Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
This announcement is for information purposes only and does not constitute an invitation or solicitation of an offer to acquire, purchase or subscribe for securities or an invitation to enter into an agreement to do any such things, nor is it calculated to invite any offer to acquire, purchase or subscribe for any securities.
This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No securities may be offered or sold in the United States absent registration unless pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of United States securities laws. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and, financial statements. No public offer of securities is to be made by the Company in the United States.
The Company does not intend to make any public offering of securities in the United States. None of the Notes will be offered to the public in Hong Kong and none of the Notes will be placed to any connected persons of the Company.
LONGFOR GROUP HOLDINGS LIMITED
龍 湖 集 團 控 股 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 960)
PROPOSED ISSUANCE OF SENIOR NOTES
AND UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
The Company proposes to conduct an international offering of senior notes. The completion of the Proposed Notes Issue is subject to, among other things, market conditions and investors' interest. The pricing of the Notes, including the aggregate principal amount, the Offer Price and interest rates, will be determined through a book building exercise conducted by Citigroup, Goldman Sachs, Haitong International, HSBC and Morgan Stanley as joint global coordinators, joint bookrunners and joint lead managers and Barclays and China International Capital Corporation as joint bookrunners and joint lead managers.
Upon finalization of the terms of the Notes, Citigroup, Goldman Sachs, Haitong International, HSBC, Morgan Stanley, Barclays and China International Capital Corporation and the Company, will enter into the Purchase Agreement and other ancillary documents. The Company expects that the proceeds from this Proposed Notes Issue will be used for refinancing and corporate purposes, in accordance with the terms of registration that the Company obtained from the PRC National Development and Reform Commission on January 17, 2019.
Approval in-principle has been obtained for the listing of the Notes on the SGX-ST. Admission of the Notes to the SGX-ST is not to be taken as an indication of the merits of the Company, its subsidiaries, or the Notes. No listing of the Notes has been sought in Hong Kong.
As no binding agreement in relation to the Proposed Notes Issue has been entered into as at the date of this announcement, the Proposed Notes Issue may or may not be completed. Investors and shareholders of the Company are urged to exercise caution when dealing in the securities of the Company.
Further announcement in respect of the Proposed Notes Issue will be made by the Company should the Purchase Agreement be signed.
1
THE PROPOSED NOTES ISSUE
Introduction
The Company proposes to conduct an international offering of senior notes.
In connection with the Proposed Notes Issue, the Company will provide certain professional investors with recent financial information of the Group as extracted from the unaudited consolidated financial statements for the six months ended June 30, 2019 (the "Unaudited Financial Statements"). To ensure equal dissemination of information to the shareholders of the Company, the Unaudited Financial Statements are attached hereto.
The completion of the Proposed Notes Issue is subject to, among other things, market conditions and investors' interest. The pricing of the Notes, including the aggregate principal amount, the Offer Price and interest rates, will be determined through a book building exercise conducted by Citigroup, Goldman Sachs, Haitong International, HSBC and Morgan Stanley as joint global coordinators, joint bookrunners and joint lead managers, Barclays and China International Capital Corporation as joint bookrunners and joint lead managers. Upon the finalization of the terms of the Notes, Citigroup, Goldman Sachs, Haitong International, HSBC, Morgan Stanley, Barclays and China International Capital Corporation and the Company, will enter into the Purchase Agreement and other ancillary documents, pursuant to which, Citigroup, Goldman Sachs, Haitong International, HSBC, Morgan Stanley, Barclays and China International Capital Corporation will be the initial purchasers of the Notes.
The Proposed Notes Issue will only be offered or sold in offshore transactions to non-U.S. persons in accordance with Regulation S under the Securities Act, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. None of the Notes will be offered to the public in Hong Kong and none of the Notes will be placed to any Connected Persons of the Company.
Use of Proceeds
The Company expects that the proceeds from the Proposed Notes Issue will be used for refinancing and corporate purposes, in accordance with the terms of registration that the Company obtained from the PRC National Development and Reform Commission on January 17, 2019.
Listing
Approval in-principle has been obtained for the listing of the Notes on the SGX-ST. Admission of the Notes to the SGX-ST is not to be taken as an indication of the merits of the Company, its subsidiaries, or the Notes. No listing of the Notes has been sought in Hong Kong.
GENERAL
As no binding agreement in relation to the Proposed Notes Issue has been entered into as at the date of this announcement, the Proposed Notes Issue may or may not be completed. Investors and shareholders of the Company are urged to exercise caution when dealing in the securities of the Company.
A further announcement in respect of the Proposed Notes Issue will be made by the Company should the Purchase Agreement be signed.
2
DEFINITIONS
In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:
"Barclays"
"Board"
"China International Capital Corporation"
"China" or "PRC"
"Citigroup"
"Company"
"Connected Person"
"Goldman Sachs"
"Group"
"Haitong International"
"Hong Kong"
"HSBC"
"Listing Rules"
"Morgan Stanley"
"Notes"
"Offer Price"
Barclays Bank PLC, one of the joint bookrunners and joint lead managers in respect of the Notes Issue
the board of directors of the Company
China International Capital Corporation Hong Kong Securities Limited, one of the joint bookrunners and joint lead managers in respect of the Notes Issue
the People's Republic of China excluding except where the context otherwise requires, for the purpose of this announcement, Hong Kong, Macau Special Administrative Region of China and Taiwan
Citigroup Global Markets Limited, one of the joint global coordinators, joint bookrunners and joint lead managers in respect of the Notes Issue
Longfor Group Holdings Limited (龍湖集團控股有限公司), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange
has the meaning ascribed to it under the Listing Rules
Goldman Sachs (Asia) L.L.C., one of the joint global coordinators, joint bookrunners and joint lead managers in respect of the Notes Issue
the Company and its subsidiaries
Haitong International Securities Company Limited, one of the joint global coordinators, joint bookrunners and joint lead managers in respect of the Notes Issue
the Hong Kong Special Administrative Region of the PRC
The Hongkong and Shanghai Banking Corporation Limited, one of the joint global coordinators, joint bookrunners and joint lead managers in respect of the Notes Issue
The Rules Governing the Listing of Securities on the Stock Exchange
Morgan Stanley & Co. International plc, one of the joint global coordinators, joint bookrunners and joint lead managers in respect of the Notes Issue
the senior notes to be issued by the Company
the final price at which the Notes will be sold
3
"Proposed Notes Issue"
"Purchase Agreement"
"Securities Act"
"SGX-ST"
"Stock Exchange"
an international offering of the Notes by the Company
the agreement proposed to be entered into between the Company, Citigroup, Goldman Sachs, Haitong International, HSBC, Morgan Stanley, Barclays and China International Capital Corporation in relation to the Proposed Notes Issue
the United States Securities Act of 1933, as amended
Singapore Exchange Securities Trading Limited
The Stock Exchange of Hong Kong Limited
By order of the Board
Longfor Group Holdings Limited
Wu Yajun
Chairperson
Hong Kong, September 9, 2019
As at the date of this announcement, the Board comprises eight members: Madam Wu Yajun, Mr. Shao Mingxiao, Mr. Zhao Yi and Mr. Li Chaojiang who are executive Directors; and Mr. Frederick Peter Churchouse, Mr. Chan Chi On, Derek, Mr. Xiang Bing and Mr. Zeng Ming who are independent non-executive Directors.
4
REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TO THE BOARD OF DIRECTORS OF LONGFOR GROUP HOLDINGS LIMITED 龍湖集團控股有限公司
(incorporated in the Cayman Islands with limited liability)
We have reviewed the condensed consolidated financial statements of Longfor Group Holdings Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") set out on pages 6 to 50, which comprise the condensed consolidated statement of financial position as of June 30, 2019 and the related condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the six-month period then ended, and certain explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and International Accounting Standard 34 "Interim Financial Reporting" ("IAS 34") issued by the International Accounting Standards Board. The directors of the Company are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with IAS 34. Our responsibility is to express a conclusion on these condensed consolidated financial statements based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
Scope of Review
We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants. A review of these condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
August 26, 2019
5
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2019
Six months ended June 30, | ||||||
2019 | 2018 | |||||
NOTES | RMB' 000 | RMB' 000 | ||||
(unaudited) | (unaudited) | |||||
Revenue | 3 | 38,569,813 | 27,120,815 | |||
Cost of sales | (25,987,889) | (17,050,830) | ||||
Gross profit | 12,581,924 | 10,069,985 | ||||
Other income | 4 | 617,529 | 604,714 | |||
Other gains and losses | 5 | (66,789) | (188,405) | |||
Lease liability charges | (252,292) | - | ||||
Fair value gain upon transfer to investment properties | 105,185 | 406,298 | ||||
Change in fair value of investment properties | 2,206,897 | 2,188,990 | ||||
Change in fair value of derivative financial instruments | 219,623 | (62,854) | ||||
Selling and marketing expenses | (1,175,094) | (871,313) | ||||
Administrative expenses | (2,165,526) | (1,777,854) | ||||
Finance costs | 6 | (58,482) | (41,737) | |||
Share of results of associates | 381,058 | 78,211 | ||||
Share of results of joint ventures | 675,742 | 371,989 | ||||
Profit before taxation | 13,069,775 | 10,778,024 | ||||
Income tax expense | 7 | (4,919,938) | (4,085,305) | |||
Profit for the period | 8 | 8,149,837 | 6,692,719 | |||
Other comprehensive income: | ||||||
Item that will not be reclassified to profit or loss: | ||||||
Fair value gain on investment in unlisted | ||||||
equity instruments at fair value through other | ||||||
comprehensive income | - | 156,075 | ||||
Item that may be reclassified subsequently to profit | ||||||
or loss: | ||||||
Net fair value gain on hedging instruments | 287,598 | 185,613 | ||||
Gain on hedging instruments reclassified to profit | ||||||
or loss | (99,097) | (332,879) | ||||
188,501 | (147,266) | |||||
Other comprehensive income for the period | 188,501 | 8,809 | ||||
Total comprehensive income for the period | 8,338,338 | 6,701,528 | ||||
6
Six months ended June 30, | ||||
2019 | 2018 | |||
NOTES | RMB' 000 | RMB' 000 | ||
(unaudited) | (unaudited) | |||
Profit for the period attributable to: | ||||
Owners of the Company | 6,309,981 | 5,429,650 | ||
Non-controlling interests | 1,839,856 | 1,263,069 | ||
8,149,837 | 6,692,719 | |||
Total comprehensive income for the period | ||||
attributable to: | ||||
Owners of the Company | 6,498,482 | 5,438,459 | ||
Non-controlling interests | 1,839,856 | 1,263,069 | ||
8,338,338 | 6,701,528 | |||
Earnings per share, in RMB cents | ||||
Basic | 10 | 107.8 | 92.9 | |
Diluted | 10 | 106.0 | 91.0 | |
7
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT JUNE 30, 2019
At | At | |||
June 30, | December 31, | |||
2019 | 2018 | |||
NOTES | RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | |||
NON-CURRENT ASSETS | ||||
Investment properties | 11 | 115,600,340 | 84,409,540 | |
Property, plant and equipment | 12 | 1,412,794 | 3,365,689 | |
Prepaid lease payments | - | 16,518,641 | ||
Land use rights | - | 414,360 | ||
Right-of-use assets | 408,246 | - | ||
Interests in associates | 7,729,967 | 7,571,982 | ||
Interests in joint ventures | 6,830,470 | 7,365,020 | ||
Equity instruments at fair value through other | ||||
comprehensive income | 895,141 | 734,265 | ||
Deposits paid for acquisition of land use rights | - | 9,968,487 | ||
Derivative financial instruments | 18 | 429,021 | 313,611 | |
Deferred taxation assets | 5,604,128 | 4,192,962 | ||
138,910,107 | 134,854,557 | |||
CURRENT ASSETS | ||||
Inventories of properties | 13 | 309,786,910 | 246,562,069 | |
Other inventories | 656,470 | 826,649 | ||
Deposits paid for acquisition of properties | ||||
held for development | 8,716,949 | - | ||
Accounts and other receivables, deposits and | ||||
prepayments | 14 | 27,387,769 | 22,573,317 | |
Amounts due from non-controlling interests | 27 | 41,063,597 | 32,888,617 | |
Amounts due from associates | 27 | 7,713,866 | 6,876,577 | |
Amounts due from joint ventures | 27 | 12,704,671 | 12,835,904 | |
Taxation recoverable | 4,928,619 | 4,202,728 | ||
Pledged bank deposits | 133,954 | 180,529 | ||
Derivative financial instruments | 18 | 67,305 | - | |
Bank balances and cash | 57,938,821 | 45,083,066 | ||
471,098,931 | 372,029,456 | |||
8
At | At | |||
June 30, | December 31, | |||
2019 | 2018 | |||
NOTES | RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | |||
CURRENT LIABILITIES | ||||
Accounts and bills payables, deposits received | ||||
and accrued charges | 15 | 73,342,082 | 62,233,952 | |
Contract liabilities | 161,241,442 | 113,439,818 | ||
Lease liabilities | 868,099 | - | ||
Amounts due to non-controlling interests | 27 | 27,704,438 | 24,527,983 | |
Amounts due to associates | 27 | 7,751,160 | 8,945,018 | |
Amounts due to joint ventures | 27 | 8,306,651 | 7,173,139 | |
Taxation payable | 18,654,807 | 21,611,655 | ||
Bank and other borrowings - due within one year | 16 | 13,756,326 | 11,743,175 | |
Other derivative financial instruments | 16 | 1,562 | 168,944 | |
311,626,567 | 249,843,684 | |||
NET CURRENT ASSETS | 159,472,364 | 122,185,772 | ||
TOTAL ASSETS LESS CURRENT LIABILITIES | 298,382,471 | 257,040,329 | ||
CAPITAL AND RESERVES | ||||
Share capital | 19 | 518,584 | 516,783 | |
Reserves | 83,478,075 | 81,144,649 | ||
Equity attributable to owners of the Company | 83,996,659 | 81,661,432 | ||
Non-controlling interests | 70,614,376 | 59,156,696 | ||
TOTAL EQUITY | 154,611,035 | 140,818,128 | ||
NON-CURRENT LIABILITIES | ||||
Bank and other borrowings - due after one year | 16 | 117,652,746 | 99,456,124 | |
Senior notes - due after one year | 17 | 8,641,765 | 8,620,623 | |
Lease liabilities | 8,197,878 | - | ||
Derivative financial instruments | 18 | 71,882 | 176,765 | |
Other derivative financial instruments | 16 | 146,683 | 221,728 | |
Deferred taxation liabilities | 9,060,482 | 7,746,961 | ||
143,771,436 | 116,222,201 | |||
298,382,471 | 257,040,329 | |||
9
10
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2019
