Revenue Recorded a Three-fold Growth to RMB1,437,841,000
Driving Up Core Profit Increase more than Five-fold
HONG KONG, April 1 /PRNewswire-Asia/ --
Financial Highlights
RMB'000 For the year ended 31 December
2008 2007
Revenue 1,437,841 330,043
Gross profit 496,550 164,342
Gross profit margin 34.5% 49.8%
Increase in fair value of investment
properties 104,235 405,776
Profit attributable to shareholders 253,986 391,306
Basic earnings per share (RMB cents) 13 26
Final dividend per share (RMB cents) 2 --
(As at 31 December 2008)
Land Bank 5,325,527 sq. m.
(sufficient for coming 5 years)
Cash and cash equivalents RMB1,668,441,000
Zhong An Real Estate Limited ("Zhong An" or the "Group"; stock code: 672), one of the leading PRC property developers in Pan Yangtze River Delta region, announced today its annual results for the year ended 31 December 2008.
During the year under review, the growth momentum of the Group's revenue persisted despite the challenges facing the PRC's property market, with revenue up 336% to RMB1,437,841,000. The increase in the fair value of investment properties for the year 2008 dropped significantly as compared to 2007. Excluding this factor, core profit recorded a gain of RMB178,080,000, representing an increase of 543% as compared to the previous year. Basic earnings per share were RMB0.13. Profit attributable to shareholders was RMB253,986,000. The Board of Directors recommended the payment of final dividend of RMB2 cents per share (2007: Nil).
The Group's Chairman Mr. Shi Kancheng said, "The year 2008 was a watershed year for the PRC's property market following ten years of high-speed growth. The growth momentum of the market weakened quickly as a result of PRC government's macro control measures launched in the first half of the year. Then the global financial crisis that emerged in the middle of the year caused the property market to go downhill rapidly from its peak, plunging the market to doldrums. In the face of the challenging business environment, the Group upheld its prudent investment strategy and maintained a financial policy that attached importance to high cash flow and a low gearing ratio. As a result, it was able to maintain its strength to promote business growth. Capitalizing on the low land cost it enjoyed, the Group enhanced the flexibility of its property pricing strategy, thus achieving satisfactory results this year."
During the year under review, the Group's residential projects in Zhejiang and Anhui provinces were developed without a hitch. The sales were satisfactory and helped consolidate the Group's foundation for long-term growth. During the year, the Group's booked GFA reached 244,099 sq. m., of which New White Horse Apartment in Hangzhou accounted for 183,642 sq. m. As for Phase 1 and 2 of Vancouver City in Huaibei, Anhui, the booked GFA was more than 54,000 sq. m.
In addition to residential projects, the Group has proactively diversified itself in Pan Yangtze River Delta region in order to increase and stabilize revenue sources. The Highlong Plaza, a large-scale integrated commercial development project in Xiaoshan district, Hangzhou, was completed by different stages and operated officially during the year. The occupancy rates of the shopping arcade, office building and hotel were approximately 100%, 55% and 43% respectively. Serviced apartment building was well-received by the market after its commencement of operation since December 2008. Another commercial property, International Office Centre, started construction in August 2008.
As for land bank, the Group took a prudent approach in acquiring land during the year. It also captured opportunities to acquire land sites and refine its land bank structure. In the early 2008, the Group acquired a piece of land adjacent to Xiang Lake, Xiaoshan District, Zhejiang Province with an aggregate GFA of 222,932 sq. m. for commercial use at a consideration of approximately RMB370 million. As at 31 December 2008, the total GFA of the Group's land bank in Zhejiang and Anhui provinces was approximately 5,325,527 sq. m. in total. Such land bank is sufficient for supporting the future development of the Group in the next four to five years.
During the year under review, the Group maintained a solid financial position. As of the end of 2008, the Group was in a net cash position with cash and bank deposit of approximately RMB1.67 billion. Also, the Group's gearing stayed at low level, with the ratio of total liability to total assets of 36%.
Mr. Shi concluded, "Looking ahead, the PRC property market will encounter different challenges. But the Group believes that homebuyers' demand will persist and the current problem is merely a matter of a lack of confidence of consumers. The Group will continue to focus on property development in the Yangtze River Delta, the most economically vibrant region in China, as well as well developed second-tier cities in Zhejiang province. It will seek to gain its market share by launching innovative products, broadening its sales network, offering more after-sale services and value-for-money products. Meanwhile, it will firmly uphold its clearly defined investment approach, increase the proportion of investment properties, bring in business partners, and expand its property-related industry chain that encompasses property management and retail business, with a view to balancing the amount of revenues from different businesses and building an investment properties portfolio with comprehensive lifestyle features. Leveraging on its solid financial strength and abundant cash flow, the Group will capture opportunities brought about by the market adjustment. It will follow a prudent approach as it seeks to acquire high quality projects and develop high-end villas. It will refine its asset line-up, boost its overall corporate strength and reinforce the Group's business foundation so as to promote long-term and steady growth and generate maximum returns for its shareholders."
About Zhong An
Zhong An, one of the leading PRC property developers in Pan Yangtze River Delta region, possesses more than10 years of experience in property development and is primarily engaged in the development and sales of large-scale mid- to high-end residential properties in two prominent provinces of Pan Yangtze River Delta region - Zhejiang Province and Anhui Province. The Group also develops and holds commercial properties, including shopping arcades, office buildings and serviced apartment buildings, for long-term investment in order to diversify its operation and revenue sources.
For enquiries, please contact:
iPR Ogilvy Ltd.
Callis Lau/ Tina Law/ Andson Tsang/ Juliana Li/ Polly Leung
Tel: +852-2136-6952/ +852-2136-6181/ +852-2136-6178/ +852-2169-0467/
+852-2136-8059
Fax: +852-3170-6606
Email: callis.lau@iprogilvy.com/ tina.law@iprogilvy.com /
andson.tsang@iprogilvy.com/ juliana.li@iprogilvy.com/
polly.leung@iprogilvy.com
