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China Overseas Land & Investment Ltd. Announces 2020 Annual Results Author:China Overseas Land and Investment Ltd.

Contracted sales, revenue and profit attributable to shareholders
excluding fair value gain achieved double-digit growth against market headwinds
Double-digit dividend growth in the year, full-year dividend payout ratio over 30%

(Hong Kong, 29 March 2021) China Overseas Land & Investment Ltd. (“COLI” or the “Group”, stock code: 0688.HK) announced its 2020 annual results today.

Despite the uncertainty in the external environment, the Group in 2020 achieved substantive growth.

The Group Series of Companies achieved contracted property sales of RMB360.72 billion, an increase of 12.5% as compared to last year. Revenue of the Group increased by 13.5% to RMB185.79 billion. Profit attributable to the shareholders of the Company amounted to RMB43.90 billion, profit attributable to the shareholders of the Company after deducting net gains after tax arising from changes in fair value of investment properties, amounted to RMB38.03 billion, an increase of 10.9% as compared to last year; basic earnings per share increased by 5.5% to RMB4.01 as compared to last year, net profit margin reached 23.6%, which were at an outstanding level in the industry. As at the end of 2020, net assets per share was RMB28.68, return on equity was 14.8%. The Board proposed a final dividend of HK73 cents per share, together with the interim dividend, total cash dividends for the year were HK118 cents per share, an increase of 15.7% as compared to last year, dividend payout ratio was 30.23%.

Financially stable and with ample cash on hand, average borrowing cost remains at the lowest range in the industry. The Group is committed to the principle of prudent financial strategy, indicators such as liability to asset ratio were much lower than those required by the controlling measures under the “three red lines”, thus qualifying as a “green category” enterprise. As at the end of 2020, the Group’s liability to asset ratio was 60.1%, net gearing 32.6%; the weighted average borrowing cost was 3.8%, which was in the lowest range in the industry; cash on hand was RMB110.47 billion. The three major international credit rating agencies assigned to COLI the highest grade ratings among mainland property developers: A- (Fitch), Baa1 (Moody’s), and BBB+ (S&P). With the ongoing tightening of financial policies in the real estate industry, the advantage of the Group’s financial strength has become more prominent.

Strategically focuses on major cities, ensuring high-quality operation. The Group Series of Companies in 2020 achieved contracted sales of RMB360.72 billion, an increase of 12.5% as compared to last year. The market share in major cities continued to rise. In 2020, the contracted sales of first-tier cities Beijing-Shanghai-Guangzhou-Shenzhen and Hong Kong reached RMB112.6 billion. The Group Series of Companies had 6 projects ranked top 15 in national single project sales, and ranked top three in market share in 18 cities.

Increases market penetration in first- and second-tier cities, promoting “blue ocean strategy”. During the year, the Group acquired 64 land parcels in 30 cities in Mainland China and in Hong Kong, adding 13.28 million sq m attributable GFA to the land reserve with attributable land premium of RMB131.80 billion. Among which, attributable land premium of metropolitan areas in Beijing-Tianjin-Hebei region, Yangtze River Delta and Greater Bay Area reached RMB78.5 billion, accounting for 59.6%; attributable land premium of first-tier cities reached RMB 43.5 billion, accounting for 33.0%. To adapt to the second half of the real estate match in which high-quality land is increasingly scarce, the Group will promote “blue ocean strategy” of land investment to acquire large, quality land through multiple channels. During the year, the Group successfully secured a batch of mega-sized projects including the Shanghai Hongqi Village project, Wuhan Hanyang District project, Taiyuan Tanghuaichanyeyuan District project, and Shanghai East Jianguo Road project, each with a construction area in excess of one million sq m. The value of the Group’s newly added attributable land premium through the “blue ocean strategy” reached RMB32.7 billion, accounting for 24.8% of the total attributable land premium in the year. As at the end of 2020, the total land reserve of the Group Series of Companies reached 91.90 million sq m.

The Group’s owned commercial assets achieved quality growth and met revenue target as scheduled. In 2020, the Group’s operating revenue from commercial properties reached RMB4.40 billion. As at the end of 2020, the Group Series of Companies owned and operated 49 office buildings and 16 shopping malls. As the largest single-ownership office developer and operator in Mainland China, Fortune Global 500 companies accounted for more than 25% of the leased area.

Growing from the main business of real estate development, steps further into upstream and downstream on diversified businesses. During the year, the Group built a number of investment platforms driven by technology, including investment and establishment of Lingchao Supply Chain Management Company which is committed to building an integrated, industry-leading B2B building materials service platform; established Haizhichuang Technology Company Limited, to collaborate with a number of high-tech companies and focus on investing in smart space and smart community products; established Guojian Smart Energy Technology Company Limited, which focuses on investment, construction, operation and related technology research and development of electric charging piles, to promote research and development as well as application of industrial ecology.

The Group continues to fulfill corporate social responsibility and progress along the path of green development. As at the end of 2020, the Group had 64 new projects that obtained green building certifications, with a certified GFA of 10.95 million sq m; one project obtained Platinum-level pre-certification under the WELL Building Standard, and the Group was granted for the first time the “Healthy Building Label (健康建築評價標識)” certification, under the Group Standard of Architectural Society of Mainland China, where 16 projects were certified. During the year, the Group promoted the development of green finance and issued two tranches of domestic CMBS. The first tranche was the first and largest-ever domestic green CMBS project, which also earned green certification and CMBS of the Year at “Frontiers Awards” in the 5th Annual China Real Estate Securitization Summit 2020.

In 2020, supporting the fight against the pandemic and work and production resumption, the Group granted rent reduction of approximately RMB125 million to 1,300 commercial properties tenants. The Group achieved various targeted poverty alleviation initiatives, including poverty alleviation through industry support and education, establishing agricultural brand “Sea of Hope” in Kangle County, Kang County and Zhuoni County in Gansu Province, successfully helping them to become self-sufficient.

During the year, the Group was awarded “Corporate Citizen of the Year 2020” and “Outstanding Enterprise in Social Responsibility 2020”, selected as a constituent stock of the Hang Seng Corporate Sustainability Index Series for eleven consecutive years, included in the newly introduced Hang Seng ESG50 Index by Hang Seng Index Company Limited in July, as well as rated BB by MSCI ESG Ratings.

In 2021, China’s economy is expected to maintain quality growth, the real estate market will grow steadily and healthily. The Group will commit to being “a Company of Four Excellences” through “Good Products, Good Services, Good Effectiveness, Good Citizen”, keeping its eyes on the long term and grow through openness.

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