Attributable to owners of the Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory | held for | Share | Investment | Non- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Capital | Special | Other | surplus | Exchange | share | option | Share award | revaluation | Hedging | Retained | controlling | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
capital | premium | reserve | reserve | reserve | reserve | reserve | award | reserve | reserve | reserve | reserve | profits | Total | interests | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1, 2018 (audited) | 514,209 | 1,305,784 | (437,448) | 620,672 | 380,143 | 1,901,354 | (1,654) | (853,359) | 368,799 | 124,358 | 23,114 | (212,407) | 66,856,213 | 70,589,778 | 35,612,011 | 106,201,789 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the period | - | - | - | - | - | - | - | - | - | - | - | - | 5,429,650 | 5,429,650 | 1,263,069 | 6,692,719 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value gain on hedging instruments | - | - | - | - | - | - | - | - | - | - | - | 185,613 | - | 185,613 | - | 185,613 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on hedging instruments reclassified to | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
profit and loss | - | - | - | - | - | - | - | - | - | - | - | (332,879) | - | (332,879) | - | (332,879) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value gain on equity instruments through | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
other comprehensive income | - | - | - | - | - | - | - | - | - | - | 156,075 | - | - | 156,075 | - | 156,075 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income for the period | - | - | - | - | - | - | - | - | - | - | 156,075 | (147,266) | 5,429,650 | 5,438,459 | 1,263,069 | 6,701,528 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of equity-settledshare-based payments | - | - | - | - | - | - | - | - | 10,545 | 94,497 | - | - | - | 105,042 | - | 105,042 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend paid to non-controlling interests | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (212,332) | (212,332) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital injection from non-controlling shareholders | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 9,114,727 | 9,114,727 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional non-controlling interest arising on | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
acquisition of assets and liabilities through | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
acquisition of subsidiaries (Note 20) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 537,209 | 537,209 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deemed disposal of partial interest in subsidiaries | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
not resulting in losing of control (Note 22) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 848,800 | 848,800 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares vested under the share award scheme | - | - | - | - | - | - | - | 53,365 | - | (12,616) | - | - | (40,749) | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend recognised as distribution (Note 9) | - | (1,548,950) | - | - | - | - | - | - | - | - | - | - | (1,760,178) | (3,309,128) | - | (3,309,128) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issue of shares on exercise of share options | 1,857 | 243,166 | - | - | - | - | - | - | (70,791) | - | - | - | - | 174,232 | - | 174,232 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of shares under the share award scheme | - | - | - | - | - | - | - | (153,115) | - | - | - | - | - | (153,115) | - | (153,115) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of additional interest in subsidiaries | - | - | - | - | 11,013 | - | - | - | - | - | - | - | - | 11,013 | (2,175,691) | (2,164,678) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal of partial interest in subsidiaries not | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
resulting in losing of control | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 2,580,629 | 2,580,629 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At June 30, 2018 (unaudited) | 516,066 | - | (437,448) | 620,672 | 391,156 | 1,901,354 | (1,654) | (953,109) | 308,553 | 206,239 | 179,189 | (359,673) | 70,484,936 | 72,856,281 | 47,568,422 | 120,424,703 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11
Attributable to owners of the Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory | held for | Share | Investment | Non- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Capital | Special | Other | surplus | Exchange | share | option Share award | revaluation | Hedging | Retained | controlling | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
capital | premium | reserve | reserve | reserve | reserve | reserve | award | reserve | reserve | reserve | reserve | profits | Total | interests | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | RMB'000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1, 2019 (audited) | 516,783 | - | (437,448) | 620,672 | 391,156 | 1,951,251 | (1,654) | (1,154,052) | 286,501 | 384,035 | 304,307 | (749,335) | 79,549,216 | 81,661,432 | 59,156,696 | 140,818,128 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the period | - | - | - | - | - | - | - | - | - | - | - | - | 6,309,981 | 6,309,981 | 1,839,856 | 8,149,837 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value gain on hedging instruments | - | - | - | - | - | - | - | - | - | - | - | 287,598 | - | 287,598 | - | 287,598 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain on hedging instruments reclassified to | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
profit and loss | - | - | - | - | - | - | - | - | - | - | - | (99,097) | - | (99,097) | - | (99,097) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income for the period | - | - | - | - | - | - | - | - | - | - | - | 188,501 | 6,309,981 | 6,498,482 | 1,839,856 | 8,338,338 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of equity-settledshare-based payments | - | - | - | - | - | - | - | - | 4,748 | 134,255 | - | - | - | 139,003 | - | 139,003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of share awards | - | - | - | - | - | - | - | - | - | (2,404) | - | - | 2,404 | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend paid to non-controlling interests | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (296,000) | (296,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital injection from non-controlling shareholders | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 6,409,375 | 6,409,375 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional non-controlling interest arising on | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
acquisition of assets and liabilities through | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
acquisition of subsidiaries (Note 20) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 2,869,269 | 2,869,269 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deemed disposal of partial interest in subsidiaries | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
not resulting in losing of control (Note 22) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 545,230 | 545,230 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares vested under the share award scheme | - | - | - | - | - | - | - | 135,094 | - | (90,860) | - | - | (44,234) | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend recognised as distribution (Note 9) | - | (218,825) | - | - | - | - | - | - | - | - | - | - | (3,892,906) | (4,111,731) | - | (4,111,731) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issue of shares on exercise of share options | 1,801 | 218,825 | - | - | - | - | - | - | (60,671) | - | - | - | - | 159,955 | - | 159,955 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of shares under the share award scheme | - | - | - | - | - | - | - | (350,482) | - | - | - | - | - | (350,482) | - | (350,482) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal of partial interest in subsidiaries not | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
resulting in losing of control (Note 21) | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 89,950 | 89,950 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At June 30, 2019 (unaudited) | 518,584 | - | (437,448) | 620,672 | 391,156 | 1,951,251 | (1,654) | (1,369,440) | 230,578 | 425,026 | 304,307 | (560,834) | 81,924,461 | 83,996,659 | 70,614,376 | 154,611,035 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
Six months ended June 30, | |||||
2019 | 2018 | ||||
RMB' 000 | RMB' 000 | ||||
(unaudited) | (unaudited) | ||||
OPERATING ACTIVITIES | |||||
Profit before taxation | 13,069,775 | 10,778,024 | |||
Adjustments for: | |||||
Finance costs | 58,482 | 41,737 | |||
Depreciation of property, plant and equipment | 50,559 | 43,566 | |||
Fair value gain upon transfer to investment properties | (105,185) | (406,298) | |||
Change in fair value of investment properties | (2,206,897) | (2,188,990) | |||
Change in fair value of derivative financial instruments | (219,623) | 62,854 | |||
Net exchange losses | 7,758 | 179,270 | |||
Lease liability charges | 252,292 | - | |||
Interest income | (409,849) | (153,091) | |||
Share-based payments expenses | 139,003 | 105,042 | |||
Other adjusting items | (1,051,071) | (324,844) | |||
Operating cash flows before movements in working capital | 9,585,244 | 8,137,270 | |||
Decrease (increase) in other inventories | 170,179 | (62,056) | |||
Increase in properties held for development | (28,019,540) | - | |||
Increase in properties under development for sales | (25,634,551) | (19,808,438) | |||
Decrease in properties held for sales | 22,637,588 | 15,826,346 | |||
Increase in deposits paid for acquisition of properties held | |||||
for development | (9,314,878) | (6,079,394) | |||
Increase in accounts and other receivables, deposits and | |||||
prepayments | (6,629,528) | (2,244,599) | |||
Increase (decrease) in accounts and bills payables and | |||||
accrued charges | 5,994,974 | (1,118,965) | |||
Increase in contract liabilities | 47,801,624 | 37,067,491 | |||
Cash from operations | 16,591,112 | 31,717,655 | |||
The People's Republic of China (The "PRC") income tax paid | (8,700,322) | (6,897,446) | |||
NET CASH FROM OPERATING ACTIVITIES | 7,890,790 | 24,820,209 | |||
12
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (unaudited) | |||
INVESTING ACTIVITIES | ||||
Additions to investment properties | (6,754,592) | (2,011,928) | ||
Additions to prepaid lease payments | - | (32,329,266) | ||
Acquisition of assets and liabilities through acquisition of | ||||
subsidiaries (Note 20) | (1,404,533) | (1,995,123) | ||
Investments in joint ventures | (19,442) | (728,490) | ||
Investments in associates | (117,782) | (220,545) | ||
Dividend received from associates | 300,600 | 400,000 | ||
Dividend received from a joint venture | 47,089 | 250,000 | ||
Advances to associates | (2,085,531) | (459,052) | ||
Repayments from joint ventures | 2,779,019 | 997,492 | ||
Repayments from non-controlling interests | 2,834,541 | 4,321,497 | ||
Purchase of equity instruments at fair value through other | ||||
comprehensive income | (160,876) | (177,413) | ||
Advances to joint ventures | (2,647,786) | (1,905,835) | ||
Repayments from associates | 1,248,242 | 469,489 | ||
Advances to non-controlling interests | (10,659,521) | (12,431,128) | ||
Placement of pledged bank deposits | (49,736) | (74,090) | ||
Withdrawal of pledged bank deposits | 96,311 | 110,304 | ||
Capital reduction from an associate | 40,255 | - | ||
Purchase of property, plant and equipment | (71,250) | (1,352,012) | ||
Interest received | 409,849 | 153,091 | ||
Other investing cash flows | 21,308 | 493 | ||
NET CASH USED IN INVESTING ACTIVITIES | (16,193,835) | (46,982,516) | ||
13
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (unaudited) | |||
FINANCING ACTIVITIES | ||||
Capital contribution from non-controlling shareholders | 6,409,375 | 9,114,727 | ||
Repayment of bank and other loans | (16,518,213) | (3,931,314) | ||
Interest paid | (3,264,359) | (2,050,287) | ||
New bank and other loans raised | 35,768,222 | 31,365,877 | ||
Proceeds from issue of bonds | 2,200,000 | 3,000,000 | ||
Expenses on issue of bonds | (13,709) | (18,780) | ||
Repurchase of senior notes | - | (35,378) | ||
Advances from joint ventures | 1,963,295 | 1,119,057 | ||
Advances from associates | 1,714,397 | 2,766,294 | ||
Advances from non-controlling interests | 15,843,976 | 11,211,521 | ||
Dividend paid | (1,781,855) | (1,179,954) | ||
Dividend paid to non-controlling interests | (296,000) | (212,332) | ||
Capital injection from non-controlling shareholders resulted | ||||
in deemed disposal of partial interest in subsidiaries not | ||||
resulting in losing of control | 545,230 | 848,800 | ||
Proceeds from issue of shares | 159,955 | 174,232 | ||
Payment for purchase of shares under the share award scheme | (350,482) | (153,115) | ||
Acquisition of additional interests in subsidiaries | - | (2,164,678) | ||
Proceeds from disposal of partial interest in subsidiaries not | ||||
resulting in losing of control | 89,950 | 2,580,629 | ||
Proceed from issuance of senior notes | - | 5,099,839 | ||
Redemption of senior notes | - | (5,509,451) | ||
Redemption of bonds | (1,265,006) | - | ||
Repayment to non-controlling interests | (15,855,141) | (9,594,134) | ||
Repayment to associates | (2,908,255) | (3,272,850) | ||
Repayment to joint ventures | (829,783) | (1,593,898) | ||
Repayment for lease liabilities | (452,797) | - | ||
NET CASH FROM FINANCING ACTIVITIES | 21,158,800 | 37,564,805 | ||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 12,855,755 | 15,402,498 | ||
CASH AND CASH EQUIVALENTS AT THE BEGINNING | ||||
OF THE PERIOD | 45,083,066 | 26,642,154 | ||
CASH AND CASH EQUIVALENTS AT THE END OF | ||||
THE PERIOD | 57,938,821 | 42,044,652 | ||
ANALYSIS OF THE BALANCES OF CASH AND | ||||
CASH EQUIVALENTS | ||||
Bank balances and cash | 57,938,821 | 42,044,652 | ||
14
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
-
BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 ("IAS 34") Interim Financial Reporting issued by the International Accounting Standards Board as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"). - PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the historical cost basis except for investment properties and certain financial instruments, which are measured at fair values.
Other than changes in accounting policies resulting from application of new and amendments to International Financial Reporting Standards ("IFRSs"), the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended June 30, 2019 are the same as those followed in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2018.
Application of new and amendments to IFRSs and an interpretation
In the current interim period, the Group has applied, for the first time, the following new and amendments to IFRSs issued by the International Accounting Standards Board which are mandatory effective for the annual period beginning on or after January 1, 2019 for the preparation of the Group's condensed consolidated financial statements:
IFRS 16
IFRIC 23 Amendments to IFRS 9 Amendments to IAS 19 Amendments to IAS 28 Amendments to IFRSs
Leases
Uncertainty over Income Tax Treatments Prepayment Features with Negative Compensation Plan Amendment, Curtailment or Settlement Long-term Interests in Associates and Joint Ventures Annual Improvements to IFRS Standards 2015 - 2017 Cycle
Except as described below, the application of the new and amendments to IFRSs in the current period has had no material impact on the Group's financial performance and positions for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.
