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Future Land Development Holdings Limited 新城發展控股有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 1030) ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2018 ANNUAL RESULTS HIGHLIGHTS – Achieved contracted sales of RMB221,098.0 million with corresponding contracted sales area of approximately 18,121,000 sq.m., representing an increase of 74.8% and 95.2%, respectively; – Recognised revenue increased by 34.2% to RMB54,781.0 million; – Gross profit increased by 40.3% to RMB19,057.4 million; – Gross profit margin increased from 33.3% to 34.8%; – Net profit for the year increased by 100.3% to RMB12,047.6 million, of which RMB6,761.0 million was attributable to equity holders of the Company, representing a year-on-year increase of 78.2%; – Core earnings* increased by 104.4% to RMB10,187.6 million, of which RMB5,663.1 million was attributable to equity holders of the Company, representing a year-on-year increase of 83.4%; – Total cash at hand** amounted to RMB47,655.8 million; – Net debt-to-equity ratio as at year end decreased from 100.4% as at last year end to 78.6%; and – The Board recommended a payment of final dividend of RMB30 cents per share. * Core earnings equal to net profit less after-tax fair value gains or losses on investment properties and disposal (including direct sale and transfer of assets and equity interest) gains or losses (whether directly or through equity transfer) on investment properties including those recorded in other gains, and exclude unrealized foreign exchange gains or losses relating to borrowings, and after-tax gain on disposal of certain subsidiaries engaging in residential property management business. ** Including restricted cash. 1 The board (the “Board”) of directors (the “Directors”) of Future Land Development Holdings Limited (the “Company”) is pleased to announce the consolidated financial results of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2018 together with the comparative figures for the year 2017 as follows: CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2018 31 December 31 December Note 2018 2017 RMB’000 RMB’000 ASSETS Non-current assets Property, plant and equipment 3,014,910 2,919,703 Investment properties 40,758,000 23,496,000 Intangible assets 539,109 59,503 Investments in associates 6,840,149 1,953,166 Investments in joint ventures 12,633,050 11,966,336 Deferred income tax assets 3,031,448 1,658,730 Available-for-sale financial assets – 1,099,526 Financial assets at amortised costs 734,735 – Financial assets at fair value through profit or loss 1,032,194 – Derivative financial instruments – 162,539 Goodwill 10,260 777 Land use rights 427,949 429,592 Other receivables and prepayments 5 463,427 727,710 Total non-current assets 69,485,231 44,473,582 Current assets Prepayments for leasehold land 13,610,385 9,808,432 Properties held or under development for sale 145,596,570 76,396,636 Trade and other receivables and prepayments 5 58,906,517 34,071,920 Other financial assets at amortised cost 220,001 – Contract cost 1,229,533 – Derivative financial instruments 151,475 – Restricted cash 6,441,945 4,105,100 Cash and cash equivalents 41,213,881 20,542,676 Total current assets 267,370,307 144,924,764 Total assets 336,855,538 189,398,346 2 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONT’D) As at 31 December 2018 31 December 31 December Note 2018 2017 RMB’000 RMB’000 EQUITY Equity attributable to owners of the Company Share capital: nominal value 6 4,813 4,609 Reserves 19,147,278 12,776,397 19,152,091 12,781,006 Non-controlling interests 26,568,692 11,851,538 Total equity 45,720,783 24,632,544 LIABILITIES Non-current liabilities Borrowings 7 56,515,373 34,108,070 Deferred income tax liabilities 3,720,666 1,755,493 Trade and other payables 8 144,505 – Total non-current liabilities 60,380,544 35,863,563 Current liabilities Trade and other payables 8 75,524,146 56,558,252 Advances from customers 435,133 50,866,242 Contract liabilities 118,230,992 – Current income tax liabilities 9,476,038 6,204,479 Borrowings 7 24,987,790 15,273,142 Financial liabilities at fair value through profit or loss 2,069,576 – Derivative financial instruments 12,478 – Dividends payables 18,058 124 Total current liabilities 230,754,211 128,902,239 Total liabilities 291,134,755 164,765,802 Total equity and liabilities 336,855,538 189,398,346 3 CONSOLIDATED STATEMENT OF INCOME For the year ended 31 December 2018 Year ended 31 December Note 2018 2017 RMB’000 RMB’000 Revenue 9 54,780,995 40,820,316 Cost of sales and