Financial Year 2019: Interim Results Presentation

Financial Year 2019: Interim Results Presentation 22 August 2019

Disclaimer

This presentation may contain forward-looking statements. Any such forward-looking statements are based on a number of assumptions about the operations of the Country Garden Holdings Company Limited (the "Company") and factors beyond the Company's control and are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from these forward-looking statements. The Company undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such dates. The information in this presentation should be considered in the context of the circumstances prevailing at the time of its presentation and has not been, and will not be, updated to reflect material developments which may occur after the date of this presentation. The slides forming part of this presentation have been prepared solely as a support for oral discussion about background information about the Company. This presentation also contains information and statistics relating to the China and property development industry. The Company has derived such information and data from unofficial sources, without independent verification. The Company cannot ensure that these sources have compiled such data and information on the same basis or with the same degree of accuracy or completeness as are found in other industries. You should not place undue reliance on statements in this presentation regarding the property development industry. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. Information and opinion contained in this presentation may be based on or derived from the judgment and opinion of the management of the Company. Such information is not always capable of verification or validation. None of the Company or financial adviser of the Company, or any of their respective directors, officers, employees, agents or advisers shall be in any way responsible for the contents hereof, or shall be liable for any loss arising from use of the information contained in this presentation or otherwise arising in connection therewith. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. It shall not to be construed as a solicitation or an offer or invitation to buy or sell any securities or related financial instruments. No part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This presentation may not be copied or otherwise reproduced.

This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No securities may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. No public offer of securities is to be made by the Company in the United States.

© 2019 Country Garden Holdings Company Limited. All rights reserved.

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Content

1. Results Highlights
2. Business Overview
3. Strategic Outlook

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sales outperforming peers

attributable contracted sales amounted to RMB281.95 billion

with an attributable GFA of 31.29 million sq.m.

3

significant growth in

revenue

the Group's revenue amounted to RMB202.01 billion

representing a YoY growth of 53.2%

4

sufficient cash balance

cash balance amounted to RMB222.84 billion

representing 12.8% of total asset

the Group's unused credit lines totaled RMB313.30 billion

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gross profit growth

gross profit amounted to RMB54.86 billion, up by 56.9% YoY gross profit margin up by 0.7 percentage points YoY to 27.2%

6

net profit growth

net profit amounted to RMB23.06 billion, up by 41.3% YoY

Core net profit attributable to owners of the Company amounted

to RMB15.98 billion, up by 23.4% YoY

net profit margin reached 11.4%

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financial stability enhanced

net gearing ratio reached 58.5%, dropped 0.5 p.p. YoY

total debt to EBITDA1down to 3.5x from 4.7x

EBITDA1to interest coverage ratio reached 4.4x, up 0.4x YoY

Note:

1. EBITDA is annualized profit before income tax adjusted by interest expenditure, depreciation, amortization and other non-operating profit and loss items

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steady performance in

sell-through and

cash collection

attributable sell-through rate reached 65.0%

cash collected from attributable sales of properties amounted to

RMB265.94 billion with cash collection ratio of 94.3%

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Content

1. Results Highlights
2. Business Overview
3. Strategic Outlook

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nationwide coverage

projects spanning across all provinces in Mainland China

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As at 30 June 2019, the number of projects acquired in Mainland China by the Group amounted to 2,381, spanning across 279 cities in 31 provinces/autonomous regions/municipalities and covering a total of 1,235 districts / counties.

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1

Xinjiang

Tibet

											3Heilongjiang
						7			Inner	6Jilin
								Mongolia
										29Liaoning
							8Beijing
				21	Hebei29Tianjin
		9	78	108Shandong
6	Qinghai	Ningxia	Shanxi
	138
		15Gansu					282Jiangsu
			36Shaanxi Henan164
				27Shanghai
				113Hubei Anhui
		72Sichuan 39Chongqing			64	172	Zhejiang
					Hunan
				144		92
						Jiangxi
	36Yunnan	59Guizhou					Fujian
	91			498Guangdong

Guangxi

29Hainan

Note：

1. There are 20projects outside Mainland China

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safety and quality improvement

with speed control

Keeps attaching great attention to engineering safety

and construction quality

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Construction safety is our long-term goal

• Clear responsibilities:Identify safety responsibilities at all levels of the company

• Intensified training:compulsory site safety training for workers

• Management in place:evaluate safety management effectiveness of contractors and third-party supervisors

• Raising awareness:established July 26 as "Country Garden's Production Safety Day", with regular safety events to be carried out to enhance employees' safety awareness

Object

Minimize risk

factors

PeopleEnvironment

• Strengthen emergency management:hold emergency meetings and conduct preventive measures in advance of extreme weather

• Ensure emergency response in place:special emergency plans, regular emergency trainings and rehearsals are required at regional and project level