2.1 Impacts and changes in accounting policies of application on IFRS 16 Leases
The Group has applied IFRS 16 for the first time in the current interim period. IFRS 16 superseded IAS 17 Leases ("IAS 17"), and the related interpretations.
2.1.1 Key changes in accounting policies resulting from application of IFRS 16
The Group applied the following accounting policies in accordance with the transition provisions of IFRS 16.
Definition of a lease
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
For contracts entered into or modified on or after the date of initial application, the Group assesses whether a contract is or contains a lease based on the definition under IFRS 16 at inception or modification date. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed.
15
As a lessee
Leases of low-value assets
The Group applies the recognition exemption for lease of low-value assets. Lease payments on leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Right-of-use assets
Except for leases of low value assets, the Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Except for those that are classified as investment properties and measured under fair value model, right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use asset includes:
- the amount of the initial measurement of the lease liability; and
- any lease payments made at or before the commencement date, less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term.
The Group presents right-of-use assets that do not meet the definition of investment property as
- separate line item on the condensed consolidated statement of financial position. Right-of-use assets that meet the definition of investment property are presented within "investment properties".
Refundable rental deposits
Refundable rental deposits paid are accounted under IFRS 9 Financial Instruments ("IFRS 9") and initially measured at fair value. Adjustments to fair value at initial recognition are considered as additional lease payments and included in the cost of right-of-use assets. Before the application of IFRS 16, the Group considered refundable rental deposits paid as rights and obligations under leases to which IAS 17 applied. Based on the definition of lease payments under IFRS 16, such deposits are not payments relating to the right to use of the underlying assets and were adjusted to reflect the discounting effect at transaction. At the date of initial application, the Group assessed and considered the impact of these refundable rental deposits paid as insignificant at January 1, 2019.
Lease liabilities
At the commencement date of a lease, the Group recognises and measures the lease liability at the present value of lease payments that are unpaid at that date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.
The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable.
After the commencement date, lease liabilities are adjusted by interest accretion and lease payments.
The Group remeasures lease liabilities (and makes a corresponding adjustment to the related right-of-use assets) whenever the lease term has changed in which case the related lease liability is remeasured by discounting the revised lease payments using a revised discount rate at the date of reassessment.
16
Taxation
For the purposes of measuring deferred tax for leasing transactions in which the Group recognises the right-of-use assets and the related lease liabilities, the Group first determines whether the tax deductions are attributable to the right-of-use assets or the lease liabilities.
For leasing transactions in which the tax deductions are attributable to the lease liabilities, the Group applies IAS 12 Income Taxes requirements to the leasing transaction as a whole. Temporary differences relating to right-of-use assets and lease liabilities are assessed on a net basis. Excess of depreciation on right-of-use assets over the lease payments for the principal portion of lease liabilities resulting in net deductible temporary differences.
As a lessor
Refundable rental deposits
Refundable rental deposits received are accounted under IFRS 9 and initially measured at fair value. Adjustments to fair value at initial recognition are considered as additional lease payments from lessees.
Sublease
When the Group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset.
2.1.2 Transition and summary of effects arising from initial application of IFRS 16 Definition of a lease
The Group has elected the practical expedient to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a Lease and not apply these standards to contracts that were not previously identified as containing a lease. Therefore, the Group has not reassessed contracts which already existed prior to the date of initial application.
For contracts entered into or modified on or after January 1, 2019, the Group applies the definition of a lease in accordance with the requirements set out in IFRS 16 in assessing whether a contract contains a lease.
As a lessee
The Group has applied IFRS 16 retrospectively with the cumulative effect recognised at the date of initial application, January 1, 2019. Any difference at the date of initial application is recognised in the opening retained profits and comparative information has not been restated.
As at January 1, 2019, the Group recognise additional lease liabilities and right-of-use asset at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments by applying IFRS 16C 8(b)(ii) transition.
When recognising the lease liabilities for leases previously classified as operating leases, the Group has applied incremental borrowing rates of the relevant group entities at the date of initial application. The weighted average incremental borrowing rate applied by the Group is 5.89%.
17
At January 1, | |||
2019 | |||
RMB' 000 | |||
Operating lease commitments disclosed as at December 31, 2018 | 11,479,336 | ||
Less: Discounting at relevant incremental borrowing rates | (2,746,511) | ||
Less: Recognition exemption of low-value assets | (275,966) | ||
Lease liabilities as at January 1, 2019 | 8,456,859 | ||
Analysed as | |||
Current | 703,059 | ||
Non-current | 7,753,800 | ||
8,456,859 | |||
The carrying amount of investment property as at January 1, 2019 comprises the following:
At January 1, | ||
2019 | ||
RMB' 000 | ||
Carrying amount as at December 31, 2018 | 84,409,540 | |
Reclassification from prepaid lease payment | 7,811,956 | |
Right-of-use assets relating to operating leases recognised upon | ||
application of IFRS 16 | 8,456,859 | |
Reclassification from properties, plant and equipment | ||
(Structure and leasehold improvement for subleasing) | 1,955,781 | |
Investment properties | 102,634,136 | |
The carrying amount of right-of-use assets as at January 1, 2019 comprises of following:
At January 1, | ||
2019 | ||
RMB' 000 | ||
Carrying amount as at December 31, 2018 | - | |
Reclassification from land use rights | 414,360 | |
Right-of-use assets as at January 1, 2019 | 414,360 | |
As a lessor
In accordance with the transitional provisions in IFRS 16, except for sub-leases in which the Group acts as an intermediate lessor, the Group is not required to make any adjustment on transition for leases in which the Group is a lessor but account for these leases in accordance with IFRS 16 from the date of initial application and comparative information has not been restated.
Before application of IFRS 16, refundable rental deposits received were considered as rights and obligations under leases to which IAS 17 applied. Based on the definition of lease payments under IFRS 16, such deposits are not payments relating to the right-of-use assets and were adjusted to reflect the discounting effect at transition. At the date of initial application, the Group assessed and considered the impact of refundable rental deposits received these as insignificant at January 1, 2019.
18
At the date of initial application and current period, the Group assessed and considered that the impact of IFRS 16 as a lessor is insignificant.
The following adjustments were made to the amounts recognised in the condensed consolidated statement of financial position at January 1, 2019. Line items that were not affected by the changes have not been included.
Carrying | Carrying | ||
amounts | amounts | ||
previously | under | ||
reported at | IFRS 16 at | ||
December 31, | January 1, | ||
2018 | Adjustments | 2019 | |
RMB' 000 | RMB' 000 | RMB' 000 | |
Non-current Assets | |||
Property, plant and equipment | 3,365,689 | (1,955,781) | 1,409,908 |
Prepaid lease payments (Note i) | 16,518,641 | (16,518,641) | - |
Land use rights | 414,360 | (414,360) | - |
Right-of-use assets | - | 414,360 | 414,360 |
Investment properties (Note i) | 84,409,540 | 18,224,596 | 102,634,136 |
Current Assets | |||
Inventories of properties (Note i) | 246,562,069 | 8,706,685 | 255,268,754 |
Current Liabilities | |||
Lease liabilities | - | (703,059) | (703,059) |
Non-current Liabilities | |||
Lease liabilities | - | (7,753,800) | (7,753,800) |
Notes:
- As a result of adopting IFRS 16, the directors of the Company assessed the development plan for these prepaid lease payments, and considered that prepaid lease payments with undetermined use would be classified as investment properties while prepaid lease payments with development for sales purpose would be classified as properties held for development as at January 1, 2019.
- For the purpose of reporting cash flows from operating activities under indirect method for the six months ended June 30, 2019, movements in working capital have been computed based on opening condensed consolidated statement of financial position as at January 1, 2019 as disclosed above.
2.2 Impacts and changes in accounting policies of application of other new and amendments to IFRSs
Impacts and changes in accounting policies of application on Amendments to IFRSs Annual Improvements to IFRS Standards 2015 - 2017 Cycle
The annual improvement packages amended the following four standards.
IAS 12 Income Taxes
The Group recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the Group originally recognised the transactions that generated the distributable profits. This is the case irrespective of whether different tax rates apply to distributed and undistributed profits.
19
IAS 23 Borrowing Costs
For any specific borrowing that remains outstanding after the related qualifying asset is ready for its intended use or sale, that borrowing becomes part of the funds that the Group borrows generally when calculating the capitalisation rate on general borrowings.
3. SEGMENT INFORMATION
The Group determines its operating segments based on internal reports about components of the Group that are regularly reviewed by the chief operating decision maker ("CODM") (i.e., the executive directors of the Company) in order to allocate resources to the segment and to assess its performance.
The Group is organised into business units based on their types of activities, based on which information is prepared and reported to the Group's CODM for the purposes of resource allocation and assessment of performance. The Group's operating segments under IFRS 8 Operating Segments are identified as the following three main operations:
- Property development: this segment represents the development and sales of office premises, commercial and residential properties. All the Group's activities in this regard are carried out in the PRC.
- Property investment: this segment represents the lease of investment properties, which are developed by the Group to generate rental income and to gain from the appreciation in the properties' values in the long term. Currently the Group's investment property portfolio mainly comprises shopping malls and long-term rental apartments and are all located in the PRC.
- Property management and related services and others: this segment mainly represents the income generated from property management and related services, hotel operation and others. Currently the Group's activities in this regard are carried out in the PRC.
-
Segment results
For the purposes of assessing segment performance and allocating resources between segments, the Company's executive directors monitor the revenue and results attributable to each operating segment on the following bases:
Segment assets include all tangible assets and current assets directly attributable to each segment with the exception of properties held for development, deposits paid for acquisition of for acquisition of properties held for development, interests in associates and joint ventures, equity instruments at fair value through other comprehensive income, deferred taxation assets, taxation recoverable, derivative financial instruments and other corporate assets. Other corporate assets are not allocated to the operating segments because they are head office assets or assets which are managed centrally by the Group. The investment properties included in segment assets are stated at cost when assessed by the chief operating decision maker.
Revenue and expenses are allocated to the operating segments with reference to sales generated by those segments and the expenses incurred by those segments. Segment profit does not include the Group's share of results arising from the activities of the Group's associates and joint ventures.
The measure used for reporting segment profit is adjusted earnings before interest, other gains and losses, lease liability charges, taxes, depreciation, share of results of associates and joint ventures, change in fair value of investment properties and upon transfer to investment properties, change in fair value of derivative financial instruments and finance costs ("Adjusted Earnings"), where "interest" is regarded as including investment income and "depreciation" is regarded as including impairment losses on non-current assets. To arrive at Adjusted Earnings, the Group's earnings are further adjusted for items not specifically attributed to individual segments, such as directors' and auditor's remuneration and other head office or corporate administration costs.
In addition to receiving segment information concerning segment profit, management is provided with segment information concerning revenue (including inter-segment sales). Inter-segment sales are priced with reference to prices charged to external parties for similar service.
20
Information regarding the Group's operating segments is set out below.
Six months ended June 30, 2019 (unaudited) | ||||||||||
Property | ||||||||||
management | ||||||||||
and related | ||||||||||
Property | Property | services | ||||||||
development | investment | and others | Total | |||||||
RMB' 000 | RMB' 000 | RMB' 000 | RMB' 000 | |||||||
Revenue from external customers | ||||||||||
Recognised at a point in time | 30,351,766 | - | - | 30,351,766 | ||||||
Recognised over time | 3,813,351 | 2,577,135 | 1,827,561 | 8,218,047 | ||||||
Inter-segment revenue | - | - | 123,293 | 123,293 | ||||||
Segment revenue | 34,165,117 | 2,577,135 | 1,950,854 | 38,693,106 | ||||||
Segment profit (Adjusted Earnings) | 8,905,632 | 2,055,386 | 445,812 | 11,406,830 | ||||||
Six months ended June 30, 2018 (unaudited) | ||||||||||
Property | ||||||||||
management | ||||||||||
and related | ||||||||||
Property | Property | services | ||||||||
development | investment | and others | Total | |||||||
RMB' 000 | RMB' 000 | RMB' 000 | RMB' 000 | |||||||
Revenue from external customers | ||||||||||
Recognised at a point in time | 21,938,053 | - | - | 21,938,053 | ||||||
Recognised over time | 2,099,238 | 1,851,424 | 1,232,100 | 5,182,762 | ||||||
Inter-segment revenue | - | - | 60,578 | 60,578 | ||||||
Segment revenue | 24,037,291 | 1,851,424 | 1,292,678 | 27,181,393 | ||||||
Segment profit (Adjusted Earnings) | 7,498,093 | 1,387,264 | 313,315 | 9,198,672 | ||||||
In addition to receiving segment information concerning segment profit, the CODM is provided with information concerning the Group's consolidated amount of interests in associates and related share of results, interests in joint ventures and related share of results, changes in fair value of investment properties and upon transfer to investment properties, change in fair value of derivative financial instruments, other income, other gains and losses, lease liability charges, finance costs from borrowings, depreciation, and amortisation and impairment losses (if any) which are not allocated to operating segments.
