Aoyuan management team introduces 2019 interim results

Financial Highlights

*excluding non-recurring profit and loss items and their related tax expenses, comprising fair value gain on investment properties, net exchange difference, etc.

(16 August 2019 – Hong Kong) China Aoyuan Group Limited (“Aoyuan” or the “Company”, Stock Code: 3883) announced its unaudited interim results for the six months ended 30 June 2019.

High Earnings Sustainability with Robust Growth in Revenue and Profit 

In the first half of 2019, Aoyuan recorded contracted sales of RMB53.63 billion with an increase of 33% y-o-y, attributable contracted sales maintained at a relatively high level of 84%. As of 30 June 2019, contracted sales that were yet to be recognized as revenue amounted to approximately RMB139.0 billion, which will be gradually recognized in the next 2 years, representing high earnings sustainability.

In the first half of 2019, Aoyuan attained robust growth in both revenue and profit. Revenue increased by 73% y-o-y to RMB23.67 billion. Gross profit increased by 81% y-o-y to RMB7.05 billion with gross profit margin of 29.8%. Net profit increased by 90% y-o-y to RMB2.80 billion with net profit margin of 11.8%. Core net profit increased by 79% y-o-y to RMB2.49 billion with core net profit margin of 10.5%. Basic earnings per share increased by 87% y-o-y to RMB84.8 cents.

Strategic Land Banking with Full Coverage of “Three Olds” Redevelopment

Aoyuan adheres to a well-balanced regional layout with a niche focus on the Guangdong-Hong Kong-Macao Greater Bay Area. As a key player in the Greater Bay Area, Aoyuan has been included in the Hang Seng Stock Connect Big Bay Area Composite Index. In the first half of 2019, Aoyuan acquired a total of 34 projects with newly added GFA of approximately 7.26 million sq.m., which will provide newly added saleable resources of over RMB80.0 billion. As of 30 June 2019, total GFA of Aoyuan’s land bank was approximately 40.12 million sq.m. (attributable: 81%) with total saleable resources of approximately RMB425.5 billion, as well as laying a strong foundation for Aoyuan’s healthy growth.

With strategic layout and planning in advance, Aoyuan has a full coverage of "Three Olds" urban redevelopment, including old towns, old villages and old factories. Aoyuan has over 30 urban redevelopment projects at different phases. Planned total GFA is approximately 16 million sq.m. with estimated saleable resources of approximately RMB219.7 billion, providing additional sales contribution and growth momentum for Aoyuan.

Outstanding Financing Capability with Continuous Credit Rating Upgrades

With emphasis on diversifying its financing channels, Aoyuan has shown its outstanding financing capability in both onshore and offshore markets. Since the beginning of 2019, Aoyuan has raised a total of approximately US$1.65 billion in the offshore market through issuances of USD bonds in public offering and private placement, as well as syndicated bank loans, further extending its debt maturity profile. In 2019, Aoyuan opened the Asia USD bond market and subsequently launched the first fully marketed 3-year PRC property high yield issuance since Q4 2018. Aoyuan has fully utilized its offshore bond issuance  quota of US$1.45 billion obtained from the National Development and Reform Commission (NDRC).

Aoyuan’s credit ratings were further upgraded for its prudent financial management and improving debt structure. As of 30 June 2019, the net gearing ratio was at reasonable industry level of 64.2%; Aoyuan’s liquidity was sufficient with total bank balances and cash amounting to approximately RMB54.84 billion. Following the upgrades of corporate rating and rating outlook from all 3 major international rating agencies, namely Fitch, S&P and Moody’s in 2016 to 2018, Aoyuan’s outlook has been further upgraded by Moody’s and S&P to “positive” in February and March 2019, respectively. Aoyuan’s domestic credit rating was upgraded to “AAA”, the highest credit rating in PRC, by United Credit Ratings in May 2019, reaffirming that Aoyuan’s comprehensive strength is well recognized by all sectors. The credit rating upgrades also help lowering Aoyuan’s borrowing costs.

Outlook for Second Half of 2019

Aoyuan management commented, “In the first half of 2019, Aoyuan has continued to achieve leapfrog progress in terms of both sales and operating results. It continued to strengthen its strategy of ‘one core business with vertical development’ to build a healthy lifestyle ecosystem. Upholding high standards of corporate governance and transparency, Aoyuan has earned inclusion in ‘Fortune China 500’ for three consecutive years since 2017 and was named among ‘Fortune China Top 50 Board of Directors’ in 2019. Looking forward to second half of 2019, Aoyuan will continue to implement its regional cultivation strategy with a focus on key cities, as well as to maintain prudent financial and risk management. This is to ensure that the Company can maintain resilience and outperform in complex environments to realize sustainable and high-quality development, thus bringing fruitful returns to shareholders and investors.”

2019 interim results investor presentation

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About Aoyuan

China Aoyuan Group Limited (“Aoyuan” or the “Company”) is listed on the Main Board of The Stock Exchange of Hong Kong Limited, under the stock code 3883. It is a member of MSCI China Index, Hang Seng Stock Connect Hong Kong Index and Hang Seng Stock Connect Big Bay Area Composite Index. Aoyuan is named among “Forbes Asia’s Fab 50 2018” and “Fortune China Top 50 Board of Directors 2019”, as well as being included in “Fortune China 500” for three consecutive years since 2017. Aoyuan is a renowned property developer and a pioneer of composite real estate in China. Based in Guangdong with a focus on Guangdong-Hong Kong-Macao Greater Bay Area, Aoyuan has a strategic layout in South China, core regions of Central and Western China, East China and the Bohai Rim. As of 30 June 2019, the total GFA of its land bank was approximately 40.12 million sq.m. across 75 onshore and offshore cities. Leveraging on outstanding development and operation management and sound financial position, Aoyuan has maintained a growth rate higher than the industry average over the years, with a CAGR of 89% from 2016 to 2018. Aoyuan will continue to strengthen its strategy of “one core business with vertical development” to build a healthy lifestyle ecosystem.

For more information, please visit the company website of Aoyuan: http://www.aoyuan.com.cn