For Immediately Release 25 March 2015
Yuzhou Properties Company Limited (01628.HK)
Announces 2014 Annual Results
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Revenue and Gross Profit Both Reached Record High
Adhering to the Development Principle of "Balanced Quality Growth"
Financial Highlights
Total revenue increased by 4.90 % to RMB 7,836.63 million, reaching a record high. Gross profit increased by 22.67 % to RMB 2,844.77 million, also reaching a record high. Gross profit margin increased by 5.26 percentage points to 36.30%, a high level in the industry. Contracted sales in 2014 increased by 9.51% to RMB12,001.29 million.
Profit attributable to Owners of the parent was RMB 1,254.38 million. Net profit margin was 16.01 %. Core profit attributable to Owners of the parent was RMB 1,025.34 million. Core profit margin was 13.08 %.
Basic earnings per share was RMB 36 cents. Basic core earnings per share was RMB 30 cents. Return on equity was 16.15 %.
The full year dividend was HK16 cents per share, an increase of 6.67% compared with last year, representing a payout ratio of approximately 43.17% of core net profit for year 2014.
Cash and bank balances (including restricted cash) amounted to RMB 9,784.74 million which is an 151.95 % increase year on years, which far outstriped the short term debt with one year maturity of RMB 3,805.45 million.
Average funding cost decreased by 0.2 percentage point to 8.49%, a low level among the B rating property developers. Moody's upgraded Yuzhou's bond rating from B2 to B1, with stable outlook. S&P maintained B bond rating and B+ family rating, with stable outlook.
The net gearing ratio in 2014 of the Group was 59.85%, down by 18.13 percentage points from 77.98% in 2013. |
(25 March 2015, Hong Kong) Yuzhou Properties Company Limited ("Yuzhou Properties" or the "Company"; stock code: 01628.HK) is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (collectively, the "Group") for the twelve months ended 31 December 2014 (the "Period").
During the period, turnover of the Group was a record high of RMB 7,836.63 million, representing an increase of 4.90% as compared with the corresponding period of the previous year. Gross profit increased by 22.67% to RMB 2,844.77 million and gross profit margin climbed 5.26 percentage points to 36.30% as compared with the same period of last year. Profit attributable to owners of the parent reached RMB1,254.38 million, with basic earnings per share of RMB36.30 cents and net profit margin of 16.01%. Core profit attributable to shareholders was RMB1,025.34 million, with core basic earnings per share of RMB29.67 cents and core profit margin was 13.08%. Dividend of the year increased 6.67% to HK16 cents per share. Payout ratio was approximately 43.17% of core net profit for year 2014.
Against the periodic fluctuation of the property market in 2014, year-on-year decrease in the turnover and areas sold in the property market, the Group adhered to the development principle of "quality growth" according to the market demand, keep enhancing its management, enhancing its brand influence, increasing its land reserves appropriately and reinforcing its financial structure while maintaining rapid and sound development. Therefore, the Group had been listed as one of the top 100 real estate enterprises for nine consecutive years and firmly maintained its position as the market leader with the largest market share in Xiamen and as one of Fujian Province and Hefei city's top five real estate developers in 2014. The Group has maintained a relatively high gross profit margin of 36.30%, much higher than the average level of the industry.
Three Businesses Go Forward Together and Achieved Contracted Sales of Over RMB 12 Billion
In 2014, the income of the Group mainly came from three business categories, namely, property sales, rental of investment properties and property management, as well as hotel operation. As of 31 December 2014, the turnover of the Group was a record high of RMB7,836.63 million, representing an increase of 4.90% over last year, mainly because of the increase in property sales income recognized. Specifically, during the period, the property sales income was approximately RMB7,680.66 million, up 4.52% compared to the corresponding period of last year; the income from investment properties was around RMB51.54 million, up 4.84% compared to the corresponding period of last year; the property management income was about RMB88.25 million, up 23.90% compared to the corresponding period of last year.
