CIFI 2013 Attributable Core Net Profit Rises 64.9%

Outperforming Stated Contracted Sales Targets

Improved Financing Structure and Lowered Finance Costs

HONG KONG, Feb. 26, 2014 /PRNewswire/ --

CIFI Holdings (Group) Co., Ltd. ("CIFI," or the "Group," HKEX Code: 884), one of the "Top 100 Real Estate Developers in China" and a company focused on the property development, property investment and property management businesses in the PRC, is pleased to announce its audited annual results for the twelve months ended 31 December 2013 ("the period").

Outperforming Stated Contracted Sales Targets

During the period, the Group sustained its high rate of growth and further achieved record highs in terms of sales and profit. In 2013, the Group achieved contracted sales of RMB15.32 billion, representing a significant increase of 60.5% over the RMB9.54 billion it recorded in the previous year and surpassing the Group's initial yearly contracted sales target of RMB12.5 billion set early in the year as well as the revised sales contracted target of RMB14.0 billion in the middle of the year. In 2013, recognised revenue amounted to RMB11,909.2 million, representing a significant increase of 46.2% over the RMB8,143.9 million recorded in the previous year.

The Group's core net profit attributable to equity owners increased by 65.0% to RMB1,518.8 million in 2013 from RMB920.6 million in 2012.

The Board recommended payment of a final dividend of HK7 cents per share for the year ended 31 December 2013 (HK4 cents per share for the year ended 31 December 2012), representing a dividend payout ratio of approximately 21.9% on the core net profit attributable to equity owners.

Improved Profit Margins

Benefitting from a higher proportion of recognised revenue from sales of office projects, better profit margins from new projects due to higher selling prices versus reasonable land prices and more efficient selling and general administrative expenses as well as lower interest costs as a proportion of sales, the Group's gross profit margin and core net profit margin were 25.8% and 12.8%, respectively, in 2013, an improvement over 23.7% and 11.3%, respectively, in 2012. The Group delivered a core return on average equity of 20.0% in 2013, surpassing the 18.8% achieved in 2012.

Strategically Ventured into Three New Cities: Hangzhou, Wuhan and Shenyang

The Group's contracted sales in 2013 were dispersed among 42 projects in 10 cities. During the year, the Group launched pre-sales of 12 new projects which started pre-sales in 2013 including Shanghai CIFI City, Shanghai CIFI Jiangwan Mansion, Shanghai CIFI Samite Life, Suzhou CIFI Private Mansion Usonian City Villa, Suzhou CIFI Private Mansion, Suzhou CIFI Elegant City, Suzhou CIFI Sunny Life, Beijing CIFI Private Villa Riverside Garden, Beijing CIFI The Education Park, Tianjin CIFI Paradise Bay, Tianjin CIFI Private Mansion and Chongqing CIFI Purple City. Pre-sales of the Group's two Hangzhou new projects started in the last few days before the year-end.

CIFI was ranked 32nd and 36th nationally in terms of contracted GFA sold and contracted sales amount, respectively, in 2013 according to the "Top 50 Real Estate Enterprise Property Developers by Sales in the First Half of 2013" jointly published by China Real Estate Information Corporation and China Real Estate Appraisal Center.

The Group's land acquisitions in 2013 were characterised by (1) higher quality, better locations and larger sites in top notch first- and second-tier cities in China; (2) expansion mainly in the first- and second-tier cities where we have coverage, with new penetration into three new second-tier cities: Hangzhou, Wuhan and Shenyang; (3) being targeted at end-user demand with primarily mass market residential properties with small-to-medium unit sizes and office properties for sale; (4) attractive estimated profit margins using conservative future average selling price assumptions; and (5) use of joint venture strategies through partnerships with leading large-scale property developers, as well as other investment institutions, as equity partners.

During the year, the Group purchased 21 new projects in Shanghai, Suzhou, Hangzhou, Hefei, Jiaxing, Beijing, Tianjin, Shenyang, Chongqing, Changsha, and Wuhan, with a total planned GFA and a attributable GFA of approximately 3.8 million sq.m. and approximately 2.7 million sq.m., respectively. The corresponding land acquisition consideration attributable to the Group was approximately RMB10,771.6 million.

As at 31 December 2013, the Group's land bank amounted to a total GFA of approximately 9.2 million sq.m., of which attributable GFA amounted to approximately 7.6 million sq.m. As at 31 December 2013, the average unit cost of land bank based on the Group's attributable GFA and attributable cost was approximately RMB2,900 per sq.m.

