COUNTRY GARDEN HOLDINGS COMPANY LIMITED 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 only and is not an offer to sell or the solicitation of an offer to buy securities and neither this announcement nor anything herein forms the basis for any contract or commitment whatsoever. This announcement is not an offer of securities for sale in the United States. Neither this announcement nor any copy hereof may be taken into or distributed in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Company and will contain detailed information about the Company and management, as well as financial statements. The Company does not intend to register any of the securities in the United States.
The communication of this announcement and any other document or materials relating to the issue of the senior notes offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the United Kingdom's Financial Services and Markets Act 2000, as amended. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Financial Promotion Order")), or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together being referred to as "Relevant Persons"). In the United Kingdom, the senior notes offered hereby are only available to, and any investment or investment activity to which this announcement relates will be engaged in only with, Relevant Persons. Any person in the United Kingdom that is not a Relevant Person should not act or rely on this announcement or any of its content.
COUNTRY GARDEN HOLDINGS COMPANY LIMITED
碧 桂 園 控 股 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 2007)
PROPOSED ISSUE OF US$ SENIOR NOTES
AND
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2019
1
THE PROPOSED NOTES ISSUE
Introduction
The Company proposes to conduct an international offering of the US$ Senior Notes to institutional investors.
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 30 June 2019 (the "Financial Statements"). To ensure equal dissemination of information to the shareholders of the Company, the Financial Statements is attached hereto. Further, the Company will provide certain professional investors with updated information about the Group which is stated below.
In connection with the Proposed Notes Issue, the Company has appointed Morgan Stanley, Goldman Sachs (Asia) L.L.C. and BNP PARIBAS as the joint global coordinators, joint lead managers and joint bookrunners in respect of the Proposed Notes Issue.
Terms of the Proposed Notes Issue, including the aggregate principal amount, the offer price and interest rate, will be determined through a book-building exercise. Upon finalisation of the terms of the US$ Senior Notes, Morgan Stanley, Goldman Sachs (Asia) L.L.C. and BNP PARIBAS as the joint global coordinators, joint lead managers and joint bookrunners, and the Company will enter into a Purchase Agreement and other ancillary documents.
The US$ Senior Notes will not be offered to the public in Hong Kong.
The US$ Senior Notes have not been and will not be registered under the U.S. Securities Act. The US$ Senior Notes will only be offered outside of the United States in offshore transactions in compliance with Regulation S under the U.S. Securities Act.
No PRIIPs key information document (KID) has been prepared as the US$ Senior Notes are not available to retail investors in the EEA.
Proposed use of proceeds
Completion of the Proposed Notes Issue is subject to market conditions and investor interest. If the US$ Senior Notes are issued, the Company intends to use the net proceeds of the Proposed Notes Issue for refinancing existing medium to long term offshore indebtedness, which will become due within one year.
Listing
Application will be made to the SGX-ST for the listing and quotation of the US$ Senior Notes on the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made or opinions expressed in this announcement. Approval in-principle for the listing and quotation of the US$ Senior Notes on the SGX-ST is not to be taken as an indication of the merits of the Company, the Subsidiary Guarantors, any other subsidiary or associated company of the Company, the US$ Senior Notes or the Subsidiary Guarantees.
2
ABOUT COUNTRY GARDEN
The Company is PRC's largest residential property developer that capitalizes on urbanization. With centralized management and standardization, the Group runs the businesses of property development, construction, interior decoration, property investment, and the development and management of hotels. The Group offers a broad range of products to cater for diverse demands, namely residential projects such as townhouses, condominiums, car parks and retail shop spaces. The Group also develops and manages hotels at some of its property projects with the aim of increasing the properties' value. The Group's other businesses are robotics and modern agriculture.
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 materialise. 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.
3
4
The following table sets forth the information of our top 100 projects with the highest contracted sales in the PRC as of June 30,
2019(1):
Completed property developments(2) | Properties under development(3) | Properties for future development(4) | ||||||||||||||||||||
Total | ||||||||||||||||||||||
Aggregate | Total | saleable | Actual/ | |||||||||||||||||||
saleable | Total | saleable | GFA | Total | Total | Estimated | Estimated | |||||||||||||||
GFA for | completed | GFA sold | pre-sold | saleable | saleable | pre-sale | GFA for | pre-sale | ||||||||||||||
Serial | City | entire | saleable | and | pending | Completion | GFA under | GFA pre- | commencement | Estimated | future | commencement | Estimated | |||||||||
number | Project | (District) | project | GFA | delivered | delivery | date | development | sold | date | completion date | development | date | completion date | ||||||||
sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | ||||||||||||||||
1 | Asian Games Town ( | ) | Guangzhou (Panyu) | 1,021,512 | 357,851 | 352,316 | 5,535 | 7/Jun/11 | 419,697 | 235,384 | 11/Jun/12 | 2nd Quarter, 2021 | 243,965 | 4th Quarter, 2019 | 4th Quarter, 2023 | |||||||
2 | Country Garden-Phoenix Bay ( | ) | Foshan (Shunde) | 1,445,119 | 310,462 | 272,306 | 23,547 | 7/Jan/19 | 737,320 | 374,709 | 22/Sep/17 | 2nd Quarter, 2021 | 397,337 | 4th Quarter, 2019 | 4th Quarter, 2023 | |||||||
3 | Country Garden Hill Lake City ( | ) | Qingyuan (Qingcheng) | 1,995,771 | 963,760 | 957,304 | 2,819 | 25/Dec/18 | 573,758 | 424,867 | 23/Nov/17 | 2nd Quarter, 2021 | 458,252 | 4th Quarter, 2019 | 4th Quarter, 2022 | |||||||
4 | Country Garden-Southwest Uptown ( | ) | Guiyang (Guanshanhu) | 1,256,690 | 5,047 | 5,047 | 30/Oct/17 | 633,729 | 446,520 | 23/Feb/18 | 2nd Quarter, 2021 | 617,913 | 3rd Quarter, 2019 | 4th Quarter, 2023 | ||||||||
5 | Country Garden-Phoenix City ( | ) | Zhenjiang (Jurong) | 6,628,310 | 3,254,852 | 3,190,630 | 42,492 | 27/Dec/18 | 860,967 | 299,807 | 13/Oct/17 | 4th Quarter, 2021 | 2,512,490 | 4th Quarter, 2019 | 4th Quarter, 2024 | |||||||
6 | Country Garden-Yunnan Image ( | ) | Kunming (Panlong) | 491,607 | 117,739 | 110,042 | 3,545 | 18/Apr/19 | 215,558 | 146,967 | 14/Sep/18 | 4th Quarter, 2020 | 158,310 | 4th Quarter, 2019 | 4th Quarter, 2021 | |||||||
7 | Country Garden-Future City ( | ) | Wenzhou (Jingkai) | 353,450 | 353,450 | 197,008 | 10/Jul/18 | 4th Quarter, 2020 | ||||||||||||||
8 | Country Garden-Golden Era ( | ) | Fuyang (Yingzhou) | 236,013 | 106,632 | 105,702 | 221 | 29/May/19 | 129,381 | 119,378 | 31/Oct/17 | 2nd Quarter, 2020 | ||||||||||
9 | Country Garden-Ten Miles Beach (including Diamond Sea & Weigang Bay) | Huizhou (Huidong) | 4,647,457 | 3,660,140 | 3,655,551 | 21/May/18 | 644,122 | 162,115 | 24/May/18 | 4th Quarter, 2021 | 343,195 | 1st Quarter, 2020 | 4th Quarter, 2022 | |||||||||
( | ) | |||||||||||||||||||||
10 | Country Garden-Longteng Shijia ( | ) | Kunming (Wuhua) | 277,236 | 277,236 | 151,115 | 6/Dec/18 | 4th Quarter, 2021 | ||||||||||||||
11 | Country Garden-Qindu Mansion ( | ) | Xianyang (Qindu) | 534,872 | 222,136 | 112,631 | 30/Jan/19 | 2nd Quarter, 2021 | 312,736 | 3rd Quarter, 2019 | 4th Quarter, 2022 | |||||||||||
12 | Country Garden-Phoenix City ( | ) | Xi'an (Weiyang) | 1,542,467 | 622,005 | 618,526 | 30/Jan/19 | 708,745 | 668,892 | 5/Nov/10 | 4th Quarter, 2020 | 211,717 | 4th Quarter, 2019 | 4th Quarter, 2021 | ||||||||
13 | Country Garden-North City Image ( | ) | Kunming (Panlong) | 497,333 | 191,028 | 157,044 | 17/Aug/18 | 3rd Quarter, 2021 | 306,305 | 4th Quarter, 2019 | 2nd Quarter, 2022 | |||||||||||
14 | Country Garden-Phoenix City ( | ) | Zhongshan (South District) | 765,691 | 119,909 | 76,278 | 17,944 | 29/Jun/18 | 263,961 | 60,938 | 29/Nov/18 | 4th Quarter, 2020 | 381,821 | 4th Quarter, 2019 | 2nd Quarter, 2022 | |||||||
15 | Guangzhou Foxconn Tech Town ( | ) | Guangzhou (Zengcheng) | 121,634 | 115,599 | 69,493 | 7/Sep/18 | 1st Quarter, 2021 | 6,035 | 4th Quarter, 2019 | 1st Quarter, 2021 | |||||||||||
16 | Country Garden-Huyue Tianjing ( | ) | Taizhou (Hailing) | 202,097 | 202,097 | 135,010 | 22/Jun/18 | 2nd Quarter, 2020 | ||||||||||||||
17 | Country Garden-Jade Jiangnan ( | ) | Hangzhou (Xiaoshan) | 36,600 | 36,600 | 31,786 | 21/Sep/18 | 1st Quarter, 2020 | ||||||||||||||
18 | Country Garden-Jin Tang ( | ) | Xi'an (Chanba) | 93,101 | 14,196 | 14,196 | 28/Aug/09 | 78,904 | 60,979 | 16/Nov/18 | 3rd Quarter, 2020 | |||||||||||
19 | Country Garden-Yuchuan Mansion ( | ) | Xining (Chengbei) | 409,205 | 210,948 | 142,667 | 25/Jul/18 | 4th Quarter, 2020 | 198,257 | 3rd Quarter, 2019 | 4th Quarter, 2021 | |||||||||||
20 | Shatian Country Garden ( | ) | Dongguan (Shatian) | 266,929 | 266,929 | 159,367 | 54,389 | 20/Aug/18 | ||||||||||||||
21 | Country Garden-Haichang Tianlan ( | ) | Tianjin (Binhai New District) | 319,135 | 127,466 | 125,452 | 145 | 14/May/19 | 176,846 | 162,270 | 27/Apr/18 | 4th Quarter, 2020 | 14,823 | 3rd Quarter, 2019 | 2nd Quarter, 2021 | |||||||
22 | Country Garden-Park Palace ( | ) | Huizhou (Dayawan) | 486,273 | 306,694 | 297,744 | 201 | 18/Jan/19 | 103,182 | 59,099 | 9/Nov/18 | 4th Quarter, 2020 | 76,398 | 4th Quarter, 2019 | 4th Quarter, 2023 | |||||||
