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China Logistics Property Announces 2018 Annual Results

China Logistics Property Holdings Co., Ltd
2019-03-28 16:24 2365
  • Core operating performance positive across the board, with revenue significantly up by 44.2% to RMB 582 million, net profit amounted to RMB 554 million and occupancy rate at or above 92.4%  
  • Commenced fund management business, having already attracted top institutional investors LaSalle and ICBC  
  • Included as part of Hang Seng Composite Small Cap Index and Shenzhen Connect
  • China's premium logistics facilities persistently in short supply, sector supported by government policy  
  • To accelerate growth and strengthen nationwide network in three to four years, with a key focus on Greater Bay Area, Bohai Economic Zone, Yangtze River Delta Economic Zone

HONG KONG, March 28, 2019 /PRNewswire/ -- China Logistics Property Holdings Co., Ltd ("CNLP" or the "Company", together with its subsidiaries, the "Group"; Stock code: 1589), a leading provider of logistics facilities in China, today announced its annual results ended 31 December 2018.

During the period, the Group's revenue significantly increased by 44.2% from RMB 404 million to RMB 582 million year-on-year, registering a net profit of RMB 554 million. The adjusted net profit before the effects of other gains/losses-net, exchange gains and losses, and share of profit of investments accounted for using the equity method[1] increased by 34% year-on-year. The Group's occupancy rate reached 92.4%, compared to 89.8% last year. As of 31 December 2018, the Company held 191 logistics facilities that were in operations and under construction spanning 4.1 million square meter (GFA), with an additional 3.7 million square meter (GFA) of land reserve.

Mr. LI Shifa, Chairman and President of CNLP, said: "2018 was a year of great significance to CNLP. The Group did not only record strong business and financial growth across core operations, but also repeatedly gained recognition from the capital markets. Last year, we continued to achieve ultra-high occupancy rate with our premium logistic facilities and nimble leasing strategies. Meanwhile, we also proactively built new facilities and maintained abundant land reserve to realize economy of scale and sustainable growth. The fund business we commenced last year has already been attracted institutional investment giants -- LaSalle and ICBC. We are also delighted to be part of the Hang Seng Composite Small Cap Index and Shenzhen Stock Connect. These developments have further optimized our capital structure."

Recognized once again by capital markets

Last year, the Group entered into agreement with LaSalle Investment Management Asia and ICBC International respectively, to jointly invest US$300 million and RMB 1.6 billion in operating logistics warehousing projects in China. In addition to providing capital for the Group's further expansion in China, the fund management business also helps it transform into an asset-light model, with a lower leverage and more diversified income overall. On 11 March 2019,  the Company was officially included as part of the Hang Seng Composite Index Small Cap Index and Shenzhen Connect. The southbound trading is looking to benefit the liquidity and turnover of the Company's shares.  

Mr. LI added: "The Group will strive to maintain its leading position in the industry, with the vision to become the largest provider of premium logistics facilities in China. Supported by industry tailwinds and quality capital, we believe that the Group can further strengthen our nationwide network by developing land reserve, acquiring new land, identifying new investment projects and selectively acquiring existing logistics facilities. On top of the existing high levels, we will seek to further accelerate our lease-up cycle and optimize tenant portfolio."

Growth driver: China's persistent shortage of premium logistics property

China's logistics facilities are far behind that in the developed economies, both in terms of quantity or quality. Therefore, industry leaders are exposed to enormous growth opportunities in acquiring land and developing investment projects. The Chinese government has indicated its long-term goal to further reduce the ratio of the total social logistics cost to GDP from 14.8% now to around 12% by 2025.

The importance of retail consumption in China's economic development is indisputable. The requirement for logistics facilities in the new retail era will be ever more challenging. All the clients, including third-party logistics providers, retailers, manufacturers and e-commerce companies, are looking for the most efficient logistics facilities. They do not only need to deal with the more regular end-to-end delivery required by traditional retail, but also online shopping orders from all directions. Consumer goods have to be delivered to their customers at the lowest cost and the highest efficiency in order to maintain competitiveness. This means that the market demand for logistics facilities will be higher both in terms of quantity and quality, particularly the strength of the nationwide network of logistics facilities. These together present optimistic and robust growth opportunities for CNLP as a leading player in the industry.

[1] The 2017/18 difference in "other gains/losses-net" is mainly due to the sale of Yuji project in 2017, which was not a regular business income;

The 2017/18 difference in "exchange gains and losses" is mainly due to USD/RMB exchange rates;

The 2017/18 difference in "share of profit of investments accounted for using the equity method" was mainly due to the fact that the HongYu project was still under construction in 2017 thus realized significant appreciation. The project was completed in 2018.

About China Logistics Property Holdings Co., Ltd

CNLP was one of the early entrants and pure-players in China's logistics facilities market, with major shareholders including RRJ Capital, JD.com and Sino-Ocean. Since 2003, the Group has participated in the development, operations and management of premium logistics facilities. With 15 years' experience, the Group has developed a highly effective and return driven business model. As of 31 December 2018, its prime logistics facilities portfolio reached 4.1 million square meters (GFA) with 150 logistics facilities operating in 32 logistics parks, located in logistics hubs in 16 provinces and centrally administered municipalities. The Group's extensive geographic reach and premium logistics facilities create a strong "network effect" that allows tenants to expand across its logistics facilities network as their businesses grow. The Group commenced fund management business in 2018, with over RMB 3.6 billion of assets under management as of 31 December 2018.

In March 2019, the Group was included as a constituent of Shenzhen Connect, and Hang Seng Composite Small Cap Index, respectively.

For further information about CNLP, please visit the Company's website at http://www.cnlpholdings.com.

Source: China Logistics Property Holdings Co., Ltd
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