omniture

Agile Group Holdings Limited Interim Results Announcement 2017

Profit Attributable to Shareholders Up 207.9%
Declared Interim Dividend of HK22.0 Cents Per Share
Prudent Financial Performance with Diversified Businesses
Agile Group Holdings Limited
2017-08-28 20:52 3660

HONG KONG, Aug. 28, 2017 /PRNewswire/ --


For the six months ended 30 June

Change

 (%)

(RMB million)

2017

2016

Revenue

22,315

22,558

-1.1

Gross profit

8,324

4,515

+84.4

Net profit

2,306

1,001

+130.3

Profit attributable to
shareholders of

 the Company

1,859

604

+207.9

Basic earnings per share (RMB)

0.479

0.155

+209.0

Interim dividend per share (HK cents)

0.22

-

-

Agile Group Holdings Limited ("Agile" or the "Group"; Stock Code: 3383) is pleased to announce its interim results for the six months ended 30 June 2017 ("Review Period").

For the Review Period, the revenue of the Group was RMB22,315 million, representing a decrease of 1.1% when compared with the corresponding period of last year. The Group's gross profit and profit for the period were RMB8,324 million and RMB2,306 million respectively, representing an increase of 84.4% and 130.3% when compared with the corresponding period of last year. Overall gross profit margin and net profit margin were 37.3% and 10.3% respectively, representing an increase of 17.3 percentage points and 5.9 percentage points when compared with the corresponding period of last year. Profit attributable to shareholders of the Company was RMB1,859 million, representing an increase of 207.9% when compared with the corresponding period of last year.

The board of directors of the Company (the "Board") has declared an interim dividend of HK22.0 cents per ordinary share for the six months ended 30 June 2017 (six months ended 30 June 2016: Nil).

Commenting on the Group's 2017 interim results, Mr. Chen Zhuo Lin, Chairman and President of the Group, said, "In the first half of 2017, the Central government has followed up with its policy orientation that housing supply should regain its residential purpose. Local governments adopted "City-specific Policies", with a view to curbing the demand for speculative trading, so as to rolling out a positive outlook for long-term development of the industry. During the Review Period, the Group continued to enhance its product competitiveness while capitalising on market opportunities. With a focus on the demand of first time home buyers and upgraders, the Group adjusted its marketing strategies flexibly in response to the tightening policies in each region, and launched projects in a timely manner at reasonable prices. The pre-sales performance for the first half of the year was satisfactory."

During the Review Period, the Group's accumulated pre-sales was RMB40,390 million, representing an increase of 42.0% when compared with the corresponding period of last year. The accumulated GFA pre-sold was 3.245 million sq.m., representing an increase of 13.3% when compared with the corresponding period of last year. The corresponding average selling price was RMB12,446 per sq.m., representing an increase of 25.3% when compared with the corresponding period of last year. Of these, the projects in cities including Changzhou, Guangzhou, Hainan, Nanjing, Nantong, Yunnan and Zhongshan continued to show satisfactory pre-sales performance and recorded outstanding results.

In respect of other businesses, during the Review Period, the Group's revenue from property management and property investment business recorded an increase of 15.3% and 4.0% respectively when compared with the corresponding period of last year, of which, Guangzhou Agile Center recorded an occupancy rate of 95%.

New brand image to promote diversified businesses

The year 2017 marks the 25th anniversary of the Group. From concentration on property development to diversified development, the Company's business segments have undergone great changes. The Company has introduced a new brand image this year, reflecting the business model of "focusing on property development supported by a diversified range of businesses" and laying a solid cornerstone for its diversified development in the long term.

In respect of property management, the Group continued to expand the "A-Living" business and to improve services of the "A-Steward" online platform. It also cooperated with partners in various areas, with a view to providing residents and tenants with more diversified services. As at 30 June 2017, the Group's contracted GFA under management was 70.54 million sq.m.. During the Review Period, the Group entered into a strategic cooperation framework agreement with Greenland Holdings Corporation Limited ("Greenland Group"), whereby the Group acquired 100% equity stake in Greenland Property Service to commence dual-branded strategic cooperation, with an aim to enhancing the value of their property projects, and to establish a leading integrated modern service management platform of international standards in China to provide the best and most comprehensive property management service for their clients, including property management, internet technology, tourism, advertising, marketing and housing inspection. Furthermore, Greenland Group will offer 10 million sq.m. in GFA of properties to be managed by "A-Living" each year for a period of 5 years, laying a strong foundation for the development of "A-Living".

In respect of environmental protection, the Group has focused on the development of the businesses of solid waste treatment, environmental restoration and water affairs, aiming to become a leading operator in environmental service, in which, the planned annual processing capacity of disposal hazardous waste was 1.3 million tonnes. During the Review Period, the Group successfully acquired equity interests in 3 environmental protection companies.

In respect of hotel operations and property investment, the Group continued to optimise its services, expand marketing channels, broaden sources of income and reduce operating expenses, while developing hotel and investment property related businesses prudently to increase the competitive strength of its existing assets.

Multiple strategies for replenishment of land bank

With a view to meeting its future development needs, the Group continued to adopt its strategic land replenishment plan to optimise its land bank. During the Review Period, the Group adopted a more active yet prudent land acquisition strategy and increased its land bank by acquiring a total planned GFA of 3.42 million sq.m., in which the Group's total attributable planned GFA was 2.62 million sq.m. in Changzhou, Chongqing, Haikou, Lingshui, Xi'an, Yangzhou, Zhenjiang and Zhongshan by way of tender, auction, listing-for-sale and equity acquisition. Total consideration attributable by the Group was RMB10,100 million. Among which, Haikou is the newly explored market of the Group. As at 30 June 2017, the Group had a land bank with an estimated GFA of about 31.63 million sq.m. in 45 cities and districts, laying a solid cornerstone for its property development business.

