2019 profit attributable to shareholders amounted to RMB41.62 billion, net profit margin 25.4%,
89.23 million sq m land reserves as at the end of 2019
(Hong Kong, 26 March 2020) China Overseas Land & Investment Ltd. (“COLI” or the “Group”, stock code: 0688.HK) announced its 2019 annual results today.
Built on 40 years of development and having braved the challenges of numerous economic and real estate cycles, the Group holds a long-term market perspective in planning the development of the enterprise to ensure steady and sustained long-term growth.
In 2019, the Group maintained a better and faster high-quality growth, with industry leading profitability to create stable and growing return to shareholders. Contracted property sales of the Group Series of Companies in 2019 were HK$377.17 billion, representing an increase of 25.2% YoY. The revenue of the Group was RMB163.65 billion, profit attributable to equity shareholders of the Company increased by 10.3% to RMB41.62 billion; net profit margin amounted to 25.4%, among the highest in the industry. At the end of 2019, shareholders’ funds increased to RMB280.60 billion, at the forefront of the industry, net assets per share was RMB25.61, basic earnings per share of the Group was RMB3.80. The Group proposed a final dividend of HK57 cents per share, together with the interim dividend, the total dividend per share for the year was HK102 cents. The Group’s aggregate cash dividend payment between 2017 and 2019 exceeded HK$29.8 billion.
Financially stable with ample cash. Committed to the principle of prudent financial management, as at the end of 2019, the Group’s liability to assets ratio was 60.06%, net gearing was 33.68%, lowest among real estate companies with an annual contracted sales above RMB100 billion. In 2019, the weighted average borrowing costs was 4.21%, among the lowest level in the industry. The Group has ample cash on hand, amounting to RMB95.45 billion. The three major international credit rating agencies assigned to COLI the highest investment grade ratings among mainland property developers: Baa1 (Moody’s), BBB+ (S&P) and A- (Fitch).
Focused development in first- and second-tier cities with higher safety margins. During the year, the Group acquired 53 parcels of land in 25 cities in mainland China and Hong Kong, adding a total gross floor area (“GFA”) of 11.46 million sq m, attributable GFA of 10.97 million sq m, and a corresponding attributable land premium of RMB113.4 billion. The vigorous roll-out of highspeed rail and urban rail is accelerating population transfer to higher tier cities. We focus on cultivating first- and second-tier cities with higher safety margins and stronger ability to resist risk. Approximately 68% of the Group’s new land bank in 2019 was located in the Guangdong-Hong Kong-Macau Greater Bay Area, the Beijing-Tianjin-Hebei urban agglomeration and the Yangtze River Delta metropolitan area.
Over 80% of the land reserves was located in first- and second-tier cities. As at the end of 2019, the land reserves of the Group Series of Companies totalled 89.23 million sq m, of which more than 80% was located in first- and second-tier cities. The Group ranks top three in local market share in 23 cities and achieved sales in excess of HK$10 billion in 11 major cities. Sales in Beijing exceeded HK$ 40 billion, while sales in Nanjing and Guangzhou exceeded HK$ 20 billion.
Revenue from commercial properties rose steadily, staying ahead in the office building segment. In 2019, the Group’s total revenue from commercial properties was RMB4.16 billion, an increase of 22% YoY. As at the end of 2019, the total area of commercial properties held by the Group Series of Companies and under operations was 4.38 million sq m, which comprised a total of 45 office buildings, 13 shopping malls, 12 premium hotels and two long-term rental apartments. The Group is the largest single ownership office developer and operator in mainland China, attracting more than 140 of Fortune Global 500 companies to be a tenant in the China Overseas office buildings. The Group’s flexible working office brand “OfficeZip” established presence in seven mainland China cities including Beijing, Shanghai and Chengdu, with a total of 12 OfficeZip projects with an area of approximately 74,000 sq m. It is expected that the total revenue from commercial properties will exceed HK$10 billion in 2023.
The Group adheres to its product philosophy “enjoyable space, smart IoT, green technology and healthy living”. To meet the needs of customers in the coming era, we have adopted “going smart” and industrialisation as the two major directions for a quality upgrade. During the year, COLI joined hands with technology companies including Huawei to lead the research and development and application of smart communities and smart homes for the world’s first 5G community, China Overseas Zhenru Mansion in Shanghai. The Group also differentiated from more than 40 of its peers by participating in the preparation of two national standards: “Smart Community Construction Code” and “Smart Building Design Standard”.
The Group continues to fulfill its corporate social responsibility. Staying on the course of green development, the Group secured green building certification for 74 new projects in 2019, with a building area of 15.82 million sq m. The Group’s “Sea of Hope” charitable initiative was carried out in three national-level poverty stricken counties which were Kang county, Zhuoni county, Kangle county, promoting systematic poverty alleviation through industry promotion, consumption promotion, and local education, such efforts were highly recognized by different sectors of society. The Group has been included in the “Hang Seng Corporate Sustainability Index” for ten consecutive years and received a BB rating from MSCI ESG Research in 2019.
In the first quarter of 2020, the Group was united in its targeted efforts against the Covid-19 outbreak, ensured the safety and protection of all employees, so that none of our Wuhan employees were infected. The Group actively and efficiently implemented epidemic prevention and control in its properties and communities, to accelerate the resumption of work and production rationally. Dozens of employees of the Group participated in the volunteering and donated anti-epidemic materials to hospitals, related institutions in cities such as Wuhan, Shenzhen. At the end of the February, Commercial properties of The Group exempted rents by more than RMB20 million, to relieve pressure on our partners. As of now, except those in Wuhan, all other sales offices, construction sites and commercial properties in operation have resumed work 100%.
The spread of Covid-19 has now been controlled in China. The Group is confident that the property market in China will continue to exceed RMB10 trillion per annum, and the Group is steadfast in its determination to pursue its core strategy, adhering to its sustainability visions of “Good Products”, “Good Services”, “Good Citizenship” and “Good Effectiveness”, and maintain the strategic structural balance of “today, tomorrow, and the day after tomorrow”. Residential development is the Group’s main businesses of today; Commercial asset management is the growth driver of tomorrow; new businesses including senior living, education and logistics are the growth drivers of tomorrow, and will spur growth the day after tomorrow.
In 2020, the Central Government continues to increase counter-cyclical adjustments to ensure stable progress of the economy. Aiming to stabilise land prices, housing prices and market expectations, government policies continue to guide the steady growth of the real estate industry. Though the release of home purchase demand has been delayed by the Covid-19 outbreak, such demand will not disappear. City-specific policies have become more targeted and flexible, which will bring more differentiated market opportunities. The Group is confident of achieving steady and sustained growth in 2020.
From left to right: COLI’s management team: Mr. ZHANG Zhichao, CEO; Mr. YAN Jianguo, Chairman; Mr. LUO Liang, Vice Chairman, Executive Vice President, COO and Chief Architect; Mr. GUO Guanghui, Vice President
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