2017 Annual Results Guorui Properties Limited (2329.HK)
March 2018 1 Performance Highlights CONTENTS
2 Financial Summary
3 Development plan
4 Appendixes 01 Performance Highlights 1.1 Sales increased by 34% YoY, hitting a record high
Total contracted sales: approx. RMB14.9 bn, up by 34% Regional distribution: Beijing-Tianjin-Hebei: 42%, South China: 24%, Yangtze River Delta: 7%, JVs: 19% Total GFA sold: approx. 920k sqm, down by14%; ASP: RMB16,000/sqm, rose by 56% YoY Locked-in contracted sales: approx. RMB9.4 bn, up 135%
Contracted sales amount Distribution Average selling price (RMB mn) (By city) (RMB/sqm)
CAGR：34% 2017 2016 2017 2016 14,877
32% 32,800 11,099 29,100
19,800 19% 6,569 15,600 6,206 14,700 9,900 14,000 10% 10% 14,500 8,900 8% 6,800 6% 5% 11,600 4% 3% 2% 1% 17% 38% 15% 9% 6% 5% 6% 4%
2014 2015 2016 2017 4 1.2 Land replenishment over 800k sqm in 2017
Total land bank: 8.5 mn sqm, average land cost: RMB4,700/sqm Acquired 6 projects in 4 cities. Total GFA added 810k sqm at total consideration of RMB9.9 bn. Average land cost: RMB12,000/sqm Saleable resources generated from the 6 projects: RMB30 bn.
Land bank analysis Shenyang Beijing As % of total GFA As % of total land cost Yongqing Tier 1 22% 65%
Tier 2 and hot spots 53% 23% Xi'an Zhengzhou Tier 3 &4 25% 12% Suzhou Island Chongming
Primary land development and urban redevelopment Total planed GFA Acc. investment Beijing 474,300 919.5 Foshan Shantou Shantou 4,300,000 5.7 Shenzhen Chaozhou 2,900,000 9.4 Shenzhen 2,300,000 416 Haikou Wanning 9,974,300 1,351
5 1.3 Profitability ranks at the forefront of the industry
Revenue: RMB6.8 bn dropped by15.5% mainly due to the uneven delivery schedule.
EPS: RMB39.46 cents, increased by 12% YoY.
GPM：47%，NPM：29%，Core NPM: 19%
293 9,000 46% 47% 50% 229 41% 45% 310 8,000 39% 281 45% 46% 40% 204 95 7,000 40% 35% 268 6,000 38% 221 30% 5,000 25% 7,513 4,000 6,029 6,382 19% 20% 3,000 17% 4,790 15% 16% 15% 2,000 10%
1,000 5%
- 0% 2014 2015 2016 2017 2014 2015 2016 2017 Rev. Rev from development Core NPM GPM Project Development PLD IP GPM of development Core NPM of development 6 1.4 Rental income recorded steady growth
Holding 9 investment properties with total GFA of 800k sqm, including 440k sqm leasable area. In 2017, total rental income: RMB310 mn up by 6%
5 IPs in Beijing with total GFA of 320k sqm, including 280k sqm rentable area. Effective leasable area: 145k sqm, generated RMB280mn
7 02 Financial Summary
8 2.1 Summary on P&L
(RMB mn) 2017 2016 YoY change
Contracted sales amount 14,877 11,099 +34% Revenue 6,787 8,035 -16% Gross profit 3,169 3,118 +2% Gain on fair value change of IPs 956 852 +12% Gross profit margin 47% 39% +8pts Profit for the year 2,040 1,956 +4% Net profit margin 30% 24% +6pts Total CI attributable to owners of the company 1,945 1,563 +24% EPS – basic (RMB cents) 39.46 35.38 +12% - diluted (RMB cents) 39.20 35.04 +12% Dividend per share (HK cents) 8.07 5.55 +45%
9 2.2 Debt structure Onshore Offshore Total interest-bearing debt: RMB30.2 bn, 18% higher than Jun 30 2017 1% 7%
Stable funding cost：6.5%
Credit facilities: RMB56 bn, approved yet undrawn
facilities: RMB22 bn End 2014 End 2015 End 2016 End 2017
By channels By Tenure
Onshore bond 13% Offshore bonds 6% Offshore bank loans 48% 25% 14% 13% 1%
Domestic bank loans Trust 64% 16% in 1 year 1-2 years 2-3 years 3-5 years
10 2.3 Cash flow
(RMB mn) Cash on hand as at Dec 31 2016: 1,521 Sales proceeds 6,713 Rental and others 960 Land premium (9,115) Construction cost (3,683) SG&As (452) Tax (1,280) Sub-total: (6,857) Loans net added 10,360 Interests (1,655) Dividends (330) Others (721) Sub-total: 7,654 Cash on hand as at Dec 31 2017*： 2,318
*Including restricted bank deposit：RMB727 mn
11 03 Development plan for 2018
12 3.1 More co-operations for steady and healthy growth
Seize opportunities for land replenishment via co- Win-win Co-operation operations, M&As other than public auctions Seeking balance between projects with high margin, higher IRR and asset turnover Cities on our radar: Tianjin, Wuxi, Wuhan and Chongqing, etc.
