financial difficulties in fulfilling its due liabilities. In order to implement an orderly managed restructuring plan with creditors, the Company has applied to the Bermuda Court in July 2022 for the appointment of a "light touch" provisional liquidator for the purpose of debt restructuring which was approved by the Bermuda Court on 15 August 2022 (Bermuda time). The Company will continue to publish relevant announcements to provide the latest news to the shareholders and potential investors of the Company. Year 2022 is the most stressful year in the Group's history and its performance has fallen to the bottom.

 
FUTURE OUTLOOK

The major changes in the world that have not been seen in a century are accelerating. The Russia-Ukraine War continues. Global inflation is still high. The Fed is still under pressure to raise interest rates. The growth momentum of the world economy and trade has weakened. The world has entered a new period of turmoil and transform. China's development is at the time when strategic opportunities and risks coexist, and uncertain and unpredictable factors increase. While pursuing high-quality development, the Chinese economy is still facing the triple pressure from demand contraction, supply shock, and weakening expectations. However, we are cautiously optimistic about the Chinese government‘s 2023 GDP growth target of 5%, given that the COVID-19 pandemic is behind us and China‘s economy is large and resilient.
 
In terms of China’s real estate industry, the industry suffered an unprecedented blow in 2022, and it will take time to deal with various risks arising from it. However, the stringent real estate control policies have turned loose, and three measures have been introduced to support real estate enterprises‘ financing in terms of credit, bonds and equity, market confidence is gradually recovering. At the beginning of the year, property sales in the first-tier cities represented by Beijing and Shanghai took the lead in recovering. Although it will take some time for the recovery to spread to the second- and third-tier cities, we expect the industry to recover gradually throughout the year. The situation in the second half of the year will be more obviously. It will be a high probability event that the whole year will be better than 2022.
 
The real estate industry has always been a pillar industry of China’s economy. The yearning for a better life of 1.4 billion Chinese people has not changed. The Group still has confidence in the long-term development of the industry. In 2023, the group will continue to respond calmly, resolve risks, and ensure the stability of the group’s operations; pay close attention to market trends, determine sales based on production, and seize opportunities for disposal of various projects in the market; continue to accelerate the construction progress of the old renovation project in Fengwei Village, Huangpu District, Guangzhou City, strive to achieve sales repayment; continue to resolutely carry out asset disposal work, and vigorously promote cash return; continue to focus on maintaining active communication with creditors of all parties and promoting debt restructuring to realize the best interests of creditors.

 
ACKNOWLEDGEMENTS

Being the chairman of the Board, I would also like to express my sincere gratitude to all our staff, customers, suppliers and business associates, creditors and shareholders for their unwavering assistance and support to the Group in the past years.