2018 profit attributable to shareholders amounted to HK$44.9 billion, net profit margin 26.2%,
91.44 million sq m land bank as at the end of 2018, 2019 sales target HK$350 billion
(Hong Kong, 20 March 2019) China Overseas Land & Investment Ltd. (“COLI” or the “Group”, stock code: 0688.HK) announced its 2018 annual results today.
In 2018, the Group achieved better and faster development. Facing the new environment with increased tightening measures and tightened liquidity, the group adhered to the development strategy of seeking and making progress steadily. Contracted property sales of the Group Series of Companies were HK$301.24 billion, representing an increase of 29.8% YoY.
Profitability remained at industry-leading level, creating stable dividend growth to shareholders. In 2018, the revenue of the Group was HK$171.46 billion; operating profit was HK$70.73 billion; profit attributable to equity shareholders of the Company was HK$44.9 billion; net profit margin amounted to 26.2%, remaining at a high level in the industry. As at the end of 2018, equity attributable to shareholders were HK$283.48 billion, at industry-leading level, and net assets per share increased by 6.7% to HK$25.87. The Group proposed a final dividend of HK50 cents per share. Together with the interim dividend, the total dividend per share for the year was HK90 cents.
Revenue from commercial properties rose rapidly, staying ahead in the office building segment. In 2018, the Group’s total operating revenue from commercial properties was HK$4.06 billion, up by 38.1%. As at the end of 2018, the total area of commercial properties held by the Group Series of Companies and under operations was 4.09m sq m, which comprised a total of 42 office buildings, 13 shopping malls and 12 premium hotels. The Group is the biggest developer of office buildings under single ownership and the leased area exceeded 500,000 sq m for two consecutive years, attracting more than 120 of Fortune Global 500 companies taking on lease in the China Overseas office buildings. The Group’s co-working office brand “OfficeZip” established presence in six mainland China cities including Beijing, Shanghai and Chengdu, with co-working area amounting to approximately 30,000 sq m. It is expected that the total operating revenue from commercial properties will exceed HK$10 billion in 5 years.
Financially stable with ample cash. Committing to the principle of prudent financial management, the Group maintained the lowest debt to asset ratio among those real estate companies with an annual contracted sales above HK$100 billion. By the end of 2018, the net gearing was 33.7%, the weighted average borrowing costs were 4.30%, among the lowest level in the industry. The Group has ample cash on hand, amounting to HK$100.56 billion.
Adhered to a land acquisition strategy of seeking steady progress amid stability. In 2018, the Group acquired 63 parcels of land in 28 cities in mainland China and Hong Kong, adding a total gross floor area (“GFA”) of 17.64m sq m with an attributable interest of 12.72m sq m, and a total land premium of HK$144.32 billion with an attributable interest of HK$108.44 billion. Among the new additions to the land reserve, Hongqi Village in Shanghai, which is the largest urban village redevelopment project in the city’s downtown area, and Kai Tak Area 4B Site 2 in Kowloon, Hong Kong, attracted much market attention. As at the end of 2018, the Group Series of Companies’ total land bank was 91.44m sq m.
Promoting innovative businesses in an orderly manner and launching new businesses into operation. In 2018, the Group’s new businesses focused on real estate development saw 13 projects coming on stream, covering the Group’s 3 businesses segments – education, senior living and logistics, in 12 business types, ranging from schools, kindergartens, COLI Academy, outdoor campsites and senior apartments, to logistic industrial parks and more, with a cumulative operating area exceeding 350,000sq m. The Group will continue to explore new growth opportunities that drive its sustainable long-term development.
Diversified land acquisition channels, leveraging on an integrated model of investment, construction and operations. Last year, the Group made use of diversified land acquisition channels, leveraging on an integrated model of investment, construction and operations, the Group developed innovative investment channels. The first one is the Shenzhen Contemporary Art Centre and Urban Planning Exhibition Hall, which is one of the 60 major landmark construction projects in the “Twelfth Five-Year Plan” of Shenzhen, established as one of the new Shenzhen cultural landmarks. Another is the “Xiong An First-Bid”– Xiong An Citizen Service Centre, which is a project led by the Group to invest, construct and operate. Serving as the command and management centre for the construction of Xiong An new district, the project is a showcase of future cities.
Launched a share option scheme and named by the Central Government as a pilot organization for the “Professional Manager” system. In 2018, the Group launched its share option scheme, granting share options comprising 107 million shares to 404 middle to senior executives. In the next few years, the Group will launch the share option scheme in phases. During the year, the Group is named by the Central Government as a pilot organization for the “Professional Manager” system. Our senior executives all signed a professional manager agreement pledging their commitment to effectively create value for the Company, aligning the interest of the Company, its shareholders, business associates, staff and the community.
2019 marks the 40th anniversary of the Group, representing an era of maturity and confidence on the path ahead. Having braved the challenges of numerous economic and real estate cycles, the Group strongly believes that China’s economy is still in a period of strategic opportunity, with much room for development. Aiming to stabilise land prices, housing prices and market expectations, government policies will continue to balance between solidifying results from prior measures and maintaining steady growth. It will also reinforce city-specific policies.
In connection with the market trend, Mr. Yan Jianguo, Chairman and Chief Executive Officer of China Overseas Land & Investment Limited, said, ‘The Group will maintain its strategies and stay committed to its vision “to be an exceptional international property developer and operator”, firmly adhering to becoming a company of “Four Excellences”, with its operating philosophy of “good products, good services, good effectiveness and good citizenship”, maintaining its positioning to focus on “major cities, mainstream areas and mainstream products”, and stride through market cycles to better and faster development. Taking into account the fact that the mainland real estate industry is evolving to a steady development period, the 2019 annual contracted sales target of the Group Series of Companies is HK$350 billion.’
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