When the golden timeof the real estate industry has gone away, the strategic transformation hasbecome the unanimous choice for many real estate enterprises. The real estateenterprises have taken on an obvious financialization, and the real estate +finance will become the key point of the next round of industrial shuffle.

During thefinancialized transformation, some enterprises have just begun theirtransformation, while some have become financial holding groups. On August 26, OceanwideHoldings under continuous transformation formally released the semiyearly statementsof 2016, indicating that the operating income of the first half year exceeded10 billion with a great increase of 172%. In addition to the good performanceof traditional real estate business, the comprehensive prosperity of financiallayout has become another important factor of the growth in the performance.

Outstandingperformance in the mid-term financial statements

According to the semiyearlystatements of Oceanwide Holdings in 2016, by June 30, the total assets reached138.815 billion Yuan and the owners’ equity attributable to shareholders oflisted company was 15.736 billion Yuan, with a respective increase of 13.58%and 24.55%. The total operating income of the first half year was 11.705billion Yuan with a year-on-year growth of 172.02%; the net profit attributableto shareholders of listed company was 911 million Yuan with a year-on-yeargrowth of 24.54%. The operating income took on an obvious tendency of growth inthe first quarter. According to the statements of the first quarter, thecompany realized an operating income of 5.07 billion Yuan, 1.93 times more thanthat in the same period of last year.

Oceanwide Holdingsexpressed that, the company will continuously promote the realization of thestrategic transformation objective to build an international enterprise groupof integrated industry and finance focusing on finance on the basis of industryvia the platform of Internet, and the investment business was an important partof the transformation strategy of the company, expedite the release of theperformance of traditional real estate business, strengthen the emergingbusiness such as finance and strategic investment, and jointly enhance thetransformation and upgrading, and the operation performance.

Development of realestate business

With the loose andstable policies and centralized demand release, the commercial houses continuedwith an obvious recovery in 2015. As a result, the real estate business of OceanwideHoldings registered a great increase, realizing an operating income of 9.325billion Yuan with a year-on-year growth of 336.64%.

The company expressedthat, the company further expedited the de-stocking of the real estateindustry, among which the first and second-tier cities such as Beijing,Shanghai, Shenzhen and Wuhan had outstanding performance in the market. Bymaking use of the good market opportunities, the company released the landvalue and comprehensively expedited the development and sales of the realestate project on such basis, realizing a great increase in such operationindexes as operating income, net profit and sales amount.

In recent years, thesubordinate key projects of Oceanwide Holdings in Beijing and Shanghai havegradually entered into a intensive sales period. Currently, all the projectsfor sale are high-quality projects in core plots in key cities such as Beijing,Shanghai and Wuhan. In the first half year, the real estate business of the companyrealized a settlement income of 8.903 billion Yuan with a year-on-year growthof 391.54%; achieved a contract sales amount of 9.512 billion Yuan with ayear-on-year growth of 67.58%, of which Wuhan Project realized 4.897 billionYuan with a year-on-year growth of 64%, Beijing Project realized 4.322 billionYuan with a year-on-year growth of 88.69%. Meanwhile, the gross profit rate ofthe real estate business was 45.15%, much higher than the average industriallevel.

Oceanwide Holdings saidthat, on one hand, the company will continuously focus on the investment opportunitiesfor domestic and foreign high-quality projects; on the other hand, it will continuouslyexplore new types of operation and profit-making modes of the real estate developmentand operation with its characteristics according to the blueprint of Wuhan CBDproject operation and management, gradually realize the comprehensive operationfrom the development and construction, and transit from the single real estatesale to the diversified profit-making modes organically integrating theproperty sale, real estate operation, financial service and investmentmanagement, in order to maintain and expand the competitive advantages andrealize the sustainable development of the enterprise.

Prosperity of financialbusiness

As early as 2014, OceanwideHoldings has put forward the foresighted development mode integrating thefinancial and strategic investment plates, and eliminating the pure dependenceon real estate business, and successively finished a series of capitaloperation actions such as the holding of Minsheng Securities, increase incapital of Minsheng Trust, acquisition of Asia-Pacific Property & CasualtyInsurance, initiation of reinsurance, etc. In 2016, the financial layout wasstill intensely conducted.

During the reportperiod, Oceanwide Holdings successfully controlled Minsheng Trust and increasedits capital, increasing the shareholding proportion from 25% to 93.42%. Uponcompletion of capital increase, the registered capital of Minsheng Trustreached 7 billion Yuan, and the net assets exceeded 9 billion Yuan, ranking thetop in the industry. In the first half, the operating income and net profit ofMinsheng Trust respectively reached 543 million Yuan and 230 billion Yuan witha respective increase of 80.71% and 88.96%; the managed trust asset scaleachieved 132.331 billion Yuan with a year-on-year growth of 54.02%.

In the first half, Asia-PacificProperty & Casualty Insurance and new financial business became the mainimpetus of the financial layout. During the report period, Asia-PacificProperty & Casualty Insurance actively adjusted its business structure,expedited product innovation, introduced top talents and comprehensivelyenhanced the business capability and management level, centered on thetransformation development. Meanwhile, Oceanwide Holdings also planned to raisefunds totaling 4 billion Yuan by means of private placement of shares in 2016,which would be used to increase the capital of Asia-Pacific Property &Casualty Insurance and effectively strengthen the capital power of Asia-PacificProperty & Casualty Insurance.

In addition, AsiaPacific Reinsurance Co., Ltd. (planned), Asia Pacific Internet Life InsuranceCo., Ltd. (planned) and Minsheng Fund Management Co., Ltd. (planned) areintensely expediting the preparations for construction, which have beensubmitted to the supervision organization for approval; six companies have beenregistered in the Internet financial plate, of which part of the technologyplatform construction and product design have been completed, and the internalproduct tests will be finished in the recent period. Later the companies willbe put into formal operation.

However, influenced bydepression of capital market and tightened industrial regulation, the overalloperation performance of Minsheng Securities was lower than expectation. Atpresent, the suspension of Minsheng Securities to open new securities accounthas been revoked, and Minsheng Securities are comprehensively optimizing thebusiness model, talent team and management system on the basis of careful analysisof the current status of all the businesses, in order to better enhance theoperation efficiency and reduce the operation risk.

After more than twoyears’ business development, the financial business of Oceanwide Holdings hasextended to the securities, trust, insurance, futures, funds (planned), assetmanagement and Internet finance, and basically formed the financial layout andbusiness distribution centered on Minsheng Securities, Minsheng Trust and Asia-PacificProperty & Casualty Insurance.

Escort by strategicinvestment

Among the multi-wheelstrategic layout of “finance + real estate +strategic investment” of OceanwideHoldings, the strategic investment with a stable growth has contributed to thecompany transformation.

In the first half of2016, the company made several accurate investments centered on the existingand future industrial layout via the platform of Oceanwide Equity InvestmentCompany, including an investment of 2.5 billion Yuan in Wanda Media and acquisitionof shares of BAIC BJEV with 128 million Yuan. Meanwhile, it also focused on theinvestment opportunities in the private placement of shares by listed companiesand NEEQ, and made securities investments in the secondary market in a properand prudent manner. In the future, Oceanwide Holdings will seek for excellentinvestment object, explore into the industry chain investment opportunities,and comprehensively enhance the accurate investment capability following thecompany strategy.

The transformationinto finance is a large tendency for large-scale real estate enterprises. Withdeepened financialization of the real estate enterprises, Oceanwide Holdingswith several financial licenses will no doubt take the leading position in themarket, and the building of full-license financial holding enterprise will makecontinuous contributions to the performance of the company.