23 | Country Garden-Guokong Tianyu ( | ) | Zhengzhou (Jinshui) | 76,768 | 76,768 | 43,937 | 27/Jun/18 | 1st Quarter, 2020 | ||||||||||||||
24 | Shaoguan Country Garden-Sun City ( | ) | Shaoguan (Xilian) | 3,212,372 | 1,709,884 | 1,707,949 | 1,073 | 25/Jan/19 | 288,682 | 163,034 | 8/May/17 | 3rd Quarter, 2020 | 1,213,806 | 3rd Quarter, 2019 | 4th Quarter, 2023 | |||||||
25 | Country Garden-Phoenix City ( | ) | Meizhou (Wuhua) | 984,762 | 408,136 | 318,051 | 22/May/18 | 4th Quarter, 2020 | 576,626 | 4th Quarter, 2019 | 4th Quarter, 2022 | |||||||||||
26 | Urumqi Country Garden ( | ) | Urumqi (Midong) | 378,762 | 245,700 | 166,872 | 11/Aug/18 | 4th Quarter, 2020 | 133,062 | 4th Quarter, 2019 | 2nd Quarter, 2021 | |||||||||||
27 | Country Garden-Longcheng Tianyue ( | ) | Zhengzhou (Zhongyuan) | 517,123 | 517,123 | 417,982 | 20/May/17 | 1st Quarter, 2021 | ||||||||||||||
28 | Lanzhou Country Garden ( | ) | Lanzhou (Chengguan) | 2,333,584 | 1,961,999 | 1,942,594 | 876 | 18/Jun/19 | 264,929 | 263,119 | 19/Oct/16 | 4th Quarter, 2019 | 106,657 | 4th Quarter, 2019 | 4th Quarter, 2020 | |||||||
29 | Country Garden-Peninsula 1 ( | ) | Qingyuan (Qingcheng) | 493,405 | 137,527 | 135,349 | 230 | 25/Mar/19 | 293,835 | 197,080 | 13/Apr/18 | 2nd Quarter, 2020 | 62,043 | 4th Quarter, 2019 | 2nd Quarter, 2021 | |||||||
30 | Zengcheng Country Garden Center ( | ) | Guangzhou (Zengcheng) | 146,318 | 146,318 | 25,536 | 6/Dec/18 | 2nd Quarter, 2021 | ||||||||||||||
31 | Country Garden-Beihai Sunshine ( | ) | Beihai (Haicheng) | 561,760 | 210,370 | 92,644 | 11/Jan/19 | 3rd Quarter, 2020 | 351,390 | 4th Quarter, 2019 | 2nd Quarter, 2022 | |||||||||||
32 | Country Garden-College Impression ( | ) | Zhenjiang (Jurong) | 467,210 | 173,409 | 173,205 | 19/Oct/18 | 205,991 | 120,455 | 22/Jul/16 | 2nd Quarter, 2020 | 87,810 | 4th Quarter, 2019 | 2nd Quarter, 2021 | ||||||||
33 | Kunshan Art Gallery Orchid Garden ( | ) | Suzhou (Kunshan) | 66,939 | 44,035 | 24,241 | 5/Dec/18 | 2nd Quarter, 2020 | 22,904 | 4th Quarter, 2019 | 4th Quarter, 2020 | |||||||||||
34 | Country Garden Daming Mansion ( | ) | Nantong (Qidong) | 451,764 | 248,419 | 247,789 | 15/May/19 | 203,345 | 127,490 | 18/Jan/18 | 2nd Quarter, 2021 | |||||||||||
35 | Country Garden-Runyang Valley ( | ) | Huizhou (Huiyang) | 821,565 | 93,691 | 91,249 | 913 | 22/Jan/19 | 284,927 | 219,748 | 26/Jan/18 | 2nd Quarter, 2021 | 442,947 | 4th Quarter, 2019 | 4th Quarter, 2023 | |||||||
36 | Country Garden-Yanshanhui( | ) | Changzhou (Liyang) | 268,436 | 167,873 | 103,717 | 2/Aug/18 | 4th Quarter, 2020 | 100,563 | 4th Quarter, 2019 | 2nd Quarter, 2021 | |||||||||||
37 | Country Garden -Xianchen Mansion ( | ) | Taizhou (Xianju) | 125,338 | 124,734 | 56,073 | 5/Dec/18 | 2nd Quarter, 2020 | 604 | 3rd Quarter, 2019 | 2nd Quarter, 2020 | |||||||||||
38 | Country Garden-Xi Yue ( | ) | Guangzhou (Nansha) | 112,900 | 112,900 | 65,417 | 12/Jan/18 | 4th Quarter, 2019 | ||||||||||||||
39 | Country Garden-Xiliuhu( | ) | Zhengzhou (Gaoxin) | 359,608 | 296,701 | 112,432 | 12/Dec/17 | 2nd Quarter, 2021 | 62,907 | 3rd Quarter, 2019 | 4th Quarter, 2022 | |||||||||||
40 | Country Garden-City Garden ( | ) | Zhanjiang (Mazhang) | 591,623 | 296,215 | 294,764 | 1,451 | 10/Apr/19 | 295,115 | 209,210 | 26/Dec/17 | 3rd Quarter, 2020 | 293 | 3rd Quarter, 2019 | 3rd Quarter, 2020 | |||||||
41 | Country Garden -Binjiang Yue ( | ) | Taizhou (Jiaojiang) | 122,753 | 121,095 | 57,629 | 19/Oct/18 | 3rd Quarter, 2020 | 1,658 | 3rd Quarter, 2019 | 3rd Quarter, 2020 | |||||||||||
42 | Country Garden-Park No.1 ( | ) | Tangshan (Lubei) | 134,457 | 103,902 | 65,869 | 14/Sep/18 | 4th Quarter, 2020 | 30,556 | 3rd Quarter, 2019 | 4th Quarter, 2020 | |||||||||||
43 | Cixi Hangzhou Bay ( | ) | Ningbo (Cixi) | 505,935 | 251,791 | 110,415 | 29/Sep/18 | 3rd Quarter, 2020 | 254,144 | 3rd Quarter, 2019 | 4th Quarter, 2021 | |||||||||||
44 | Country Garden-Jiuzhangtai( | ) | Taizhou (Jiaojiang) | 76,371 | 76,371 | 44,830 | 28/Jun/18 | 3rd Quarter, 2020 | ||||||||||||||
45 | Country Garden-Jade Park ( | ) | Suzhou (Wujiang) | 51,270 | 40,700 | 39,793 | 25/Sep/18 | 4th Quarter, 2020 | 10,570 | 3rd Quarter, 2019 | 4th Quarter, 2021 | |||||||||||
46 | Country Garden-High-tech Era ( | ) | Xi'an (Yanta) | 230,921 | 106,900 | 105,870 | 22/Jun/18 | 3rd Quarter, 2020 | 124,021 | 4th Quarter, 2019 | 4th Quarter, 2021 | |||||||||||
47 | Country Garden-Shuanghu City ( | ) | Zhengzhou (Xinzheng) | 111,253 | 111,253 | 72,369 | 28/Feb/19 | 1st Quarter, 2021 | ||||||||||||||
48 | Country Garden Taidong Tianyue Bay ( | ) | Huizhou (Dayawan) | 903,370 | 135,601 | 131,784 | 1,031 | 14/Mar/19 | 113,346 | 72,163 | 22/Sep/17 | 4th Quarter, 2019 | 654,423 | 4th Quarter, 2019 | 4th Quarter, 2022 | |||||||
49 | Country Garden-Yinjiangnan( | ) | Hangzhou (Xiaoshan) | 32,590 | 32,590 | 22,204 | 29/Nov/18 | 1st Quarter, 2020 | ||||||||||||||
50 | Country Garden-Ten Miles Riverside ( | ) | Liuzhou (Chengzhong District) | 437,704 | 146,165 | 144,774 | 344 | 12/Apr/19 | 266,114 | 201,072 | 25/Aug/17 | 3rd Quarter, 2020 | 25,426 | 4th Quarter, 2019 | 4th Quarter, 2020 | |||||||
51 | Xinhui Country Garden-Phase One to Nine ( | ) | Jiangmen (Xinhui) | 1,585,254 | 1,459,727 | 1,437,211 | 22,516 | 19/Mar/19 | 125,527 | 98,944 | 28/Apr/17 | 3rd Quarter, 2020 | ||||||||||
52 | Wenzhou Oujiangkou International New City ( | ) | Wenzhou (Oujiangkou) | 180,630 | 180,630 | 153,484 | 23/Dec/17 | 2nd Quarter, 2021 | ||||||||||||||
53 | Country Garden-Longcheng Mansion ( | ) | Qiannan (Longli) | 174,048 | 138,700 | 95,375 | 22/Jun/18 | 3rd Quarter, 2020 | 35,348 | 4th Quarter, 2019 | 3rd Quarter, 2020 | |||||||||||
54 | Three Thousand City ( | ) | Suzhou (Wujiang) | 102,872 | 41,733 | 40,529 | 27/Nov/18 | 61,139 | 47,907 | 14/Apr/18 | 4th Quarter, 2020 | |||||||||||
55 | Country Garden-Yunding( | ) | Ningbo (Cixi) | 84,500 | 84,500 | 42,593 | 16/Oct/18 | 4th Quarter, 2019 | ||||||||||||||
56 | Zhaotong Country Garden ( | ) | Zhaotong (Zhaoyang) | 240,590 | 54,971 | 54,666 | 153 | 8/Apr/19 | 176,580 | 108,078 | 10/Oct/18 | 2nd Quarter, 2020 | 9,038 | 3rd Quarter, 2019 | 1st Quarter, 2020 | |||||||
57 | Country Garden-Tianjiao Mansion ( | ) | Huizhou (Huicheng) | 142,915 | 142,915 | 69,032 | 7/Sep/18 | 2nd Quarter, 2020 | ||||||||||||||
58 | Country Garden-Haichang Tianlan ( | ) | Chengdu (Shuangliu) | 558,894 | 231,478 | 222,406 | 3,473 | 26/Apr/19 | 288,727 | 158,844 | 27/Oct/17 | 4th Quarter, 2020 | 38,689 | 4th Quarter, 2019 | 4th Quarter, 2020 | |||||||
59 | Country Garden-City Garden ( | ) | Taiyuan (Xinghualing) | 229,122 | 225,900 | 221,323 | 18/Jan/18 | 4th Quarter, 2020 | 3,222 | 3rd Quarter, 2019 | 4th Quarter, 2020 | |||||||||||
60 | Country Garden-Jade Bay ( | ) | Foshan (Nanhai) | 530,396 | 402,443 | 402,168 | 165 | 10/May/19 | 127,952 | 69,743 | 16/Nov/18 | 4th Quarter, 2020 | ||||||||||
61 | Country Garden Phoenix City ( | ) | Baoji (Gaoxin District) | 943,677 | 236,133 | 104,745 | 27/Jun/18 | 4th Quarter, 2020 | 707,544 | 3rd Quarter, 2019 | 4th Quarter, 2023 | |||||||||||
62 | Country Garden-Central Park ( | ) | Zhenjiang (Jurong) | 663,178 | 321,074 | 178,060 | 16/Nov/17 | 4th Quarter, 2019 | 342,104 | 3rd Quarter, 2019 | 2nd Quarter, 2022 | |||||||||||
63 | Country Garden-Jade Legend ( | ) | Weinan (Linwei) | 235,900 | 235,900 | 135,433 | 1/Jun/18 | 4th Quarter, 2020 | ||||||||||||||
64 | Country Garden-Lianfa Xunyang Mansion ( | ) | Jiujiang (Lianxi District) | 132,918 | 132,149 | 87,727 | 22/Aug/18 | 2nd Quarter, 2021 | 769 | 3rd Quarter, 2019 | 2nd Quarter, 2021 | |||||||||||
65 | Country Garden-The Cullinan ( | ) | Urumqi (Xincheng District) | 162,004 | 162,004 | 90,813 | 19/Oct/18 | 4th Quarter, 2020 | ||||||||||||||
66 | Country Garden-Shifu Mansion ( | ) | Chuzhou (Chengnan) | 165,091 | 25,231 | 18,490 | 798 | 19/Jun/19 | 139,860 | 106,533 | 5/Sep/17 | 2nd Quarter, 2020 |
GROUP THE ABOUT INFORMATION UPDATED
5
Completed property developments(2) | Properties under development(3) | Properties for future development(4) | |||||||||||||||||
Total | |||||||||||||||||||
Aggregate | Total | saleable | Actual/ | ||||||||||||||||
saleable | Total | saleable | GFA | Total | Total | Estimated | Estimated | ||||||||||||
GFA for | completed | GFA sold | pre-sold | saleable | saleable | pre-sale | GFA for | pre-sale | |||||||||||
Serial | City | entire | saleable | and | pending | Completion | GFA under | GFA pre- | commencement | Estimated | future | commencement | Estimated | ||||||
number | Project | (District) | project | GFA | delivered | delivery | date | development | sold | date | completion date | development | date | completion date | |||||
sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | |||||||||||||
67 | Country Garden-Golden Era ( | ) | Tai'an (Daiyue) | 183,475 | 107,224 | 46,098 | 25/Jan/19 | 2nd Quarter, 2021 | 76,251 | 3rd Quarter, 2019 | 2nd Quarter, 2021 | ||||||||
68 | Country Garden-Changnan Mansion ( | ) | Jingdezhen (Zhushan) | 272,882 | 272,882 | 178,729 | 26/Mar/18 | 3rd Quarter, 2021 | |||||||||||
69 | Changde Country Garden ( | ) | Changde (Wuling) | 725,449 | 239,596 | 239,441 | 10/May/19 | 385,717 | 132,657 | 21/Sep/16 | 4th Quarter, 2020 | 100,136 | 1st Quarter, 2020 | 2nd Quarter, 2021 | |||||
70 | Country Garden Twin Star City ( | ) | Foshan (Sanshui) | 363,966 | 363,966 | 41,672 | 26/Nov/18 | 4th Quarter, 2021 | |||||||||||
71 | Changshu South Xincheng South ( | ) | Suzhou (Changshu) | 125,176 | 125,176 | 48,258 | 19/Oct/18 | 2nd Quarter, 2020 | |||||||||||
72 | Shengze Country Garden (including Tianyu & Times City) ( | ) | Suzhou (Wujiang) | 490,619 | 255,421 | 216,455 | 34,492 | 12/Apr/19 | 235,198 | 162,144 | 16/Dec/16 | 4th Quarter, 2020 | |||||||
73 | Country Garden-Huaxi Impression ( | ) | Guiyang (Huaxi) | 580,661 | 234,184 | 109,632 | 19/Jul/18 | 2nd Quarter, 2020 | 346,477 | 3rd Quarter, 2019 | 2nd Quarter, 2022 | ||||||||
74 | Country Garden-Jade Hill ( | ) | Foshan (Sanshui) | 432,326 | 299,386 | 294,418 | 4,968 | 3/Mar/16 | 132,940 | 58,960 | 19/Jul/18 | 2nd Quarter, 2020 | |||||||