21
- Reconciliations of segment revenue and profit or loss
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (unaudited) | |||
Revenue | ||||
Segment revenue | 38,693,106 | 27,181,393 | ||
Elimination of inter-segment revenue | (123,293) | (60,578) | ||
Consolidated revenue | 38,569,813 | 27,120,815 | ||
Profit | ||||
Segment profit | 11,406,830 | 9,198,672 | ||
Other income | 617,529 | 604,714 | ||
Other gains and losses | (66,789) | (188,405) | ||
Lease liability charges | (252,292) | - | ||
Fair value gain upon transfer to investment properties | 105,185 | 406,298 | ||
Change in fair value of investment properties | 2,206,897 | 2,188,990 | ||
Change in fair value of derivative financial instruments | 219,623 | (62,854) | ||
Finance costs | (58,482) | (41,737) | ||
Share of results of associates | 381,058 | 78,211 | ||
Share of results of joint ventures | 675,742 | 371,989 | ||
Depreciation and amortisation | (56,673) | (54,059) | ||
Unallocated expenses | (2,108,853) | (1,723,795) | ||
Consolidated profit before taxation | 13,069,775 | 10,778,024 | ||
- Revenue from major product and services
The following is an analysis of the Group's revenue from its properties sold, properties invested and services provided:
Six months ended June 30, | |||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
Sales of properties | |||
Recognised at a point in time | 30,351,766 | 21,938,053 | |
Recognised over time | 3,813,351 | 2,099,238 | |
Property development segment | 34,165,117 | 24,037,291 | |
Revenue from property management and related services and | |||
others/property management and related services and others | |||
segment - recognised over time | 1,827,561 | 1,232,100 | |
Revenue from contract with customers | 35,992,678 | 25,269,391 | |
Rental income under property investment segment | 2,577,135 | 1,851,424 | |
Total revenue | 38,569,813 | 27,120,815 | |
Add: inter-segment revenue under property management and | |||
related services and other segment | 123,293 | 60,578 | |
Total segment revenue | 38,693,106 | 27,181,393 | |
22
-
Geographical information
The following table sets out information about the Group's revenue from external customers by cities in the PRC, based on the location at which the properties are sold, properties are invested and services are provided
Revenue from | |||
external customers | |||
Six months ended June 30, | |||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
Beijing | 1,524,419 | 1,660,533 | |
Chengdu | 2,507,173 | 3,175,313 | |
Chongqing | 10,938,779 | 4,022,386 | |
Hangzhou | 919,777 | 4,862,172 | |
Jinan | 9,507,172 | 1,393,552 | |
Nanjing | 1,534,120 | 123,455 | |
Ningbo | 363,678 | 2,479,566 | |
Qingdao | 1,092,447 | 2,127,255 | |
Shanghai | 1,552,783 | 488,495 | |
Shenyang | 1,147,821 | 795,732 | |
Sunan | 1,395,290 | 407,407 | |
Xiamen | 1,178,646 | 1,717,858 | |
Other cities in the PRC | 4,907,708 | 3,867,091 | |
38,569,813 | 27,120,815 | ||
No revenue from transaction with a single external customer amounts to 10% or more of the Group's revenue.
-
Segment assets
The following is an analysis of the Group's assets by operating segment:
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Property development | 316,809,690 | 269,553,969 | |
Property investment (Note) | 85,122,172 | 57,071,210 | |
Property management and related services and others | 755,332 | 1,460,156 | |
Total segment assets | 402,687,194 | 328,085,335 | |
Note: The above amount of segment assets relating to leasing of properties represents the cost of investment properties and upon initial recognition cost of right-of-use assets classified under investment properties.
23
4. | OTHER INCOME | |||
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (unaudited) | |||
Interest income | 409,849 | 153,091 | ||
Government subsidies (Note a) | 27,427 | 29,829 | ||
Penalty income (Note b) | 80,908 | 44,273 | ||
Consultancy income (Note c) | 82,155 | 347,607 | ||
Sundry income | 17,190 | 29,914 | ||
Total | 617,529 | 604,714 | ||
Notes:
- The amount represents the grants received from the relevant PRC government to encourage the investments in specific regions. The subsidies are unconditional and granted on a discretionary basis to the Group during the period.
- It represents penalty received from property buyers who do not execute sales and purchase agreements on property sales or from tenants who early terminate tenancy agreements.
- The amount represents the consultancy services provided to the Group's joint ventures and associates in relation to the property development projects.
5. OTHER GAINS AND LOSSES
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (unaudited) | |||
Gain on disposal of property, plant and equipment | 385 | 313 | ||
Net exchange losses (Note) | (164,780) | (410,806) | ||
Reclassification of fair value gain of hedging instruments from hedging reserve | 99,097 | 332,879 | ||
Loss on early redemption of senior notes | - | (110,791) | ||
Others | (1,491) | - | ||
(66,789) | (188,405) | |||
Note: It represents exchange difference arising from translation of bank balances, bank borrowings and senior notes, original currencies of which are either denominated in Hong Kong Dollar ("HKD") or United States Dollar ("USD").
24
6. | FINANCE COSTS | ||||
Six months ended June 30, | |||||
2019 | 2018 | ||||
RMB' 000 | RMB' 000 | ||||
(unaudited) | (unaudited) | ||||
Interest on bank and other borrowings | |||||
Wholly repayable within five years | (2,418,624) | (1,418,392) | |||
Not wholly repayable within five years | (593,930) | (579,398) | |||
Interest expense on senior notes | (160,165) | (202,130) | |||
(3,172,719) | (2,199,920) | ||||
Less: Amount capitalised to properties under development for sales and | |||||
investment properties under development | 3,114,237 | 2,158,183 | |||
(58,482) | (41,737) | ||||
Borrowing costs capitalised arose on the general borrowing pool of the Group and were calculated by applying a capitalisation rate of 4.70% (six months ended June 30, 2018: 4.81%) per annum for the six months ended June 30, 2019 to expenditure on the qualifying assets.
7. | INCOME TAX EXPENSE | ||||
Six months ended June 30, | |||||
2019 | 2018 | ||||
RMB' 000 | RMB' 000 | ||||
(unaudited) | (unaudited) | ||||
Current tax | |||||
PRC Enterprise Income Tax ("EIT") | (2,720,777) | (2,238,823) | |||
Withholding Tax on distributed earnings | (108,049) | - | |||
Land Appreciation Tax ("LAT") | (2,383,502) | (1,917,953) | |||
(5,212,328) | (4,156,776) | ||||
Overprovision in prior periods | |||||
LAT* | 194,745 | 174,963 | |||
(5,017,583) | (3,981,813) | ||||
Deferred taxation | |||||
Current period | 97,645 | (103,492) | |||
(4,919,938) | (4,085,305) | ||||
- The development plan for several property projects had been revised in which the revised estimated appreciation value was different with the appreciation value made in prior periods, resulting in an overprovision of LAT in respect of prior periods.
No provision for Hong Kong Profits Tax has been made as the Group does not have income which arises in, or is derived from, Hong Kong.
Under the Law of the PRC on EIT (the "EIT Law") and Implementation Regulations of the EIT Law, the tax rate of the PRC subsidiaries is 25% for both periods.
Certain of the Company's subsidiaries operating in the PRC are eligible for exemption from PRC EIT for both periods.
25
8. | PROFIT FOR THE PERIOD | |||||
Six months ended June 30, | ||||||
2019 | 2018 | |||||
RMB' 000 | RMB' 000 | |||||
(unaudited) | (unaudited) | |||||
Profit for the period has been arrived at after charging (crediting): | ||||||
Depreciation of property, plant and equipment | 50,559 | 43,566 | ||||
Amortisation of land use rights | - | 10,493 | ||||
Depreciation of right-of-use assets | 6,114 | - | ||||
Gain on disposal of property, plant and equipment | (385) | (313) | ||||
Operating lease rentals | - | 62,165 | ||||
9. | DIVIDENDS | |||||
Six months ended June 30, | ||||||
2019 | 2018 | |||||
RMB' 000 | RMB' 000 | |||||
(unaudited) | (unaudited) | |||||
Dividends recognised as distribution during the period: | ||||||
Final dividend recognised in respect of 2018 of RMB0.69 | ||||||
(six months ended June 30, 2018: Final dividend recognised | ||||||
in respect of 2017 of RMB0.473) per share | 4,111,731 | 2,802,418 | ||||
Special dividend recognised in respect of 2017 of RMB0.085 per share | - | 506,710 | ||||
4,111,731 | 3,309,128 | |||||
Subsequent to the end of the reporting period, the Board declared the payment of an interim dividend of RMB2,145,338,000, representing RMB0.36 per share, based on the number of shares in issue as at June 30, 2019, in respect of the six months ended June 30, 2019 (six months ended June 30, 2018: RMB1,779,101,000).
10. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to the owners of the Company is based on the following data:
Six months ended June 30,
2019 2018
RMB' 000 RMB' 000
(unaudited) (unaudited)
Earnings attributable to the owners of the Company for the | ||
purposes of calculation of basic and diluted earnings per share | 6,309,981 | 5,429,650 |
26
2019 | 2018 | ||
' 000 | ' 000 | ||
(unaudited) | (unaudited) | ||
Number of shares | |||
Weighted average number of ordinary shares for the | |||
purpose of calculation of basic earnings per share | 5,853,064 | 5,842,758 | |
Effect of dilutive potential ordinary shares in respect of | |||
- Share options | 58,855 | 86,803 | |
- Share awards | 42,733 | 36,556 | |
Weighted average number of ordinary shares for the | |||
purpose of calculation of diluted earnings per share | 5,954,652 | 5,966,117 | |
The weighted average number of ordinary shares adopted in the calculation of basic and diluted earnings per share for both periods have been arrived at after deducting the shares held in trust for the Company by an independent trustee under the share award scheme of the Company.
11. INVESTMENT PROPERTIES | |||||
Completed | |||||
investment | Investment | ||||
properties | properties | ||||
and right-of- | under | ||||
use assets | development | Total | |||
RMB' 000 | RMB' 000 | RMB' 000 | |||
At December 31, 2018 (audited) | 61,986,740 | 22,422,800 | 84,409,540 | ||
Adjustments arising from initial application of IFRS 16 | 10,412,640 | 7,811,956 | 18,224,596 | ||
At January 1, 2019 (restated) | 72,399,380 | 30,234,756 | 102,634,136 | ||
Additions | 1,489,457 | 6,074,757 | 7,564,214 | ||
Acquisition of assets through acquisition | |||||
of subsidiaries (Note 20) | - | 2,751,777 | 2,751,777 | ||
Transfer from properties held for sales (Note) | 443,316 | - | 443,316 | ||
Net increase in fair value recognised in profit or loss | 601,860 | 1,605,037 | 2,206,897 | ||
At June 30, 2019 (unaudited) | 74,934,013 | 40,666,327 | 115,600,340 | ||
Unrealised gain on property revaluation included | |||||
in profit or loss | 707,045 | 1,605,037 | 2,312,082 | ||
Note: The transfer from properties held for sales to investment properties were made since there was a change in use as evidenced by the inception of operating leases to third parties.
Included in the above, there are right-of-use assets amounting to RMB11,368,942,000 (December 31, 2018: nil) as at June 30, 2019. There are additions to right-of-use assets amounting to RMB1,401,484,000 (six months ended June 30, 2018: nil).
The investment properties are all situated in the PRC.
27
The fair values of the Group's investment properties at dates of transfer and June 30, 2019 have been arrived at on the basis of valuations carried out on those dates by Savills Valuation and Professional Services Limited, a firm of independent qualified professional valuer not connected with the Group, who has appropriate qualifications and recent experience in the valuation of similar properties in the relevant locations.
In estimating the fair value of the properties, the highest and best use of the properties is their current use.
The fair values of the investment properties were determined by the valuer on the following basis:
Completed properties | - | arrived at by capitalising the net rental income derived from the existing |
and right-of-use assets | tenancies with due allowance for reversionary incoming potential of the | |
respective properties. | ||
Properties under | - | valued on the basis that they will be developed and completed in |
development | accordance with the latest development proposals and taken into account | |
the construction costs that will be expended to complete the development | ||
as well as developer's profit margin to reflect the quality of the completed | ||
development. For the investment properties that the fair value are not | ||
reliably measureable but expect the fair value of the properties to be reliably | ||
measureable in future, the investment properties shall be measured at cost | ||
until the fair value become reliably measureable or construction is completed | ||
(whichever is earlier). |
All of the Group's property interests in leasehold land and buildings to earn rentals or for capital appreciation purposes are measured using the fair value model and classified and accounted for as investment properties.
-
PROPERTY, PLANT AND EQUIPMENT
During the six months ended June 30, 2019, additions to property, plant and equipment amounted to RMB71,250,000 (six months ended June 30, 2018: RMB1,407,001,000), consisting of construction in progress for hotel properties, motor vehicles and equipment and furniture. - INVENTORIES OF PROPERTIES
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Properties held for development | 13,763,534 | - | |
Properties under development for sales | 279,399,700 | 232,015,490 | |
Properties held for sales | 16,623,676 | 14,546,579 | |
309,786,910 | 246,562,069 | ||
The inventories of properties were located in the PRC. Inventories of properties which are expected to be recovered in more than twelve months after the end of the reporting period are classified under current assets as it is expected to be realised in the Group's normal operating cycle.
28
14. ACCOUNTS AND OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Trade receivables are mainly arisen from sales of property development and property investment. Considerations in respect of sales of properties are paid by purchasers in accordance with the terms of the related sales and purchase agreements. For lease of properties, rental income is paid by tenants within two months in accordance with the terms in the tenancy agreement.
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Trade receivables (Note a) | 700,806 | 2,560,699 | |
Other receivables, net of allowance for doubtful debts (Note b) | 7,193,976 | 5,682,971 | |
Advances to contractors | 2,200,991 | 2,074,294 | |
Prepaid value added tax and other taxes | 13,578,858 | 9,360,560 | |
Prepayments and utilities deposits (Note c) | 3,713,138 | 2,894,793 | |
27,387,769 | 22,573,317 | ||
Notes:
- The following is an aged analysis of trade receivables at the end of the reporting period based on the dates of delivery of goods and rendering of services:
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Within 60 days | 301,598 | 2,178,339 | |
61 - 180 days | 255,048 | 325,067 | |
181 - 365 days | 142,085 | 47,456 | |
1 - 2 years | 2,075 | 9,837 | |
700,806 | 2,560,699 | ||
- Other receivables mainly comprise rental deposits, receivables of refund of the deposits for land auctions, deposits for construction work, temporary payments and miscellaneous project-related deposits paid which are refundable within one year.
