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The Group holds to its philosophy of Excellent Integrity, Eternal and Excellent Products (誠信卓越,精品永恒). This operational approach will not change as the scale of operations grows. The Group strives to improve the quality of its projects and to provide customers with a choice of differentiated and desirable products.


Annual Summary

• Projects (including joint ventures) with GFA of about 8.38 million sq m were completed.

• Turnover amounted to HK$78.61 billion, comprising the value of sales amounting to HK$60.87 million from projects completed in 2013 and HK$17.74 billion from projects completed in prior years.

• A total of 9.23 million sq m of property (including joint ventures and associated companies) was sold, raising HK$138.52 billion.

• Gross profit margin for property development projects of PRC property development remained at a satisfactory level; operating profit was HK$22.02 billion.

• Turnover of Hong Kong and Macau property development was HK$5.08 billion; operating profit was HK$1.52 billion.

• Increased effort on collecting sales proceeds resulted in collecting HK$120.4 billion from the buyers (including joint ventures) during the year. As at the end of 2013, pre-sales deposits received (including joint ventures) amounting to HK$66.88 billion, an increase of 15.0% on last year.

The property market was duly affected as the Chinese government continued to implement tightening measures in respect of the property sector. Speculation and investment sentiments were effectively curbed, as well as the rise in residential property prices. The consolidation process of the property industry has been accelerated, as a result, it is in favour of the healthy development of the industry in the long run. Domestic demand for properties remains robust as a result of China’s sound economic development, rising personal income and the ongoing urbanisation process, which underscores the Group’s confidence in the long-term development prospects of the domestic property market. As the new government change the focus to use market measures to control the property market, it is expected that austerity measures will not be tightened, causing the release of strong underlying demand which helps to improve the overall property market sentiment, therefore sales are satisfactory. As an industry leader and with the annual sales exceeding HK$100 billion in scale, the Group must be able to sustain relatively balanced sales on a monthly basis, regardless of market sentiments. By taking the opportunity of improved market sentiment and intensifying the sales effort, the contracted sales of the Group in the first half of the year exceeded 80% of the annual target. In August, the Group even lifted its annual sales target to HK$120 billion. As satisfactory market sentiments sustained during the latter half of the year, the property contracted sales (including sales by joint ventures and associated companies) for the year increased to HK$138.52 billion. Total sold area was 9.23 million sq m. Sales in mainland China were HK$136.94 billion, accounting for 98.9% of total sales. Total sold area in mainland China amounted to 9.22 million sq m. Sales in Hong Kong and Macau during the sluggish year amounted to HK$1.58 billion. On a full-year basis, the Group reported record-high sales with satisfactory selling prices, which was attributable to its shrewd judgment and flexible marketing strategies in response to market changes by the management, while the name of “China Overseas Property” brand was itself an effective driver in marketing promotion and helped to ease the pressure of cutting prices.

In response to market changes, the Group accelerated the speed of construction of its property projects in mainland China with GFA (including joint ventures) of about 8.38 million sq m was completed. The value of sales recognised as the Group’s turnover in 2013 was HK$60.87 billion. Furthermore, the level of the Group’s sales of properties completed as at the end of 2012 was satisfactory with about 910,000 sq m sold for approximately HK$17.74 billion. Hence, turnover for property development increased by 28.0% to HK$78.61 billion. The operating profit reached HK$23.54 billion. In pursuit of bigger operating scale, the Group has to accelerate its pace of development and sales for all its projects. This will result in better cash inflow, assets turnover and return on shareholders’ fund, but the gross profit margin of projects inevitably be squeezed. Taking out the effects caused by the affordable housing and the three projects repurchased from the real estate fund, the gross profit margin for property development projects of the Group was remained at a satisfactory and industry-leading level.

At the end of 2013, the Group had about 1.34 million sq m of properties held for sale with book cost of HK$19.42 billion. The Group increased effort on collecting sales proceeds, there was a cash inflow of over HK$120.4 billion from sales for the Group and the joint ventures. The pre-sales deposits were HK$66.88 billion as at the end of 2013, an increase of 15.0% compared with the previous year.

In 2014, sentiments in the property market of mainland China is expected to be stable. 2014 will still be a challenging year for most of the developers. As an operationally and financially sound developer with a strong brand name, the Group is in a relatively advantageous position. The Group is confident of its performance in 2014 and sees sound opportunities to enlarge its market shares, acquire prime sites and consolidate its market leadership. Prospects for the property markets in Hong Kong and Macau remain stable. The Group will dedicate its effort in marketing activities for projects on hand and continue to expand its business in Hong Kong and Macau when appropriate in 2014.

The Group strives to expedite its development through joint venture cooperation and mergers & acquisitions. At the end of December 2013, the Group’s investment interest in 15 joint ventures plus amounts due from and deduct amounts due to joint ventures decreased significantly to HK$13.63 billion. This was mainly due to the repurchase of the three projects cooperated with the real estate fund and that HK$7.0 billion was returned from joint ventures. Sales from joint ventures reached HK$25.06 billion and the recognised turnover was HK$32.45 billion. Besides, there was a cash inflow of about HK$25.66 billion from sales for the year and pre-sales deposits of HK$5.46 billion at the year end. All the joint ventures are financially sound and they together held cash amounted to HK$13.2 billion at the year end, of which three joint ventures have HK$3.14 billion of bank loans. Since most of the joint venture projects are large scale and close to the completion phase, the profit contribution for 2013 increased significantly to approximately HK$2.94 billion. Furthermore, COGO is the major associated company of the Group and is expected to develop rapidly in the coming years which will effectively complement the business of China Overseas Property. COGO reported good performance in 2013 with a net profit of about HK$3.38 billion. After adjusting for the profit booked by the Group when the control of COGO was acquired in 2010, the Group still recorded a net profit of about HK$830 million from COGO.