75 | Country Garden-Longshang Garden ( | ) | Huizhou (Huicheng) | 91,700 | 91,700 | 75,886 | 15/Jun/18 | 4th Quarter, 2019 | |||||||||||
76 | Country Garden Baoqing Mansion ( | ) | Shaoyang (Shuangqing) | 445,119 | 284,271 | 236,717 | 22/Jan/18 | 3rd Quarter, 2020 | 160,848 | 4th Quarter, 2019 | 4th Quarter, 2021 | ||||||||
77 | Country Garden-Jade Bay ( | ) | Xuzhou (Pizhou) | 294,575 | 172,476 | 68,670 | 23/Nov/18 | 2nd Quarter, 2020 | 122,099 | 4th Quarter, 2019 | 4th Quarter, 2021 | ||||||||
78 | Country Garden-Shengshi Mingmen ( | ) | Zhongshan (Torch District) | 262,671 | 101,748 | 36,016 | 24/Apr/18 | 3rd Quarter, 2020 | 160,923 | 3rd Quarter, 2019 | 2nd Quarter, 2021 | ||||||||
79 | Country Garden Poly-Tianqi( | ) | Zhongshan (Nanlang) | 115,792 | 115,792 | 89,089 | 13/Oct/17 | 1st Quarter, 2020 | |||||||||||
80 | Fenhu Country Garden ( | ) | Suzhou (Wujiang) | 139,929 | 73,326 | 53,722 | 2,371 | 27/Dec/18 | 66,603 | 13,480 | 26/Apr/18 | 4th Quarter, 2019 | |||||||
81 | Country Garden Dongjiang Phoenix Bay ( | ) | Heyuan (Yuancheng) | 420,258 | 149,894 | 149,894 | 25/Dec/18 | 270,365 | 230,088 | 27/Oct/17 | 2nd Quarter, 2020 | ||||||||
82 | Country Garden Eco City-Zuo'an (including Dongjing) ( | ) | Wuhan (Hongshan) | 360,097 | 281,812 | 281,614 | 25/Oct/17 | 78,286 | 34,949 | 4/Apr/19 | 3rd Quarter, 2020 | ||||||||
83 | Suqian Country Garden ( | ) | Suqian (Susu Industrial Zone) | 553,005 | 342,046 | 333,769 | 5,697 | 28/Jun/19 | 206,018 | 163,721 | 11/Jul/14 | 2nd Quarter, 2020 | 4,941 | 3rd Quarter, 2019 | 1st Quarter, 2020 | ||||
84 | Country Garden-Shili Chunfeng ( | ) | Chuzhou (Nanqiao) | 471,118 | 80,994 | 58,773 | 4,280 | 6/May/19 | 153,207 | 74,124 | 29/Sep/17 | 3rd Quarter, 2020 | 236,917 | 3rd Quarter, 2019 | 3rd Quarter, 2021 | ||||
85 | Yulin Country Garden ( | ) | Yulin (Yuzhou) | 1,209,183 | 325,202 | 256,172 | 66,702 | 13/Nov/18 | 323,968 | 296,610 | 14/Jul/17 | 4th Quarter, 2020 | 560,013 | 3rd Quarter, 2019 | 4th Quarter, 2023 | ||||
86 | Country Garden-Yundi Tianqi ( | ) | Jining (Zoucheng) | 248,921 | 102,500 | 94,339 | 28/Aug/18 | 4th Quarter, 2020 | 146,421 | 3rd Quarter, 2019 | 3rd Quarter, 2021 | ||||||||
87 | Country Garden-Phoenix City ( | ) | Yancheng (Yandu) | 364,701 | 28,862 | 18,452 | 2,406 | 13/Jun/19 | 116,635 | 90,394 | 3/Apr/18 | 4th Quarter, 2020 | 219,203 | 3rd Quarter, 2019 | 4th Quarter, 2021 | ||||
88 | Haikou Binjiang Coast ( | ) | Haikou (Haidian Island) | 79,641 | 79,641 | 23,481 | 24/Feb/10 | 3rd Quarter, 2020 | |||||||||||
89 | Country Garden-Jiangnan Shijia ( | ) | Zhenjiang (Jurong) | 536,343 | 251,679 | 134,590 | 2/Nov/17 | 4th Quarter, 2020 | 284,664 | 4th Quarter, 2019 | 4th Quarter, 2021 | ||||||||
90 | Country Garden-Qianshui Bay ( | ) | Changzhou (Wujin) | 155,319 | 155,319 | 96,998 | 27/Jun/18 | 2nd Quarter, 2020 | |||||||||||
91 | Country Garden-Huafu Phoenix City ( | ) | Shanwei (Haifeng) | 357,077 | 7,260 | 7,260 | 19/Jun/18 | 249,070 | 177,101 | 22/Sep/17 | 4th Quarter, 2020 | 100,746 | 4th Quarter, 2019 | 4th Quarter, 2021 | |||||
92 | Country Garden-Jade City ( | ) | Qingdao (High-tech Zone) | 143,162 | 67,099 | 30,921 | 7/Mar/19 | 1st Quarter, 2021 | 76,062 | 4th Quarter, 2019 | 4th Quarter, 2021 | ||||||||
93 | Country Garden Purple Dragon Mansion ( | ) | Chuzhou (Langya) | 262,836 | 262,836 | 201,138 | 21/Jul/17 | 4th Quarter, 2020 | |||||||||||
94 | Country Garden-Tianluan Mountain ( | ) | Shanwei (Haifeng) | 351,730 | 264,734 | 162,927 | 8/Jun/18 | 4th Quarter, 2020 | 86,996 | 4th Quarter, 2019 | 4th Quarter, 2021 | ||||||||
95 | Country Garden-Central City One ( | ) | Zunyi (Honghuagang) | 134,336 | 134,336 | 97,177 | 6/Jul/18 | 4th Quarter, 2020 | |||||||||||
96 | Country Garden River and City ( | ) | Qingyuan (Qingcheng) | 279,208 | 130,443 | 129,770 | 449 | 20/Mar/19 | 134,297 | 63,788 | 22/Jun/18 | 3rd Quarter, 2020 | 14,468 | 3rd Quarter, 2019 | 3rd Quarter, 2021 | ||||
97 | Kunshan Binjiang One Nine Eight ( | ) | Suzhou (Kunshan) | 33,639 | 2,438 | 2,438 | 13/Jul/10 | 31,201 | 19,138 | 23/Nov/18 | 4th Quarter, 2020 | ||||||||
98 | Country Garden-Phoenix Center ( | ) | Jinan (Lixia) | 119,484 | 119,484 | 42,863 | 24/Aug/18 | 4th Quarter, 2020 | |||||||||||
99 | Country Garden-Phoenix Villa ( | ) | Yantai (Laishan) | 222,331 | 114,920 | 104,560 | 25/May/18 | 4th Quarter, 2020 | 107,411 | 3rd Quarter, 2019 | 4th Quarter, 2021 | ||||||||
100 | Country Garden-Phoenix City ( | ) | Xuchang (Changge) | 549,531 | 151,000 | 90,979 | 27/Sep/18 | 4th Quarter, 2020 | 398,531 | 3rd Quarter, 2019 | 4th Quarter, 2023 | ||||||||
Total | 50,195,052 | 18,993,657 | 18,509,125 | 276,966 | 18,591,044 | 11,233,325 | 12,610,351 |
Notes:
- All the GFAs displayed in this section are attributable to the owners of the Company.
- Based on the measurement reports from relevant government departments.
- Based on the actual measurements by the project management department of the Group.
- "GFA for future development" for each project is the GFA expected to be built.
6
The following table sets forth the information of our landbank GFA breakdown in the PRC by location as of June 30, 2019(1):
Completed property developments(2) | Properties under development(3) | |||||||||
Aggregate | ||||||||||
Total saleable | ||||||||||
saleable GFA | Total | Total saleable | GFA pre-sold | Total saleable | ||||||
for entire | completed | GFA sold and | pending | GFA under | Total saleable | GFA for future | ||||
Location | project | saleable GFA | delivered | delivery | development | GFA pre-sold | development(4) | |||
sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | sq.m. | ||||
Guangdong . . . . . . . . . . . . . . . . | 120,117,245 | 65,199,817 | 63,939,467 | 827,323 | 25,577,245 | 12,891,538 | 29,340,183 | |||
Jiangsu . . . . . . . . . . . . . . . . . . . . | 41,269,737 | 17,880,725 | 17,342,582 | 303,429 | 13,498,794 | 7,361,140 | 9,890,217 | |||
Anhui . . . . . . . . . . . . . . . . . . . . . | 30,843,659 | 15,877,524 | 15,431,353 | 158,373 | 9,697,105 | 6,251,201 | 5,269,030 | |||
Hunan . . . . . . . . . . . . . . . . . . . . . | 28,215,523 | 7,335,493 | 7,162,880 | 92,599 | 10,534,719 | 6,041,872 | 10,345,311 | |||
Henan . . . . . . . . . . . . . . . . . . . . . | 20,213,528 | 1,974,161 | 1,854,867 | 43,631 | 10,227,844 | 5,449,499 | 8,011,524 | |||
Hubei . . . . . . . . . . . . . . . . . . . . . | 19,833,812 | 8,746,880 | 8,646,729 | 83,330 | 6,225,386 | 3,613,686 | 4,861,546 | |||
Shandong . . . . . . . . . . . . . . . . . . | 17,505,027 | 2,852,278 | 2,796,587 | 36,815 | 7,366,797 | 3,941,029 | 7,285,952 | |||
Guangxi . . . . . . . . . . . . . . . . . . . | 16,982,863 | 3,676,060 | 3,514,742 | 116,828 | 6,761,034 | 4,524,036 | 6,545,769 | |||
Zhejiang . . . . . . . . . . . . . . . . . . . | 14,916,211 | 3,549,414 | 3,216,925 | 260,809 | 7,905,874 | 4,468,377 | 3,460,923 | |||
Guizhou . . . . . . . . . . . . . . . . . . . | 13,929,408 | 3,002,356 | 2,907,306 | 77,541 | 5,557,364 | 3,863,716 | 5,369,688 | |||
Sichuan . . . . . . . . . . . . . . . . . . . . | 10,740,517 | 2,360,871 | 2,321,568 | 13,274 | 4,234,439 | 2,140,050 | 4,145,208 | |||
Liaoning . . . . . . . . . . . . . . . . . . . | 10,452,967 | 6,607,027 | 6,498,115 | 67,237 | 1,787,007 | 1,337,239 | 2,058,933 | |||
Hebei . . . . . . . . . . . . . . . . . . . . . | 9,778,118 | 2,116,409 | 2,066,528 | 12,945 | 3,667,204 | 2,054,627 | 3,994,504 | |||
Shaanxi . . . . . . . . . . . . . . . . . . . . | 8,467,910 | 954,235 | 943,844 | 390 | 3,425,268 | 1,799,310 | 4,088,407 | |||
Fujian . . . . . . . . . . . . . . . . . . . . . | 8,270,120 | 3,147,094 | 3,017,877 | 86,060 | 3,816,368 | 2,059,693 | 1,306,658 | |||
Jiangxi . . . . . . . . . . . . . . . . . . . . . | 6,953,689 | 1,424,550 | 1,403,952 | 19,552 | 3,456,380 | 2,369,967 | 2,072,758 | |||
Hainan . . . . . . . . . . . . . . . . . . . . | 6,121,669 | 2,546,232 | 2,415,754 | 44,747 | 1,495,341 | 407,438 | 2,080,095 | |||
Chongqing . . . . . . . . . . . . . . . . . | 5,425,070 | 2,097,238 | 1,945,292 | 83,877 | 2,083,618 | 938,675 | 1,244,214 | |||
Yunnan . . . . . . . . . . . . . . . . . . . . | 5,106,263 | 670,335 | 660,570 | 4,227 | 1,883,035 | 1,013,055 | 2,552,893 | |||
Inner mongolia . . . . . . . . . . . . . | 4,755,724 | 1,554,439 | 1,541,072 | 11,040 | 584,358 | 361,696 | 2,616,927 | |||
Gansu . . . . . . . . . . . . . . . . . . . . . | 4,221,580 | 2,463,392 | 2,405,099 | 27,671 | 921,659 | 763,007 | 836,529 | |||
Tianjin . . . . . . . . . . . . . . . . . . . . . | 4,091,632 | 1,412,946 | 1,308,799 | 21,901 | 626,785 | 295,375 | 2,051,901 | |||
Shanxi . . . . . . . . . . . . . . . . . . . . . | 3,432,095 | 219,932 | 134,320 | 79,155 | 948,014 | 532,772 | 2,264,149 | |||
Qinghai . . . . . . . . . . . . . . . . . . . . | 1,280,631 | 45,068 | 44,922 | - | 746,330 | 598,019 | 489,233 | |||
Xinjiang . . . . . . . . . . . . . . . . . . . | 874,008 | - | - | - | 584,494 | 317,169 | 289,514 | |||
Shanghai . . . . . . . . . . . . . . . . . . | 801,587 | 135,686 | 126,282 | 4,899 | 351,001 | 116,998 | 314,900 | |||
Beijing . . . . . . . . . . . . . . . . . . . . . | 769,139 | - | - | - | 219,778 | 50,152 | 549,360 | |||
Ningxia . . . . . . . . . . . . . . . . . . . . | 763,609 | 50,890 | 30,501 | 14,806 | 578,461 | 338,015 | 134,258 | |||
Jilin . . . . . . . . . . . . . . . . . . . . . . . | 686,447 | 170,083 | 169,790 | - | 174,384 | 84,638 | 341,980 | |||
Heilongjiang . . . . . . . . . . . . . . . | 556,167 | 441,995 | 429,017 | 668 | - | - | 114,172 | |||
Tibet . . . . . . . . . . . . . . . . . . . . . . | 44,321 | - | - | - | 35,500 | 34,233 | 8,821 | |||
Total . . . . . . . . . . . . . . . . . . . . . . | 417,420,275 | 158,513,129 | 154,276,739 | 2,493,127 | 134,971,588 | 76,018,221 | 123,935,558 |
Notes:
- All the GFAs displayed in this section are attributable to the owners of the Company.
- Based on the measurement reports from relevant government departments.
- Based on the actual measurements by the project management department of the Group.
