Top Spring International Announces Interim Results 2011

Turnover and Gross Profit Surged by 14 Times and 52 Times to HK$3,103 million and HK$2,049 million for the Six Months Ended 30 June 2011

HONG KONG, Aug. 24, 2011 /PRNewswire-Asia/ --

Highlights

• Turnover increased by approximately 14 times to approximately HK$3,103.1 million from approximately HK$204.4 million in the corresponding period last year
• Gross profit margin rose to approximately 66% from approximately 19% in the corresponding period last year; Gross profit increased by 52 times year-on-year to approximately HK$2,048.9 million
• The Group achieved contracted sales of approximately RMB2,187.2 million (approximately HK$2,599.8 million) with contracted saleable GFA of 126,687 sq.m., representing an increase of approximately 19% and a decrease of approximately 3%, respectively, as compared with the corresponding period of last year
• For the period from 1 January 2011 to 19 August 2011, the Group achieved contracted sales of approximately RMB3,304.5 million (equivalent to approximately HK$3,927.9 million) with contracted saleable GFA of 198,799 sq.m.
• Rental income from investment properties amounted to approximately HK$50.5 million, representing a growth of approximately 28% as compared with the corresponding period of last year
• Profit attributable to equity shareholders was approximately HK$562.7million
• Earnings per share was approximately HK63.35 cents
• The Board of Directors has declared interim dividend of HK15 cents per share, with a payout ratio of approximately 24%

Top Spring International Holdings Limited ("Top Spring" or the "Company" and, together with its subsidiaries, the "Group") (Stock Code: 3688), a real estate property developer in the PRC and one of the major real estate property developers in Shenzhen and Changzhou, announced its interim results for the six months ended 30 June 2011.

During the six months ended 30 June 2011, the Group's turnover increased by approximately 14 times to approximately HK$3,103.1 million from approximately HK$204.4 million for the corresponding period last year. Contracted sales of the Group amounted to approximately RMB2,187.2 million (equivalent to approximately HK$2,599.8 million) with contracted saleable GFA of 126,687 sq.m., representing an increase of 19% and a decrease of approximately 3%, respectively, as compared with the corresponding period of last year. During the period under review, the Group recorded a gross profit of approximately HK$2,048.9 million, an increase of approximately 52 times as compared with the corresponding period of last year. Gross profit margin rose to approximately 66% from approximately 19% in the corresponding period of last year, mainly due to the rise in proportion of sale of high margin properties, in particular our Shenzhen Hidden Valley and The Spring Land, being recognized in the six months ended 30 June 2011.

During the period under review, profit attributable to equity shareholders of the Company amounted to approximately HK$562.7 million. Basic earnings per share was approximately HK63.35 cents (1H2010: loss per share of approximately HK7.13 cents). The Board of Directors declared the payment of an interim dividend of HK15 cents per share for the six months ended 30 June 2011, with a payout ratio of approximately 24% (1H2010: nil).

Mr. Wong Chun Hong, Executive Director, Chairman and Chief Executive Officer of the Group said "In the first half of 2011, the Group was able to achieve outstanding results even under a tough market environment in respect of contracted sales, recognized profit and the improvement of financial structure. This proves the success of our strategy of "Quality property is a gateway to quality living", "dual business line mode of medium & high-end residential and urban mixed use communities" and "land acquisition policy focusing on low land cost and high appreciation potential."

For the six months ended 30 June 2011, the total contracted saleable GFA sold amounted to 126,687 sq.m. (1H2010: 130,550 sq.m.) with total contracted sales of approximately RMB2,187.2 million (equivalent to approximately HK$2,599.8 million) (1H2010: approximately RMB1,832.4 million (equivalent to approximately HK$2,094.4 million)). For the period from 1 January 2011 to 19 August 2011, the Group has achieved contracted sales of approximately RMB3,304.5 million (equivalent to approximately HK$3,927.9 million with contracted saleable GFA of 198,799 sq.m.

For the six months ended 30 June 2011, the Group completed construction of The Spring Land Phase 2 and Shenzhen Hidden Valley Phase 4 with total saleable/leasable GFA of approximately 113,957 sq.m.. For the six months ended 30 June 2011, the Group's property development business achieved a turnover of approximately HK$2,985.1 million with saleable GFA of approximately 110,889 sq.m. being recognized, representing approximately 24 times and 10 times, respectively, over the corresponding period last year.

