Jinhe Commercial Management: Marginal Rent Transaction Prices Decline, Profitability Further Under Pressure

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According to the viewpoint network: On March 27, Shanghai Jinhhe Commercial Operations Management (Group) Co., Ltd. held an online meeting to discuss the performance for the year 2025 and cash dividend explanation. The company’s chairman and general manager, Yu Minjun, along with director, deputy general manager, and board secretary Wang Li, financial director Shi Jun, and independent directors Guo Yanling, Lu Kaiwei, and Pan Min attended this meeting.

During the meeting, an investor asked about the reasons for the company choosing to simultaneously carry out substantial asset impairment provisions and large cash dividends at the end of 2025. In response, Yu Minjun stated that the main reasons for the substantial asset impairment provisions are as follows:

In 2025, the overall demand in the commercial office market is under pressure, competition is intensifying, and market rents are declining. Although the company adopted a strategy of trading price for volume, the rental rate at the end of 2025 slightly increased compared to the beginning of the year, but the marginal rental transaction price decreased, leading to a decline in the gross profit margin of the company’s main business and further pressure on net profit. Considering that the marginal rental transaction price of some projects declined during the reporting period, and based on the principle of prudence, the company conducted year-end impairment tests on relevant assets in accordance with the “Accounting Standard for Enterprises No. 8 - Asset Impairment” and related accounting policies. This impairment matter is a non-cash flow accounting treatment, and if the effects of accounting treatment are excluded, the company’s current cash flow remains stable, with the impaired projects operating normally and stably, ensuring the overall stability of the company’s operations.

She further stated that the main reasons for the company’s implementation of the above dividends are as follows:

First, as of December 31, 2025, the company’s consolidated cash and cash equivalents amount to approximately 220 million yuan, with interest-bearing liabilities at zero (0), indicating that the cash for dividends is sufficiently available; second, the company’s operating conditions are stable, with the collection rate maintaining a reasonable level. If the two dividends totaling approximately 155 million yuan in 2025 are excluded, the operating cash flow minus financing cash flow still has an inflow of about 100 million yuan; third, the company has recently focused on light asset entrustment management projects, resulting in limited capital expenditures, which aligns with the company’s operational development plans; fourth, in light of regulatory guidance and internal considerations, the company values shareholder returns and actively adheres to dividend arrangements, thus implementing dividends this year. The dividend plan is a proactive response to policies, formulated under the premise of ensuring normal operations and long-term development, aimed at enhancing investors’ sense of acquisition, promoting all shareholders to share in the company’s operational results, and boosting investor confidence in the company’s future development. This move not only aligns with the company’s long-term planning for steady development but also enhances investor confidence, laying a solid foundation for the company’s sustained growth.

Yu Minjun stated that in the future, the company will continue to operate steadily and will prudently formulate dividend plans based on the capital market environment, company performance, and capital expenditure plans. Relevant proposals will be strictly submitted to the board of directors and shareholders’ meeting for deliberation in accordance with relevant laws and regulations, and corresponding information disclosure obligations will be fulfilled.

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