- "GFA for future development" for each project is the GFA expected to be built.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited | Audited | ||
30 June | 31 December | ||
2019 | 2018 | ||
Note | RMB million | RMB million | |
Non-current assets | |||
Property, plant and equipment | 8 | 23,815 | 23,421 |
Investment properties | 8 | 14,446 | 16,435 |
Intangible assets | 660 | 670 | |
Land use rights | - | 2,496 | |
Right-of-use assets | 4 | 4,264 | - |
Properties under development | 9 | 126,970 | 107,812 |
Investments in joint ventures | 10 | 32,160 | 27,891 |
Investments in associates | 11 | 19,725 | 18,768 |
Financial assets at fair value through other | |||
comprehensive income | 2,587 | 1,796 | |
Derivative financial instruments | 2,089 | 992 | |
Trade and other receivables | 12 | 26,778 | 10,962 |
Deferred income tax assets | 21,057 | 18,701 | |
274,551 | 229,944 | ||
Current assets | |||
Properties under development | 9 | 662,174 | 626,937 |
Completed properties held for sale | 31,305 | 44,338 | |
Inventories | 10,112 | 8,822 | |
Trade and other receivables | 12 | 485,062 | 426,397 |
Contract assets and contract acquisition costs | 13 | 20,550 | 17,094 |
Prepaid income tax | 24,826 | 21,350 | |
Restricted cash | 14 | 14,514 | 14,200 |
Cash and cash equivalents | 14 | 208,322 | 228,343 |
Financial assets at fair value through profit or loss | 15 | 15,042 | 12,019 |
Derivative financial instruments | 272 | 250 | |
1,472,179 | 1,399,750 | ||
Current liabilities | |||
Contract liabilities | 607,550 | 562,800 | |
Trade and other payables | 16 | 554,398 | 498,821 |
Receipts under securitisation arrangements | 550 | 794 | |
Current income tax liabilities | 29,240 | 30,783 | |
Senior notes | 17 | 7,038 | 2,238 |
Corporate bonds | 18 | 28,098 | 23,964 |
Convertible bonds | 19 | 21 | 8,051 |
Bank and other borrowings | 20 | 78,760 | 91,844 |
Lease liabilities | 4 | 51 | - |
Derivative financial instruments | 88 | 111 | |
Dividend payable | 27 | 6,563 | - |
1,312,357 | 1,219,406 | ||
Net current assets | 159,822 | 180,344 | |
Total assets less current liabilities | 434,373 | 410,288 |
7
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited | Audited | ||
30 June | 31 December | ||
2019 | 2018 | ||
Note | RMB million | RMB million | |
Non-current liabilities | |||
Senior notes | 17 | 50,427 | 39,478 |
Corporate bonds | 18 | 19,238 | 17,944 |
Convertible bonds | 19 | 5,202 | 5,117 |
Bank and other borrowings | 20 | 143,105 | 139,839 |
Lease liabilities | 4 | 261 | - |
Deferred government grants | 176 | 249 | |
Deferred income tax liabilities | 26,751 | 32,224 | |
Derivative financial instruments | 2,878 | 2,029 | |
248,038 | 236,880 | ||
Equity attributable to owners of the Company | |||
Share capital and premium | 21 | 28,025 | 27,881 |
Other reserves | 22 | 8,281 | 8,247 |
Retained earnings | 22 | 94,554 | 85,202 |
130,860 | 121,330 | ||
Non-controlling interests | 55,475 | 52,078 | |
Total equity | 186,335 | 173,408 | |
Total equity and non-current liabilities | 434,373 | 410,288 |
The above interim condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.
8
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT
Unaudited | ||||
Six months ended 30 June | ||||
2019 | 2018 | |||
Note | RMB million | RMB million | ||
Revenue | 7 | 202,006 | 131,894 | |
Cost of sales | 24 | (147,150) | (96,921) | |
Gross profit | 54,856 | 34,973 | ||
Other income and gains - net | 23 | 1,656 | 1,758 | |
Gains arising from changes in fair value of and transfer to | ||||
investment properties | 8 | 16 | 539 | |
Selling and marketing costs | 24 | (9,098) | (4,502) | |
Administrative expenses | 24 | (9,571) | (5,069) | |
Research and development expenses | 24 | (620) | (331) | |
Net impairment losses on financial and contract assets | (973) | (482) | ||
Operating profit | 36,266 | 26,886 | ||
Finance income | 25 | 1,506 | 777 | |
Finance costs | 25 | (601) | (596) | |
Finance income - net | 25 | 905 | 181 | |
Share of results of joint ventures and associates | 10,11 | 2,317 | (210) | |
Profit before income tax | 39,488 | 26,857 | ||
Income tax expenses | 26 | (16,431) | (10,538) | |
Profit for the period | 23,057 | 16,319 | ||
Profit attributable to: | ||||
- Owners of the Company | 15,635 | 12,939 | ||
- Non-controlling interests | 7,422 | 3,380 | ||
23,057 | 16,319 | |||
Earnings per share attributable to owners of | ||||
the Company (expressed in RMB yuan per share) | ||||
Basic | 28 | 0.73 | 0.60 | |
Diluted | 28 | 0.71 | 0.58 |
The above interim condensed consolidated income statement should be read in conjunction with the accompanying notes.
9
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited | |||
Six months ended 30 June | |||
2019 | 2018 | ||
RMB million | RMB million | ||
Profit for the period | 23,057 | 16,319 | |
Other comprehensive income | |||
Items that will not be reclassified to profit or loss: | |||
- Change in fair value of financial assets at fair value | |||
through other comprehensive income | 72 | (14) | |
Items that may be reclassified to profit or loss: | |||
- Deferred (losses)/gains on cash flow hedges | (65) | 2 | |
- Deferred gains/(costs) of hedging | 527 | (169) | |
- Currency translation differences | (349) | (261) | |
Total other comprehensive income/(loss) for the period, | |||
net of tax | 185 | (442) | |
Total comprehensive income for the period | 23,242 | 15,877 | |
Total comprehensive income attributable to: | |||
- Owners of the Company | 15,824 | 12,514 | |
- Non-controlling interests | 7,418 | 3,363 | |
23,242 | 15,877 |
The above interim condensed consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
10
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited | ||||||
Attributable to owners of the Company | ||||||
Share | ||||||
capital | Non- | |||||
and | Other | Retained | controlling | |||
premium | reserves | earnings | Total | interests | Total equity | |
RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | |
(note 21) | (note 22) | (note 22) | ||||
Balance at 1 January 2019 | 27,881 | 8,247 | 85,202 | 121,330 | 52,078 | 173,408 |
Comprehensive income | ||||||
for the six months | ||||||
ended 30 June 2019 | ||||||
Profit for the period | - | - | 15,635 | 15,635 | 7,422 | 23,057 |
Other comprehensive income | - | 156 | 33 | 189 | (4) | 185 |
Total comprehensive income | ||||||
for the six months | ||||||
ended 30 June 2019 | - | 156 | 15,668 | 15,824 | 7,418 | 23,242 |
Transactions with owners in | ||||||
their capacity as owners: | ||||||
Capital injections from non-controlling interests | - | - | - | - | 1,412 | 1,412 |
Transfer to statutory reserves | - | 32 | (32) | - | - | - |
Dividend (note 27) | - | - | (6,563) | (6,563) | (196) | (6,759) |
Employee share option scheme: | ||||||
- Value of employee services | - | 179 | - | 179 | - | 179 |
- Issue of shares pursuant to share option scheme | 144 | (9) | - | 135 | - | 135 |
Effect of redemption of convertible bonds upon maturity | - | (220) | 220 | - | - | - |
Non-controlling interests arising | ||||||
from business combinations (note 31) | - | - | - | - | 931 | 931 |
Disposals of subsidiaries (note 30) | - | (59) | 59 | - | (6,159) | (6,159) |
Changes in ownership interests in subsidiaries | ||||||
without change of control | - | (45) | - | (45) | (9) | (54) |
Total transactions with owners | 144 | (122) | (6,316) | (6,294) | (4,021) | (10,315) |
Balance at 30 June 2019 | 28,025 | 8,281 | 94,554 | 130,860 | 55,475 | 186,335 |
11
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited | ||||||
Attributable to owners of the Company | ||||||
Share | ||||||
capital | ||||||
and | Other | Retained | Non-controlling | |||
premium | reserves | earnings | Total | interests | Total equity | |
RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | |
(note 21) | (note 22) | (note 22) | ||||
Balance at 1 January 2018 | 24,461 | 5,943 | 63,267 | 93,671 | 22,941 | 116,612 |
Comprehensive income for | ||||||
the six months | ||||||
ended 30 June 2018 | ||||||
Profit for the period | - | - | 12,939 | 12,939 | 3,380 | 16,319 |
Other comprehensive income | - | (425) | - | (425) | (17) | (442) |
Total comprehensive income | ||||||
for the six months | ||||||
ended 30 June 2018 | - | (425) | 12,939 | 12,514 | 3,363 | 15,877 |
Transactions with owners in | ||||||
their capacity as owners: | ||||||
Capital injections from non-controlling interests | - | - | - | - | 2,027 | 2,027 |
Transfer to statutory reserves | - | 132 | (132) | - | - | - |
Issue of shares | 6,339 | - | - | 6,339 | - | 6,339 |
Dividend | - | - | (5,424) | (5,424) | - | (5,424) |
Distribution in specie | - | (490) | (1,275) | (1,765) | (25) | (1,790) |
Buy-back of shares | (616) | - | - | (616) | - | (616) |
Employee share schemes | ||||||
- Value of employee services | - | 230 | - | 230 | - | 230 |
Equity component of convertible bonds | - | 375 | - | 375 | - | 375 |
Non-controlling interests arising | ||||||
from business combinations | - | - | - | - | 9,160 | 9,160 |
Disposals of subsidiaries | - | - | - | - | (230) | (230) |
Changes in ownership interests in subsidiaries | ||||||
without change of control | - | (380) | - | (380) | 267 | (113) |
Total transactions with owners | 5,723 | (133) | (6,831) | (1,241) | 11,199 | 9,958 |
Balance at 30 June 2018 | 30,184 | 5,385 | 69,375 | 104,944 | 37,503 | 142,447 |
The above interim condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
12
INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Unaudited | ||||
Six months ended 30 June | ||||
2019 | 2018 | |||
Note | RMB million | RMB million | ||
Cash flows from operating activities | ||||
Cash generated from operations | 34,347 | 24,567 | ||
Income tax paid | (23,037) | (13,963) | ||
Interest paid | (9,502) | (7,437) | ||
Net cash generated from operating activities | 1,808 | 3,167 | ||
Cash flows from investing activities | ||||
Net cash outflow on acquisitions of subsidiaries | 31 | (440) | (7,235) | |
Proceeds from disposals of property, plant and equipment | - | 137 | ||
Purchases of property, plant and equipment | (1,723) | (2,033) | ||
Payments for investment properties | (177) | (36) | ||
Purchases of intangible assets | (30) | (63) | ||
Purchases of land use rights | - | (282) | ||
Purchases of right-of-use assets | (1,831) | - | ||
Investments in joint ventures | (1,620) | (5,222) | ||
Investments in associates | (178) | (3,243) | ||
Deposits for acquisitions of companies | (24,834) | (8,738) | ||
Loans advanced to third parties | - | (69) | ||
Net cash outflow on disposals of subsidiaries | 30 | (5,607) | (1,569) | |
Payments for financial assets at fair value through | ||||
other comprehensive income | (830) | (2) | ||
Proceeds from disposal of financial assets at fair value | ||||
through other comprehensive income | 140 | - | ||
Payments for financial assets at fair value through | ||||
profit or loss | (14,604) | (4,014) | ||
Proceeds from disposal of financial assets at fair value | ||||
through profit or loss | 11,660 | 24,522 | ||
Repayments from loans to third parties | 680 | 99 | ||
Interest received | 1,506 | 777 | ||
Net cash used in investing activities | (37,888) | (6,971) |
13
INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Unaudited | ||||
Six months ended 30 June | ||||
2019 | 2018 | |||
Note | RMB million | RMB million | ||
Cash flows from financing activities | ||||
Capital injections from non-controlling interests | 1,412 | 2,027 | ||
Buy-back of shares | - | (616) | ||
Net proceeds from transactions with non-controlling interests | (54) | (732) | ||
Issue of shares as a result of placing | - | 6,330 | ||
Issue of shares pursuant to share option scheme | 135 | 9 | ||
Net cash distributed in respect of distribution in specie | - | (3,085) | ||
Issue of senior notes | 17 | 16,765 | 6,451 | |
Repayment or redemption of senior notes | 17 | (1,723) | (4,942) | |
Issue of corporate bonds | 18 | 4,374 | 324 | |
Redemption of corporate bonds | 18 | (100) | (3,800) | |
Issue of convertible bonds | - | 12,546 | ||
Redemption of convertible bonds upon maturity | 19 | (7,869) | - | |
Proceeds from bank and other borrowings | 42,923 | 78,660 | ||
Repayments of bank and other borrowings | (39,277) | (28,803) | ||
Repayment of receipts under securitisation arrangements | (244) | (1,011) | ||
Principal elements of lease payments | (23) | - | ||
Settlement of derivative financial instruments | (122) | (279) | ||
Dividends paid to non-controlling interests | (196) | - | ||
Net cash generated from financing activities | 16,001 | 63,079 | ||
Net (decrease)/increase in cash and cash equivalents | (20,079) | 59,275 | ||
Cash and cash equivalents at the beginning of the period | 228,343 | 137,084 | ||
Exchange gains on cash and cash equivalents | 58 | 68 | ||
Cash and cash equivalents at the end of the period | 208,322 | 196,427 |
The above interim condensed consolidated cash flow statement should be read in conjunction with the accompanying notes.
14
NOTES TO THE INTERIM
FINANCIAL INFORMATION
1 General information
Country Garden Holdings Company Limited (the "Company") was incorporated in the Cayman Islands on 10 November 2006 as an exempted company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands.
The address of the Company's registered office is Cricket Square, Hutchins Drive, P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands. The Company is engaged in investment holding and its subsidiaries (collectively, the "Group") are principally engaged in the property development, construction, property investment and hotel operation.
The Company's shares are listed on The Stock Exchange of Hong Kong Limited.
This interim financial information is presented in Renminbi ("RMB"), unless otherwise stated, and was approved by the Board of Directors of the Company for issue on 22 August 2019. This interim financial information has not been audited.
2 Basis of preparation
This interim financial information for the six months ended 30 June 2019 has been prepared in accordance with Hong Kong Accounting Standard ("HKAS") 34, 'Interim Financial Reporting'. This interim financial information should be read in conjunction with the annual consolidated financial statements of the Company for the year ended 31 December 2018 ("2018 Financial Statements"), which have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRS") and disclosure requirements under the Hong Kong Companies Ordinance, and any public announcements made by the Company during the interim reporting period.
15
NOTES TO THE INTERIM FINANCIAL INFORMATION
3 Significant accounting policies
Except as described in Note 4 below, the accounting policies applied are consistent with those of the 2018 Financial Statements as described therein.
Except for the adoption of HKFRS 16 "Leases" of which the impact is set out in the Note 4 below, other amendments and interpretations to existing standards that are effective for the financial year beginning on 1 January 2019 and adopted by the Group for this period either do not have a material impact or are not relevant to the Group.