services 10 (35,723,588) (27,239,193) Gross profit 19,057,407 13,581,123 Fair value gains on investment properties 3,285,089 1,331,853 Fair value loss on financial instruments at fair value through profit or loss (235,790) – Selling and marketing costs 10 (2,374,416) (1,831,870) Administrative expenses 10 (2,650,816) (2,266,887) Net impairment losses on financial assets (157,769) – Other income 97,929 41,792 Other expenses (23,788) (2,486) Other gains – net 840,148 301,048 Operating profit 17,837,994 11,154,573 Financial income 11 229,626 176,332 Financial cost 11 (969,568) (844,529) Finance costs – net 11 (739,942) (668,197) Share of results of associates 990,068 266,631 Share of results of joint ventures 559,380 (10,597) Profit before income tax 18,647,500 10,742,410 Income tax expense 12 (6,599,934) (4,728,785) Profit for the year 12,047,566 6,013,625 Profit for the year attributable to: – Equity holders of the Company 6,761,004 3,793,998 – Non-controlling interests 5,286,562 2,219,627 12,047,566 6,013,625 Earnings per share for profit attributable to equity holders of the Company – Basic earnings per share 13 RMB1.15 RMB0.67 – Diluted earnings per share 13 RMB1.12 RMB0.67 4 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2018 Year ended 31 December 2018 2017 RMB’000 RMB’000 Profit for the year 12,047,566 6,013,625 Other comprehensive income Items that may be reclassified to profit or loss – Currency translation differences (304,371) (3,065) Items that may not be reclassified to profit or loss – Changes in fair value of equity investments at fair value through other comprehensive income 10,674 20,077 Total comprehensive income for the year 11,753,869 6,030,637 Total comprehensive income for the year attributable to: – Equity holders of the Company 6,565,699 3,804,087 – Non-controlling interests 5,188,170 2,226,550 11,753,869 6,030,637 5 NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2018 1 GENERAL INFORMATION Future Land Development Holdings Limited (the “Company”) was incorporated in the Cayman Islands on 23 April 2010 as an exempted company with limited liability under the Companies Law (2010 Revision) of the Cayman Islands. The address of its registered office is Grand Pavilion, Hibiscus Way, 802 West Bay Road, P.O. Box 31119, Grand Cayman KY1-1205, Cayman Islands. The principal activities of the Company and its subsidiaries (together, the “Group”) are property development and property investment in the People’s Republic of China (the “PRC”). The Company’s parent company is Wealth Zone Hong Kong Investments Limited (“Wealth Zone Hong Kong”) and the Company’s ultimate holding company is First Priority Group Limited, both of which are incorporated in the British Virgin Islands. The ultimate controlling party of the Group is Mr. Wang Zhenhua (“Mr. Wang” or the “Controlling Shareholder”). To prepare for the initial listing of the Company’s shares on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), the Group has undertaken a reorganisation (the “Reorganisation”) pursuant to which the Company became the holding company of the subsidiaries comprising the Group. Details of the Reorganisation are set out in the prospectus of the Company dated 19 November 2012. The Company’s shares began to list on the Main Board of the Stock Exchange on 29 November 2012 (the “Listing”). The consolidated financial statements are presented in thousands of Renminbi (“RMB’000”), unless otherwise stated. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation (i) Compliance with HKFRS and HKCO The consolidated financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”) and disclosure requirements of the Hong Kong Companies Ordinance Cap.622 (“HKCO”). (ii) Historical cost convention The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss and investment properties, which are carried at fair value. (iii) New standards, amendments and interpretation adopted by the Group A number of new or amended standards became applicable for the current reporting period and the Group changed its accounting policies and make adjustments as a result of adopting the following standards: • HKFRS 9 Financial Instruments • HKFRS 15 Revenue from Contracts with Customers • Amendments to HKFRS 2 – Classification and Measurement of Share-based Payment Transactions • Amendments to HKFRS 4 – Applying HKFRS 9 Financial Instruments with HKFRS 4 Insurance Contents 6 • Annual improvements 2014 – 2016 cycle • Amendments to HKAS 40 – Transfers of Investment Property, and • HK (IFRIC) 22 Foreign Currency Transactions and Advance Consideration.