Financial Highlights

(14 August 2020 – Hong Kong) China Aoyuan Group Limited (“Aoyuan” or the “Company”, Stock Code: 3883) announced today its unaudited interim results for the six months ended 30 June 2020.

Stable Revenue Growth with High Earnings Sustainability

Since full resumption of sales office and construction in late March and early April, sales momentum has regained pace. During the first seven months of 2020, Aoyuan recorded RMB60.42 billion of property contracted sales, representing completion of 46% of its full-year target. As of 30 June 2020, unbooked revenue amounted to approximately RMB180 billion, which will be gradually recognized in the next 2 years, demonstrating high earnings sustainability.  

In the first half of 2020, Aoyuan attained stable revenue growth and profit margins. Revenue increased by 19% y-o-y to RMB28.24 billion. Gross profit increased by 18% y-o-y to RMB8.28 billion; gross profit margin was 29.3%. Core net profit increased by 14% y-o-y to RMB2.83 billion; core net profit margin was 10.0%. Core net profit attributable to shareholders increased by 21% y-o-y to RMB2.45 billion; core net profit margin attributable to shareholders was 8.7%.

Onshore and Offshore Financing Costs Setting Record Low with Positive Rating Outlook

With emphasis on diversifying its financing channels, Aoyuan has demonstrated outstanding onshore and offshore financing capabilities. In February 2020, Aoyuan issued US$188 million 4.8% 363-day offshore senior notes, setting the lowest issuing cost among PRC high-yield bonds. In July 2020, Aoyuan issued US$460 million 6.35% offshore senior notes due 2024. During the period, Aoyuan secured two tranches of 3-year offshore syndicated loans of approximately US$280 million in total, at an interest rate of HIBOR/LIBOR+4.30% per annum with 9 offshore commercial banks led by Hang Seng Bank and HSBC Bank. In February and August 2020, Aoyuan issued RMB2.54 billion 5.5% onshore corporate bond due 2025, and RMB1.18 billion 5.65% onshore corporate bond due 2025, respectively.

Aoyuan's outstanding financing and execution capabilities have been well-recognized by the capital markets. Aoyuan’s corporate rating and positive rating outlook were reaffirmed by S&P and Moody’s respectively in April and May 2020, with positive rating outlook from all 3 major international rating agencies. Aoyuan’s domestic credit rating is assigned “AAA”, the highest credit rating in PRC, by United Credit Ratings.

Capitalizing on Traditional M&A Strength to Replenish Land Bank

with Accelerating Conversion of Urban Redevelopment Projects

In the first half of 2020, Aoyuan acquired a total of 44 new projects with newly added gross floor area (“GFA”) of approximately 6.95 million sq.m. (M&A: 63%) and newly added saleable resources of approximately  RMB83.2  billion, with an average land cost of RMB3,812 per sq.m., which helps to maintain reasonable land cost and stable profit margins to weather market volatility. Aoyuan has continued to capitalize on traditional M&A strength and tapped into a new land banking model of asset portfolio acquisition. In July 2020, Aoyuan completed acquisition of 29.99% issued shares with voting rights of Kinghand Group (000615.SZ) which will be consolidated into Aoyuan’s financial statements, further enriching Aoyuan’s land bank.

Through constantly expanding its urban redevelopment project pipeline, Aoyuan has achieved full coverage of the "Three Olds" urban redevelopment, including old towns, old villages and old factories. Aoyuan has over 50 urban redevelopment projects at different development phases, providing additional estimated saleable resources of approximately RMB658.7 billion, of which 95% are located in the Greater Bay Area, enriching land bank in the area as well as providing additional momentum for future growth. As of 30 June 2020, total GFA of Aoyuan’s land bank was approximately 48.74 million sq.m. (attributable: 78%) with total saleable resources of approximately RMB501.5 billion. Total saleable resources including urban redevelopment projects amounted to approximately RMB1,160.2 billion, which is sufficient for the development needs in the next 4 to 5 years.

Outlook for Second Half of 2020

Aoyuan management commented, “In the first half of 2020, amid the outbreak of the COVID-19 pandemic and the complex macro environment, Aoyuan has proactively adjusted its strategies in accordance with market changes. The Company achieved robust growth in property contracted sales and operating performance with stable margins. With the COVID-19 situation curbed in China, the country's real estate market is continuing to recover with divergence among different regions and cities. ‘Housing is for living in, not for speculation; and implementation of city-specific policies’ remains as the key policy of the market. Looking ahead to the second half of 2020, Aoyuan will place greater focus on balancing its scale and profitability. Alongside strengthening cultivation of existing areas and accelerating conversion of urban redevelopment projects, the Company will bolster sales and marketing capabilities, enhance product competitiveness and customer satisfaction, and ensure sound cash flows. Through such efforts, Aoyuan is determined to achieve sustainable and high-quality development on all fronts, thereby delivering stable and long-term returns to shareholders and investors.”

Aoyuan 2020 Interim Results Announcement- Guangzhou Main Venue

From Left: Mr. MA Jun (ED & COO), Mr. GUO Zi Wen (ED & Chairman), Mr. GUO Zi Ning (ED & CEO), Mr. Chen Zhi Bin (Group VP & CFO)

Aoyuan 2020 Interim Results Announcement- Hong Kong Sub-venue

From Left: Mr. Chan Ka Yeung Jacky (ED & Group Senior VP), Dr. Emma Qi, Moderator (Head of Corporate Finance & IR)