New and revised standards, amendments and interpretations to existing standards that have been issued and relevant to the Group but are not effective for the financial year beginning on 1 January 2019 and have not been early adopted:
Effective for the | ||
financial year | ||
beginning on or | ||
after | ||
Amendments to HKFRS 3 | Definition of a business | 1 January 2020 |
Amendments to HKAS 1 | Definition of material | 1 January 2020 |
and HKAS 8 | ||
HKFRS 17 | Insurance contracts | 1 January 2021 |
Amendments to HKFRS 10 | Sale or contribution of assets between | To be determined |
and HKAS 28 | an investor and its associates or joint ventures |
None of these is expected to have a significant impact on the Group's accounting policies.
16
NOTES TO THE INTERIM FINANCIAL INFORMATION
4 Change in accounting policy
The Group has adopted HKFRS 16 retrospectively from 1 January 2019, but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from HKFRS 16 are therefore recognised in the opening balance sheet on 1 January 2019.
-
Adjustments recognised on adoption of HKFRS 16
On adoption of HKFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as "operating leases" under the principles of HKAS 17 "Leases". These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. The weighted average lessee's incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 6.5%.
2019 | |
RMB million | |
Operating lease commitments disclosed as at 31 December 2018 | 317 |
Discounted using the lessee's incremental borrowing rate of at the | |
date of initial application | 269 |
Less: short-term leases to be recognised on a straight-line basis as expense | (25) |
Lease liabilities recognised as at 1 January 2019 | 244 |
Of which are: | |
Current lease liabilities | 75 |
Non-current lease liabilities | 169 |
Right-of-use assets were measured at the amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 31 December 2018. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.
The recognised right-of-use assets relate to the following types of assets:
30 June 2019 | 1 January 2019 | |
RMB million | RMB million | |
Lease properties | 306 | 244 |
Land use rights (reclassified from the financial statement | ||
line item"land use rights") | 3,958 | 2,496 |
Total right-of-use assets | 4,264 | 2,740 |
17
NOTES TO THE INTERIM FINANCIAL INFORMATION
4 Change in accounting policy (Continued)
- Adjustments recognised on adoption of HKFRS 16 (Continued) The recognised lease liabilities are classified as below:
30 June 2019 | 1 January 2019 | |
RMB million | RMB million | |
Current lease liabilities | 51 | 75 |
Non-current lease liabilities | 261 | 169 |
Total lease liabilities | 312 | 244 |
The change in accounting policy affected the following items in the balance sheet on 1 January 2019:
- right-of-useassets - increase by RMB2,740 million;
- lease liabilities - increase by RMB244 million.
- land use rights - decrease by RMB2,496 million;
There was no net impact on retained earnings on 1 January 2019.
In applying HKFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:
- the use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
- reliance on previous assessments on whether leases are onerous;
- the accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short-term leases;
- the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application; and
- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date, the Group relied on its assessment made applying HKAS 17 and HK(IFRIC) - Int 4 "Determining whether an Arrangement contains a Lease".
18
NOTES TO THE INTERIM FINANCIAL INFORMATION
4 Change in accounting policy (Continued)
- The Group's leasing activities and how these are accounted for
The Group leases various properties. These property lease agreements do not impose any covenants, but leased properties may not be used as security for borrowing purposes.
Until the 2018 financial year, leases of property, plant and equipment were classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease.
From 1 January 2019, long-term leases are recognised as a right-of-use assets and corresponding liabilities at the date at which the lease asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: - fixed payments (including in-substance fixed payments), less any lease incentives receivable;
- variable lease payment that are based on an index or a rate;
- amounts expected to be payable by the lessee under residual value guarantees;
- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
- the amount of the initial measurement of lease liabilities;
- any lease payments made at or before the commencement date less any lease incentives received;
- any initial direct costs; and
- restoration costs.
Payments associated with short-term leases are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
19
NOTES TO THE INTERIM FINANCIAL INFORMATION
5 Judgements and estimates
The preparation of the interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
In preparing this interim financial information, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the 2018 Financial Statements.
6 Financial risk management
6.1 Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk (mainly including foreign exchange risk, cash flow and fair value interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.
The interim financial information does not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the 2018 Financial Statements.
There have been no significant changes in any risk management policies since the last year end.
20
NOTES TO THE INTERIM FINANCIAL INFORMATION
6 Financial risk management (Continued)
6.2 Liquidity risk
The table below analyses the Group's non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity grouping based on the remaining period at the date of statement of financial position to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows and include interest, if applicable.
Between | Between | ||||
Less than | 1 and | 2 and | Over | ||
1 year | 2 years | 5 years | 5 years | Total | |
RMB million | RMB million | RMB million | RMB million | RMB million | |
Unaudited | |||||
At 30 June 2019 | |||||
Senior notes | 9,872 | 9,326 | 37,702 | 15,643 | 72,543 |
Bank and other borrowings | 93,259 | 103,914 | 50,620 | 2,036 | 249,829 |
Corporate bonds | 29,329 | 11,308 | 9,586 | - | 50,223 |
Convertible bonds | 310 | 310 | 7,817 | - | 8,437 |
Receipts under securitisation | |||||
arrangements | 569 | - | - | - | 569 |
Trade and other payables | |||||
(excluding other taxes | |||||
payable and salaries payable) | 496,747 | - | - | - | 496,747 |
Dividend payable | 6,563 | - | - | - | 6,563 |
Derivative financial instruments | 88 | 118 | 2,757 | 3 | 2,966 |
Lease liabilities | 70 | 58 | 85 | 261 | 474 |
Total | 636,807 | 125,034 | 108,567 | 17,943 | 888,351 |
Between | Between | ||||
Less than | 1 and | 2 and | Over | ||
1 year | 2 years | 5 years | 5 years | Total | |
RMB million | RMB million | RMB million | RMB million | RMB million | |
Audited | |||||
At 31 December 2018 | |||||
Senior notes | 4,224 | 8,389 | 26,799 | 12,276 | 51,688 |
Bank and other borrowings | 106,941 | 82,012 | 64,525 | 7,218 | 260,696 |
Corporate bonds | 26,016 | 10,865 | 8,632 | - | 45,513 |
Convertible bonds | 8,386 | 309 | 7,787 | - | 16,482 |
Receipts under securitisation | |||||
arrangements | 832 | - | - | - | 832 |
Trade and other payables | |||||
(excluding other taxes | |||||
payable and salaries payable) | 447,987 | - | - | - | 447,987 |
Derivative financial instruments | 111 | 239 | 1,790 | - | 2,140 |
Total | 594,497 | 101,814 | 109,533 | 19,494 | 825,338 |
21
NOTES TO THE INTERIM FINANCIAL INFORMATION
6 Financial risk management (Continued)
6.3 Fair value estimation
The table below analyses financial instruments carried or presented at fair value, by level of the inputs to valuation techniques used to measure fair value.
Level 1 | Level 2 | Level 3 | Total | |
RMB million | RMB million RMB million RMB million | |||
At 30 June 2019 | ||||
Assets | ||||
Financial assets at fair value through | ||||
other comprehensive income | 77 | - | 2,510 | 2,587 |
Derivative financial instruments | - | 2,361 | - | 2,361 |
Financial assets at fair value through | ||||
profit or loss | 338 | 14,704 | - | 15,042 |
Total | 415 | 17,065 | 2,510 | 19,990 |
Liabilities | ||||
Derivative financial instruments | - | 2,966 | - | 2,966 |
At 31 December 2018 | ||||
Assets | ||||
Financial assets at fair value through | ||||
other comprehensive income | 94 | - | 1,702 | 1,796 |
Derivative financial instruments | - | 1,242 | - | 1,242 |
Financial assets at fair value through | ||||
profit or loss | 259 | 11,760 | - | 12,019 |
Total | 353 | 13,002 | 1,702 | 15,057 |
Liabilities | ||||
Derivative financial instruments | - | 2,140 | - | 2,140 |
There were no transfers among level 1, 2 and 3 during the period.
There were no changes in valuation techniques during the period.
22
NOTES TO THE INTERIM FINANCIAL INFORMATION
7 Revenue and segment information
The executive directors of the Company review the Group's internal reporting in order to assess performance and allocate resources. The executive directors of the Company have determined the operating segments based on these reports.
The executive directors of the Company assessed the performance and operations of the Group and concluded that the Group only has two reportable segments - Property development and Construction, and the other segments are individually and collectively insignificant for segment reporting purposes.
The executive directors of the Company assess the performance of the operating segments based on a measure of operating profit, adjusted by excluding fair value changes on derivative financial instruments and including share of results of joint ventures and associates.
Segment assets consist primarily of property, plant and equipment, intangible assets, right-of-use assets, investment properties, properties under development, investments in joint ventures, investments in associates, completed properties held for sale, inventories, receivables, prepaid income tax, contract assets and contract acquisition costs and operating cash. They exclude deferred income tax assets, financial assets at fair value through other comprehensive income, financial assets at fair value through profit or loss and derivative financial instruments. Segment liabilities consist primarily of operating liabilities. They exclude senior notes, corporate bonds, convertible bonds, receipts under securitisation arrangements, bank and other borrowings, dividend payable, current and deferred income tax liabilities and derivative financial instruments.
Capital expenditure comprises additions to property, plant and equipment, investment properties, intangible assets and right-of-use assets, excluding those arising from business combinations.
Revenue consists of the following: | ||
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
Sales of properties | 196,678 | 126,885 |
Rendering of construction services | 3,459 | 2,457 |
Rental income | 143 | 117 |
Rendering of property management services | - | 1,632 |
Rendering of hotel services and others | 1,726 | 803 |
202,006 | 131,894 |
Sales between segments are carried out according to the terms and conditions agreed by the respective segments' management.
The Group's revenue is mainly attributable to the market in Mainland China and over 90% of the Group's non- current assets are located in Mainland China. No geographical information is therefore presented.
The Group has a large number of customers, none of whom contributed 10% or more of the Group's revenue.
23
NOTES TO THE INTERIM FINANCIAL INFORMATION
7 Revenue and segment information (Continued)
The segment information provided to the executive directors of the Company for the reportable segments is as follows:
Property | ||||
development | Construction | Others | Total | |
RMB million | RMB million | RMB million | RMB million | |
Six months ended 30 June 2019 | ||||
Revenue from contracts with customers | 196,678 | 21,883 | 8,050 | 226,611 |
- Recognised at a point in time | 146,934 | - | 7,200 | 154,134 |
- Recognised over time | 49,744 | 21,883 | 850 | 72,477 |
Revenue from other sources: rental income | - | - | 143 | 143 |
Segment revenue | 196,678 | 21,883 | 8,193 | 226,754 |
Inter-segment revenue | - | (18,424) | (6,324) | (24,748) |
Revenue from external customers | 196,678 | 3,459 | 1,869 | 202,006 |
Segment results | 38,427 | 171 | (142) | 38,456 |
Share of results of joint ventures | ||||
and associates | 2,353 | - | (36) | 2,317 |
Gains arising from changes in fair value of | ||||
and transfer to investment properties | - | - | 16 | 16 |
Depreciation and amortisation expenses of | ||||
property, plant and equipment, | ||||
intangible assets and right-of-use assets | 145 | 22 | 398 | 565 |
Net impairment losses on financial and | ||||
contract assets | 919 | 14 | 40 | 973 |
At 30 June 2019 | ||||
Total segment assets after elimination of | ||||
inter-segment balances | 1,605,332 | 24,389 | 75,962 | 1,705,683 |
Investments in joint ventures | ||||
and associates | 51,581 | - | 304 | 51,885 |
Capital expenditure | 957 | 20 | 2,484 | 3,461 |
Total segment liabilities after elimination of | ||||
inter-segment balances | 1,098,545 | 21,322 | 42,569 | 1,162,436 |
24
NOTES TO THE INTERIM FINANCIAL INFORMATION
7 Revenue and segment information (Continued)
Property | ||||||
development | Construction | Others | Total | |||
RMB million | RMB million | RMB million | RMB million | |||
Six months ended 30 June 2018 | ||||||
Revenue from contracts with customers | 126,885 | 16,682 | 2,807 | 146,374 | ||
- Recognised at a point in time | 87,316 | - | 71 | 87,387 | ||
- Recognised over time | 39,569 | 16,682 | 2,736 | 58,987 | ||
Revenue from other sources: rental income | - | - | 117 | 117 | ||
Segment revenue | 126,885 | 16,682 | 2,924 | 146,491 | ||
Inter-segment revenue | - | (14,225) | (372) | (14,597) | ||
Revenue from external customers | 126,885 | 2,457 | 2,552 | 131,894 | ||
Segment results | 25,463 | 157 | 1,020 | 26,640 | ||
Share of results of joint ventures | ||||||
and associates | (210) | - | - | (210) | ||
Gains arising from changes in fair value of | ||||||
and transfer to investment properties | - | - | 539 | 539 | ||
Depreciation and amortisation expenses of | ||||||
property, plant and equipment, | ||||||
intangible assets and land use rights | 167 | 15 | 336 | 518 | ||
Net impairment losses on financial and | ||||||
contract assets | 464 | 6 | 12 | 482 | ||
At 31 December 2018 | ||||||
Total segment assets after elimination of | ||||||
inter-segment balances | 1,519,796 | 21,951 | 54,189 | 1,595,936 | ||
Investments in joint ventures and associates | 46,431 | - | 228 | 46,659 | ||
Capital expenditure | 1,792 | 32 | 1,972 | 3,796 | ||
Total segment liabilities after elimination of | ||||||
inter-segment balances | 1,022,717 | 19,023 | 20,130 | 1,061,870 | ||
Reportable segment results are reconciled to profit before income tax as follows: | ||||||
Six months ended 30 June | ||||||
2019 | 2018 | |||||
RMB million | RMB million | |||||
Total segment results | 38,456 | 26,640 | ||||
Changes in fair value of derivative financial instruments | 127 | 36 | ||||
Finance income - net | 905 | 181 | ||||
Profit before income tax | 39,488 | 26,857 |
25
NOTES TO THE INTERIM FINANCIAL INFORMATION
7 Revenue and segment information (Continued)
Reportable segments' assets and liabilities are reconciled to total assets and total liabilities as follows:
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Total segment assets after elimination of | ||
inter-segment balances | 1,705,683 | 1,595,936 |
Deferred income tax assets | 21,057 | 18,701 |
Financial assets at fair value through other | ||
comprehensive income | 2,587 | 1,796 |
Financial assets at fair value through profit or loss | 15,042 | 12,019 |
Derivative financial instruments | 2,361 | 1,242 |
Total assets | 1,746,730 | 1,629,694 |
Total segment liabilities after elimination of | ||
inter-segment balances | 1,162,436 | 1,061,870 |
Dividend payable | 6,563 | - |
Deferred income tax liabilities | 26,751 | 32,224 |
Current income tax liabilities | 29,240 | 30,783 |
Senior notes | 57,465 | 41,716 |
Bank and other borrowings | 221,865 | 231,683 |
Corporate bonds | 47,336 | 41,908 |
Convertible bonds | 5,223 | 13,168 |
Receipts under securitisation arrangements | 550 | 794 |
Derivative financial instruments | 2,966 | 2,140 |
Total liabilities | 1,560,395 | 1,456,286 |
26
NOTES TO THE INTERIM FINANCIAL INFORMATION
8 Property, plant and equipment and investment properties
Property, plant | Investment | |
and equipment | properties | |
RMB million | RMB million | |
Six months ended 30 June 2019 | ||
Opening net book amount at 1 January 2019 | 23,421 | 16,435 |
Acquisition of subsidiaries (note 31) | 73 | - |
Other additions | 1,660 | 177 |
Transfer from properties under development and | ||
completed properties held for sale | - | 655 |
Revaluation gains upon transfers | - | 325 |
Fair value changes | - | (309) |
Transfer to properties under development | - | (778) |
Disposals of subsidiaries | (499) | (2,059) |
Other disposals | (247) | - |
Depreciation | (613) | - |
Exchange differences | 20 | - |
Closing net book amount at 30 June 2019 | 23,815 | 14,446 |
Six months ended 30 June 2018 | ||
Opening net book amount at 1 January 2018 | 21,628 | 8,338 |
Acquisition of subsidiaries | 572 | 2,862 |
Other additions | 2,033 | 36 |
Transfer from properties under development and | ||
completed properties held for sale | - | 1,079 |
Revaluation gains upon transfers | - | 381 |
Fair value changes | - | 158 |
Transfer to properties under development | - | (331) |
Disposals of subsidiaries | (772) | - |
Other disposals | (82) | - |
Depreciation | (560) | - |
Exchange differences | 83 | - |
Closing net book amount at 30 June 2018 | 22,902 | 12,523 |
The Group's investment properties were valued at transfer or business acquisition dates, and at 30 June 2019 and 31 December 2018 by Jones Lang LaSalle Corporate Appraisal and Advisory Limited or Cushman & Wakefield Limited, independent and professionally qualified valuers who hold recognised relevant professional qualifications and have recent experience in the locations and segments of the investment properties valued. For all investment properties, their current use equates the highest and best use.