Speed up the pace of sales and marketing while gearing Steady and Healthy growth up cash collection ratio Be prudent on the size of total debt, while lower the proportion of short-term debt Diversify channels for funding and refinancing to lower the cost and avoid single platform risk
13 3.2 Speed up sales for larger market share
Saleable resources for 2017: RMB26 bn, sales through ratio: 57%
saleable resources to realize: RMB40 bn，add up to RMB50 bn for 2018
25,000 Est. resources As % of total amount 45% Est. GFA ASP 40% 42,480 40% 600,000 45,000
20,000 35% 40,000 500,000 32,293 35,000 30% 15,000 400,000 30,000 25% 25,000 20% 300,000 10,000 16% 17,013 20,000 15,185 15% 13,696 11% 200,000 15,000 8% 7% 10% 15,171 9,016 5,000 7,566 10,000 5% 5% 12,193 4% 3% 100,000 11,342 4,890 5% 2% 1% 5,000
- 0% - -
14 3.3 Key projects for sale in 2018
Saleable Planned GFA Remarks Project Location resources (sqm) (RMB) (RMB mn)
Beijing, Glory Garden South 5th Ring Road 6.4 2,300 Commercial & office 54% for operation, price for the Beijing, Royal Palace South 2nd Ring Road 29 2,200 rest capped at 79k/sqm 36% for operation, price for the Beijing, Cuihu North 6th Ring Road 27 3,700 rest capped at 54k/sqm
Beijing, Xiaowayao West 4th Ring Road 8 6,000 Cap Price: 59k/sqm
Beijing, Glory Villa North 5th Ring Road 57 5,700 70-80k/sqm
Qidong, Yingtai Island Chongming 109 7,760 15k-27k/sqm Foshan, New Capital + Foshan 50 5,400 15k/sqm Xiqiao Exit YQ, Beijing-Taipei Yongqing, Glory City 110 3,900 17k/sqm Express Way Suzhou, Glory Villa Wuzhong District 24 3,400 33k/sqm
40,360
15 3.4 Enhance management for steady incomes
Estimated construction scale: 6 mn sqm, stay stable YoY, planned GFA to complete: 1.7 mn sqm, up 20% YoY Major investment properties will put into operation, including Shopping center in Shenyang, 110k sqm, Hademen Plaza, 140k sqm. In the next 3 years, more projects in the pipeline will yield good results for the Company 添加标题 添加标题 添加标题
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Shenyang, Glory city Beijing, Hademen Plaza
Foshan, South Leavy Bay Shenzhen, Hi-Tech Park 16 04 Appendixes
17 4.1 Contracted sales in FY17
Contracted sales amount GFA Sold ASP As % of total amount (RMB mn) (sqm) (RMB/sqm) （%） Beijing 4,829 165,686 29,147 32% Glory City 57 1,294 44,098 Fugui Garden 122 1,740 70,000 Glory Villa, East 116 9,182 12,591 Glory Villa, West 1,702 55,779 30,509 Daxing Yinghai 2,833 97,691 29,000 Haikou 1,432 72,289 19,809 10% Glory City 899 50,175 17,913 Glorty Riverview Garden 247 10,092 24,490 West Coast Glory 286 12,022 23,790 Wanning, Glory City 93 10,459 8,861 1% Yongqing, Glory City 1,422 91,349 15,562 10% Zhengzhou, Glory City 244 16,796 14,549 2% Shenyang, Glory City 750 110,739 