- Included in the prepayments and utilities deposits, there are mainly properties held for development amounting to RMB3,708,500,000 (2018: RMB2,892,098,000) which are paid on behalf of certain entities which the Group potentially invests in them ("potential investees"). In the opinion of the directors, such payments are prepayment for property development projects for those potential investees.
29
15. ACCOUNTS AND BILLS PAYABLES, DEPOSITS RECEIVED AND ACCRUED CHARGES
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Trade payables and accrued expenditure on construction (Note a) | 56,356,803 | 44,768,028 | |
Bills payables (Note a) | 665,523 | 968,013 | |
Dividend payables | 4,111,731 | 1,781,855 | |
Other payables and accrued charges (Note b) | 8,634,944 | 9,683,746 | |
Value added tax and other tax payables | 3,573,081 | 3,822,238 | |
Consideration payable for acquisition of assets and liabilities through | |||
acquisition of subsidiaries | - | 1,210,072 | |
73,342,082 | 62,233,952 | ||
Notes:
-
Trade and bills payables and accrued expenditure on construction comprise construction costs and other project-related expenses which are payable based on project progress certified by the Group.
The following is an aged analysis of trade and bills payables, based on the invoice date and issuance date of each bill, at the end of the reporting period:
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Within 60 days | 23,658,185 | 20,868,583 | |
61 - 180 days | 10,980,974 | 8,966,617 | |
181 - 365 days | 10,285,924 | 6,333,705 | |
1 - 2 years | 2,829,205 | 2,147,504 | |
2 - 3 years | 697,060 | 460,323 | |
Over 3 years | 89,606 | 185,130 | |
48,540,954 | 38,961,862 | ||
- Other payables and accrued charges comprise mainly tax received and payable to the government on behalf of customers, receipt on behalf of certain entities from potential investment partners, accrued salaries and accrued staff welfare.
16. BANK AND OTHER BORROWINGS
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Bank loans, secured | 48,154,512 | 41,105,408 | |
Bank loans, unsecured | 47,452,185 | 35,394,192 | |
Bonds, unsecured | 35,802,375 | 34,699,699 | |
131,409,072 | 111,199,299 | ||
30
The carrying amounts of the above borrowings are repayable based on the scheduled repayment dates set out in the loan agreements, as follows:
At | At | |||
June 30, | December 31, | |||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (audited) | |||
Within one year | 13,756,326 | 11,743,175 | ||
More than one year but not exceeding two years | 23,459,419 | 22,813,096 | ||
More than two years but not exceeding three years | 31,561,037 | 20,800,932 | ||
More than three years but not exceeding four years | 20,441,082 | 10,626,929 | ||
More than four years but not exceeding five years | 24,289,018 | 24,998,929 | ||
Exceeding five years | 17,902,190 | 20,216,238 | ||
131,409,072 | 111,199,299 | |||
Less: Amount due within one year shown under current liabilities | (13,756,326) | (11,743,175) | ||
Amount due after one year | 117,652,746 | 99,456,124 | ||
The Group's bank and other borrowings are denominated in the following currencies set out below:
An analysis of borrowings by currency: | |||
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Denominated in RMB | 110,399,841 | 94,713,971 | |
Denominated in HKD | 20,270,204 | 15,747,535 | |
Denominated in USD | 739,027 | 737,793 | |
131,409,072 | 111,199,299 | ||
- During the current period, the Group obtained new bank loans amounting to RMB35,768,222,000 (six months ended June 30, 2018: RMB31,365,877,000) and repaid bank loans of RMB16,518,213,000 (six months ended June 30, 2018: RMB3,931,314,000).
The fixed rate bank borrowings at June 30, 2019 with carrying amount of RMB2,171,090,000 (at December 31, 2018: RMB3,411,442,000) carry interest ranging from 3.06% to 5.60% (at December 31, 2018: 3.06% to 5.60%) per annum. The remaining bank borrowings with carrying amount of RMB93,435,607,000 (at December 31, 2018: RMB73,088,158,000) carry interest at variable rates based on the interest rates quoted by the People's Bank of China, Hong Kong Interbank Offered Rate and London Interbank Offered Rate, the effective interest rate is ranging from 2.70% to 5.23% (at December 31, 2018: 2.63% to 5.23%) per annum at June 30, 2019, and exposing the Group to cash flow interest rate risk.
The above secured bank loans at the end of the reporting period were secured by the pledge of assets as set out in note 23.
31
- The Group's other borrowings comprised the followings as at June 30, 2019:
Term of | Effective | |||||
Name of bond | Par value | Coupon rate | Issue date | the bond | interest rate | |
RMB' 000 | ||||||
Domestic Corporate Bonds | ||||||
RMB domestic corporate bonds | 2,000,000 | 4.60% | July 7, 2015 | 5 years | 4.71% | |
of Chongqing Longhu | ||||||
Development | ||||||
("2015 First Tranche Bonds") | ||||||
RMB domestic corporate bonds | 346,701 | 3.93% | July 27, 2015 | 5 years | 4.02% | (Note a) |
of Chongqing Longhu | ||||||
Development | ||||||
("(i) form of 2015 Second | ||||||
Tranche Bonds") | ||||||
RMB domestic corporate bonds | 2,000,000 | 4.20% | July 27, 2015 | 7 years | 4.25% | (Note b) |
of Chongqing Longhu | ||||||
Development | ||||||
("(ii) form of 2015 Second | ||||||
Tranche Bonds") | ||||||
RMB domestic corporate bonds | 2,000,000 | 4.08% | November 2, | 7 years | 4.13% | (Note c) |
of Chongqing Longhu | 2015 | |||||
Development | ||||||
("2015 Third Tranche Bonds") | ||||||
RMB domestic corporate bonds | 2,051,996 | 3.30% | January 25, | 5 years | 3.41% | (Note d) |
of Chongqing Longhu | 2016 | |||||
Development | ||||||
("(i) form of 2016 First | ||||||
Tranche Bonds") | ||||||
RMB domestic corporate bonds | 1,800,000 | 3.68% | January 25, | 8 years | 3.73% | (Note e) |
of Chongqing Longhu | 2016 | |||||
Development | ||||||
("(ii) form of 2016 First | ||||||
Tranche Bonds") | ||||||
RMB domestic corporate bonds | 1,482,998 | 3.19% | March 4, 2016 | 6 years | 3.28% | (Note f) |
of Chongqing Longhu | ||||||
Development | ||||||
("(i) form of 2016 Second | ||||||
Tranche Bonds") | ||||||
RMB domestic corporate bonds | 1,500,000 | 3.75% | March 4, 2016 | 10 years | 3.78% | (Note g) |
of Chongqing Longhu |
Development
("(ii) form of 2016 Second Tranche Bonds")
32
Term of | Effective | |||||
Name of bond | Par value | Coupon rate | Issue date | the bond | interest rate | |
RMB' 000 | ||||||
RMB domestic corporate bonds | 700,000 | 3.06% | July 14, 2016 | 5 years | 3.17% | (Note h) |
of Chongqing Longhu | ||||||
Development | ||||||
("(i) form of 2016 Third | ||||||
Tranche Bonds") | ||||||
RMB domestic corporate bonds | 3,000,000 | 3.68% | July 14, 2016 | 7 years | 3.75% | (Note i) |
of Chongqing Longhu | ||||||
Development | ||||||
("(ii) form of 2016 Third | ||||||
Tranche Bonds") | ||||||
RMB domestic corporate bonds | 3,000,000 | 4.96% | August 2, 2018 | 5 years | 5.03% | (Note j) |
of Chongqing Longhu | ||||||
Development | ||||||
("2018 First Tranche Bonds") | ||||||
RMB domestic corporate bonds | 2,000,000 | 4.80% | November 6, | 5 years | 4.87% | (Note k) |
of Chongqing Longhu | 2018 | |||||
Development | ||||||
("2018 Second Tranche | ||||||
Bonds") | ||||||
RMB domestic corporate bonds | 1,700,000 | 3.99% | February 21, | 5 years | 4.08% | (Note l) |
of Chongqing Longhu | 2019 | |||||
Development | ||||||
("(i) form of 2019 | ||||||
First Tranche Bonds") | ||||||
RMB domestic corporate bonds | 500,000 | 4.70% | February 21, | 7 years | 4.77% | (Note m) |
of Chongqing Longhu | 2019 | |||||
Development | ||||||
("(ii) form of 2019 | ||||||
First Tranche Bonds") | ||||||
Green Bonds | ||||||
RMB green bonds of Chongqing | 1,600,000 | 4.40% | February 16, | 5 years | 4.49% | (Note n) |
Longhu Development | 2017 | |||||
("(i) form of 2017 First | ||||||
Tranche Green Bonds") | ||||||
RMB green bonds of Chongqing | 1,440,000 | 4.67% | February 16, | 7 years | 4.72% | (Note o) |
Longhu Development | 2017 | |||||
("(ii) form of 2017 First | ||||||
Tranche Green Bonds") | ||||||
RMB green bonds of Chongqing | 1,000,000 | 4.75% | March 6, 2017 | 7 years | 4.79% | (Note p) |
Longhu Development | ||||||
("2017 Second Tranche | ||||||
Green Bonds") |
33
Term of | Effective | |||||
Name of bond | Par value | Coupon rate | Issue date | the bond | interest rate | |
RMB' 000 | ||||||
Medium-term Notes | ||||||
RMB medium-term notes | 1,700,000 | 4.80% | July 21, 2017 | 3 years | 5.01% | |
of the Company | ||||||
("(i) form of 2017 First | ||||||
Medium-term Notes") | ||||||
RMB medium-term notes | 300,000 | 5.00% | July 21, 2017 | 5 years | 5.10% | |
of the Company | ||||||
("(ii) form of 2017 First | ||||||
Medium-term Notes") | ||||||
Rental Apartments Special | ||||||
Bonds | ||||||
RMB rental apartments special | 3,000,000 | 5.60% | March 21, 2018 | 5 years | 5.64% | (Note q) |
bonds of Chongqing | ||||||
Longhu Development | ||||||
("2018 First Tranche Rental | ||||||
Apartments Bonds") | ||||||
RMB rental apartments special | 2,000,000 | 4.98% | August 17, 2018 | 5 years | 5.04% | (Note r) |
bonds of Chongqing |
Longhu Development
("2018 Second Tranche Rental
Apartments Bonds")
Notes:
- Chongqing Longhu Development is entitled to adjust the coupon rate on June 27, 2018 and, the investors have the option to sell back the bonds on July 27, 2018 at par or hold until maturity. On July 27, 2018, the investors have sold back (i) form of 2015 second Tranche Bonds with principal amount of RMB1,653,299,000 at a redemption price equal to 100% of the principal amount to Chongqing Longhu Development.
- Chongqing Longhu Development is entitled to adjust the coupon rate on June 27, 2020 and, the investors have the option to sell back the bonds on July 27, 2020 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on October 2, 2020 and, the investors have the option to sell back the bonds on November 2, 2020 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on December 25, 2018 and, the investors have the option to sell back the bonds on January 25, 2019 at par or hold until maturity. On January 25, 2019, the investors have sold back (i) form of 2016 First Tranche Bonds with principal amount of RMB248,004,000 at a redemption price equal to 100% of the principal amount to Chongqing Longhu Development.
- Chongqing Longhu Development is entitled to adjust the coupon rate on December 25, 2020 and, the investors have the option to sell back the bonds on January 25, 2021 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on February 4, 2019 and, the investors have the option to sell back the bonds on March 4, 2019 at par or hold until maturity. The investors have sold back (i) form of 2016 Second Tranche Bonds with principal amount of RMB1,017,002,000 at a redemption price equal to 100% of the principal amount to Chongqing Longhu Development.
34
- Chongqing Longhu Development is entitled to adjust the coupon rate on February 4, 2021 and, the investors have the option to sell back the bonds on March 4, 2021 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on June 14, 2019 and, the investors have the option to sell back the bonds on July 14, 2019 at par or hold until maturity. On July 14, 2019, the investors have sold back (ii) form of 2016 Second Tranche Bonds with principal amount of RMB230,000,000 at a redemption price equal to 100.00% of the principal amount to Chongqing Longhu Development.
- Chongqing Longhu Development is entitled to adjust the coupon rate on June 14, 2021 and, the investors have the option to sell back the bonds on July 14, 2021 at par or hold until maturity.
- Chongqing Longhu Developments is entitled to adjust the coupon rate on July 2, 2021 and, the investors have the option to sell back the bonds on August 2, 2021 at par or hold until maturity.
- Chongqing Longhu Developments is entitled to adjust the coupon rate on October 6, 2021 and, the investors have the option to sell back the bonds on November 6, 2021 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on January 21, 2022 and, the investors have the opinion to sell back the bonds on February 21, 2022 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on January 21, 2024 and, the investors have the option to sell back the bonds on February 21, 2024 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on January 16, 2020 and, the investors have the option to sell back the bonds February 16, 2020 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on January 16, 2022 and, the investors have the option to sell back the bonds on February 16, 2022 at par or hold until maturity.
- Chongqing Longhu Development is entitled to adjust the coupon rate on February 6, 2022 and, the investors have the option to sell back the bonds on March 6, 2022 at par or hold until maturity.
- Chongqing Longhu Developments is entitled to adjust the coupon rate on February 21, 2021 and, the investors have the option to sell back the bonds on March 21, 2021 at par or hold until maturity.
- Chongqing Longhu Developments is entitled to adjust the coupon rate on July 17, 2021 and, the investors have the option to sell back the bonds on August 17, 2021 at par or hold until maturity.