• Risk factors examination:establish a comprehensive safety inspection system
• • Daily inspection by security officers of general contractor and supervisory agency
  • Weekly onsite inspection by project general manager
  • Monthly inspection by cooperation partners
  • Monthly inspection at regional level
  • Group's quarterlythird-party inspection
  • Special inspection on Group's safety and quality compliance
  • Monthly special safety inspection (base pit,large-scale machinery, fire prevention, winter break, high slope, high retaining wall, closed management, id- verification)

• Critical risk points assessment and control:suspend any part involving risks of major safety hazards

Management focus	①	Base pit	②	Fire prevention	③	Safety education and training	④	Work at heights
(accomplished)	⑤	Large-scale	⑥	Formwork and	⑦	Behavior management of	⑧	Temporary electricity
		machinery		scaffolding		partners		use

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Control and further enhance construction quality

Strengthening of control measures		Construction technology upgrade

• Project self-inspection • Third-party inspection

Problem	• Unannounced	•	Quality inspection of special
spotting
inspection by the Group	items

	•	Establish a three-level alerting mechanism for quality
		control: conduct monthly quality assessment meetings
		to issue warnings to regional companies where quality
		risks exist according to their level of severity and to
Problem		urge those regional companies for improvement
solving	•	Reinforce project rectification: regional companies to
		analyze lowest-ranked project to identify the problems
		by analogy. Individual quality issues can be solved
		through establishing regulations and systems
	•	Stringent selection of general contractors and supervisors
	•	Formulate key issues of quality control with a customer-
		oriented approach.
	•	Facilitate regional companies to establish regulations and
Strengthening		systems and enhance behavior management. Implement
	measures for front-end quality management
measures
•	Introduce external supervision, open construction sites for
		public visits and conduct pre-inspection by property
		owners
	•	Develop construction quality courses with regular trainings

source the from Improvement

Develop Intelligent Construction System

• Combine current construction technology with intelligent manufacturing and robotic technology to improve construction safety and quality

Unify Engineering Technical Standards

• The Group has formulated bottom line on engineering technical standards complying with law and regulations. Based on the Group's protocol, regional companies have established their own technical standards in accordance with regional characteristics.

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effective human resources

management

over 1,000 holders of doctorates

more than 320 of them were promoted to project general

manager level or above

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poverty alleviation

working for the common good

22-year dedication to poverty alleviation

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Adhere to poverty alleviation and contribute to society

		Poverty
Precise Poverty Alleviation
		Charity Education
	Alleviation

1. Through entrepreneurship investment

• Promoted industrial projects to settle in underprivileged area; supported entrepreneurs in rural area.
• Aggregated sales of poverty alleviation products amounted to approx. RMB50 million, helped more than 30,000 people in poverty to increase income.
• Developed tourism industry. First 5 tourist routes established with approx. 3,000 participants.

1. Through job creating

• Provided vocational skills training for approx. 58,400 members of rural labor force, of which 25,000 achieved recommended employment by end of June 2019.

1. Through healthcare and education services

• Established a number of healthcare and poverty alleviation funds; donated RMB100 million to support the national "Poverty Alleviation Action - Cataract Rehabilitation" project.
• Set up a charity fund to help students in poverty to complete their studies.

Covering about 336 thousand people in 14 counties

in 9 provinces

1. Charity Schools

• GuoHua Memorial Middle School: The only charity high school in China providing free education and boarding for students, with key university admission rate of 98%, 616 graduates with master degree and 97 with doctoral degree.
• Guangdong Country Garden Polytechnic: The first charity vocational college in the country with an aggregated 1,887 students and employment rate of 100%.

2. Education Foundations

• 27 tuition aids have been established, covering 39 tertiary institutions with total donation of RMB2.1 billion.

3. Training for teachers at rural schools

• Conducted training for teachers at rural schools leveraging self- owned educational resources such as GuoHua Memorial Middle School

4. Improvement of rural schooling

• Including donation of school construction funds and improvement of school facilities, etc.

Providing educational resources for students in need

The Group and the founder's family donated a total of RMB5.5 billion for public welfare and charity,

of which RMB0.6 billion was made in 1H2019 by the Group

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Content

1. Results Highlight
2. Business Overview
3. Strategic Outlook

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sufficient land bank

support the Group's steady performance

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Sufficient salable resources in Mainland China to provide strong support for future development

Acquired Attributable Salable Resources1:

RMB1,758.7 billion

• Salable resources targeting tier 1 cities: RMB314.9billion
• Salable resources targeting tier 2 cities: RMB603.5billion
• Salable resources targeting tier 3&4 cities: RMB840.3billion

Potential Attributable Salable Resources1:

RMB1,025.1 billion2

• Salable resources with signed MOU and pending for business registration: RMB20.2billion
• Salable resources with participation in primary development for land : RMB1,004.9billion

