Times China : With Stable 2021 Annual Results, Times China Will Firmly Adhere to Quality and Steady Development

2022.03.31 With Stable 2021 Annual Results, Times China Will Firmly Adhere to Quality and Steady Development

Times China Holdings Limited (stock code: 01233.HK, hereinafter "Times China") published its 2021 annual results announcement online on March 31, 2022.

▲ Online Results Announcement of Times China

Board Chairman Shum Chiu Hung (second from left), Executive Director Niu Jimin (first from left), Joint President Zhou Siyang (second from right), and Investor Relations Manager Zhou Ying (first from right) of Times China; (Note: CFO Huang Sining was not present in person, and he attended virtually due to the pandemic in Hong Kong)

The Company maintained stable, healthy development in 2021 amid dramatic fluctuations in the industry and market. In 2021, Times China recorded RMB95.59 billion in contracted sales, representing a year-on-year decrease of 4.8%. Operating income reached RMB43.64 billion for a year-on-year increase of 13.1%. The core net profit reached RMB4.8 billion, a decline of 10.9% year on year. The core net profit margin was 11.0%, dropped three percentage points year on year.

Times China management has stated that, in the future, the Company will actively adapt to the national policies and directions while adjusting the Company's business model and adopting a new one for quality and steady development. This overall effort will encourage and promote the Company's sustainable development.

Continuously Reduce Leverage Level and Build a Secure

Fundamental Position

Times China has historically maintained a sound financial style and built a secure fundamental position.

The report shows that in 2021, Times China steadily reduced the leverage level through active debt management. As of the end of 2021, the interest-bearing debts of Times China decreased by RMB8.12 billion from the end of last year. The Company's performance regarding the regulatory indicators known as the "three red lines" also continued to improve. Specifically, the net debt ratio and the cash-to-short-term debt ratio were 76.7% and 1.9, respectively, outperforming the regulatory requirements. The debt-to-assets ratio, excluding accounts received in advance, was 74.6%, a decrease of four percentage points from the end of 2020. The management of Times China has stated that the Company would further optimize its performance with respect to financial indicators and vigorously promote the objective of "turning the three red lines to green" by the end of 2022.

Concurrently, Times China was continuing to optimize the financing cost. In 2021, the average financing cost was approximately 6.6%, a decrease of 0.7percentage points from the 2020 figure of 7.3%.

Times China has, since 2021, continuously displayed its confidence to the market through multiple measures such as repurchases. In 2021, Times China repurchased 6.48 million shares with a combined value of HKD60.45 million. For the USD bonds due at the end of April 2022, Times China has repurchased approximately USD82.78 million as at the end of February 2022.

Times China will continue to reduce its leverage ratio and debts, maintain sound liquidity and fortify the margin of safety so as to ensure stability and consistent growth.

Focus on High-value Areas and Support Future Development with Premium Land Reserves

Times China has maintained a strong presence in the Guangdong-Hong Kong-Macao Greater Bay Area, and steadily developing areas with high growth potential, including the Yangtze River Delta, the middle reaches of the Yangtze River and the Chengdu-Chongqing City Cluster.

China's real-estate market was under multiple pressures and saw a decline in sales during the second half of 2021. Benefiting from the investment focus on the most economically vibrant areas in China, the market's sound resistance to pressure and the Company's proper strategy adjustment, Times China maintained stable sales results despite the trend, achieving RMB95.59 billion in contracted sales for the year.

As of the end of 2021, Times China had land reserves across 16 cities or regions, representing a total floor area of approximately 19.94 million square meters. In particular, the land reserves in the economically developed Greater Bay Area accounted for nearly 90%, which is sufficient to support the Company's development in the next three years.

Give Full Play to the Advantages of Urban Renewal and Continuously Contribute High-quality Land Reserves

Based on first-mover advantages and years of efforts, Times China has become a leader in China's urban renewal. As of the date of this report, the Company has approximately 135 urban renewal projects under different phases of development in nine Chinese cities. The total potential area available for sale is approximately 40 million square meters, and the estimated total value exceeds RMB1 trillion. Such projects are generally located in Guangzhou, Foshan, Dongguan, Shenzhen and other key cities throughout the Greater Bay Area.

Times China, in 2021, successfully transformed six urban renewal projects, with a total floor area of approximately 1.28 million square meters. Three, in particular, were transformed into land reserves, collectively representing a total floor area of approximately 990,000 square meters. With the gradual transformation of reserve projects, Times China will obtain high-quality land reserves through the process of urban renewal.

▲ Times China Board Chairman Shum Chiu Hung answered questions from attendees

With the fading of dividends from national policies and financial leverage, the real estate industry will bid farewell to the rapid development stage where scale was the most emphasized aspect. Times China stated that in the future, the Company will maintain a moderate scale, enhance the brand premium ability by creating excellent products and services, and maintain competitive profitability.

The Company will continue to maintain a strategic focus, emphasize residential development business and urban renewal business, and maintain an appropriate scale and premium land reserves. It will focus on the in-depth development of high-value areas in the Guangdong-Hong Kong-Macao Greater Bay Area as it steadily develops areas with high growth potential such as the Yangtze River Delta, the middle reaches of the Yangtze River and the Chengdu-Chongqing City Cluster, thereby achieving development of the highest quality.

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