The 2015 Second Tranche Bonds, 2015 Third Tranche Bonds, 2016 First Tranche Bonds, 2016 Second Tranche Bonds, 2016 Third Tranche Bonds, 2017 First Tranche Green Bonds, 2017 Second Tranche Green Bonds, 2018 First Tranche Bonds, 2018 Second Tranche Bonds, 2018 First Tranche Rental Apartments Bonds, 2018 Second Tranche Rental Apartments Bonds and 2019 First Tranche Bonds contain a liability component and early redemption options:
- Liability component represents the contractually determined stream of future cash flows discounted at the rate of interest determined by the market instruments of comparable credit status taken into account the business risk and financial risk of the Company.
- As at June 30, 2019, the fair value of put options of RMB148,245,000 (at December 31, 2018: RMB390,672,000) have been recognised in the condensed statement of financial position, of which, fair value gain of RMB219,623,000 (at December 31, 2018: loss of RMB310,350,000) was recognised for the six months ended June 30, 2019.
35
Fair Value as at
June 30, December 31,
2019 2018
RMB' 000 RMB' 000
(unaudited) (audited)
Non-current liabilities | 146,683 | 221,728 | |
Current liabilities | 1,562 | 168,944 | |
148,245 | 390,672 | ||
The Domestic Corporate Bonds and the Rental Apartments Special Bonds are non-guaranteed and listed on the Shanghai Stock Exchange.
The Green Bonds are non-guaranteed and listed on the China Central Depository & Clearing Co., Ltd..
The Medium-term notes are non-guaranteed and listed on the National Association of Financial Market Institutional Investors.
The fair value of the Domestic Corporate Bonds, the Green Bonds, the Medium-term Notes and the Rental Apartment Special Bonds, with reference to the quoted market price available on the Shanghai Stock Exchange, China Central Depository & Clearing Co., Ltd. and the National Association of Financial Market Institutional Investors, are as follows:
At | At | |||
June 30, | December 31, | |||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (audited) | |||
2015 First Tranche Bonds | 2,018,000 | 2,001,660 | ||
(i) | form of 2015 Second Tranche Bonds | 351,520 | 357,349 | |
(ii) form of 2015 Second Tranche Bonds | 2,087,700 | 2,027,933 | ||
2015 Third Tranche Bonds | 2,058,946 | 2,001,373 | ||
(i) | form of 2016 First Tranche Bonds | 2,069,438 | 2,370,840 | |
(ii) form of 2016 First Tranche Bonds | 1,823,120 | 1,825,824 | ||
(i) | form of 2016 Second Tranche Bonds | 1,492,786 | 2,558,294 | |
(ii) | form of 2016 Second Tranche Bonds | 1,480,625 | 1,508,906 | |
(i) | form of 2016 Third Tranche Bonds | 721,637 | 688,937 | |
(ii) | form of 2016 Third Tranche Bonds | 3,088,106 | 2,034,667 | |
2018 First Tranche Bonds | 3,178,473 | 3,105,087 | ||
2018 Second Tranche Bonds | 2,098,800 | 2,067,073 | ||
(i) | form of 2019 First Tranche Bonds | 1,718,865 | - | |
(ii) | from of 2019 First Tranche Bonds | 505,170 | - | |
(i) | form of 2017 First Tranche Green Bonds | 1,626,204 | 1,661,600 | |
(ii) form of 2017 First Tranche Green Bonds | 1,465,031 | 1,498,842 | ||
2018 Second Tranche Green Bonds | 1,020,041 | 1,042,724 | ||
(i) | form of 2017 First Medium-term Notes | 1,719,142 | 1,707,548 | |
(ii) form of 2017 First Medium-term Notes | 306,408 | 307,686 | ||
2018 First Tranche of Rental Apartments Special Bonds | 3,124,505 | 3,197,867 | ||
2018 Second Tranche of Rental Apartments Special Bonds | 2,116,596 | 2,067,073 | ||
36
17. SENIOR NOTES
At | At | |||
June 30, | December 31, | |||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (audited) | |||
Senior notes | ||||
- 2022 | USD senior notes issued in 2017 (Note a) | 3,119,141 | 3,109,900 | |
- 2023 | USD senior notes issued in 2018 (Note b) | 2,081,873 | 2,076,578 | |
- 2028 | USD senior notes issued in 2018 (Note c) | 3,440,751 | 3,434,145 | |
8,641,765 | 8,620,623 | |||
Analysis | ||||
Non-current liabilities | 8,641,765 | 8,620,623 | ||
- On July 13, 2017, the Company issued senior fixed rate notes to the public at 99.425% of the aggregate principal amount of USD450,000,000 (approximately RMB3,048,000,000) (the "2022 USD Notes") which carry fixed interest of 3.875% per annum (interest payable semi-annually in arrears) and will be fully repayable by July 13, 2022.
The 2022 USD Notes are listed on the Singapore Exchange Securities Trading Limited. They are senior obligations of the Company.
At any time, the Company may at its option redeem the 2022 USD Notes, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount of the 2022 USD Notes to be redeemed plus accrued and unpaid interest on the 2022 USD Notes to be redeemed, if any, to the date of redemption and (2) the Make Whole Price.
At any time on or after the date when the 2022 USD Notes of no more than 10% of the aggregate principal amount (1) originally issued on July 13, 2017 and (2) issued on July 13, 2017 of any Additional Notes permitted under "Further Issues" remain outstanding, the Company may at its option redeem the remaining outstanding 2022 USD Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of such 2022 USD Notes plus accrued and unpaid interest, if any, to (but not including) the redemption date.
"Make Whole Price" means with respect to 2022 USD Notes at any redemption date, the sum of (1) the present value of the principal amount of such 2022 USD Notes, assuming a scheduled repayment thereof on the maturity date, plus (2) the present value of the remaining scheduled payments of interest to and including the maturity date, in each case discounted to the redemption date at the Treasury Rate plus 50 basis points.
In the opinion of the directors, the fair value of the early redemption options is insignificant at initial recognition and the end of the reporting period.
Upon the occurrence of a change of control triggering event, the Company must make an offer to repurchase all outstanding 2022 USD Notes at a price in cash equal to 101% of their principal amount plus accrued and unpaid interest, if any, to (but excluding) the repurchase date.
The net carrying amount of the 2022 USD Notes is stated net of unamortised issue expenses totalling USD4,198,000 (approximately RMB28,859,000) as at June 30, 2019 (2018: USD4,897,000 (approximately RMB32,685,000)) and the effective interest rate of the 2022 USD Notes is 4.21% per annum.
37
- On January 16, 2018, the Company issued senior fixed rate notes to the public at 99.699% of the aggregate principal amount of USD300,000,000 (approximately RMB1,932,831,000) (the "2023 USD Notes") which carry fixed interest of 3.90% per annum (interest payable semi-annually in arrears) and will be fully repayable by April 16, 2023.
The 2023 USD Notes are listed on the Singapore Exchange Securities Trading Limited. They are senior obligations of the Company.
At any time, the Company may at its option redeem each series of the 2023 USD Notes, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount of such series of the 2023 USD Notes to be redeemed plus accrued and unpaid interest on such series of the 2023 USD Notes to be redeemed, if any, to the date of redemption and (2) the Make Whole Price.
At any time on or after the date when 2023 USD Notes of no more than 10% of the aggregate principal amount (1) originally issued on January 16, 2018 and (2) issued on January 18, 2018 of any Additional Notes permitted under "Further Issues" remain outstanding, the Company may as its opinion redeem the remaining outstanding 2023 USD Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of 2023 USD Notes plus accrued and unpaid interest, if any, to (but not including) the redemption date.
"Make Whole Price" means, with respect to the 2023 USD Notes at any redemption date, the sum of (1) the present value of the principal amount of such 2023 USD Notes, assuming a scheduled repayment thereof on the maturity date, plus (2) the present value of the remaining scheduled payments of interest to and including the maturity date, in each case discounted to the redemption date at the Treasury Rate plus 50 basis points.
In the opinion of the directors, the fair value of the early redemption options is insignificant at initial recognition and the end of the reporting period.
Upon the occurrence of a change of control triggering event, the Company must make an offer to repurchase all outstanding 2023 USD Notes at a price in cash equal to 101% of their principal amount plus accrued and unpaid interest, if any, to (but excluding) the repurchase date.
The net carrying amount of the 2023 USD Notes is stated net of unamortised issue expenses totalling USD2,540,000 (approximately RMB17,461,000) (2018: USD2,870,000 (approximately RMB19,698,000)) as at June 30, 2019 and the effective interest rate of the 2023 USD Notes is 4.14% per annum.- On January 16, 2018, the Company issued senior fixed rate notes to the public at 99.793% of the aggregate principal amount of USD500,000,000 (approximately RMB3,221,385,000) (the "2028 USD Notes") which carry fixed interest of 4.50% per annum (interest payable semi-annually in arrears) and will be fully repayable by January 16, 2028.
The 2028 USD Notes are listed on the Singapore Exchange Securities Trading Limited. They are senior obligations of the Company.
At any time, the Company may at its option redeem each series of the 2028 USD Notes, in whole or in part, at a redemption price equal to the greater of (1) 100% of the principal amount of such series of the 2028 USD Notes to be redeemed plus accrued and unpaid interest on such series of the 2028 USD Notes to be redeemed, if any, to the date of redemption and (2) the Make Whole Price.
At any time on or after the date when 2028 USD Notes of no more than 10% of the aggregate principal amount (1) originally issued on January 16, 2018 and (2) issued on January 18, 2018 of any Additional Notes permitted under "Further Issues" remain outstanding, the Company may as its opinion redeem the remaining outstanding 2028 USD updated Notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of 2028 USD Notes plus accrued and unpaid interest, if any, to (but not including) the redemption date.
"Make Whole Price" means, with respect to the 2028 USD Notes at any redemption date, the sum of- the present value of the principal amount 2028 USD Note, assuming a scheduled repayment thereof on the maturity date, plus (2) the present value of the remaining scheduled payments of interest to and including the maturity date, in each case discounted to the redemption date at the Treasury Rate plus 50 basis points.
38
In the opinion of the directors, the fair value of the early redemption options is insignificant at initial recognition and the end of the reporting period.
Upon the occurrence of a change of control triggering event, the Company must make an offer to repurchase all outstanding 2028 USD Notes at a price in cash equal to 101% of their principal amount plus accrued and unpaid interest, if any, to (but excluding) the repurchase date.
The net carrying amount of the 2028 USD Notes is stated net of unamortised issue expenses totalling USD4,362,000 (approximately RMB29,987,000) (2018: USD4,614,000 (approximately RMB31,661,000)) as at June 30, 2019 and the effective interest rate of the 2028 USD Notes is 4.62% per annum.
The fair value of the 2022 USD senior notes issued in 2017, 2023 USD senior notes issued in 2018, and 2028 USD senior notes issued in 2018 with reference to the quoted market price available on the Singapore Exchange Securities Trading Limited are as follows:
Fair Value as at | |||
June 30, | December 31, | ||
Senior Notes | 2019 | 2018 | |
RMB' 000 | RMB' 000 | ||
2022 USD senior notes issued in 2017 | 3,145,619 | 2,949,090 | |
2023 USD senior notes issued in 2018 | 2,101,988 | 1,956,012 | |
2028 USD senior notes issued in 2018 | 3,488,945 | 2,984,874 | |
18. DERIVATIVE FINANCIAL INSTRUMENTS | |||
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Derivative financial assets (under hedge accounting) | |||
Cash flow hedges | |||
- Cross currency interest rate swaps | 483,480 | 313,611 | |
- Foreign currency forward contracts | 12,846 | - | |
496,326 | 313,611 | ||
Analysis as: | |||
Non-current assets | 429,021 | 313,611 | |
Current assets | 67,305 | - | |
496,326 | 313,611 | ||
Derivative financial liabilities (under hedge accounting) | |||
Cash flow hedges | |||
- Cross currency interest rate swaps | 13,300 | 62,568 | |
- Foreign currency forward contracts | 58,582 | 114,197 | |
71,882 | 176,765 | ||
Analysis as: | |||
Non-current liabilities | 71,882 | 176,765 | |
39
Cross currency interest rate swaps and foreign currency forward contracts
At the end of the reporting period, the Group had cross currency interest rate swaps designated as highly effective hedging instruments in order to minimise its exposures to foreign currency and cash flow interest rate risk on its floating-rate HKD bank borrowings and fixed rate USD senior notes and corresponding interest payment by swapping a portion of those borrowings and senior notes and corresponding interest payment from HKD and USD to RMB and floating-rate interest payments to fixed rate interest payments.
At the end of the reporting period, the Group had foreign currency forward contracts designated as effective hedging instruments in order to minimise its exposures to foreign currency risk on its HKD bank borrowings by selling RMB in exchange for HKD at the borrowings maturity date.
