Greentown China 1H2020 Results
Total Page：16
File Type：pdf, Size：1020Kb
Contents Operational Review ··································· 3 Financial Overview ···································· 11 Operational Strategy ······································ 23 Prospects ······························································· 41 Appendix ···························································· 47 2 Operational Results Highlights Accelerated Abundant Premium Optimized Growth in Sales Land Bank Replenishment Financial Operation Contracted New land reserve RMB175.6 bn RMB91.2 bn Revenue RMB23.9 bn sales Rank 10th in China1 by value ↑ 181% YoY ↑ 28% YoY Cash collection Est. sales achieved 1.8 95% from new land / Total 25% Cash / ST debt ↑ 0.3 by end-2019 rate Industry-leading new land value % of Avg. net profit ↑ 3 pps 5.2% 73% Funding cost Tier 1&2 cities margin of new lands YoY ↓ 20 bps YoY Notes：1 Source: CRIC 4 Operational Results Highlights Industry Forerunner Industry-Leading Win-win Cooperative of Product Quality Brand Name Development China's Real Estate Product Ranking China Top 100 Real Estate Enterprises Greentown management3 in 1H20201 by comprehensive strength1 Spin-off and listing Top 10 in China 1st stock of No.1 in China 2 RMB 86.8 bn of brand value project management in China Xinhu Zhongbao4 China Construction Engineering Ranked 1st in the Chinese Urban Decoration Award and other product 1 Residents’ Satisfaction Survey Strategic investor of awards 13 cities 12.95% 20+ awards Notes： 1 Source: China Index Academy；2 Source: Zhongfang Zhiku; 3 Greentown Management Holdings Company Limited, listed on the Main Board of HKEx on July 10, 2020, stock code: 09979.HK; 4 Xinhu Zhongbao Company Limited (a company listed on Shanghai Stock Exchange，stock code: 600208.SH）. 5 Accelerated Growth in Sales with Structural Optimization Contracted sales reached RMB 91.2 bn, up 23% YoY, ranking 10th in China1; Investment project sales reached RMB 66.1 bn, up 34% YoY, attributable sales reached RMB 38.2 bn, up 43% YoY; Cash collection rate reached 95% at industry high; ASP RMB 24,922 per sqm, maintained industry leading position； RMB 48.5 bn, 73% (1H2019: 67%) of sales from Tier 1&2 cities; RMB 41.2 bn, 62% of sales from Yangtze River Delta; Project management business achieved a steady growth with sales of RMB 25.1 bn. Contracted sales from 5-year 1H contracted sales investment projects by value Tier 1 cities 15% Chengdu- Chongqing Beijing, Shanghai, Guangzhou, etc （RMB bn） Project Pearl River management Delta 2.6% 5.6% Others Tier 2 cities 58% ↑23% 10.9% Zhejiang (excl. Hangzhou) YoY Hangzhou, Ningbo, Wenzhou, Nanjing, Suzhou, 91.2 35.8% Hangzhou Wuxi, Qingdao, Jinan, Shenyang, Dalian, 75.4 74.3 Attr. Sales Tianjin, Chengdu, Chongqing, Hefei, Wuhan, 11.0% 59.5 from Foshan, Fuzhou, Changsha, Xi'an, Urumqi, etc. Inv. Projects 45.4 38.2bn 25.1 Tier 3&4 cities 24.9 27% Jiangsu- Bohai Shanghai-Anhui Rim 15.5% 18.6% Zhoushan, Jiaxing, Shaoxing, Jinhua, Taizhou, 1H2016 1H2017 1H2018 1H2019 1H2020 Huzhou, Xintai, Qufu, etc. Notes：1 Source: CRIC 6 New Land Bank Value Hits Record High with Effective and Precise Investment Strategy No. of Projects1 43 Focus City Clusters Deepen Premium Cities Jiangsu- Total GFA 10.97 mn sqm Others 11.6% Shanghai -Anhui 25.9% Total Land/ Hangzhou 14.7% Acquisition RMB 64.8 bn Cost （Attributable: 43.9 ） New RMB bn Saleable 175.6 Value (↑181% YoY) (Attributable: 101.2 ) Zhejiang Bohai (excl. Hangzhou) Rim 25.3% Average 22.5% Land Cost RMB 6,813 /sqm % of • RMB 111 bn, 63% from Yangtze River Delta Tier 1&2 75% Cities Note: 1. incl. new land bank replenished in core Tier 1&2 cities like Beijing, Shanghai, Hangzhou, Ningbo, Fuzhou and Xi’an, etc 7 New Land Bank Value Hits Record High with Effective and Precise Investment Strategy Rapid increase in Enhanced Efficiency on Land Bank Replenishment Project Launch The value of 1H2020 newly-added Est. 25% of 1H2020 newly-added land banks increased by 181%, hit land banks are expected to record high and rank top among contribute sales and support the peers. sales growth in 2020. Continued Expansion on Steady Growth on Investment Channels Earning Expectation 12 projects were added by M&A, 1H2020 newly-added land banks notably Xinhu’s development are expected to generate net profit projects in Shanghai, with saleable of nearly RMB 18 bn; The average resources of RMB 73.8 bn, 42% of net profit margin grows appr. 3 pps total 1H2020 newly-added land yoy. banks. 8 Enriched and Optimized Land Bank No. of Total Land Bank by GFA Projects1 172 Total GFA 48.01 mn sqm (Attributable.