For the six months ended 30 June 2011, rental income from investment properties amounted to approximately HK$50.5 million, representing an increase of approximately 28% as compared with the corresponding period of last year. Excluding the shopping mall of Chengdu Landmark which is under construction, the occupancy rate of all our investment properties achieved 100% as at 30 June 2011.

In respect of the land bank, in the first half, the Group acquired commercial, logistic and residential land in Tianjin and Changzhou respectively. The total plot ratio GFA of new land bank was approximately1,819,000 sq.m. and the average cost was approximately RMB 354 per sq.m.. As at 30 June 2011, the Group had a total of 13 projects in various stages of development, including a net saleable/leasable GFA of approximately 212,861 sq.m. of completed property developments, a net saleable/leasable GFA of approximately 627,802 sq.m. under development, a net saleable/leasable GFA of approximately 3,151,597 sq.m. held for future development and a net saleable/leasable GFA of approximately 785,808 sq.m. contracted to be acquired, totalling a net saleable/leasable GFA of approximately 4,778,068 sq.m..

The Group will launch brand new projects including Chengdu Landmark and Hangzhou Hidden Valley, two new phases of Changzhou Le Leman City, and residual residential units including Shenzhen Hidden Valley, The Spring Land, Changzhou Le Leman City and Changzhou Landmark in the second half of 2011. As projects available-for-sale in the second half are not impacted by "purchase restriction" currently, the Group expects launching of the sales of those projects will further increase its contract sales and raise its brand awareness and market shares.

Looking ahead, it is expected that Chinese Government will continue to implement a proactive fiscal policy and a prudent monetary policy. Nevertheless, the management is confident of the medium- to long- term development of the Chinese property market and believes that residential and commercial property market will benefit from the urbanization trend and strong demand for improved housing and continued growth in household consumption.

For the land bank expansion, the management is of the view that quality investment opportunities will arise in the second half. Under the guiding principle of sound financial condition, the Group will prudently and actively acquire quality, cost-effective land bank in the regions of Pearl River Delta, Yangtze River Delta Regions, Beijing-Tianjin and Chengdu-Chongqing regions and continue to focus on the development, sales and operation of medium- and high-end residential and urban communities. In July and August 2011, the Group acquired additional land bank in cities including Changzhou and Huizhou amounting to approximately 535,000 square meters in the terms of plot ratio GFA and the average cost is approximately RMB900 per square meter. As at 19 August 2011, the Group had a total net saleable/leaseable land bank of approximately 5,314,000 square meters, with an average cost approximately RMB1,400 per square meter.

Mr. Wong concluded, "Looking ahead, the Group will adhere to its mission "quality property is a gateway to quality living", and continue to enhance our product quality and brand awareness. For operation and management, the Group will seek to arouse the staff's enthusiasm, improve operational efficiency, enhance corporate governance and broaden financing channels at home and abroad to further consolidate its financial strength, in order to improve our self-advantages and competitiveness in the challenging market and achieve a multi win-win situation among the Group, customers, shareholders, partners and employees."

About Top Spring

Top Spring is a real estate property developer in PRC specializing in the development and operation of urban mixed-use communities and the development and sale of upscale residential properties in the Pearl River Delta, the Yangtze River Delta Beijing-Tianjin and Chengdu-Chongqing regions. Based in Hong Kong and Shenzhen and under the leadership of Mr. Wong Chun Hong, our Founder, Chairman and Chief Executive Officer, as at 30 June 2011, we had a total of 13 property projects at various stages of development in Shenzhen, Changzhou, Hangzhou, Chengdu, Dongguan and Tianjin with a net saleable and leasable gross floor area (GFA) of approximately 4.0 million sq.m. for which we have entered into land grant contracts and/or obtained land use rights, and a net saleable and leasable GFA of approximately 0.8 million sq.m. for which we have yet to enter into land grant contracts. On 23 March 2011, Top Spring listed its shares on the Main Board of The Stock Exchange of Hong Kong Limited and opened the door to the international capital market.

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