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.
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© 2019 Country Garden Holdings Company Limited. All rights reserved.
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Content |
- Results Highlights
- Business Overview
- 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%
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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%
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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 |
- Results Highlights
- Business Overview
- 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.
- 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.
- 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 |
- Results Highlight
- Business Overview
- 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:
- As at 30 June 2019; attributable salable resources are estimated by calculating expected ASP, expected GFA and attributable ratio
- 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. | 24 |
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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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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Disclaimer
Country Garden Holdings Company Limited published this content on 22 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 August 2019 07:57:03 UTC