Prudent financial strategy and enhanced cash flow management

During the Review Period, the Group made efforts to accelerate its sales turnover, strengthen capital and budget management, and optimise cost and expenditure control. Meanwhile, the Group optimised its debt structure through a number of financing channels. On the offshore front, the Group completed redemption of entire RMB2,000 million 6.5% senior notes due February 2017 and USD700 million 9.875% senior notes due March 2017 by using internal resources, further reducing the effective borrowing rate to 6.35%. As at 30 June 2017, the net debt to total equity ratio of the Group was 51.0%, representing an increase of 1.9 percentage points when compared with 31 December 2016.

During the Review Period, Moody's Investors Service, Inc. and S&P Global Ratings have affirmed the long-term corporate credit ratings of "Ba3" and "BB-" to the Group respectively, and unanimously raised the outlook rating to "Positive".

Moreover, the Group continued to manage its costs and expenses. As a percentage of pre-sales value, the selling and marketing costs decreased to 2.2%, while administrative expenses decreased to 1.9%, representing a decrease of 1.5 percentage points and 0.4 percentage points respectively when compared with the corresponding period of last year. On the other hand, as a percentage of revenue, the selling and marketing costs decreased to 3.7%, while administrative expenses increased to 3.3%, representing a decrease of 0.9 percentage points and increase of 0.4 percentage points respectively when compared with the corresponding period of last year.

Prospects and strategy

Mr. Chen concluded, "Looking ahead, the overall economy of China will maintain steady growth in the second half of 2017. In addition, China is committed to promoting the development of urbanisation and positioning the Guangdong-Hong Kong-Macau Greater Bay Area as a world-class bay area, so as to rolling out a significant business opportunities to our business operated in that area. The Group will continue to uphold the philosophy of prudent development, adopt a business model of "focusing on property development supported by a diversified range of businesses" and drive the steady growth and competitive strength of all its business segments. Meanwhile, the Group will create more profit growth points and strives to maintain its leading position in the property development business.

In respect of property development, the Group will continue to offer new products in a number of its projects and launch some new projects during the second half of the year in cities including Changzhou, Suzhou, Zhengzhou and Zhongshan, mainly targeting end-users including first time home buyers and upgraders. The Group has set a three-year plan, with a view to ensuring that it can maintain a steady annual growth in property sales. While maintaining reasonable profitability, the Group will continue its flexible sales strategies to improve its sell-through rate on an ongoing basis, in order to accelerate its asset turnover and enhance the cash flows. In respect of land bank replenishment, the Group will adopt an active yet prudent land acquisition strategy, with priority given to opportunities in cities where existing projects with a competitive edge are located, as well as first-and second-tier cities with substantial growth potential. The Group will continue to optimise its land bank by way of tender, auction, listing-for-sale and equity acquisition, with a view to laying a solid foundation for steady sales growth in the long term.

In respect of property management, the Group has been expanding third-party businesses and will further take over third-party property management projects. Greenland Group has become a long-term strategic investor of the Group's property management and property related business by acquiring a 20% stake in A-Living Group in mid of August 2017. In order to realise the value of A-Living Group and enhance shareholders' return, the Group has engaged professional third parties as advisers and is finalising an application for the potential spin-off and separate listing of its property management business and value-added service on The Hong Kong Stock Exchange.

In respect of environmental protection, the Group will strive to optimise the technologies and management of existing projects, continuously improve the project management capabilities, actively explore potential environmental protection projects and further expand the business in the second half of the year. In respect of education, the Group will actively drive the construction of new schools, with a view to enhancing value and creating synergy for property projects. In respect of construction, The Group will continue to actively consolidate the businesses, including design consulting, general contracting and materials trading, home decoration and landscape, and actively develop the new innovative businesses, including new building materials and health intelligent home.

In respect of hotel operations and property investment, the Group will continue to enhance the ancillary facilities and services of its hotels and commercial properties, improve its business model and expand marketing channels, while broadening sources of income and reducing operating costs, with a view to maintaining its position in the competitive market.

The Company will adjust its annual plan in accordance with market conditions and increase the pace of development to further optimise the operation and management model, so as to enhance the overall operating efficiency and comprehensive profitability of the Group. The Group will continue to enhance its overall internal management and execution capability, with a view to laying a solid foundation for healthy development in the long term, by further streamlining the decision-making process, with ongoing control on administrative expenses and enhancement of efficiency. Meanwhile, the Group will further optimise the incentive mechanism, accelerate the co-investment scheme, with a view to sharing the profit of the project with the employees."

Corporate Profile

Agile (stock code: 3383) is principally engaged in the development of large-scale comprehensive property projects, with extensive presence in the businesses of hotel operations, property investment, property management, and environmental protection. As a renowned brand in China, the Group currently owns a diversified portfolio in over 40 cities and districts.

Agile has been listed on the Main Board of Hong Kong Stock Exchange since 2005 and is a constituent stock of Hang Seng Composite Index, Hang Seng Global Composite Index, Hang Seng Stock Connect Hong Kong Index Series, Hang Seng High Dividend Yield Index and Lippo Select HK & Mainland Property Index.

Information disclosed herein is for information purpose only. We do not warrant the accuracy and completeness of the information disclosed herein which may be subject to change without further notice. No undue reliance shall be placed on the information disclosed herein as we will not be responsible or to have any liability towards anyone for whatsoever loss and damage howsoever arising therefrom or otherwise in connection therewith. Neither information disclosed herein shall constitute or deemed to constitute an offer or invitation to purchase any of our securities nor shall form the basis of any contract or commitment whatsoever.

Source: Agile Group Holdings Limited
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