Co-Operated with Leading Developers within the Industry, Forming Strategic Joint Ventures to Develop New Projects

In 2013, the Group successfully executed equity joint ventures with Greenland Holding Group Company Limited ("Greenland") to jointly develop the following newly acquired projects: Hangzhou Greenland CIFI Glorious City, the Shanghai Huacao Project, and the Hefei Baohe District Project. In addition, the Group successfully established a joint venture with Henderson China Properties Limited ("Henderson China") to jointly develop the Hangzhou Henderson CIFI Palace and Shanghai Hongqiao Central Business District Project. The Group's co-operation with renowned property developers demonstrates their recognition of CIFI's strong execution abilities and governance standards. The Group's joint venture strategy diversifies its financial exposure in the particular projects, enhancing its project branding and management capabilities by benefiting from synergies with its renowned project partners. In the future, the Group will strive to reinforce its co-operation with renowned property developers.

Sustained Prudent Financial Management, Improved Debt Structure and Lowered Financing Costs

While implementing its growth strategies, the Group has also strived to improve its financing structure and to lower its funding costs. As at 31 December 2013, its offshore financing accounted for approximately 31% of the Group's total indebtedness. In future, the Group plans to further increase the proportion of its offshore financing with a view to achieve longer debt tenures and lower interest costs.

Following its initial public offering, the Group has made significant progress in establishing its track record in overseas capital markets:

• In April 2013, the Company successfully issued its inaugural tranche of US dollar senior notes. Its US Dollar Bonds, with a principal amount of US$275 million, have a maturity period of five years and an annual coupon rate of 12.25%. The secondary trading prices of the US Dollar Bonds remained strong after the bond issue, reflecting market's strong acceptance of the Group's credit. In September 2013, the Group further issued the US Dollar Bonds Due 2018 with an additional principal amount of US$225 million. The issue price of the additional issue in September 2013 was 104% with an effective interest cost of 11.11% per annum.
• In July 2013, the Company signed a syndicated loan facility with a consortium of international and local banks. The Syndicated Loan is a dual-currency term loan facility with an aggregate amount of approximately US$156.5 million and a final maturity period of three years and interest rate of LIBOR or HIBOR plus 5.65% per annum.
• In January 2014, the Company issued a new tranche of 5-year US dollar senior notes with a principal amount of US$200 million at a coupon rate of 8.875%. The issue price of USD Dollar Bonds due 2019 was 99.545% with an effective interest cost of 8.99%. Within less than a year, the Company successfully lowered its issue cost of 5-year US dollar bonds from 12.25% to less than 9% per annum, reflecting market's strong acceptance of the Group's credit.
• In January 2014, the Group's 50:50 joint venture companies with Greenland Hong Kong Holdings Limited in respect of the Hangzhou Greenland CIFI Glorious City project signed onshore and offshore syndicated loans with a consortium of offshore and onshore banks. The Syndicated Loans comprise (i) an offshore US dollar/Hong Kong dollar dual currency term loan facility with an aggregate amount of approximately US$320 million and a final maturity of three years and interest of LIBOR or HIBOR plus 4% per annum offshore term loan; and (ii) an onshore RMB project development loan facility with a facility amount of RMB1 billion with a final maturity of three years and interest rate of 106% times PBOC Base Rate per annum.

In October 2013, the Company issued approximately 256.6 million new shares at an issue price of HK$1.52 per share with a consideration of approximately US$50 million to Dalvey Asset Holding Ltd., a company wholly-owned by RRJ Capital ("RRJ"). The new shares issued to RRJ accounted for approximately 4.3% of the enlarged issued share capital of CIFI.

As at 31 December 2013, the Group's net debt-to-equity ratio was 67.6% (31 December 2012: 62.5%).

Future Development

Looking ahead, for the sake of developing our core business, the Group's long-term goal is to become a leading and well-respected real estate enterprise in China. To achieve this, we are pursuing a "high growth and balanced development" strategy. This strategy targets a pace of expansion that exceeds the industry average and those of leading developers while stressing balance and discipline and avoiding ruthless, high gearing and low margin expansion. The Group will manage its future expansion cautiously by taking into account the Group's sales performance, joint venture strategy and financial stability.

Mr. Lin Zhong, Chairman and Executive Director of the Company, said, "While the current government measures on controlling the real estate sector are expected to remain in place, the chances of even more severe government policy being implemented is being alleviated by slower economic growth. We believe that the real estate industry in China is still in a long term growth phase, and high quality properties catering to end-users' demand will remain strong in the long run. Based on its abundant saleable resources within the year and using conservative sell-through assumptions, the Group has set its initial contracted sales target for the full year of 2014 at RMB22 billion, representing an increase of approximately 43.8% from the contracted sales in 2013. The Group is confident that it will achieve its sales target for 2014 and continues to emphasise and strengthen its fast turnaround and high sell-through development model."