(18 March 2015 – Hong Kong) China Aoyuan Property Group Limited ("Aoyuan" or the "Company", Stock Code: 3883), a renowned property developer in China, is pleased to announce its audited consolidated annual results for the year ended 31 December 2014. 

Sustainable Sales Growth with a rate above Industry Average

During the year, the Company achieved revenue of approximately RMB7.0 billion, representing y-o-y increases of 22%. Gross profit rose by 18% to approximately RMB2.1 billion, with gross profit margin remaining stable at approximately 30%. Net profit amounted to approximately RMB800 million. Basic earnings per share amounted to approximately RMB29.1 cents. The board of directors recommended the payment of a final dividend of RMB8.7 cents per share. 

In 2014, Aoyuan maintained outstanding growth momentum with continuous business development. In 2014, the Company achieved contracted sales of approximately RMB12.2 billion with contracted GFA sold of approximately 1.34 million sq.m., representing y-o-y increases of 22% and 25%, respectively. Total contracted sales were evenly split between residential and commercial properties. 

The first two months of 2015 maintained robust growth momentum of the fourth quarter of 2014, and contracted sales achieved approximately RMB1.8 billion with contracted GFA sold of approximately 230,000 sq.m., representing y-o-y increases of approximately 28% and 87%, respectively.

Solid Financial Performance with Deleveraging and High Cash Collection Rate

The Company upholds sound and prudent operational and financial management while actively diversifying its financing channels. As of 31 December 2014, the Company lowered its net gearing ratio to 61.8%, down 2.2 percentage points y-o-y and down 8.6 percentage points compared to the first half of 2014. Deleverage is successfully achieved. Its cash collection ratio remained at a relative high level of 81%. As of 31 December 2014, bank balances and cash (including restricted bank deposits) amounted to approximately RMB5.9 billion, representing y-o-y increases of 26%.

In the first half of 2014, Aoyuan successfully issued a 5-year, US$300 million senior notes, which were well-received by international capital markets and were 4.2 times oversubscribed, further optimizing the Company’s debt structure. In the second half of 2014, the Company has introduced Huaxia Life Insurance Co. Ltd as a strategic investor by means of capital injection to facilitate its asset-light operating model, therefore strengthening cash flows and maintaining gearing ratio in a reasonable level. 

Prudent Land Bank Expansion Strategy with Eye on Domestic and Overseas Markets

Aoyuan continued to adopt a prudent land acquisition strategy, primarily focusing on Tier 1 and 2 cities and supplemented by Tier 3 and 4 cities in the regions where it has established its presence. By doing so, the Company can achieve synergy effects among projects, thereby further strengthening its market position. In 2014, the Company acquired eight high-quality residential and commercial projects in Guangdong and Chongqing with a total GFA of approximately 2.66 million sq.m. at RMB4.6 billion, further optimizing its land bank. As of 31 December 2014, Aoyuan possessed a total land bank of 12.31 million sq.m. in GFA, including 1.64 million sq.m. of completed properties, 3.89 million sq.m. under construction and 6.78 million sq.m. held for future development, which can meet its development needs in over five years.

In the first quarter of 2015, the Company acquired two high quality projects in Shanghai and Jiaxing, Zhejiang which further enhance Aoyuan’s strategic layout in the Yangtze River Delta region. The Company has also acquired a prime site located at 130 Elizabeth Street in the heart of Sydney through a joint venture with Ecove, a prominent Australian developer, to develop luxury residential apartments, starting overseas expansion strategy. 

2015 Outlook

In 2015, the Company will continue to uphold the strategy to develop commercial and residential properties in parallel and to accelerate turnover. The proportion of residential and commercial properties is adjusted in dynamic manner to respond flexibly to market changes. Commercial properties continue to retain the asset-light operating model, primarily with saleable properties and supplemented by investment properties.

Being the pioneer of regimen-themed property in the south China, Aoyuan will continue to upgrade composite real estate model with themes of cultural tourism, regimen, and senior care so as to enhance asset quality and valuation. The Company will engage in strategic cooperation with Shanshui Scenery Culture to develop Aoyuan Shaoguan Impression into the first world-class tourist resort complex in south China, integrating cultural tourism, commercial and residential mix together.

In Jan 2015, the Company launched its internet strategy and Ao apartment version 1.0, and will take advantage of mobile internet technology to enhance its product portfolio, thereby providing commercial and residential clients with value-added services through its customer service platform, and in turn enhancing sales growth.

With China’s real estate industry entering a silver age and the growth and the growth in migration and Chinese foreign overseas investments, Aoyuan will progressively make investments in the overseas market in the future. The Company announced its first overseas project in the heart of Sydney, the 130 Elizabeth Street project, laying a foundation for the Company as it taps the overseas market and expands its income sources and diversifies asset portfolio so as to balance risk. 

In 2015, Aoyuan will build a brand new composite real estate model and lead beyond healthy lifestyle, to promote sustainable growth of the Company for fruitful returns to our shareholders.