Total

Attributable

Salable

Resources:

RMB2,783.8

billion

Notes:

1. As at 30 June 2019; attributable salable resources are estimated by calculating expected ASP, expected GFA and attributable ratio
2. Estimated potential attributable salable resources targeting Shenzhen, Dongguan, Huizhou, Guangzhou, Foshan, Shanghai, Beijing and Zhengzhou are RMB680 billion, while estimated attributable salable resources of potential projects in other regions (Guiyang, Taiyuan, Xi'an, Lanzhou, Kunming, Xuzhou, etc.) are RMB345.1 billion

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Guangdong-Hong Kong- Macao Greater Bay Area

Existing attributable salable resources

amounted to RMB346.7 billion

Potential attributable salable resources

amounted to RMB551.9 billion

Existingattributable salable resources in Shenzhenamounted to RMB22.5 bn,

while potentialattributable salable resources amounted to RMB196.1 bn

Existingattributable salable resources targeting Shenzhenamounted to RMB115.5 bn,

while potentialattributable salable resources amounted to RMB414.4 bn

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Sufficient salable resources in Greater Bay Area to lead peers

Country Garden's attributable salable resources located in Guangdong-HongKong-Macao Greater Bay Area amounted to RMB346.7 billion with salable GFA of approximately 24.57 million sq.m.

Attributable	Attributable
salable resources	salable GFA
RMB billion	'000 sq. m.

Attributable	Attributable
salable resources	salable GFA
RMB billion	'000 sq. m.

23.4	3,430
42.2	3,140

Zhaoqing

Guangzhou Huizhou

77.4 2,820

109.9 8,830

Foshan

Dongguan

19.8

1,650

20.2 2,500

9.1 510

Shenzhen

Zhongshan

Jiangmen	Hong
Kong
	Zhuhai

19.9 1,020

22.5 660

2.3 10

The Group also owned potential land bank in the Greater Bay Area with attributable salable resources of

RMB551.9 billion, aggregating to RMB898.6 billion along with acquired attributable salable resources to create

significant development value

Note：	23
1. Attributable salable resources are estimated by calculating expected ASP, expected GFA and attributable ratio

Sufficient resources in urban redevelopment projects in Shenzhen with extensive market coverage

• As at 30 June 2019, the Group involved in urban redevelopment projects with attributable GFA totaled at 14.04 million sq.m., representing attributable resources of RMB 199.3 billion.

Average project clearing cycle

project clearing cycle 63 months in total

Approval	Special	Project	Signing of
by	land
regulations	principal
authorities	agreement

29 months

16 months

11 months

7 months

Progress of land clearing (as at 30 June 2019)

(RMB billion)Attributable resources by development stage

150
119.6
	120
90
	39.7
60			25.5	7.4	7.1
		30
0
Approval by	Special	Confirmation	Signing of land	Completion of
					authorities	regulations	of project	agreement	project clearing
							principal

Projects to be launched in future

(RMB billion)

120

105.7

100

80
60
				35.5
40
	14.8	19.2
	20				9.6
7.4
0
2H2019	2020	2021	2022	2023 Long-term

Note: The forecast is based on current urban redevelopment projects and has no relevance to new projects in future.

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salable resources distribution

in line with the trend of

migration

Among existing salable resources:

98% are in regions with population of over 0.5 mn; 94% are in regions featuring immigration;

75% are in top-five city clusters

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Rational distribution of salable resources: major resources in line with the trend of migration

Permanent	Attributable	Contribution to
residents by
salable resources	total salable
end of 2017
(RMB billion)	resources
(million)
>10	281.4	16%
5-10	619.6	35%
3-5	588.0	33%
1-3	210.9	12%
0.5-1	29.0	2%
<0.5	29.8	2%
Total	1,758.7	100%
	Attributable	Contribution to
Net population	salable resources	total salable
	(RMB billion)	resources
Inflow	1,659.3	94%
Outflow	99.4	6%
Total	1,758.7	100%

Attributable

City clusters salable resources (RMB billion)

Top-five city clusters

1,313.8

• Yangtze River Delta / Jiangsu,

Zhejiang, Shanghai and	358.9
Anhui
Guangdong	467.9

• BohaiRim/Beijing-Tianjin-
  Hebei-Liaoning-Shanxi-254.2Shandong-Inner Mongolia
  Area

	Middle Yangtze River /	162.1
	Hunan and Hubei
	Sichuan and Chongqing	70.7
Other pocket regions	444.9
	Henan	94.2
	Hainan	69.2
	Guizhou	64.3
	others	217.2
Total	1,758.7

Contribution

to total salable resources

75%

20%

27%

15%

9%

4%

25%

5%

4%

4%

12%

100%

As at end of June 2019, among the salable resources, 98% are in regions with population of over 0.5 million;