The terms of the cross currency interest rate contracts and foreign currency forward contracts have been negotiated to match the terms of the respective designated hedged items and the directors consider that the cross currency interest rate swaps and foreign currency forward contracts are effective hedging instruments. The major terms of these contracts are as follows:
Cross currency interest rate swaps:
Notional amount | Maturity | Exchange rates | Interest rate swap |
Buy HKD310,000,000 | 28/04/2020 | RMB1: HKD1.1997 From HIBOR + 3.1% to fixed rate | |
(2018: Buy HKD310,000,000) | of 6.47% | ||
Buy HKD310,000,000 | 28/04/2020 | RMB1: HKD1.1998 From HIBOR + 3.1% to fixed rate | |
(2018: Buy HKD310,000,000) | of 6.47% | ||
Buy HKD387,500,000 | 28/04/2020 | RMB1: HKD1.2081 From HIBOR + 3.1% to fixed rate | |
(2018: Buy HKD387,500,000) | of 6.33% | ||
Buy HKD500,000,000 | 28/04/2020 | RMB1: HKD1.2065 From HIBOR + 3.1% to fixed rate | |
(2018: Buy HKD500,000,000) | of 6.25% | ||
Buy USD70,000,000 | 29/01/2023 | RMB1: USD0.1595 | From fixed rate of 3.9% to fixed |
(2018: Buy USD70,000,000) | rate of 4.17% | ||
Buy USD175,000,000 | 16/04/2023 | RMB1: USD0.1582 | From fixed rate of 3.9% to fixed |
(2018: Buy USD175,000,000) | rate of 3.65% | ||
Buy USD30,000,000 | 16/01/2028 | RMB1: USD0.1583 | From fixed rate of 4.5% to fixed |
(2018: Buy USD30,000,000) | rate of 5.5% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.1593 | From fixed rate of 4.5% to fixed |
(2018: Buy USD20,000,000) | rate of 5.5% | ||
Buy USD50,000,000 | 16/01/2028 | RMB1: USD0.1596 | From fixed rate of 4.5% to fixed |
(2018: Buy USD50,000,000) | rate of 5.5% | ||
Buy USD30,000,000 | 16/01/2028 | RMB1: USD0.1516 | From fixed rate of 4.5% to fixed |
(2018: Buy USD30,000,000) | rate of 5.5% | ||
Buy USD55,000,000 | 16/04/2023 | RMB1: USD0.1512 | From fixed rate of 3.9% to fixed |
(2018: Buy USD55,000,000) | rate of 4.9% | ||
Buy USD50,000,000 | 13/07/2022 | RMB1: USD0.1511 | From fixed rate of 3.875% to fixed |
(2018: Buy USD50,000,000) | rate of 4.875% | ||
Buy USD30,000,000 | 16/01/2028 | RMB1: USD0.1511 | From fixed rate of 4.5% to fixed |
(2018: Buy USD30,000,000) | rate of 5.5% | ||
Buy USD50,000,000 | 13/07/2022 | RMB1: USD0.1502 | From fixed rate of 3.875% to fixed |
(2018: Buy USD50,000,000) | rate of 4.8% | ||
Buy USD50,000,000 | 13/07/2022 | RMB1: USD0.1507 | From fixed rate of 3.875% to fixed |
(2018: Buy USD50,000,000) | rate of 4.8% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.1471 | From fixed rate of 4.5% to fixed |
(2018: Buy USD20,000,000) | rate of 5.44% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.1478 | From fixed rate of 4.5% to fixed |
(2018: Buy USD20,000,000) | rate of 5.44% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.147 | From fixed rate of 4.5% to fixed |
(2018: Buy USD20,000,000) | rate of 5.37% | ||
Buy USD50,000,000 | 13/07/2022 | RMB1: USD0.1594 | From fixed rate of 3.875% to fixed |
(2018: Buy USD50,000,000) | rate of 4.875% |
40
Notional amount | Maturity | Exchange rates | Interest rate swap |
Buy USD50,000,000 | 13/07/2022 | RMB1: USD0.1511 | From fixed rate of 3.875% to fixed |
(2018: Buy USD50,000,000) | rate of 4.875% | ||
Buy USD50,000,000 | 13/07/2022 | RMB1: USD0.1511 | From fixed rate of 3.875% to fixed |
(2018: Buy USD50,000,000) | rate of 4.875% | ||
Buy USD50,000,000 | 13/07/2022 | RMB1: USD0.1512 | From fixed rate of 3.875% to fixed |
(2018: Buy USD50,000,000) | rate of 4.85% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.1474 | From fixed rate of 4.5% to fixed |
(2018: Buy USD20,000,000) | rate of 5.48% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.147 | From fixed rate of 4.5% to fixed |
(2018: Buy USD20,000,000) | rate of 5.48% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.1467 | From fixed rate of 4.5% to fixed |
(2018: Buy USD20,000,000) | rate of 5.38% | ||
Buy USD30,000,000 | 16/01/2028 | RMB1: USD0.144 | From fixed rate of 4.5% to fixed |
(2018: Buy USD30,000,000) | rate of 5.55% | ||
Buy USD30,000,000 | 16/01/2028 | RMB1: USD0.145 | From fixed rate of 4.5% to fixed |
(2018: Buy USD30,000,000) | rate of 5.55% | ||
Buy USD30,000,000 | 13/01/2022 | RMB1: USD0.1506 | From fixed rate of 3.875% to fixed |
(2018: Buy USD30,000,000) | rate of 4.805% | ||
Buy USD30,000,000 | 13/01/2022 | RMB1: USD0.1505 | From fixed rate of 3.875% to fixed |
(2018: Buy USD30,000,000) | rate of 4.805% | ||
Buy USD40,000,000 | 13/07/2022 | RMB1: USD0.1461 | From fixed rate of 3.875% to fixed |
(2018: Buy USD40,000,000) | rate of 4.55% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.1489 | From fixed rate of 4.5% to fixed |
(2018: nil) | rate of 5.37% | ||
Buy USD20,000,000 | 16/01/2028 | RMB1: USD0.1476 | From fixed rate of 4.5% to fixed |
(2018: nil) | rate of 5.35% | ||
Foreign currency forward contracts: | |||
Buy | Sell | Maturity | |
HKD500,000,000 | RMB458,150,000 | 25/01/2023 | |
HKD500,000,000 | RMB456,500,000 | 25/01/2023 | |
HKD500,000,000 | RMB457,899,987 | 25/01/2023 | |
HKD300,000,000 | RMB277,770,000 | 25/01/2023 | |
HKD300,000,000 | RMB275,730,000 | 25/01/2023 | |
HKD300,000,000 | RMB277,500,000 | 25/01/2023 | |
HKD300,000,000 | RMB279,090,000 | 25/01/2023 | |
HKD200,000,000 | RMB185,400,000 | 25/01/2023 | |
HKD300,000,000 | RMB277,740,000 | 25/01/2023 | |
HKD150,000,000 | RMB137,475,000 | 25/01/2023 | |
HKD200,000,000 | RMB177,460,000 | 25/01/2023 | |
HKD100,000,000 | RMB92,150,000 | 25/01/2023 | |
HKD300,000,000 | RMB280,140,000 | 25/01/2023 | |
HKD300,000,000 | RMB278,940,000 | 25/01/2023 | |
HKD300,000,000 | RMB278,040,000 | 25/01/2023 | |
HKD100,000,000 | RMB91,220,000 | 25/01/2023 | |
HKD200,000,000 | RMB181,800,000 | 25/01/2023 | |
HKD100,000,000 | RMB91,500,000 | 25/01/2023 | |
HKD300,000,000 | RMB276,750,000 | 26/01/2023 | |
HKD300,000,000 | RMB280,350,000 | 26/01/2023 | |
HKD300,000,000 | RMB280,350,000 | 26/01/2023 | |
HKD200,000,000 | RMB186,940,000 | 26/01/2023 | |
HKD100,000,000 | RMB91,800,000 | 26/01/2023 | |
HKD100,000,000 | RMB92,400,000 | 26/01/2023 | |
HKD100,000,000 | RMB92,200,000 | 26/01/2023 | |
HKD100,000,000 | RMB91,800,000 | 26/01/2023 | |
HKD100,000,000 | RMB91,500,000 | 26/01/2023 |
41
Buy | Sell | Maturity |
HKD100,000,000 | RMB92,250,000 | 02/01/2024 |
HKD300,000,000 | RMB278,100,000 | 25/01/2023 |
HKD150,000,000 | RMB137,775,000 | 25/01/2023 |
HKD200,000,000 | RMB182,440,000 | 25/01/2023 |
HKD100,000,000 | RMB91,800,000 | 25/01/2023 |
HKD100,000,000 | RMB92,400,000 | 25/01/2023 |
HKD500,000,000 | RMB458,800,000 | 25/01/2023 |
HKD100,000,000 | RMB89,500,000 | 25/01/2023 |
HKD200,000,000 | RMB179,000,000 | 25/01/2023 |
HKD300,000,000 | RMB275,130,000 | 25/01/2023 |
HKD300,000,000 | RMB276,300,000 | 25/01/2023 |
All of the above cross currency interest rate swaps and foreign currency forward contract are designated and effective as cash flow hedges. The fair values gain of the above cross currency interest rate swap contracts totalling RMB287,598,000 during the period ended June 30, 2019 (for the year ended December 31, 2018: gain of RMB136,846,000) have been recognised in other comprehensive income and accumulated in equity. The fair value gain of the hedging instruments amounting to RMB99,097,000 during the period ended June 30, 2019 (for the year ended December 31, 2018: gain of RMB648,760,000) were reclassified from hedging reserve to profit and loss in the same period.
19. SHARE CAPITAL | |||
Number of ordinary | |||
shares of par value | Nominal value | ||
HK$0.10 each | HK$' 000 | ||
Authorised | |||
At January 1, 2018 and June 30, 2018 | 10,000,000,000 | 1,000,000 | |
Issued and fully paid | |||
At January 1, 2018 | 5,907,604,605 | 590,760 | |
Issue of shares upon exercise of share options | 22,732,500 | 2,273 | |
At June 30, 2018 | 5,930,337,105 | 593,033 | |
Shown in the condensed consolidated financial statements | |||
At June 30, 2018 | RMB' 000 equivalent | 516,066 | |
Authorised | |||
At January 1, 2019 and June 30, 2019 | 10,000,000,000 | 1,000,000 | |
Issued and fully paid | |||
At January 1, 2019 | 5,938,471,605 | 593,847 | |
Issue of shares upon exercise of share options (Note) | 20,799,500 | 2,080 | |
At June 30, 2019 | 5,959,271,105 | 595,927 | |
Shown in the condensed consolidated financial statements | |||
At June 30, 2019 | RMB' 000 equivalent | 518,584 | |
RMB' 000 equivalent | |||
At December 31, 2018 | 516,783 | ||
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Note:
During the six months ended June 30, 2019, the Company issued 20,799,500 (2018: 22,732,500) ordinary shares of HK$0.10 each upon exercise of share options. The exercise price of the share options during the period range from HK$8.28 to HK$12.528 (equivalent to RMB7.27 to RMB11.00) (2018: HK$8.28 to HK$12.528 (equivalent to RMB6.98 to RMB10.56)). The new ordinary shares rank pari passu with the then existing shares in all respects.
20. ACQUISITION OF ASSETS AND LIABILITIES THROUGH ACQUISITION OF SUBSIDIARIES During the six months ended June 30, 2019, the Group acquired the interests in the following entities:
Equity | |||
Place of | interests | ||
incorporation/ | acquired by | Total | |
Name of subsidiary | establishment | the Group | consideration |
RMB' 000 | |||
Wuhan Yuanboyuan Real Estate Co. Ltd. | |||
("Wuhan Yuanboyuan") | PRC | 60% (Note a) | NIL |
Fuzhou Shengjia Properties Development Co. Ltd. | PRC | 37% (Note b) | 18,500 |
Wuhan Chenmingzhongli Real Estate Co. Ltd. | PRC | 60% | 6,000 |
Hangzhou Binzhe Management Co. Ltd. | PRC | 34% (Note b) | 286,200 |
Shenzhen Chuangzhen Management Co. Ltd. | PRC | 30% (Note c) | 621,718 |
Beijing Kaiyuanhean Investment Co. Ltd. | PRC | 51% | 598,158 |
Notes: |
- During the six months ended June 30, 2019, pursuant to a revised shareholders' agreement of Wuhan Yuanboyuan, which was previously accounted for as a joint venture of the Group, entered into between the Group and its joint venture partner, the Group has obtained control of voting power to govern the relevant activities of the entity. Unanimous consent from the shareholders of this entity was required for relevant activities before signing of revised shareholders' agreement. After signing of the revised shareholders' agreement, relevant activities of the entity are decided by the shareholders' meeting and consent with simple majority is required from the shareholders' meeting. The Group has 60% voting power in the shareholders' meeting, the Group is able to exercise control of the entity and thus it is regarded as a subsidiary of the Group.
- The relevant activities of the entity require consent with more than half of the directors in the board of directors of the entity. The Group has the power to appoint three out of five directors in the board of directors of the entity and as such, the Group is able to exercise control of the entity and thus it is regarded as a subsidiary of the Group.
- The relevant activities of the entity require consent with more than half of the directors in the board of directors of the entity. The Group has the power to appoint two out of three directors in the board of directors of the entity and as such, the Group is able to exercise control of the entity and thus it is regarded as a subsidiary of the Group.
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Assets acquired and liabilities recognised in these transactions at the date of acquisition are as follows:
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
Investment property | 2,751,777 | - | ||
Property, plant and equipment | 3,118 | 40,970 | ||
Properties held for development | 1,619,154 | 4,019,553 | ||
Properties under development for sales | 6,394,663 | 3,366,593 | ||
Amounts due from the Group | 158,235 | - | ||
Amounts due from non-controlling interests | 350,000 | - | ||
Accounts and other receivables, deposits and prepayments | 247,867 | 580,092 | ||
Taxation recoverable | - | 6,400 | ||
Deferred taxation assets | - | 34 | ||
Bank balances and cash | 126,043 | 79,874 | ||
Accounts and bills payables, deposits received and accrued charges | (1,367,508) | (740,485) | ||
Amounts due to ex-shareholders assigned to the Group | - | (3,551,985) | ||
Amounts due to the Group | (1,538,078) | (6,180) | ||
Amounts due to non-controlling interests | (3,187,620) | (1,235,747) | ||
5,557,651 | 2,559,119 | |||
Less: Non-controlling interests | (2,869,269) | (537,209) | ||
2,688,382 | 2,021,910 | |||
Consideration satisfied by: | ||||
Cash | 1,530,576 | 2,074,997 | ||
Consideration payable | - | 493,650 | ||
Consideration payable to non-controlling interests | - | 2,995,341 | ||
Interest in joint venture | 1,157,806 | 9,907 | ||
2,688,382 | 5,573,895 | |||
Less: Loans assignment | - | (3,551,985) | ||
Consideration for acquiring the equity interest in the subsidiaries | 2,688,382 | 2,021,910 | ||
Net cash outflow: | ||||
Cash paid | (1,530,576) | (2,074,997) | ||
Less: Cash and cash equivalent balances acquired | 126,043 | 79,874 | ||
(1,404,533) | (1,995,123) | |||
In the opinion of directors, the acquisition of these entities do not constitute businesses. Therefore, the transactions were determined by the directors of the Company to be acquisition of assets and liabilities rather than a business combination as defined in IFRS 3 (Revised) Business Combinations.