：27.98 ) Bohai Rim 20.4% Total saleable GFA 32.97 mn sqm (Attributable. : 19.08) Jiangsu- Shanghai-Anhui14.9% Average Hangzhou land cost RMB 6,234 /sqm 9.5% Zhejiang (excl. Hangzhou) 25.6% Total RMB bn Pearl River Delta 2.9% saleable 742.7 value （ ↑25% from end-2019） Chengdu- Chongqing 3.2% Others 21.8% % of Tier 74% Overseas 1&2 Cities 1.7% Provinces/cities entered Note: 1 incl. projects under construction and pending construction 9 Improved Turnover and Efficiency Investment projects FY2019 1H2020 2H2020 Est. FY2020 Est. (mn sqm） Commenced 11.25 9.34 6.45 4.80 construction ↑20% YoY Completed 6.62 5.79 1.44 5.18 construction ↑14% YoY Significant Acceleration in New Projects’ Turnover 2.9 months Commence Construction Wenzhou Osmanthus Grace +24% +14% 3.8 months +10% +5% Presale Tianjin Sincere Garden (W3) 6.1 months Construction Presale Return on Delivery Return on shareholders’ invt. Commencement shareholders’ investment Deqing Fengqi Chunlan 10 Key Financial Data (RMB mn) 1H2020 1H2019 Change Revenue 23,896 18,658 +28.1% Gross profit 6,184 5,969 +3.6% Net gain on disposal of subsidiaries 352 88 + 264 mn and gain from M&A Provision and reversal of impairment -221 101 + 322 mn losses on certain assets Other income 1,557 1,362 +14.3% Administrative expenses -1,447 -1,404 +3.1% Selling expenses -624 -665 -6.2% Finance costs -1,252 -801 +56.3% Share of results of JVs/ associates 472 497 -5.0% 12 Key Financial Data (RMB mn) 1H2020 1H2019 Change Net profit 3,130 3,073 +1.9% Profit attributable to owners of 2,096 2,058 +1.9% the Company Basic earnings per share (RMB) 0.65 0.67 -3.0% Core net profit attributable to 2,435 2,430 +0.2% owners of the Company1 Note: 1. Core net profit attributable to owners has been adjusted, excluding the net post-tax effects of foreign exchange gains and losses, gains from acquisitions, provision and reversal of impairment losses on certain assets and fair value adjustments on certain assets 13 Key Financial Data (RMB mn) 30 Jun 2020 31 Dec 2019 Change Total assets 375,585 337,092 +11.4% In which: Total inventories 195,632 179,691 +8.9% Bank balances and cash 62,849 51,894 +21.1% Total liabilities 301,462 267,937 +12.5% In which: Total borrowings 111,852 95,577 +17.0% Contracted liabilities 88,121 76,325 +15.5% Net assets 74,123 69,155 +7.2% 14 Revenue Boosted with Profit Improved Revenue SG&A/Revenue RMB mn ↑28.1% ↓2.4 pps 23,896 11.1% 18,658 8.7% 1H2019 1H2020 1H2019 1H2020 Profit Attr. to Owners of Gross Profit the Company RMB mn RMB mn ↑3.6% ↑1.9% 6,184 5,969 2,058 2,096 1H2019 1H2020 1H2019 1H2020 15 Well-managed Expense with Enhanced Efficiency - Administrative Expenses (RMB mn) 1H2020 1H2019 Change Real estate development expenses1 - Cost of human resources 306 309 -1.0% - Daily operating expenses 86 99 -13.1% - Others 323 305 +5.9% Subtotal 715 713 +0.3% Non-real estate development expenses2 452 406 +11.3% Depreciation and amortization expenses 280 286 -2.1% Total 1,447 1,405 +3.0% Notes： 1. The administrative expenses of the real estate development business basically remained the same level compared with 1H2019 and the ratio of administrative expenses to contracted sales dropped 19.6% YoY, which was benefited from the optimization of the management and control model in recent years while constantly improving per capita efficiency. In addition subject to the COVID-19 pandemic in 1H2020 part of expenses occurred less. 2. The revenue for non-real estate development business increased to RMB3.182 bn in 1H2020 from RMB2.769 bn in 1H2019. At the same time, the ratio of expenses dropped 3.3% compared with 1H2019 16 Well-managed Expense with Enhanced Efficiency - Selling Expenses (RMB mn) 1H2020 1H2019 Change Real estate development expenses1 - Cost of human resources 210 147 +42.9% - Cost of marketing activities 226 301 -24.9% - Other operating fees 90 84 +7.1% Subtotal 526 532 -1.1% Non-real estate development expenses2 98 133 -26.3% Total 624 665 -6.2% Notes： 1. The selling expenses of real estate development business in 1H2020 dropped 1.1% YoY. Due to the higher YoY growth of sales, the ratio of selling expenses to contracted sales dropped 20.7% YoY. Mainly due to the Group’s flexible use of sales strategies to transfer offline marketing campaign to online platform implementation and promotion. In addition, the group’s high quality properties are more in demand by the market after the COVID-19. 2. The YoY decrease of RMB35 mn in non-real estate development expenses was mainly due to the hotel business contraction as affected by the COVID-19 pandemic. The ratio of expense decreased 36.4% compared with 1H2019. 17 Funding Cost Hits Record Low Level 1H2020 weighted avg. interest cost was 5.2%, down 20 bps from 5.4% in 1H2019. (RMB mn) 1H2020 1H2019 Change Interest expenses 1,252 801 +56.3% Capitalized interest 2,577 2,185 +17.9% expenses Interest income -1,300 -743 +75.0% Net Interest 2,529 2,243 +12.8% In which: net interest in P&L -48 58 In 1H2020, the capitalization interest rate was 67.3 % (1H2019：73.2 %).