There were no changes to the valuation techniques during the period.
The Group's policy is to recognise change of fair value hierarchy levels as of the date of event or change in circumstances that caused the change. At 30 June 2019 and 31 December 2018, the Group only had investment properties measured at Level 3 valuation.
27
NOTES TO THE INTERIM FINANCIAL INFORMATION
9 Properties under development
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Properties under development expected to be completed | ||
and delivered: | ||
- Within a normal operating cycle included under | ||
current assets | 662,174 | 626,937 |
- Beyond a normal operating cycle included under | ||
non-current assets | 126,970 | 107,812 |
789,144 | 734,749 | |
Amounts comprise: | ||
- Construction costs including depreciation and staff | ||
cost capitalised | 339,609 | 318,756 |
- Land costs | 431,165 | 398,795 |
- Borrowings costs capitalised | 18,370 | 17,198 |
789,144 | 734,749 |
The normal operating cycle of the Group's property development generally ranges from one to two years.
At 30 June 2019, properties under development included the costs to fulfil those contracts, revenue of which was recognised over time amounting to RMB15,574 million (31 December 2018: RMB16,589 million).
At 30 June 2019, properties under development amounting to RMB480,692 million (31 December 2018: RMB517,817 million) were expected to be completed and delivered beyond one year.
The capitalisation rate used to determine the amount of interest on general borrowings incurred eligible for capitalisation for the six months ended 30 June 2019 was 6.42% per annum (six months ended 30 June 2018: 6.21% per annum). Most of the properties under development are located in Mainland China.
28
NOTES TO THE INTERIM FINANCIAL INFORMATION
10 Investments in joint ventures
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
At 1 January | 27,891 | 19,346 |
Transfer from subsidiaries | 2,736 | 778 |
Other additions | 1,671 | 7,048 |
Transfer to subsidiaries | (1,324) | (112) |
Disposals | (127) | (39) |
Share of results | 1,313 | (279) |
- Gains arising from negative goodwill | 50 | 51 |
- Others | 1,263 | (330) |
At 30 June | 32,160 | 26,742 |
The balance comprises the following: | ||
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Unlisted investments | ||
- Share of net assets | 31,745 | 27,553 |
- Goodwill | 415 | 338 |
32,160 | 27,891 |
Additions during the period mainly included the acquisitions of shares in a number of property development companies, the investments in a number of newly established property development companies together with certain third parties, and the investment in certain property development companies over which the Group lost control as a result of partial disposals of the Group's interests in these companies. None of the acquisitions was individually significant to the Group.
The negative goodwill was mainly resulted from the fact that the joint ventures partners intended to cooperate with a leading property developer in the PRC to resolve liquidity issues or bring in industry expertise.
The goodwill arose from the acquisitions of properties development companies, which is mainly attributable to economies of scale expected from the acquisitions.
As at 30 June 2019, certain borrowings of joint ventures were guaranteed by the Group and/or secured by the Group's certain interests in joint ventures with an aggregate carrying value of RMB3,809 million (31 December 2018: RMB3,391 million).
29
NOTES TO THE INTERIM FINANCIAL INFORMATION
11 Investments in associates
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
At 1 January | 18,768 | 11,585 |
Transfer from subsidiaries | 34 | 286 |
Other additions | 247 | 5,332 |
Transfer to subsidiaries | (302) | (965) |
Disposals | (26) | (102) |
Share of results | 1,004 | 69 |
- Gains arising from negative goodwill | - | 153 |
- Others | 1,004 | (84) |
At 30 June | 19,725 | 16,205 |
None of the acquisition was individually significant to the Group.
As at 30 June 2019, certain borrowings of the Company and associates were guaranteed by the Group and/ or secured by the Group's certain interests in associates with an aggregate carrying value of RMB4,521 million (31 December 2018: RMB3,640 million).
12 Trade and other receivables
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Included in current assets | ||
- Trade receivables - net (note (a)) | 42,399 | 40,597 |
- Other receivables - net (note (b)) | 286,441 | 251,182 |
- Loans to related and third parties - net | 14 | 687 |
- Prepayments for land (note (c)) | 111,436 | 109,670 |
- Other prepayments | 44,772 | 24,261 |
485,062 | 426,397 | |
Included in non-current assets | ||
- Deposits for acquisitions of companies | 26,778 | 10,962 |
511,840 | 437,359 |
30
NOTES TO THE INTERIM FINANCIAL INFORMATION
12 Trade and other receivables (Continued)
- Details of trade receivables are as follows:
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Trade receivables | 42,551 | 40,724 |
Less: allowance for impairment | (152) | (127) |
Trade receivables - net | 42,399 | 40,597 |
Trade receivables mainly arise from sales of properties. Property buyers are generally granted credit terms of 1 to 6 months. The ageing analysis of trade receivables based on property delivery date is as
follows: | ||
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Within 90 days | 38,113 | 37,275 |
Over 90 days and within 180 days | 2,390 | 1,593 |
Over 180 days and within 365 days | 1,326 | 1,149 |
Over 365 days | 722 | 707 |
42,551 | 40,724 |
As at 30 June 2019 and 31 December 2018, trade receivables were mainly denominated in RMB.
There is no concentration of credit risk with respect to trade receivables as the Group has a large number of buyers. Trade receivables were collateralised by the titles of the properties sold.
31
NOTES TO THE INTERIM FINANCIAL INFORMATION
12 Trade and other receivables (Continued)
(b) Details of other receivables are as follows: | |||
30 June | 31 December | ||
2019 | 2018 | ||
RMB million | RMB million | ||
Amounts due from joint ventures, associates and other | |||
related parties | 111,997 | 83,387 | |
Land auction and other deposits | 38,900 | 61,705 | |
Others(*) | 138,403 | 107,995 | |
289,300 | 253,087 | ||
Less: allowance for impairment | (2,859) | (1,905) | |
Other receivables - net | 286,441 | 251,182 |
- These receivables mainly included current accounts due from the other shareholders of certain subsidiaries, joint ventures and associates of the Group for various payments on their behalf, which are interest-free, unsecured and repayable according to contract terms.
- Prepayments for land are related to prepaid land acquisition costs while relevant land use right certificates have not been obtained as at 30 June 2019.
13 Contract assets and contract acquisition costs
Details of contract assets and contract acquisition costs are as follows: | |||
30 June | 31 December | ||
2019 | 2018 | ||
RMB million | RMB million | ||
Contract assets related to sales of properties | 9,823 | 7,277 | |
Contract assets related to construction services | 3,670 | 2,960 | |
Contract acquisition costs | 7,057 | 6,857 | |
Total contract assets and contract acquisition costs | 20,550 | 17,094 |
32
NOTES TO THE INTERIM FINANCIAL INFORMATION
14 Cash and cash equivalents
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Cash at banks and on hand | 222,618 | 241,599 |
Short-term deposits (note (a)) | 218 | 944 |
222,836 | 242,543 | |
Less: restricted cash (note (b)) | (14,514) | (14,200) |
208,322 | 228,343 |
- The short-term deposits are denominated in RMB and have terms ranging within 3 months (31 December 2018: within 3 months). The effective interest rate of these deposits as at 30 June 2019 was 0.99% per annum (31 December 2018: 1.22% per annum).
- In accordance with relevant government requirements, certain property development companies of the Group are required to place in designated bank accounts certain amount of pre-sale proceeds as guarantee deposits for the constructions of the related properties. The deposits can only be used for payments for construction costs of the relevant properties when approval from related government authority is obtained. Unused guarantee deposits will be released after the completion of construction of the related properties.
- Cash and deposits are denominated in the following currencies:
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
RMB | 207,208 | 232,044 |
HKD | 2,760 | 902 |
USD | 3,618 | 3,575 |
Ringgit Malaysia | 8,688 | 4,518 |
Other currencies | 562 | 1,504 |
222,836 | 242,543 |
The conversion of RMB and RM denominated balances into other currencies and the remittance of bank balances and cash out of the PRC and Malaysia are subject to relevant rules and regulations of foreign exchange control promulgated by the PRC and Malaysian governments.
33
NOTES TO THE INTERIM FINANCIAL INFORMATION
15 Financial assets at fair value through profit or loss
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
PRC listed equity security (note (a)) | 338 | 259 |
Wealth management products (note (b)) | 14,704 | 11,760 |
15,042 | 12,019 |
- This represented a 2.29% (31 December 2018: 2.29%) equity interest in a company listed on the National Equities Exchange and Quotations in the PRC. The fair value of the investment at 30 June 2019 was calculated using the quoted market price.
- Wealth management products are mainly investments in financial products issued by certain financial institutions. The fair values of these investments approximated their carrying values as at 30 June 2019 and 31 December 2018.
16 Trade and other payables
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Trade payables (note (a)) | 272,051 | 255,053 |
Other payables (note (b)) | 224,183 | 192,339 |
Other taxes payable | 50,763 | 41,034 |
Salaries payable | 6,888 | 9,800 |
Accrued expenses | 513 | 595 |
554,398 | 498,821 |
- The ageing analysis of trade payables based on the date of invoices is as follows:
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Within 90 days | 226,915 | 211,512 |
Over 90 days and within 180 days | 35,886 | 34,648 |
Over 180 days and within 365 days | 6,008 | 5,698 |
Over 365 days | 3,242 | 3,195 |
272,051 | 255,053 |
- Other payables mainly included deposits from property buyers and current accounts due to certain joint ventures, associates and other shareholders of certain subsidiaries, joint ventures and associates of the Group and outstanding considerations to acquire certain subsidiaries, joint ventures and associates. These amounts are interest-free, unsecured and repayable according to contract terms.
34
NOTES TO THE INTERIM FINANCIAL INFORMATION
17 Senior notes
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
As at 1 January | 41,716 | 31,913 |
Additions (note (a)) | 16,765 | 6,451 |
Repayment on maturity (note (a)) | (1,723) | - |
Early redemption | - | (4,757) |
Interest expenses | 1,723 | 1,280 |
Coupon interest paid | (1,396) | (1,138) |
Currency translation differences | 380 | 11 |
57,465 | 33,760 | |
Less: current portion included in current liabilities | (7,038) | (5,349) |
Included in non-current liabilities | 50,427 | 28,411 |
- During the period ended 30 June 2019, the Group has newly issued and repaid senior notes as follows:
Name of notes | Par value | Interest | Issue date | Term of | |
USD | rate | the notes | |||
million | |||||
Issued during the period: | |||||
2022 Notes III | 550 | 7.125% | 25 January 2019 | 3 years | |
2024 | Notes - tranche II(*) | 450 | 8.000% | 25 January 2019 | 5 years |
2024 | Notes II | 550 | 6.500% | 8 April 2019 | 5 years |
2026 | Notes II | 950 | 7.250% | 8 April 2019 | 7 years |
Repaid during the period on maturity: | |||||
2019 Notes II | 250 | 7.500% | 5 June 2014 | 5 years |
- 2024 Notes - tranche II was consolidated and form a single series with the 2024 Notes.
