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China Overseas Land and Investment Limited Announces 1H 2017 Interim Results Author:China Overseas Land and Investment Ltd.

China Overseas Land and Investment Limited
Announces 1H 2017 Interim Results

25th listing anniversary: record-high for contracted sales, construction commencement &
expected GFA completion, industry leading margin
Profits attributable to shareholders +25.2% YoY. Accelerated development in metropolitan cities

(Hong Kong, 21 August 2017) China Overseas Land and Investment Limited (the “Company”; Stock Code: 0688.HK) announced today the unaudited interim results of the Company and its subsidiaries (the “Group”) for the six months ended 30 June 2017.

In the first half of 2017, the Group’s contracted sales increased 33.7% compared with same period last year, to HK$127.32 billion, and corresponding area sold was 7.8 million sqm. Operating profit increased 18.0% to HK$32.13 billion; Profit attributable to equity owners of the Company increased 25.2% to HK$21.65 billion. In the past 2 years of upward-trending market, the Group continued to leverage its cost control advantage, gross profit increased 3.0ppts to 30.5%, Sales & General Administration as a percentage of revenue down from 3.4% to 2.6%, net profit margin increase 4.3ppts to 24.8%, maintained an industry leading level. As of 30 June 2017, the Group’s shareholders’ equity increased 9.5% to HK$243.4 billion, and net assets per share was HK$22.22. During the period, ROE was 9.3%. EPS increased 13.1% to HK$1.98.

Construction commencement & full year expected GFA completion reaches new height

At 19 million sqm GFA, 2017 full year expected GFA is 1.75 times of previous years. During the period, the Group broke record on its construction commencement at 9.3 million sqm. In 2017, the GFA under construction will be over 30.0 million sqm, highest in the history of the Company. These GFAs are expected to greatly augment upcoming saleable resources, speeding up the growth of the Company’s residential business.

Diversified land strategy

Since this year, the Group has actively searched for diversified land acquisition channels, through open market and cooperation, realizing low land premium, pushing down land cost. During the period, the Group added 27 land parcels in mainland China and Hong Kong, with total GFA over 6.33 million sqm; at the end of June, the Group’s land bank is 58.53 million sqm. From January to July 2017, the Group has acquired a total of 36 land parcels, where average land premium of those in mainland is 38.8%. 

Prudent financial management. Tight control on cash collection

The Group continues to uphold prudent financial policies and adopt an effective and integrated financial and capital usage and financing model. The Group considers carefully the cost of funding onshore and offshore and strives to maintain reasonable gearing level and cash balances. As at 30 June 2017, net gearing was at 16.1%, raising the efficiency of capital usage, with room to improve in the future. During the period, the Group repaid the debt of CITIC asset portfolio high-interest and other term-to-maturity notes, the weighted average borrowing costs of the Group dropped from 4.76% in 2016 to 4.2%, among the lowest levels in the industry.  With HK$119.5 billion cash on hand, the financial of the Group is ample.

During the period, cash collection was HK$114.8 billion, 32.5% higher than the same period last year which was HK$86.7 billion. The Group, through managing its cash collection, has achieved cash collection ratio at 90.2%, continues to be one of the highest in the industry.

Mr. Yan Jianguo, Chairman and Chief Executive Officer of COLI said, “During the year, the Group has diversified its land acquisition channels, speed up augmenting its land bank, speed up the pace of development, making new record-highs on construction commencement and GFA under construction, thereby effectively amplify upcoming saleable resources. Considering the market condition and more saleable resources of the Group, the Group has decided to raise the full year sales target (inclusive of join ventures and associates) by 10%.”

With regards to the market, Yan expressed, “Going forward, the Group will focus on high-value target customer segments and demands of upgraders which are core competence of the Group. We will strive to penetrate the high-value end of the markets in 1st and 2nd tier cities and following rail transport development to accelerate its development in core metropolitan cities. At the same time, the Group will adopt a more flexible and effective multi-channel investment mode and seize acquisition opportunities so as to maintain faster development on a quality and effective base.”

25th anniversary of listing. Over HK$38 billion accumulated dividend distributed

COLI became listed on the Hong Kong Stock exchange on 20 August 1992. This year we are proudly celebrating the 38th anniversary of our establishment, 25th anniversary of our listing, and 10th anniversary of becoming a blue chip stock of the Hang Seng Index, representing exceptional accomplishment in China’s real estate industry.  COLI’s market capitalization has surged from Hk$4.2 billion at its initial listing to about HK$280 billion as at mid-August 2017. We have so far distributed an accumulated dividend of more than HK$38 billion to our shareholders, delivering great returns to our shareholders.

Taking this opportunity, COLI would like to thank all shareholders and friends, their support has made our strides steady and sure. Going forward, we will continue to march forward with vision and passion, going hand in hand with our shareholders and friends through economic and industry cycles, and together witness and share our rewards over time.

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COLI management at 1H 2017 Interim Results

From left: Mr. Luo Liang, Vice President and Chief Architect; Mr. Yan Jianguo, Chairman and Chief Executive Officer; Mr. Horace Nip, Chief Financial Officer

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