6,773 5% Foshan 862 58,787 14,657 6% New Capital 804 57,511 13,975 Glory Shengping Commercial Center 58 1,276 45,396 Shantou 1,161 117,362 9,893 8% Shantou, Glory City (II) 451 28,294 15,933 Siji Garden 278 35,476 7,834 Glory Garden 432 53,592 8,068 Suzhou, Glory Villa 655 19,991 32,783 4% Island Chongming, Yingtai 464 39,851 11,639 3% JVs 2,965 211,568 14,013 20% Total 14,877 914,877 16,261 18 4.2 Land parcels newly acquired (as at 28 March 2018)
Total Land ASP Attributable Project Use Location planned premium Channel Date (RMB/sqm) interests GFA (sqm) (RMB mn)
1 Xiqiao, Foshan R Town center 248,591 1,724 8,669 80% Auction 1H17
Daxing Yinghai, 2 R+C South 5th Ring Road 206,989 3,914 23,637 80% Auction 1H17 Beijing Lake Butterfly, 3 H City Center 53,656 412 7,679 100% M&A 1H17 Qidong Royal Palace, 4 R South 2nd Ring Road 294,514 1,621 34,400 16% Auction 2H17 Beijing Project Cuihu, 5 R West 6th Ring Road 273,288 2,094 27,365 28% Auction 2H17 Beijing
6 Ezhou, Wuhan Multi Port Sanjiang 150,000 88 1,067 55% M&A 2H17
Tianjin, Chongqing, 7 JVs R 2,600,000 268 1,031 10% M&A 2H17 Sanya, Handan, etc
8 Xiaowayao, Beijing R West 4th Ring Road 140,000 88 1,232 51% M&A 1Q18
Total 3,967,038 10,209 10,683
Attributable GFA totaled: 955,663 sqm R: Residential, C: Commercial, H:Hotel 19 4.3 Land bank analysis (by type)
Completed yet Under Future Use Total GFA unsold development development (sqm) (sqm) (sqm) (sqm) （%）
1 Residential 230,441 1,412,721 3,150,351 4,793,513 56% 2 Commercial for sale 115,473 494,056 266,747 876,276 10% 3 Commercial held for investment 484,839 303,283 - 788,122 9% 4 Hotel - 88,092 104,536 192,628 2% 5 Parking spaces 73,147 367,085 359,230 799,462 9% 6 Ancillary - 164,436 294,416 458,852 5% 7 Hospital - 360,154 - 360,154 4% 8 Specialized market - - 150,000 150,000 2% 9 Others - 15,854 71,511 87,365 1% Total 903,900 3,205,681 4,396,791 8,506,372
20 4.4 Primary land development in Beijing
Location: North gate of Temple Heaven Total planned GFA: 470k sqm
21 4.5 Urban redevelopment, Shenzhen
Location: Port Yantian Total planned GFA: 2.3 mn
22 4.6 Financial summary for past 5 years
(RMB mn) 2017 2016 2015 2014 2013
Total asset 58,544 44,718 35,227 29,013 22,467
Total liability 44,951 32,907 25,299 20,477 16,371 Cash and cash 2,318 1,521 2,076 1,730 906 equivalents Total debt 30,158 19,888 15,275 10,819 7,337
Net debt 27,840 18,367 13,199 9,089 6,431
Total equity 13,592 11,810 9,928 8,536 6,096
2017 2016 2015 2014 2013
D/A ratio 77% 74% 72% 71% 73%
EBITDA（RMB mn） 2,646 2,561 2,101 1,972 3,302
EBITDA/Interests 1.54 2.2 2.5 2.6 6.4
______1. EBITDA= Gross profit – SG&A + D&A 2. Interest coverage (x)=EBITDA/interest expense 23 Disclaimer
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