Shenzhen Stock Exchange Company Management Department:
Ernst & Young Hua Ming Certified Public Accountants (Special General Partnership) received and reviewed the inquiry letter regarding China Communications Real Estate Group Co., Ltd. (hereinafter referred to as "the Company") for the 2025 annual report. The inquiry was issued on April 13, 2026, under the document number 70071827_A01.
According to the relevant regulations, the financial report submitted by the Company must comply with the accounting standards applicable to enterprises. The inquiry seeks to clarify whether the financial report for the year ending December 31, 2025, accurately reflects the Company's financial status and whether the revenue and cost structures are appropriately disclosed.
Based on the inquiry from the Shenzhen Stock Exchange Company Management Department (hereinafter referred to as "the Management Department"), we have reviewed the Company's responses to the inquiries and conducted a detailed investigation into the relevant issues, as outlined below:
Inquiry Question 1: Issues Related to Financial Reporting
Specific Inquiry 1:
The report indicates that the Company's operating income for 2025 is projected to be 147.07 million yuan, belonging to the Company listed on the Shenzhen Stock Exchange. The net profit attributable to shareholders is projected to be 17.21 million yuan, with a decrease of 19.64%, 66.99%, and 67.65% respectively. The report period for the Company is expected to be 1333.43 million yuan, with a decrease of 22.40%. The gross profit margin is 8.01%. In the first quarter of 2025, the Company expects to achieve a net profit of 117.70 million yuan, 14.76 million yuan, 10.48 million yuan, and 14.14 million yuan, achieving a net profit of 4.93 million yuan, with a decrease of 4.80% compared to 2024. The Company’s financial performance is expected to show a significant decline.
Company Response
-
The Company clarifies that the operating income and financial status are influenced by the market environment and industry development. The Company can provide detailed explanations regarding the revenue sources and cost structures.
-
The Company expects to see a decline in operating income due to the ongoing market conditions and the impact of policy changes.
-
The Company will continue to monitor the market trends and adjust its strategies accordingly.
Inquiry Question 2: Issues Related to Financial Reporting
Specific Inquiry 2:
The report indicates that the Company has completed the asset restructuring and will focus on the development of real estate projects. The total investment in these projects is expected to reach 65.00 million yuan. The inquiry seeks to clarify whether the financial report accurately reflects the Company's financial status and whether the revenue and cost structures are appropriately disclosed.
-
The Company confirms that the financial report will provide a clear representation of the asset restructuring and its impact on financial performance.
-
The Company will ensure that the financial report complies with the relevant accounting standards and accurately reflects the financial status.
-
The Company will provide further details on the revenue sources and cost structures in the financial report.
| Category | 2025 | 2024 | Change |
|---|---|---|---|
| Real Estate Sales | 1,333,257.47 | 1,718,091.27 | -22.40% |
| Property Services | 128,981.75 | 89,965.68 | -43.37% |
| Others | 8,450.23 | 22,000.00 | -61.85% |
| Total Operating Income | 1,470,689.45 | 1,830,204.25 | -19.64% |
Inquiry Question 3 Related to Financial Report Items
Specific Inquiry Question 3
The report shows that your company's largest customer is China Communications Construction Group Ltd., with sales amounting to 6.41 billion yuan, accounting for 34.96% of total sales for the year. China Communications Construction Group Ltd. is also the largest supplier to your company, with a purchase amount of 7.23 billion yuan, accounting for 41.91% of total purchases. Please explain the reasons for this situation.