21. DISPOSAL OF PARTIAL INTEREST IN SUBSIDIARIES NOT RESULTING IN LOSING OF CONTROL
During the six months ended June 30, 2019, the Group disposed of its 35% equity interest in Ningbo Jinjun Properties Information Consulting Co. Ltd. ("Ningbo Jinjun"), which is wholly-owned subsidiary of the Company, to independent third party at considerations of RMB89,950,000, respectively. The difference between the consideration received and the net asset values disposed of are considered insignificant.
44
Subsequent to the disposal, the remaining 65% equity interest of Ningbo Jinjun is still held by the Group. In the opinion of the directors, the Group has sufficiently dominant voting interest to direct the relevant activities of the Company and therefore the Group has control over it. Accordingly, the entity remained as subsidiary of the Group and the disposal have been accounted for as equity transactions.
22. DEEMED DISPOSAL OF PARTIAL INTERESTS IN SUBSIDIARIES NOT RESULTING IN LOSING OF CONTROL
During the period ended June 30, 2019, the Group deemed partial disposed the interest in the following entities:
Equity interest | Equity interest | ||||
held by | held by | Capital | |||
the Group | the Group | Increased | injection from | ||
Place of | before deemed | after deemed | in paid up | independent | |
Name of subsidiary | incorporation | disposal | disposal | capital | third parties |
RMB' 000 | RMB' 000 | ||||
Jiaxing Zhenyue Real Estate | |||||
Consultancy Co., Ltd. | PRC | 100% | 51% | 700,000 | 343,000 |
Guangzhou Xuanliang | 25.1% | ||||
Development Ltd. | PRC | 100% | (Note a) | 270,000 | 202,230 |
During the period ended June 30, 2018, the Group deemed partial disposed the interest in the following entities:
Equity interest | Equity interest | ||||
held by | held by | Capital | |||
the Group | the Group | Increased | injection from | ||
Place of | before deemed | after deemed | in paid up | independent | |
Name of subsidiary | incorporation | disposal | disposal | capital | third parties |
RMB' 000 | RMB' 000 | ||||
Fuzhou Chenrui Investment | |||||
Co., Ltd. | PRC | 100% | 60% | 10,000 | 4,000 |
Jinan Taihui Real Estate | 34% | ||||
Development Co., Ltd. | PRC | 100% | (Note b) | 1,280,000 | 844,800 |
Note: |
- The relevant activities of the entity require consent with more than half of the directors in the board of directors of the entity. The Group has the power to appoint four out of seven directors in the board of directors of the entity and as such, the Group is able to exercise control of the entity and thus it is regarded as a subsidiary of the Group.
- The relevant activities of the entity require consent with more than half of the directors in the board of directors of the entity. The Group has the power to appoint three out of five directors in the board of directors of the entity and as such, the Group is able to exercise control of the entity and thus it is regarded as a subsidiary of the Group.
In the opinion of the directors, the difference between the consideration received and the attributable net asset values deemed disposed of are considered insignificant for each of the deemed disposals above.
45
23. PLEDGE OF ASSETS
The following assets were pledged to secure certain banking facilities granted to the Group at the end of the reporting period:
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Investment properties | 29,406,362 | 26,768,840 | |
Prepaid lease payment | - | 329,657 | |
Inventories of properties | 97,644,055 | 83,591,945 | |
Pledged bank deposits | 133,954 | 180,529 | |
127,184,371 | 110,870,971 | ||
24. COMMITMENTS
At the end of the reporting period, the Group had the following commitments:
At | At | ||
June 30, | December 31, | ||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (audited) | ||
Contracted but not provided for in the condensed consolidated | |||
financial statements: | |||
- Expenditure in respect of projects classified as properties under | |||
development for sales and investment properties under development | 56,430,186 | 46,873,439 | |
- Expenditure in respect of acquisition of properties held for development | 6,118,964 | 8,092,178 | |
62,549,150 | 54,965,617 | ||
25. CONTINGENT LIABILITIES
The Group provided guarantees amounting to RMB9,534,882,000 (at December 31, 2018: RMB8,543,177,000) as at June 30, 2019 in respect of mortgage bank loans granted to purchasers of the Group's properties. In the opinion of the directors of the Company, the fair values of these financial guarantee contracts of the Group are insignificant at initial recognition and the directors of the Company consider that the possibility of the default of the parties involved is remote, accordingly, no value has been recognised at the inception of the guarantee contracts and at the end of the reporting period as at June 30, 2019 and December 31, 2018.
Guarantees are given to banks with respect to loans procured by the purchasers of the Group's properties. Such guarantees will be released by banks upon delivery of the properties to the purchasers and completion of the relevant mortgage properties registration.
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26. SHARE-BASED PAYMENT TRANSACTIONS
The Company's restricted share award scheme (the "Restricted Share Award Scheme") and Post-IPO share option scheme (the "Post-IPO Share Option Scheme") were adopted pursuant to resolutions passed on October 28, 2014 and December 23, 2009 respectively. The objective of the Restricted Share Award Scheme is to recognise and motivate the contribution of directors and employees of the Group, to provide incentives, to help the Group in retaining its existing employees and recruiting additional employees and to provide them with economic interests in attaining the long-term business objectives of the Group. The share award scheme allows the Group to make bonus payments to eligible persons by way of the Company's shares acquired by and held through an independent trustee until fulfillment of specified conditions before vesting.
On March 31, 2019, 26,790,000 shares of the Company were awarded to the directors and employees of the Group respectively under the Restricted Share Award Scheme. The share awards granted to directors and employees are to be vested in equal entitlement during each year of the vesting period, from 4 to 10 years. The first vesting date is April 1, 2020 respectively. The estimated fair value of the awards granted are RMB633,030,578 based on the market prices of the relevant shares at the grant dates.
The primary purpose of Pre-IPO Share Option Scheme and Post-IPO Share Option Scheme is to provide incentives to directors and eligible employees. The Pre-IPO Share Option Scheme and Post-IPO Share Option Scheme will expire in 10 years from the date of adoption.
The table below discloses movements of the Company's share awards and share options outstanding:
Number of | Number | ||||
share awards | of share | ||||
under Restricted | options under | ||||
Share Award | Post-IPO Share | ||||
Scheme | Option Scheme | ||||
Outstanding as at January 1, 2019 | 71,486,500 | 110,901,500 | |||
Granted during the period | 26,790,000 | - | |||
Exercised during the period | - | (20,799,500) | |||
Vested during the period | (8,731,250) | - | |||
Forfeiture during the period | (525,375) | - | |||
Outstanding as at June 30, 2019 | 89,019,875 | 90,102,000 | |||
The weighted average closing price of the Company's shares immediately before the dates on which the options were exercised was HK$26.33.
The Group recognised expenses of RMB134,255,000 and RMB4,748,000 for the six months ended June 30, 2019 (six months ended June 30, 2018: RMB94,497,000 and RMB10,545,000) respectively in relation to share awards and share options granted to the directors and employees of the Group. The shares awarded by the Company will be settled with the existing shares held by the trust. Accordingly, the respective amounts were credited to share award reserve. The expenses in relation to share options were credited to share option reserve.
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27. RELATED PARTY TRANSACTIONS/BALANCES Related Party Transactions
During the period, the Group entered into the following significant transactions with its related parties:
- Joint ventures
Six months ended June 30,
2019 2018
RMB' 000 RMB' 000
(unaudited) (unaudited)
Consultancy income | 71,096 | 182,959 | |
- Associates
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (unaudited) | |||
Consultancy income | 11,059 | 164,648 | ||
(c) | Key management | |||
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (unaudited) | |||
Sales of properties | 51,225 | 66,905 | ||
(d) | Related companies | |||
Six months ended June 30, | ||||
2019 | 2018 | |||
RMB' 000 | RMB' 000 | |||
(unaudited) | (unaudited) | |||
Property management income (Note) | 1,643 | 4,181 | ||
Administrative expenses (Note) | 13,733 | 3,509 | ||
Note: The related companies are controlled by Madam Wu Yujun, a director of the Company.
- The remuneration of directors and other members of key management during the period was as follows:
Six months ended June 30, | |||
2019 | 2018 | ||
RMB' 000 | RMB' 000 | ||
(unaudited) | (unaudited) | ||
Short-term benefits | 56,850 | 51,200 | |
Post-employment benefits | 259 | 239 | |
Share-based payment | 22,068 | 16,577 | |
79,177 | 68,016 | ||
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Related Party Balances
- Amounts due from non-controlling interests/associates/joint ventures
The amounts are denominated in RMB, except for an amount due from a joint venture of RMB2,072,548,000 is denominated in HKD, all of which are unsecured and interest-free. The amounts due from associates and joint ventures mainly represented the land costs paid on their behalf for properties held under development. In the opinion of the directors of the Group, the amounts are expected to be repaid within 12 months after the end of the reporting period and therefore classified as current asset.
- Amounts due to non-controlling interests/associates/joint ventures
The amounts are denominated in RMB which are unsecured, interest-free and repayable on demand.
28. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
Fair value of the Group's financial assets and liabilities that are measured at fair value on a recurring basis
Some of the Group's financial assets and liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and liabilities are determined (in particular, the valuation technique(s) and inputs used), as well as the level of the fair value hierarchy into which the fair value measurements are categorised (levels 1 to 3) based on the degree to which the inputs to the fair value measurements is observable.
- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active market for identical assets or liabilities;
- Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Fair value as at | ||||
June 30, | December 31, | Fair value | ||
Financial assets/(liabilities) | 2019 | 2018 | hierarchy | Valuation techniques and key inputs |
RMB'000 | RMB'000 | |||
Cross currency interest rate swaps and | Assets: 496,326 | Assets: 313,611 | Level 2 | Discounted cash flows. Future cash flows |
foreign currency forward contracts classified | Liabilities: (71,882) | Liabilities: (176,765) | are estimated based on forward exchange | |
as derivative financial instruments in the | rates and interest rates (from observable | |||
condensed consolidated statement of financial | forward exchange rates and yield curves | |||
position | at the end of the reporting period) and | |||
contracted forward rates and interest rates, | ||||
discounted at a rate that reflects the credit | ||||
risk of the Group or the counterparties, as | ||||
appropriate. | ||||
Early redemption option derivatives in relation | 148,245 | 390,672 | Level 2 | The fair value of early redemption options |
to the Domestic Corporate Bonds, Green Bonds | are determined by assessing the difference | |||
and Rental Apartments Special Bonds issued by | between the fair values of the bonds by | |||
the Group | quoted price and the pure bond value. | |||
Equity instruments designated as at FVTOCI | 895,141 | 734,265 | Level 3 | The fair value of equity instruments |
designated as at FVTOCI are determined | ||||
by recent transaction of the entity's own | ||||
securities. |
49
Except as detailed in the following table, the directors of the Company consider that the carrying amounts of financial liabilities recorded at amortised cost in the condensed consolidated financial statements approximate their fair values:
At June 30, 2019 | At December 31, 2018 | ||||||
Carrying | Carrying | ||||||
amount | Fair value | amount | Fair value | ||||
RMB' 000 | RMB' 000 | RMB' 000 | RMB' 000 | ||||
Financial liabilities | |||||||
Bonds, unsecured | 35,802,375 | 36,071,113 | 34,699,699 | 34,955,422 | |||
2022 USD Notes issued in 2017 | 3,119,141 | 3,145,619 | 3,109,900 | 2,949,090 | |||
2023 USD Notes issued in 2018 | 2,081,873 | 2,101,988 | 2,076,578 | 1,956,012 | |||
2028 USD Notes issued in 2018 | 3,440,751 | 3,488,945 | 3,434,145 | 2,984,874 | |||
29. EVENTS AFTER THE REPORTING PERIOD
-
On July 18, 2019, the Group through Chongqing Longhu Development, an indirectly wholly-owned subsidiary, issued the (i) form of 2019 first tranche of Rental Apartments Special Bonds of RMB500,000,000 with a coupon rate of 3.90% repayable in full by July 19, 2024. Chongqing Longhu Development is entitled to adjust the coupon rate on June 19, 2022, and after that, the investors have the option to sell back the bonds on July 19, 2022.
The proceeds from issuance of the Rental Apartment Special Bonds will be used for refinancing and in accordance with the approval obtained by Chongqing Longhu Development from the China Securities Regulatory Commission of the PRC on March 5, 2019. - On July 18, 2019, the Group through Chongqing Longhu Development, an indirectly wholly-owned subsidiary, issued the (ii) form of 2019 first tranche of Rental Apartments Special Bonds of RMB1,500,000,000 with a coupon rate of 4.67% repayable in full by July 19, 2026. Chongqing Longhu Development is entitled to adjust the coupon rate on June 19, 2024 and after that, the investors have the option to sell back the bonds on July 19, 2024.
The proceeds from issuance of Rental Apartments Special Bonds will be used for refinancing and in accordance with the approval that obtained by Chongqing Longhu Development from the China Securities Regulatory Commission of the PRC on March 5, 2019. - On July 14, 2019, the investors have sold back (ii) form of 2016 Second Tranche Bonds with principal amount of RMB230,000,000 at a redemption price equal to 100.00% of the principal amount to Chongqing Longhu Development.
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Longfor Properties Co. Ltd. published this content on 09 September 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 September 2019 00:01:04 UTC