The Group's contracted sales totaled a record high of approximately RMB12,001.29 million in 2014, representing an increase of 9.51% year-over-year, recording a mid-to-upper performance in the industry. The area of contracted sales area amounted to 1,203,561 sq.m., representing an increase of 15.30% year on year. The average selling price dropped slightly from RMB10,499 per sq.m. in 2013 to RMB9,971 per sq.m in 2014, mainly because Hefei contributed a growing share to the overall property sales of the Group and the average selling price of the city was lower than that of Xiamen. In addition, the sales of properties subscribed for but not contracted totaled approximately RMB684 million.
Adequate and High Quality Land Reserve
The Group adhered to its strategic guideline of "Based in West Strait and Expand Nationwide Coverage in China" in replenishing strategically its land reserves by taking into account comprehensively various factors i.e. land market environment, real estate market development trend and its own financial conditions. As of 31 December 2014, the aggregate salable GFA of land reserves of the Group was 8.7 million sq.m., with a total of 48 projects located eleven cities in West-Strait Economic Zone, Yangtze River Delta Region and Bohai Rim Region and Hong Kong; the average land cost was approximately RMB2,232 per sq.m.. Having gained a project with primary land development qualification, the Group believes that its land reserves currently held and managed are sufficient for its development over the next five to six years.
During the year, the Group acquired six new parcels of quality land and increased plot ratio of one existing parcel of land, providing an aggregate GFA of 1,006,062 sq.m., at an average land cost of RMB5,350 sq.m, which was below the market level. Located in Hefei, Fuzhou, Quanzhou, Nanjing and Hong Kong respectively, the newly acquired land parcels are expected to generate satisfactory returns for the Group over the next three to four years.
Exploring Model of Purchasing Lands by Collaboration Actively
In recent years, Yuzhou Properties has created a model of purchasing lands by collaborating with investment funds and real estate enterprises. For example, the project of Xiamen Haicang Dream Town with Vanke contributed the contracted sales amount of RMB1,416.41 million in 2014. While in the cooperation with investment funds enterprises, we have project equity interests cooperation with PING AN and CITIC-CP Asset Management Company. The model of equity interests cooperation, bonds cooperation or incorporation not only enhanced the financial flexibility of land acquisition and reduced the investment risks at the preliminary stage of development, but also substantially shortened the input-output cycle, relieved the capital liquidity stress on the premise of keeping the reasonable expansion speed, and accelerated the realization of size effect.
Development Strategies and Prospect
By combining the macro-economic and market outlook in 2015, with the analysis conducted by the Group's management of the trend of the real estate industry, the Group will continue to implement its unswervingly grand strategy of "Based in West Strait and Expand Nationwide Coverage in China" in the upcoming 5 to 10 years. "Based in West Strait" implies that we need to cultivate and root in the West Strait Economic Zone market. All cities that we entered should take into account the "sell-through rate, profit margin and execution", and form the synergy effect through radiating among city agglomeration. "Expand Nationwide Coverage in China" means the need to realize our middle to long term strategic layout. The Group will maintain moderate scale expansion, consolidate current nationwide regional layout, and form the synergetic development layout of focusing on the West Strait Economic Zone, and taking tier 1 and 2 core cities in the Yangtze River Delta Region and the Bohai Rim Region with great development potentials as regional centers, and, on top of that, attempt to extend our operations to cities overseas, like Hong Kong, to realize a prudent strategic expansion "from the core cities to the regions and the whole country."
