2019 Interim Results Guorui Properties Limited (2329.HK) August 2019 CONTENTS 01 Performance Review Development Plan 02 03 Appendixes 01PART Performance Review 1H2019 Interim Results Highlights Contracted Sales: +87% Achieved RMB12.8 bn, representing 87% growth YoY; target to accomplish 30% growth in 2019. Real Estate Income+74% Achieved RMB3.41 bn, representing 74% growth YoY. Rental Income: +38% Achieved RMB290 mn in rental income, representing 38% growth YoY. Land Cost: RMB2,878sq.m As at 30 Jun 2019, land reserves reached a total GFA of 16,084,092 sq.m. and the average cost of land reserves was RMB2,878 per sq.m. for the Reporting Period. The corresponding value of the goods exceeded RMB 120 billion. In addition, the Group has been undertaking primary land development, redevelopment of shanty town and projects developed under the “Urban Redevelopment” policy in Beijing, Shenzhen and Shantou. During the Reporting Period, the development area reached 5.8 million sq.m., of which Shenzhen accounted for 51.6%. Gross Profit: +41% Achieved RMB1.07 bn in gross profit, representing 41% growth YoY. Leverage: Improvement As at 30 Jun 2019, net gearing ratio decreased 4 bps pts. As at 30 Jun, 2019, the balance of monetary funds was RMB3.7 billion, an increase of 89.6% from 31 Dec, 2018. The monetary funds/interest-bearing liabilities due within one year increased by 22% from 31 Dec, 2018. 4 1.1 Record High Contracted Sales Contracted sales: approx. RMB12.8 bn, up 87% YoY. Major contributors: 58% from the Beijing-Tianjin-Hebei Region and 33% from the Yangtze River Delta and the Guangdong-Macau-Hong Kong Region. GFA sold: approx. 0.60 mn sq.m, up 7.3% YoY; ASP: approx. RMB21,216 / sq.m, up 75% YoY; As at 30 Jun 2019, sales locked and booking in the future approx. RMB18.8 bn. Contracted sales Contracted GFA Sold Average selling price (RMB mn) (k sq.m) (RMB/sqm) 25,000 1,400 1,322 21,216 25,000 21,913 1,200 1,064 20,000 16,580 20,000 +87% +7.3% 16,260 1,000 915 14,877 15,000 12,147 15,000 12,828 11,099 800 10,430 563 604 600 10,000 10,000 6,843 400 5,000 5,000 200 - - - FY16 FY17 FY18 1H18 1H19 FY16 FY17 FY18 1H18 1H19 FY16 FY17 FY18 1H18 1H19 5 1.2 Robust sales in T1 cities and its vicinity Over 30 projects in 17 cities contributed to the sales in 1H2019； Robust sales in T1 cities and vicinity in 1H2019. 1H19 1H18 Beijing-Tianjin-Hebei Region and Shenyang 62% 34% (Beijing, Tianjin, Yongqing and Shenyang, etc.) Yangtze River Delta and OBOR Region 23% 25% (Chongming Island, Suzhou and Chongqing) Pearl River Delta 15% 41% (Shantou, Foshan and Haikou, etc.) 1H19 1H18 First-tier cities and its vicinity 60% 23% (Beijing, Yongqing, Chongming Island) Second-tier and popular cities 28% 25% (Tianjin, Shenyang, Suzhou, Chongqing, Haikou) T3 & T4 cities 12% 52% 6 1.3 -1Investment Properties – Promising prospects of quality properties As at 30 Jun, 2019, the Group held investment properties in 7 cities with total area of approx. 970k sq.m and total rentable GFA of approx. 490k sq.m.; As at 30 Jun 2019, the investment properties totaled approx. 20.3 bn; Beijing with totaled rental leasable GFA of approx. 270 thousand sq.m, representing 55% of the total leased GFA. Beijing Glory City, Beijing Hademen, Beijing Fuguiyuan, Beijing Beiwu, Beijing Total Use Multi Usage Office & Retail Retail and Commerce Office Location City core area City core area City core area City core area 1H2019 Rental Income 127 100 21 12 260 (RMB mn) Leasable GFA (sq.m) 121,406 108,450 29,316 10,916 270,088 Leased GFA (sq.m) 101,959 69,599 23,402 10,916 205,876 Lease Term (Year) 1-6 1-8 1-5 7 Fair Value (RMB mn) 7,017 6,811 1,039 423 15,290 7 1.4 -2 Investment Properties - Continued growth in income In 1H2019, rental incomes achieved 290 mn, representing 38% growth YoY, mainly due to the increase of occupancy rate in Hademen； 2H2019 will has more rental incomes comes as the increase of GFA. Glory City, Shengping Other regions Office S5, Haikou Glory City, Shantou Total Shenyang Shopping mall Use Office & Commerce Special Purpose & retail Special Purpose Retail (phase I) City center in Location City center City center City center Chancheng 1H2019 Rental Income 7 14 4 - 25 (RMB mn) Leasable GFA (sq.m) 17,320 62,398 109,813 34,989 224,520 Leased GFA (sq.m) 16,042 60,614 36,733 19,199 132,588 Lease Term (Year) 3-6 4-13 1-4 2-5 Fair Value (RMB mn) 388 589 889 1,847 3,713 8 1.4 – 3 Investment Properties – Building and planning