Strong and Ample Cash Flow Focuses on Regions with Tremendous Growth Potential
HONG KONG, Nov. 1, 2012 /PRNewswire/ -- One of the leading property developers in Guangdong Province in China - China Aoyuan Property Group Limited ("Aoyuan" or the "Company", together with its subsidiaries the "Group"; Stock Code: 3883), is pleased to announce that all the conditions precedent set out in the disposal agreement of its Beijing Project have been fulfilled and completion of the disposal took place on 31 October 2012. The Group has received the total amounts in the sum of approximately HK$3,232,975,000 on the completion day. The Group is expected to record a pre-tax gain of approximately HK$1,093,670,000. Based on Aoyuan's equity investment in this project in July 2009, annualised return on equity investment in this project reaches over 40%, which is much higher than that of ordinary property development projects.
The Group entered into the disposal agreement on 27 March 2012 and conditionally agreed to sell 52.69% of the entire issued share capital of Century Profit Zone Investments Limited ("Century Profit"), which in turn owns 51% of the equity interest in Beijing Yaohui Real Estate Co. Ltd.("Yaohui"). Yaohui holds the interests of the development of the residential and commercial project "Chang'an Ave" which is located at the intersection of Xi Da Wang Road and Jianguo Road, Chaoyang District, Beijing, PRC with a total gross floor area of approximately 247,646 square meters.
Commenting on the completion of the disposal, Mr. GUO Zi Wen, Chairman of Aoyuan, said, "The Group recorded cash and bank deposits of approximately HK $ 4.87 billion as of 30 June 2012, with gearing ratio at 11.1%. We believe the cash inflow of HK$3.23 billion generated by the disposal of the Beijing project will further enhance the Group's cash flow, which was in a healthy position. It puts the Group in an advantageous position to continue its business development plan and increase its land bank when opportunities arise. The Group has adjusted its business strategy and planned to pay more attention to other regions such as Guangdong, Shenyang, Guangxi, Chongqing, Jiangsu, Hunan and Guizhou, which have strong growth potential with greater end-user demand and are less likely to be severely impacted by macroeconomic control measures by the Central Government. We will pursue the operating strategy of developing commercial and residential properties in parallel, operation model of 'rapid and balanced development' and 'rapid development, rapid sales' development strategy to maximize returns for our shareholders."
Corporate Profile
China Aoyuan Property Group Limited is listed on the Main Board of the Stock Exchange of Hong Kong Limited (Stock Code: 3883). As at 30 June 2012, Aoyuan owned a diversified portfolio of 26 projects all over China, in cities such as Guangdong, Shenyang, Jiangsu, Chongqing, Guangxi and Jiangxi. The Group has a land bank with a total GFA of approximately 8.81 million sq. m.
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