94% are in regions featuring immigration; 75% are in top-five city clusters

Note: Salable resources refer to figures as at 30 June 2019. Number of population migration are calculated in accordance with data from Windand statistics	26
%
on permanent residents of the city from China Urban-Rural Construction Statistical Yearbook issued by the Ministry of Housing and Urban-Rural

Development

sufficient

salable resources

attributable salable resources in 2H2019

reached RMB482.0 billion

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Products sold Attributable salable Expected attributable Attributable salable attributable to owners of resources as at 30 June new launches in 2H2019 resources by target cities

the Company in 1H2019 2019in 2H2019

Attributable salable

resources carried from

2018

Attributable salable resources in Mainland China in 2019

Attributable salable resources1in Mainland China（RMB billion）

600	Attributable sell-through rate in 1H2019:
500	65.0%	332.3	482.0
		Located	59.4	Targeting
		in Tier 1
		Tier 1 cities
		cities: 27.0
400
		Located		Targeting
		in Tier 2	156.0
	277.3	tier 2 cities
	cities:
300		139.7
273.2
200
	149.7			Targeting
			266.6
			tier 3 & 4
100	98.1	Salable resources		cities
	153.8	carried from 1H2019
	51.6	Salable resources carried
-		from 2018

Attributable new

launches in 1H2019

Note：
1. Attributable salable resources are estimated by calculating expected ASP, expected GFA and attributable ratio. Completed but unsold or under	28
construction unsold units with sales permit are also included in attributable salable resources.

robotics

to be a global leading robotics service provider

covering whole industry chain

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Develop robotic business to promote industrial innovation

Advantages

Strong R&D capability

• Establish a systematic and

standardized R&D management

system, proactively recruit

talents for scientific research,

carry out cooperation among

Business Model

Synergy

• Research and develop robots for construction leveraging continuous development of construction technology targeting real estate demand
• Develop construction technology and robots leveraging intrinsic construction demand

the industry, university and

research teams, focus on key

technologies and achieve

phased results.

• A total of 1,300 talents in R&D

team, of which more than 35%

with doctoral or master degree

Intrinsic demand

Omni industry chain

	Core			Core		Robots /
	technology			components		smart products
•	Chips	•	Controller	•	Robots for construction •
•	FPGA	•	Server driver	•	Robots for culinary
•	Operating system	•	Motor	•	Robots for healthcare
			•	…	•	Robots for inspection

Unmanned factories / Smart construction / Smart community

Intrinsic application

• Country Garden is expected to have large scale new starts of construction. We have huge demand for construction robots.
• Profound understanding of product demand makes us better adapted to market needs.

Business progress

Three major product lines :

• Robots for construction: 39 productsare under research, with 9of them having entered the on-site testing stage to fill the gap in industry supply
• Robots for healthcare:6products are under research, all of which have entered the testing stage
• Robots for culinary: theChinese restaurant serieshas been completed and is currently in trial operation, which will soon be launched to the market

Controllable R&D expenses:

• Followingon-going R&D achievements, R&D expenses amounted to RMB0.62billion in the first half of 2019. Further investment will be made subject to actual situation.

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modern agriculture

establish an international high-tech agriculture platform to provide comprehensive solutions for modern agriculture

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Integrate technology with agriculture to establish modern agriculture business with global competitiveness

Develop an omni agricultural industry chain to be a service provider of modern agricultural solutions, for the provision of diversified, safe, quality and affordable agricultural products for society

R&D

ProductionMarket

• Human Resources:

• A total of 512 talents, of which 17% with doctoral degrees;
• Focus on recruiting prominent figures in the field of R&D and professional expertise in manufacturing industry

• Leading technology:

• Introduce the world's advanced agricultural technologies from the Netherlands and Israel

• Efficient production model:
  "Company + Production Base + Farmers"
• Modern technology application:
  Extensive application of agricultural big data, molecular breeding and agriculture facility, etc.
• Safety and quality assurance:

• Engage recognizedthird-party authoritative institution for assessment (Chinese Academy of Inspection and Quarantine)

• Sales channel:

• Self-ownedretails platform

• Target customers:

• Serving approx. 4 million home owners of Country Garden
• Serving domestic and international markets

Established

projects

Progress in 1H2019

Partners

• Invested in a number of high-quality projects, including Runda Modern Agriculture, Citrus Industrial Park in Deqing County, Guangdong Province, and Animal Husbandry in Tongliao City

• Cooperated with a number of research institutions and companies including China Academy of Inspection and Quarantine, Oil Crops Research Institute of Chinese Academy of Agricultural Sciences, South China Agricultural University, Guangdong Academy of Agricultural Sciences, China Co-op Group Marine Economic

Development Co., Ltd.

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go above and beyond

with prudence

Thank you for your confidence and support in Country Garden!

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