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Aoyuan Announces 2018 Interim Results
Contracted Sales Surged by 143% Y-o-Y to RMB40.3 billion
Robust Growth in Revenue and Profit
Rating Outlook Further Upgraded
 Date:2018-08-18

 

 

 

Financial Highlights

 

RMB million

For the six months ended 30 June

2018

2017

Change

Contracted Sales

40,291

16,520

+143%

Revenue

13,667

8,154

+68%

Gross Profit

3,902

2,191

+78%

Net Profit

1,475

858

+72%

Core Net Profit *

1,392

832

+67%

*excluding non-recurring gains and losses such as fair value gain on investment properties, net exchange gain/loss and gain/loss on change in fair value of derivative financial instruments and their related tax expenses

 

(August 17, 2018 – Hong Kong) China Aoyuan Property Group Limited (“Aoyuan” or the “Company”, Stock Code: 3883), a renowned property developer in China, announced today its unaudited interim results for the six months ended 30 June 2018.

 

 

Robust and Sustainable Sales Growth with Improved Profitability

In the first half of 2018, leveraging on enhanced product competitiveness and strategic layout, Aoyaun achieved robust growth in both business scale and profit. Aoyuan recorded contracted sales of approximately RMB40.29 billion in the first half of 2018 with an increase of 143% y-o-y. Contracted sales in June were RMB 11.97 billion, setting historical high for single-month sales once again. Contracted sales in the first seven months surged by 143% y-o-y to RMB46.31 billion, achieving 63% of the full-year target; the ratio of attributable contracted sales maintained at relatively high level of 84%.

 

In the first half of 2018, Aoyuan's revenue increased by 68% y-o-y to approximately RMB13.67 billion. Gross profit increased by 78% y-o-y to RMB3.90 billion with gross profit margin of 28.6%. Net profit increased by 72% y-o-y to RMB1.48 billion. Core net profit increased by 67% y-o-y to RMB1.39 billion. Core net profit attributable to owners of the Company increased by 57% y-o-y to RMB1.16 billion.

 

 

Sufficient Land Bank with Expected Inclusion of Redevelopment Projects

In the first half of 2018, Aoyuan proactively acquired a total of 31 quality projects. Newly added GFA for development was approximately 7.27 million sq.m., among 89% of which were acquired through merger and acquisitions. The relevant newly added saleable resources was approximately RMB81.0 billion. As at 30 June 2018, total GFA of Aoyuan’s land bank was approximately 30.01 million sq.m. (attributable: 81%) with total saleable resources of approximately RMB327.5 billion and average land cost of approximately RMB2,143 per sq.m., laying a solid foundation for Aoyuan’s robust and sustainable growth.

 

Aoyuan steadily pushed forward its redevelopment projects as planned. In August 2018, the Company achieved a breakthrough and became the official developer of Zhuhai Cuiwei Village redevelopment project. The project has a planned total GFA of approximately 1.1 million sq.m.. In April 2018, Aoyuan and Henderson Land Group signed a cooperation agreement for Nitrogen Fertilizer Plant project in Panyu, Guangzhou, teaming up to create a signature redevelopment project. As at June 30, 2018, Aoyuan had a total of 15 redevelopment projects at different phases with planned total GFA of approximately 8.00 million sq.m.. The estimated saleable GFA amounts approximately 5.55 million sq.m. with saleable resources of approximately RMB129.0 billion.

 

 

Diversified Financing Channels with Upgraded Rating Outlook

Aoyuan has always maintained diversified financing channels and prudent financial management. As at June 30, 2018, Aoyuan’s net gearing ratio was at reasonable industry level of 67.5% and borrowing costs remained stable at 7.3%.

 

In the first half of 2018, Aoyuan seized the market window to raise adequate funds through diversified financing channels such as offshore club loan and US dollar senior notes, and onshore corporate bonds, securing sufficient capital. During the year, the Company secured a three-year offshore club loan of approximately HK$3.2 billion in aggregate with an interest rate of three-month HIBOR plus 3.95% per annum, from Nanyang Commercial Bank, Hang Seng Bank, Chiyu Banking Corporation, China Minsheng Banking Corporation Hong Kong Branch, Industrial and Commercial Bank of China (Asia), Wing Lung Bank, Industrial Bank Hong Kong Branch and Shanghai Pudong Development Bank Hong Kong Branch. In addition, Aoyuan also successively issued and tapped US dollar senior notes three times and raised a total of US$600 million. Aoyuan has always valued its corporate credit. Aoyuan redeemed US$250 million offshore senior notes and RMB 2.4 billion onshore corporate bond on time during the year.

 

Benefiting from the capability to execute its rapid development strategy and solid profitability, following the credit rating upgrades by three major international rating agencies, namely Fitch, Moody's and Standard & Poor's in 2016 and 2017, the Company’s rating outlook has been upgraded to “Positive” by Fitch in August 2018, reaffirming international capital markets’ recognition of Aoyuan’s business development.

 

 

Outlook for Second Half of 2018

Aoyuan management commented, “In the first half of 2018, Aoyuan successfully achieved outstanding performance in both sales and operating results, and was well-recognized by the capital markets and general public. In the second half of the year, amid increasing industry concentration and uncertainties in the macro environment, Aoyuan will strive to achieve economies of scale through its fast-churn strategy of “rapid development, rapid sales and rapid cash collection” while attaining rapid and high-quality growth. Aoyuan will continue to diversify its onshore and offshore financing channels, as well as to adhere to its prudent investment and financial management, thus delivering fruitful returns to shareholders and investors.”