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      35th Anniversary Message from the Chairman Wong Chiu Yeung: Tempering is the only way to cross the cycle and move towards the century
      2022.12.31
      510

      Dear China SCE Group friends:

      In a flash moment, We bid farewell to the very unusual 2022, and also left an extremely extraordinary 35th year of China SCE Group.

      In the past year, the development of the global economy has been severely challenged by the pandemic of the century, the bipolar competition between China and the United States, and the conflicts between Russia and Ukraine. The centennial changes came whistling in, making the world full of great uncertainty!

      The past year has been extremely difficult for private real estate companies. The first domino in real estate has collapsed in September 2021, triggering a tsunami-like collapse in financing. Most leading private real estate companies have fallen one after another due to liquidity problems, and the industry is wailing. The differentiated policies of state-owned enterprises and private enterprises have made the recovery of the industry confusing. The real estate industry has experienced a 16-month crisis, as if it had been a lifetime.

      Faced with the "tide receding" in the industry, employees at China SCE tenaciously saved themselves upborne by their resilience and perseverance. At the end of 2022, with the national real estate policy and the adjustment of epidemic prevention and control policies, the situation is improving and the future is calling.

      At the age of 35, in the prime of life, after going through the bone-chilling winter and many trials, it is a milestone and special baptism for SCE, which has given us valuable experience and solid strength to go far!

      We move steadily for 35 years.

      It is the vision of SCE to build a respectable century-old enterprise. Time flies, in the cycle of peaks and troughs, 35 years have passed since the 100-year journey.

      In the past 35 years, SCE has developed from a regional real estate company to a comprehensive urban operation service provider among China's top 50: the real estate development business has entered more than 60 cities, with more than 250 development and construction projects, serving nearly one million customers; FUNWORLD has developed nearly 40 shopping centers, with more than 2 million members while the contracted area for the property management business has reached over 40,000,000㎡; FUNLIVE manage more than 40,000 rooms, and have developed a unique asset management business model.

      Along the way, there are more opportunities and more challenges. It is the awe of the market and common sense, the strict adherence to the bottom line of operation, and the fighting spirit of all employees at China SCE who love to fight and dare to win, so that we can move forward steadily despite the ups and downs, and usher in the bright future in the crisis after crisis.

      For this round of profound adjustments in the industry, we have foreseen and plan to optimize investment models in advance and continue to carry out organizational changes. However, the systemic risk impact of the industry under the superposition of multiple factors is far from being immune to doing well. Faced with a difficult situation, we were asked whether we would choose to give up. Self-rescuers don't lie down, "survive" is our firm choice! We know very well that to become a century-old enterprise, there is a long way to go, and tempering is the only way. "Not wasting every crisis" is worthy of every crisis. The one-hundred-year journey is not about who goes faster, but who goes more steadily and goes further!

      In the 35 years journey, we are grateful for the development of the country and the opportunities of the times, and for all the old friends and new partners who have helped SCE; moreover, thanks to all employees at SCE for overcoming the difficulties together and forging ahead. Every employee at SCE is remarkable!

      We also seek a hundred years of future.

      A hundred years is not only the length of time, but also the thickness of precipitation. There is no shortcut to a century, only down-to-earth and long-term hard work. After undergoing tremendous changes in the industry, we are also constantly thinking, what is the next step for SCE?

      As a pillar industry of the national economy, real estate has experienced rapid development and rough and disorderly expansion under the impetus of China's urbanization. Five years ago, we saw that growth without quality was unsustainable, and we determined the coordinated development strategy of "Primary business supplemented by synergic business activities", thus building our differentiated competitiveness; three years ago, we saw the essence of real estate investment attributes and that blind expansion would be a disaster under the premise that the land dividend disappeared due to the price control policy. We have reduced from 15 city companies to 6 city companies, and entered the strategic contraction period ahead of schedule in the first quarter of 2021. In the future, we will start strategic iterations, focus more on core cities and advantageous areas. Only by deeply cultivating the market, deeply cultivating customers, and deeply cultivating products can we highlight our competitive advantages!

      With the optimization and adjustment of the national real estate policy, the real estate industry will enter a new development model, and we predict that the industry will usher in an era where creating customer value and products are the prime elements. Quality is deeply rooted in China SCE's DNA. We will focus more on customer needs, pay more attention to product development, focus on creating value for customers, and build our competitive advantages in the next round of competition.

      Facing such condition, Improving the safety margin of operations, building a business model oriented by cash flow and operating quality, maintaining sound financial self-discipline, and promoting sustainable development will become our operating direction; consolidation and iteration of the cognition of cadres, strengthening organizational combat effectiveness, stimulating and accumulating a high-level consensus, winning battles, and long-term reliable teams will become the new normal of management. Through the mutual reinforcement of management ability and organizational ability, China SCE's sustainable self-adaptability and self-driving force will be formed to achieve a century-old ambition.

      In terms of the second business curve, we will seize development opportunities, focus on developing asset management models, reduce financing dependence, and expand synergies with real estate. Guided by "regional focus, collaborative symbiosis, and digital empowerment", strengthen the symbiotic operation model of FUNWORLD Shopping Center, expand urban consumption and social scenarios, and create a better life for customers; relying on years of layout and brand accumulation, strengthen the cooperation between FUNLIVE and world-class funds continues to expand the value of the rental apartment platform. By improving the operation capacity, the asset value and market value of the long-term rental apartment will be continuously improved, so as to contribute better returns to fund investors.

      At present, under the real estate support policy, the industry has bottomed out, and the pandemic will eventually dissipate. Private real estate companies are about to pass through the darkest moment! Looking forward to 2023, the development of the new era is calling, the power of China's market economy is still strong, and the Chinese people's desire to change their destiny is still strong. SCE has the courage to overcome difficulties and the ability to believe in the future. At the age of 35, All employees at SCE uphold their commitments, forge ahead, grow with resilience, constantly go through each cycle, and move towards the next century-old journey with confidence.

      Finally, I wish all the fellows a happy new year, good health and happiness for the whole family.

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