Looking ahead, Mr. Lam Lung On, Chairman of Yuzhou Properties stated: "As the current land reserve will be able to meet the needs for next 3 to 5 years, the Group will not acquire land too aggressively. It is envisaged that the West Strait Economic Zone, with Xiamen as its centre, will remain the key region for our future development with the proportion in land reserves of no less than 50%. For areas outside the West Strait Economic Zone that we have already had a foothold, we will also allocate resources appropriately to increase local land reserve at reasonable prices. We will also target at the West Strait Economic Zone, Yangtze River Delta Region and the Bohai Rim Region, continue to raise the level of our land reserve in Shanghai, Xiamen and Hefei, tap into Nanjing market, cultivate Xiamen, Hefei, Shanghai, Fuzhou and Nanjing with the goal to consolidate our business in these five 5 billion worth of core cities and exploit in peripheral cities that hold economic potential and population inflow, so that a regional strong scale can be formed and excessive expansion avoided. Benefiting from the development of Fujian Free Trade Zone, Tianjin Free Trade Zone and broadening of Shanghai Free Trade Zone, collaborative development of Yangtze Economic Belt and Beijing, Tianjin and Hebei Area, the Company takes advantages of future advancement in the key cities such as Xiamen, Hefei, Nanjing, Fuzhou, Shanghai and Tianjin from above areas. The Group will continue to balance the weight of income from property sales and investment property, focusing on property sales and properly holding investment properties including shops and office building situated at core locations in tier 1 and 2 cities. Property sales and rental income will continuously bring cash flow, enabling the Group to seize suitable business development opportunities while keeping a reasonable net gearing ratio."
Mr. Lam Lung On also said: "With the development of the industry and the continued market adjustment, Yuzhou Properties will transform from single-oriented to multi-oriented business in response to the circumstances. We will take advantage of our existing resource to turn ourselves from a developer into an operator and service provider, and go from off-line to on-line and build an on-line platform for community service, seeking new business growth and breakthroughs in property management, community service, and other relevant perspectives. On the other hand, we will continue to innovate and actively probe into different types of products, such as endowment real estate and commercial complexes, to build diversified, industry-leading products. In general, Yuzhou is on its way to "diversified group, professional real estate company". The Group will enhance its cooperation with financial institutions and other strategic partners in every link of business, and seek the opportunities of acquisition and merger in the industry, thus achieving the goal of "balanced quality growth". Moreover, we will always abide by the strict financial systems and guidelines, control the Group debt ratio and maintain cash flow at a reasonable level. We believe that such operational strategies would enable the Group to maintain our competitiveness and lower risks in the changing market environment, which in turn would ensure the Group sustainable development."
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About Yuzhou Properties
Yuzhou Properties Company Limited (01628.HK) is a leading property developer in the West Strait Economic Zone and is one of the largest property developers in Xiamen, in terms of land reserve and market share. Yuzhou Properties strives to become a leading property developer in China with a well-defined expansion strategy as to enhance its dominant market position in the West Strait Economic Zone and to establish footprints in the Yangtze River Delta Region and Bohai Rim Region respectively.
Established in 1994, Yuzhou Properties specializes in the development of high quality residential, retail and commercial projects. As at 25 March 2015, the Company had over 48 projects under various stages of development in Xiamen, Fuzhou, Quanzhou, Longyan, Shanghai, Hefei, Bengbu, Tianjin, Zhangzhou,Nanjing and Hong Kong. Sites measuring a total GFA of near 8.7 million sq. m. are under development or held for future development. Those located in Xiamen measure a total GFA of 1.82 million sq. m. Known for its outstanding product quality and diversified product portfolio, strong brand awareness and its experienced management team, Yuzhou Properties has been named "Top 100 China Real Estate Enterprises" for nine consecutive years; and Top 50 China Real Estate Enterprises from 2011 to 2014. "Yuzhou" brand has been recognized by the State Administration for Industry and Commerce as a "Renowned Brand in China" and a "Famous Brand" by the Fujian provincial government and the Xiamen municipal government.
For more information about Yuzhou Properties, please visit the company's website: http://www.xmyuzhou.com.cn
Please feel free to contact us if you have any enquires:
Yuzhou Properties Company Limited (HKEX: 01628)
Head of Corporate Finance & Investor Relations
Venus Chiu
Tel ：(852) 2508 1718
Fax ：(852) 2510 0265
Email ：venus.chiu@xmyuzhou.com.cn
Yuzhou Properties Investor Relations QR Code:
Wonderful Sky Financial Group Holdings Limited (HKEX: 01260)
Kevin Mao/ Connie Li
Tel ：(852) 2851 1038
Fax ：(852) 2598 1588
Email ：kevinmao@wsfg.hk/ connieli@wsfg.hk