-
All senior notes are listed on the Singapore Exchange Securities Trading Limited. All senior notes contain various early redemption options and put option.
Early redemption options exercisable by the Group are regarded as embedded derivatives not closely related to the host contract. The directors of the Company consider that the fair value of the above early redemption options was insignificant on initial recognition and at 30 June 2019 and 31 December 2018.
Except for the above early redemption options, the holders of the 2026 Notes have a put option to request the Company to repurchase the 2026 Notes on 15 December 2021 at the price equal to 100% of the principle amounts of the 2026 Notes. The directors of the Company consider that the fair value of this put option was insignificant on initial recognition and at 30 June 2019 and 31 December 2018.
35
NOTES TO THE INTERIM FINANCIAL INFORMATION
18 Corporate bonds
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
As at 1 January | 41,908 | 47,334 |
Acquisitions of subsidiaries | - | 3,475 |
Other additions (note (a)) | 4,374 | 324 |
Repayment upon maturity | (100) | (3,800) |
Interest expenses | 1,358 | 1,304 |
Coupon interest paid | (210) | (765) |
Currency translation differences | 6 | - |
47,336 | 47,872 | |
Less: current portion included in current liabilities | (28,098) | (17,726) |
Included in non-current liabilities | 19,238 | 30,146 |
- During the period ended 30 June 2019, corporate bonds newly issued by the Group were listed as follows:
Name of bond | Par value | Interest | Issue date | Term of |
RMB | rate | the bond | ||
million | ||||
RMB Private Corporate bonds of | ||||
Guangdong Giant Leap Construction | ||||
Co., Ltd. issued in 2019 - tranche I | 2,900 | 5.93% | 26 April 2019 | 2 years |
RMB Private House Leasing bonds of | ||||
Country Garden Property Co., Ltd. | ||||
"( Country Garden Property") | ||||
issued in 2019 - tranche I | 567 | 5.95% | 1 April 2019 | 4 years |
RMB Corporate bonds of | ||||
Country Garden Property | ||||
issued in 2019 - tranche I | 590 | 5.03% | 2 April 2019 | 5 years |
RM Private Corporate bonds of | ||||
Country Garden Real Estate Sdn. Bhd. | ||||
"( Malaysia Country Garden") | ||||
issued in 2019 - tranche III | 213 | 6.40% | 18 March 2019 | 3 years |
RM Private Corporate bonds of | ||||
Malaysia Country Garden | ||||
issued in 2019 - tranche IV | 116 | 6.40% | 8 May 2019 | 3 years |
- Certain corporate bonds issued by the Group contain a debt component, put option and coupon rate adjustment options. Debt component represents the present value of the contractually determined stream of future cash flows discounted at the prevailing market interest rate at that time applicable to instruments of comparable credit status and providing substantially the same cash flows, on the same terms, but without the embedded derivatives.
The directors of the Company consider that the fair values of the above coupon rate adjustment options and put option were insignificant on initial recognition and at 30 June 2019 and 31 December 2018.
36
NOTES TO THE INTERIM FINANCIAL INFORMATION
19 Convertible bonds
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
Liability component as at 1 January | 13,168 | - |
Additions | - | 12,171 |
Repayment upon maturity (note (a)) | (7,869) | - |
Interest expenses | 112 | 243 |
Coupon interest paid | (59) | - |
Currency translation differences | (129) | 500 |
Liability component at 30 June | 5,223 | 12,914 |
Less: current portion included in current liabilities | (21) | (12,914) |
Included in non-current liabilities | 5,202 | - |
- On 16 January 2018, the Group entered into a subscription agreement for HKD-settled convertible bonds in an aggregate principal amount of HKD15,600 million due 27 January 2019 (the "2019 Convertible Bonds"). As at 30 June 2019, the Group has redeemed all 2019 Convertible Bonds upon maturity.
- The convertible bonds were guaranteed by the Company and certain subsidiaries of the Group and secured by the equity interests in certain subsidiaries of the Group.
As at 30 June 2019, there has been no conversion of the remaining HKD-settled convertible bonds in an aggregate principal amount of HKD7,830 million due 5 December 2023.
37
NOTES TO THE INTERIM FINANCIAL INFORMATION
20 Bank and other borrowings
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Included in non-current liabilities: | ||
- Secured | 107,354 | 108,300 |
- Unsecured | 90,816 | 89,779 |
Less: current portion of non-current liabilities | (55,065) | (58,240) |
143,105 | 139,839 | |
Included in current liabilities: | ||
- Secured | 2,734 | 10,775 |
- Unsecured | 20,961 | 22,829 |
Current portion of non-current liabilities | 55,065 | 58,240 |
78,760 | 91,844 | |
Total bank and other borrowings | 221,865 | 231,683 |
The Group's borrowings as at 30 June 2019 of RMB110,088 million (31 December 2018: RMB119,075 million) were secured by certain properties, right-of-use assets and equipment of the Group with total carrying values of RMB77,452 million (31 December 2018: RMB80,098 million) and/or secured by the Group's equity investment interests.
The weighted average effective interest rates is 6.54% per annum for the six months ended 30 June 2019 (six months ended 30 June 2018: 6.26% per annum).
The carrying amounts of the bank and other borrowings approximated their fair values as these borrowings are mainly floating-rate borrowings.
The carrying amounts of the bank and other borrowings are denominated in the following currencies:
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
RMB | 174,370 | 190,139 |
HKD | 13,506 | 10,121 |
USD | 25,663 | 23,114 |
RM | 2,435 | 2,539 |
Other | 5,891 | 5,770 |
221,865 | 231,683 |
38
NOTES TO THE INTERIM FINANCIAL INFORMATION
21 Share capital and premium
Equivalent | |||||||
Nominal | nominal | ||||||
Number of | value of | value of | |||||
ordinary | ordinary | ordinary | Share | Treasury | Group | ||
shares | shares | shares | premium | Total | shares | Total | |
million | HKD million | RMB million | RMB million | RMB million | RMB million | RMB million | |
Authorised | |||||||
At 1 January 2018, 30 June 2018, | |||||||
1 January 2019 and 30 June 2019, | |||||||
HKD0.10 per share | 100,000 | 10,000 | |||||
Issued and fully paid | |||||||
At 1 January 2018 | 21,280 | 2,128 | 2,003 | 22,838 | 24,841 | (380) | 24,461 |
Issue of shares | 463 | 46 | 37 | 6,302 | 6,339 | - | 6,339 |
- Issue of shares as a result of placing | 460 | 46 | 37 | 6,293 | 6,330 | - | 6,330 |
- Issue of shares pursuant to share | |||||||
option scheme | 3 | - | - | 9 | 9 | - | 9 |
Buy-back of shares | - | - | - | - | - | (616) | (616) |
Cancellation of shares | (2) | - | - | (25) | (25) | 25 | - |
At 30 June 2018 | 21,741 | 2,174 | 2,040 | 29,115 | 31,155 | (971) | 30,184 |
At 1 January 2019 | 21,646 | 2,164 | 2,032 | 28,201 | 30,233 | (2,352) | 27,881 |
Issue of shares pursuant to share | |||||||
option scheme | 14 | 2 | 1 | 143 | 144 | - | 144 |
At 30 June 2019 | 21,660 | 2,166 | 2,033 | 28,344 | 30,377 | (2,352) | 28,025 |
39
NOTES TO THE INTERIM FINANCIAL INFORMATION
22 Other reserves and retained earnings
Other reserves | ||||||||||||
Financial assets | ||||||||||||
at fair value | Deferred | |||||||||||
through other | Cash flow | costs of | ||||||||||
Statutory | Share option | comprehensive | Translation | Revaluation | hedge | hedging | Total other | Retained | ||||
Merger reserve | reserve | reserve | income reserve | reserve | reserve | reserve | reserve | Others | reserves | earnings | Total | |
RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | RMB million | |
Balance at 1 January 2019 | (150) | 7,257 | 717 | 110 | (563) | 869 | 21 | (644) | 630 | 8,247 | 85,202 | 93,449 |
Profit for the period | - | - | - | - | - | - | - | - | - | - | 15,635 | 15,635 |
Transfer to statutory reserves | - | 32 | - | - | - | - | - | - | - | 32 | (32) | - |
2018 final dividend (note 27) | - | - | - | - | - | - | - | - | - | - | (6,563) | (6,563) |
Employee share schemes | ||||||||||||
-value of employee services | - | - | 179 | - | - | - | - | - | - | 179 | - | 179 |
-Issue of shares pursuant to | ||||||||||||
share option scheme | - | - | (9) | - | - | - | - | - | - | (9) | - | (9) |
Change in fair value of | ||||||||||||
financial assets at fair value | ||||||||||||
through other comprehensive | ||||||||||||
income | - | - | - | 72 | - | - | - | - | - | 72 | - | 72 |
Disposal of fair value of financial | ||||||||||||
assets at fair value through other | ||||||||||||
comprehensive income | - | - | - | (33) | - | - | - | - | - | (33) | 33 | - |
Effect of redemption of convertible | ||||||||||||
bond upon maturity | - | - | - | - | - | - | - | - | (220) | (220) | 220 | - |
Changes in ownership interests | ||||||||||||
in subsidiaries without | ||||||||||||
change of control | - | - | - | - | - | - | - | - | (45) | (45) | - | (45) |
Disposal of subsidiaries | - | (59) | - | - | - | - | - | - | - | (59) | 59 | - |
Currency translation differences | - | - | - | - | (345) | - | - | - | - | (345) | - | (345) |
Deferred losses on cash flow hedges | - | - | - | - | - | - | (65) | - | - | (65) | - | (65) |
Deferred gains of hedging | - | - | - | - | - | - | - | 527 | - | 527 | - | 527 |
Balance at 30 June 2019 | (150) | 7,230 | 887 | 149 | (908) | 869 | (44) | (117) | 365 | 8,281 | 94,554 | 102,835 |
Balance at 1 January 2018 | (150) | 5,342 | 396 | 3 | (521) | 869 | (14) | 455 | (437) | 5,943 | 63,267 | 69,210 |
Profit for the period | - | - | - | - | - | - | - | - | - | - | 12,939 | 12,939 |
Transfer to statutory reserves | - | 132 | - | - | - | - | - | - | - | 132 | (132) | - |
2017 final dividend | - | - | - | - | - | - | - | - | - | - | (5,424) | (5,424) |
Distribution in specie | - | (107) | - | - | - | - | - | - | (383) | (490) | (1,275) | (1,765) |
Employee share schemes | ||||||||||||
-value of employee services | - | - | 230 | - | - | - | - | - | - | 230 | - | 230 |
Change in fair value of | ||||||||||||
financial assets at fair value | ||||||||||||
through other comprehensive | ||||||||||||
income | - | - | (14) | - | - | - | - | - | (14) | - | (14) | |
Equity component of | ||||||||||||
convertible bonds | - | - | - | - | - | - | - | - | 375 | 375 | - | 375 |
Changes in ownership interests | ||||||||||||
in subsidiaries without | ||||||||||||
change of control | - | - | - | - | - | - | - | - | (380) | (380) | - | (380) |
Currency translation differences | - | - | - | - | (244) | - | - | - | - | (244) | - | (244) |
Deferred gains on cash flow | ||||||||||||
hedges | - | - | - | - | - | - | 2 | - | - | 2 | - | 2 |
Deferred costs of hedging | - | - | - | - | - | - | - | (169) | - | (169) | - | (169) |
Balance at 30 June 2018 | (150) | 5,367 | 626 | (11) | (765) | 869 | (12) | 286 | (825) | 5,385 | 69,375 | 74,760 |
40
NOTES TO THE INTERIM FINANCIAL INFORMATION
23 Other income and gains - net
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
Other income | ||
- Management and consulting service income | 718 | 269 |
- Forfeiture of advances received from property buyers | 39 | 37 |
- Government subsidy income | 32 | 27 |
789 | 333 | |
Other gains | ||
- Gains arising from negative goodwill (note 31) | 87 | 847 |
- Gains on disposals of subsidiaries (note 30) | 415 | 206 |
- Gains on disposals of joint ventures and associates | 32 | - |
- Gains on disposals of property, plant and equipment | 39 | 55 |
- Changes in fair value of derivative financial instruments | 127 | 36 |
- Others | 167 | 281 |
867 | 1,425 | |
Total other income and gains - net | 1,656 | 1,758 |
24 Expenses by nature
Six months ended 30 June | |||
2019 | 2018 | ||
RMB million | RMB million | ||
Costs of properties sold | 145,624 | 94,720 | |
Advertising and promotion costs | 2,480 | 1,358 | |
Other taxes and levies | 1,545 | 1,227 | |
Contract acquisition costs | 1,814 | 973 | |
Employee benefit expenses | 9,802 | 5,827 | |
Property management and other services expenses | 531 | 20 | |
Donations (note (a)) | 601 | 501 | |
Depreciation of property. plant and equipment | 461 | 460 | |
Amortisation of intangible assets | 37 | 23 | |
Amortisation of land use rights | - | 35 | |
Depreciation of right-of-use assets | 67 | - | |
Others | 3,477 | 1,679 | |
Total cost of sales, selling and marketing costs, | |||
administrative expenses and research and | |||
development expenses | 166,439 | 106,823 |
- During the period, 17 million (six months ended 30 June 2018: RMB55 million) of the Group's donations were made through Guoqiang Public Welfare Foundation of Guangdong Province. Certain directors of the Company are also directors of the foundation.