of the projects Over 600 thousand sq.m properties are expected to be completed and delivered in the next 3-5 years. Science & Technology Park, Ruicheng Commercial Shenzhen Building， Handan Location: Near Tencent Building Location: Handan Use: Office Use: Commercial Building Building area: 270,000 sq.m Building area: 150,000 sq.m Glory Shengping Shopping Center (phase II) Location: Foshan Use: Versatility Building area: 220,000 sq.m 9 1.5 Optimized Business Layout to Ensure Future Growth As at 30 Jun 2019, the total planned GFA for land reserves of the Group was 16.08 million sq.m in 21 cities. The corresponding value of the goods exceeded RMB 120 billion. Beijing-Tianjin-Hebei The average land cost is RMB2,878 per sq.m., diversifying to increase the quality of land bank in • Shenyang Greater Bay Area. • Beijing • Tianjin In addition, the Group has been undertaking primary land development, redevelopment of shanty • Yongqing town and projects developed under the “Urban Redevelopment” policy in Beijing, Shenzhen and • Handan Shantou. During the Reporting Period, the development area reached 5.8 million sq.m., of which • Shijiazhuang Shenzhen accounted for 51.6%. Yangtze River Delta & OBOR Region • Chongming Island 45％ • Suzhou • Wuxi • Zhengzhou Major projects under PLD & renovation • Xi’an • Wuhan GFA Acc. cost • Chongqing (mn sqm) (RMB mn) 26％ • Tongren Beijing 0.5 1,137.3 Greater Bay Area and Hainan Shenzhen 3.0 468.1 • Shenzhen • Foshan 3.5 1,605.4 • Jiangmen • En’ping • Haikou • Sanya 29％ • Wanning • Shantou 10 1.6 Land Bank Analysis The development area for ancillary facilities such as residence and parking space accounts for 76% of the total GFA； Total completed yet unsold GFA was approx. 1.13 mn sq.m., with residential area accounting for 41%. Completed yet Under Future As % of Use Total GFA unsold / unleased development development total reserves (sqm) (sqm) (sqm) (sqm) (%) Residential and ancillary 1 462,996 5,940,585 5,766,346 12,169,927 75.7 facilities such as parking space 2 Office/Commercial for sale 131,247 749,306 1,291,559 2,172,112 13.5 Commercial held or intended to 3 537,148 423,209 - 960,357 6.0 be held for investment 4 Hotel - 126,604 101.095 227,699 1.4 5 Hospital - 360,154 - 360,154 2.2 6 Special-purpose - - 150,000 150,000 0.9 7 Others - 43,843 - 43,843 0.3 Total 1,131,391 7,643,701 7,309,000 16,084,092 100 11 1.7 Summary of P&L (RMB mn) 1H2019 1H2018 Change Revenue 3,775 2,238 69% Property sales 3,412 1,956 74% Primary land development 66 65 2% Property leasing 285 207 38% Property management and related services 12 11 10% Gross profit 1,075 764 41% Gains and losses from changes in fair values 532 540 -1% Sales expenses -164 -87 89% Administrative expenses -269 -207 30% Financial charges -202 -109 86% Income tax expenses -427 -353 21% Profit for the period 570 558 2% Comprehensive income for the year 573 542 6% The owner of the Company’s comprehensive 431 396 9% income during the year 12 1.8 Summary of Cash flow Statement (RMB mn) Cash on hands as at 31 Dec 2018*: 1,972 Sales proceeds 6,558 Rental income and others 318 Land premium settled -117 Construction costs settled -2,533 SG&A expenses -410 Taxes -1,183 Subtotal: 2,632 Net borrowings added 1,597 Interest expenses -1,280 Dividends paid -501 Others -682 Subtotal: -865 Cash on hands as at 30 Jun 2019*: 3,739 *Including restricted cash deposit 13 1.9 Diversification of financing channels, Declining debt scale Total interest-bearing debts: RMB30.46 bn, up 6% from 31 Dec, 2018; the monetary funds / interest-bearing liabilities due within one year increased by 21% from 31 Dec, 2018. Total approved yet undrawn credit facilities at 30 Jun, 2019: RMB7.8 bn, The issuance of bonds has not been approved for use of RMB 3 billion and USD525 million (including the company received USD230 million bond issuance approval in July 2019); As at 1H2019, the Company has repaid USD520 mn due in 2019. By Channel By Maturity Offshore bonds As at 31 Dec, 15% 48% 19% 11% 22% 2018 Corporate bonds 4% As at 30 Jun, Domestic 35% 14% 25% 26% bank 2019 Trusts loans 27% 54% within 1 Yr 1-2 Yr 2-5 Yr Over 5 Yr 14 02PART Development Plan 2.1Strengthen cooperation and pursue steady development On the principle of light capital occupation, lock in high-quality land banking by means of cooperation or mergers and acquisitions. Enhance product strength, match profitable products with fast Strengthen cooperation turnover products.