41
NOTES TO THE INTERIM FINANCIAL INFORMATION
25 Finance income - net
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
Finance income: | ||
- Interest income on bank deposits and others | 1,506 | 777 |
Finance costs: | ||
- Interest expenses | ||
- Bank and other borrowings | (7,809) | (5,894) |
- Senior notes (note 17) | (1,723) | (1,280) |
- Corporate bonds (note 18) | (1,358) | (1,304) |
- Convertible bonds (note 19) | (112) | (243) |
- Lease liabilities | (11) | - |
- Receipts under securitisation arrangements | (17) | (131) |
(11,030) | (8,852) | |
Less: amounts capitalised on qualifying assets | 11,030 | 8,852 |
- | - | |
- Net foreign exchange losses on financing activities | (601) | (411) |
- Loss on early redemption of senior notes | - | (185) |
(601) | (596) | |
Finance income - net | 905 | 181 |
42
NOTES TO THE INTERIM FINANCIAL INFORMATION
26 Income tax expenses
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
Current income tax | ||
- Corporate income tax | 11,310 | 5,185 |
- Land appreciation tax (note (c)) | 8,342 | 4,894 |
19,652 | 10,079 | |
Deferred income tax | ||
- Corporate income tax | (3,615) | 385 |
- Land appreciation tax (note (c)) | 161 | (126) |
- Withholding income tax on profit to be distributed | ||
in future (note (d)) | 233 | 200 |
(3,221) | 459 | |
16,431 | 10,538 |
- Hong Kong profits tax has been provided at the rate of 16.5% (2018:16.5%) on the estimated assessable profits of the Group's subsidiaries in Hong Kong.
- Mainland China corporate income tax has been provided at corporate income tax rate of 25%.
- Mainland China land appreciation tax is levied at progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sales of properties less deductible expenditures including cost of land and all property development expenditures.
- Withholding income tax is provided on the dividends to be distributed by the Mainland China subsidiaries of the Group. The relevant overseas holding companies have successfully obtained endorsement from various Mainland China tax bureaus to enjoy the treaty benefit of 5% withholding income tax rate on dividends received from the Mainland China subsidiaries of the Group. Accordingly, withholding income tax has been provided at 5% of the dividends to be distributed by the Mainland China subsidiaries of the Group.
27 Dividend
On 22 August 2019, the Board declared an interim dividend of RMB22.87 cents per share for the six months ended 30 June 2019, totalling RMB4,953 million (2018 interim dividend: RMB18.52 cents per share, totalling RMB4,017 million) with the eligible shareholders being given an option to elect to receive such interim dividend all in new shares of the Company or partly in new shares of the Company and partly in cash or all in cash. This interim dividend has not been recognised as liabilities in this interim financial information.
The final dividend in respect of 2018 of RMB30.32 cents (equivalent to HKD 34.49 cents) per share, totalling RMB6,563 million approved at the annual general meeting of the Company on 16 May 2019 has been paid in cash in July 2019.
43
NOTES TO THE INTERIM FINANCIAL INFORMATION
28 Earnings per share
-
Basic
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Group and held as treasury shares.
Six months ended 30 June | ||
2019 | 2018 | |
Profit attributable to owners of the Company (RMB million) | 15,635 | 12,939 |
Weighted average number of ordinary shares | ||
in issue (million) | 21,361 | 21,555 |
Earnings per share - Basic (RMB yuan per share) | 0.73 | 0.60 |
- Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company had four categories of dilutive potential ordinary shares: share options, awarded shares, written call options and convertible bonds. For the share options, awarded shares and written call options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options, awarded shares and written call options. The convertible bonds are assumed to have been converted into ordinary shares. Interest savings on convertible bonds are adjusted to the extent of the amount charged to the profit attributable to owners of the Company. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options, awarded shares and written call options and conversion of convertible bonds. Written call options were excluded from the computation of diluted earnings per share as they are anti-dilutive for six months ended 30 June 2019.
Six months ended 30 June | ||
2019 | 2018 | |
Profit attributable to owners of the Company (RMB million) | 15,635 | 12,939 |
Weighted average number of ordinary shares | ||
in issue (million) | 21,361 | 21,555 |
Adjustments - share options, awarded | ||
shares and convertible bonds (million) | 689 | 829 |
Weighted average number of ordinary shares for | ||
diluted earnings per share (million) | 22,050 | 22,384 |
Earnings per share - Diluted (RMB yuan per share) | 0.71 | 0.58 |
44
NOTES TO THE INTERIM FINANCIAL INFORMATION
29 Guarantees
30 June | 31 December | |
2019 | 2018 | |
RMB million | RMB million | |
Guarantees in respect of mortgage facilities for | ||
certain property buyers (note (a)) | 389,376 | 319,239 |
Guarantees to joint ventures and associates | ||
and certain third parties in respect of borrowings (note (b)) | 70,922 | 58,090 |
460,298 | 377,329 |
- These represented the guarantees in respect of mortgage facilities granted by certain banks relating to the mortgage loans arranged for certain buyers of the Group's properties. Pursuant to the terms of the guarantees, upon default in mortgage payments by these buyers, the Group is responsible to repay the outstanding mortgage principals together with accrued interest and penalty owed by the defaulted buyers to the banks and the Group is entitled to retain the legal title and take over the possession of the related properties. The above guarantees are to be discharged upon earlier of (i) issuance of the real estate ownership certificates which are generally available within three months after the buyers take possession of the relevant properties; and (ii) the satisfaction of mortgaged loans by the property buyers.
The directors of the Company consider that in case of default in payments, the net realisable value of the related properties can cover the repayment of the outstanding mortgage principals together with the accrued interest and penalty and therefore no provision has been made in this interim financial information for the guarantees. - These mainly represented the maximum exposure of the guarantees provided for the borrowings of certain joint ventures and associates.
45
NOTES TO THE INTERIM FINANCIAL INFORMATION
30 Disposals of subsidiaries
During the period, the Group disposed of interests in a number of subsidiaries to certain third parties. Details of the disposals are as follows:
RMB million | |
Disposal considerations | |
- Cash received | 1,036 |
- Outstanding and included in other receivables | 2,290 |
- Fair value of investments in joint ventures and associates | |
held after disposals | 2,770 |
6,096 | |
Less: | |
- Total net assets of subsidiaries disposed of | (11,840) |
- Non-controlling interests disposed of | 6,159 |
Gains on disposals | 415 |
Cash proceeds from disposals, net of cash disposed of | |
- Cash consideration received | 1,036 |
- Less: cash and cash equivalents in the subsidiaries disposed of | (6,643) |
Net cash outflow on disposals | (5,607) |
46
NOTES TO THE INTERIM FINANCIAL INFORMATION
31 Business combinations
Business combinations during the period mainly included the acquisitions of interest in property development companies and acquisitions of additional interests in then joint ventures and associates which were further recognised as the Group's subsidiaries. The directors of the Company consider that none of these subsidiaries acquired during the period was significant to the Group and thus the individual financial information of these subsidiaries on the acquisition dates was not disclosed.
The acquired companies' principal activities are property development and construction. The combined financial information of these acquired companies on the acquisition dates is summarised as follows:
RMB million | |
Total purchase consideration | 3,053 |
- Cash paid | |
- Fair value of investments in joint ventures and associates | 1,751 |
held before business combinations | |
4,804 | |
Total recognised amounts of identifiable assets acquired and | |
liabilities assumed | 2,613 |
Cash and cash equivalents | |
Restricted cash | 1,381 |
Property, plant and equipment | 73 |
Intangible assets | 8 |
Properties under development and completed properties held for sale | 49,507 |
Prepaid income tax | 2,469 |
Contract assets | 392 |
Trade and other receivables | 9,984 |
Deferred income tax assets | 8 |
Bank and other borrowings | (4,154) |
Trade and other payables | (18,339) |
Contract liabilities | (34,897) |
Current income tax liabilities | (2,683) |
Deferred income tax liabilities | (540) |
Total identifiable net assets | 5,822 |
Non-controlling interests | (931) |
Negative goodwill | (87) |
4,804 | |
Outflow of cash to acquire business, net of cash acquired | (3,053) |
- cash considerations paid | |
- cash and cash equivalents in the subsidiaries acquired | 2,613 |
Net cash outflow on acquisitions | (440) |
Gains arising from negative goodwill were mainly due to the fact that the sellers had the intention to exit from their investments in these acquired businesses due to various operational reasons or other shareholders intended to cooperate with a leading property developer in the PRC to resolve liquidity issues or bring in industry expertise.
The acquired businesses contributed total revenues of RMB10,403 million and net profit of RMB1,996 million to the Group for the period from their respective acquisition dates to 30 June 2019. Had these companies been consolidated from 1 January 2019, the interim condensed consolidated income statement for the six months ended 30 June 2019 would show pro-forma revenue of RMB202,013 million and profit for the period of RMB22,232 million.
47
NOTES TO THE INTERIM FINANCIAL INFORMATION
32 Related party transactions
-
Ultimate controlling shareholder
The Company is ultimately controlled by Ms. Yang Huiyan (the "Ultimate Controlling Shareholder"). - Transactions with related parties
Saved as disclosed in other notes above, the Group had the following significant transactions with related parties during the period:
Six months ended 30 June
2019 | 2018 |
RMB million | RMB million |
- Entities controlled by certain shareholder, certain directors and/or their close family members:
Purchase of design service | 2,225 | 2,905 | |
Construction service income | 6 | 78 | |
Purchase of property management services, | |||
consultancy and other services | 531 | 20 | |
Other transactions | 37 | 25 | |
2,799 | 3,028 | ||
(ii) | Joint ventures: | ||
Providing guarantee in respect of borrowings | 44,057 | 25,142 | |
Construction service income | 1,579 | 1,494 | |
Other transactions | 313 | 171 | |
45,949 | 26,807 | ||
(iii) | Associates: | ||
Providing guarantee in respect of borrowings | 26,740 | 22,262 | |
Construction service income | 1,459 | 1,049 | |
Other transactions | 320 | 110 | |
28,519 | 23,421 |
The prices for the above transactions were determined in accordance with the terms of the underlying agreements.
48
NOTES TO THE INTERIM FINANCIAL INFORMATION
32 Related party transactions (Continued)
- Key management compensation
Key management includes directors and chief executive officer of the Company.
Six months ended 30 June | ||
2019 | 2018 | |
RMB million | RMB million | |
Salaries, bonus, share-based compensation expenses and | 263 | |
other employee benefits | 260 |
- Balances with related parties
Saved as disclosed in other notes above, the Group had the following significant balances with its related parties:
30 June | 31 December |
2019 | 2018 |
RMB million | RMB million |
- Entities controlled by certain shareholder, certain directors and/or their close family members
Trade and other receivables | 3,612 | 2,435 | |
Contract assets and contract acquisition costs | 53 | 48 | |
Trade and other payables | 4,740 | 3,248 | |
(ii) | Joint ventures: | ||
Trade and other receivables | 81,349 | 51,446 | |
Contract assets and contract acquisition costs | 1,376 | 910 | |
Trade and other payables | 49,088 | 34,903 | |
(iii) | Associates: | ||
Trade and other receivables | 33,275 | 33,446 | |
Contract assets and contract acquisition costs | 1,133 | 895 | |
Trade and other payables | 34,101 | 27,388 |
The above balances due from/to related parties are mainly interest-free, unsecured and to be settled according to the contract terms.
49
DEFINITIONS
In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise:
"BNP PARIBAS" | BNP Paribas |
"Board" | the board of Directors |
"Company" | Country Garden Holdings Company Limited, an exempted company |
incorporated in the Cayman Islands with limited liability, the shares | |
of which are listed on the main board of the Stock Exchange (Stock | |
Code: 2007) | |
"Directors" | the directors of the Company |
"EEA" | European Economic Area |
"Goldman Sachs (Asia) | Goldman Sachs (Asia) L.L.C. |
L.L.C." | |
"Group" or | the Company and its subsidiaries |
"Country Garden" | |
"Hong Kong" | the Hong Kong Special Administrative Region of the PRC |
"Listing Rules" | the Rules Governing the Listing of Securities on the Stock |
Exchange | |
"Morgan Stanley" | Morgan Stanley & Co. International plc |
"PRC" | the People's Republic of China, excluding Hong Kong, Macau |
Special Administrative Region and Taiwan for the purpose of this | |
announcement | |
"PRIIPs" | Packaged retail and insurance-based investment products (2002/92/ |
EC) | |
"Proposed Notes Issue" | the proposed issue of the US$ Senior Notes by the Company |
"Purchase Agreement" | the agreement proposed to be entered into between, among others, |
the Company, Morgan Stanley, Goldman Sachs (Asia) L.L.C. and | |
BNP PARIBAS in relation to the Proposed Notes Issue | |
"SGX-ST" | Singapore Exchange Securities Trading Limited |
"Stock Exchange" | The Stock Exchange of Hong Kong Limited |
50
"Subsidiary Guarantees" | guarantees to be provided by the Subsidiary Guarantors |
"Subsidiary Guarantors" | certain existing subsidiaries of the Group providing guarantees for |
the US$ Senior Notes | |
"US$" | United States dollar, the lawful currency of the United States of |
America | |
"US$ Senior Notes" | the US$ denominated senior notes to be issued by the Company |
"U.S. Securities Act" | the United States Securities Act of 1933, as amended |
By Order of the Board
Country Garden Holdings Company Limited
MO Bin
President and Executive Director
Foshan, Guangdong Province, the PRC, 10 September 2019
As of the date of this announcement, the executive Directors are Mr. YEUNG Kwok Keung (Chairman), Ms. YANG Huiyan (Co-Chairman), Mr. MO Bin (President), Ms. YANG Ziying, Mr. YANG Zhicheng, Mr. SONG Jun, Mr. LIANG Guokun and Mr. SU Baiyuan. The non-executive Director is Mr. CHEN Chong. The independent non-executive Directors are Mr. LAI Ming, Joseph, Mr. SHEK Lai Him, Abraham, Mr. TONG Wui Tung, Mr. HUANG Hongyan and Mr. TO Yau Kwok.
51
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Country Garden Holdings Company Limited published this content on 10 September 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 September 2019 00:21:05 UTC
