Profit Surged Significantly by 517.7% to Nearly RMB300 Million
Gross Profit Increased by 58.6% to Over RMB700 Million
Balanced and Coordinated Business Presence in the Yangtze River Delta Megalopolis
Comprehensive Operational Capabilities Continued to Improve
An established property developer in the PRC focusing on developing quality residential properties in the Yangtze River Delta Megalopolis for customers of all ages, Yincheng International Holding Co., Ltd. （“Yincheng International” or the “Company”, together with its subsidiaries, the “Group”, Stockcode: 1902) is pleased to announce its unaudited consolidated interim resultsfor the six months ended 30 June 2020 (the “Period”).
During the Period, the Group achieved a revenue of approximately RMB4,554 million,representing an increase of 21.8% YoY. The Group’s gross profit increased by 58.6% YoY to RMB713 million, while the Group’s gross profit margin increased by 3.7 percentage points to 15.7% as compared with the corresponding period lastyear, which was primarily due to the delivery of projects with higher gross profit attribution. The Group’s profit for the six months ended 30 June 2020 recorded a significant increase of approximately 517.7% YoY to approximately RMB300 million. Net profit margin increased by approximately 5.3 percentage points YoY to approximately 6.6%, mainly due to the increase in revenue derived from sale of properties such as Honor Mansion (雲台天境), Bejoy Villa (鉑悅源墅) and Jiang Shan Yu Mansion (江山御), the increase in share of gains on joint ventures and associates, and the decrease in selling and distribution expenses,administrative expenses and provision for the land appreciation tax.
Adheredto the development strategy of “Cultivatethe Yangtze River Delta” and further entry into the five regional markets
Yincheng International has always adhered to the development strategy of “based in Nanjing, cultivate the Yangtze River Delta and radiate the urban area” (「立足南京，深耕長三角，輻射都市圈」), expanded its business from Nanjing to 10 core cities in the Yangtze River Delta Megalopolis, including Nanjing, Wuxi, Hangzhou, Suzhou, Wenzhou, Zhenjiang, Ma’anshan, Xuzhou, Hefeiand Taizhou, which have been experiencing rapid economic development. During the Period, the Group further expanded into the five regional markets of Nanjing, Sunan, Zhejiang, Huaihai and Anhui. In the first half of 2020, the Group made its first foray into Wenzhou and Changshu and has acquired 2 landparcels with an aggregate GFA of over 150,000 sq.m., which led to a more balanced and coordinated business presence in the Yangtze River Delta Megalopolis.
During the Period, the Group successively obtained 6 high-quality land parcels which are mainly located in the core cities of the Yangtze River Delta Megalopolis such as Hangzhou, Hefei andWenzhou, contributing to the Group’s long-term and stable development in thefuture. As at 30 June 2020, the Group had a land bank with an aggregate GFA ofover 5.5 million sq.m., out of which the land bank with interests attributableto the Group amounted to approximately 4.3 million sq.m.. Throughout the recent years, the Group has been actively searching for mergers and acquisitions andcity-industry integration opportunities in the megalopolis. Currently, the Group has accumulated experience from projects such as the Nanjing Eastern Senior Living Health Industry Park (東方頤年健康產業園),the Airport Exhibition Town Project in Lishui District (溧水空港會展小鎮) and Nanjing Innovative Economic Industry Headquarters Cluster (南京創新型經濟產業總部集聚區).
During the six months ended 30 June 2020,the contracted sales and the contracted sales GFA of the Group amounted to approximately RMB6,123 million and approximately 336,334 sq.m. respectively.Attributable to the higher average price of the projects launched during the Period, the contracted ASP increased by 18.2% YoY to approximately RMB18,205per sq.m.. More than 60% of the contracted sales was derived from Nanjing whichASP reached approximately RMB21,689 per sq.m., representing a YoY increase ofapproximately 31.7%. Revenue recognized from sale of properties increased by 21.0% YoY to approximately RMB4,522 million, with ASP recognized amounted toapproximately RMB17,550 per sq.m.. Duringthe Period, the Group responded proactively to the challenges posed by the COVID-19 epidemic by adjusting its project launch schedule in a timely mannerand promoting its business through various channels, including the adoption of“cloud property viewing”, “cloud sales” and “cloud delivery” through onlinelive broadcasting and small applications of the new media. Such approaches would bring convenience to property owners, while the Group could develop its online customer base and undergo digital transformation at the same time. Meanwhile,by virtue of the Group’s excellent brand image and market recognition, various residential projects such as Qingyunfu (青雲府)and Dream Mansion (悅見山) of the Group were launched for sale in June and achieved excellent sales records of close to 80% sell-through rate was met on the first day of launch.
Gradually improvement in brand image and property development and operation capabilities recognizedby capital market
With years of presence in the real estatemarket of the Yangtze River Delta Megalopolis, the Group has gradually gained recognition from the capital market for its excellent brand image and property development and operation capabilities. In May 2020, the Group has successively received an issuer credit rating by Moody’s Investors Service, Inc. and Lianhe Ratings Global Limited as having a stable outlook with a credit rating of “B2”and “B+” respectively. Not only did such ratings reflect the capital market’s recognition of the Group’s performance, but also assisted the Group in further expanding its financing channels, optimizing its financial structure, andenhancing its overseas financing capabilities. Following the successful issuance of US$100 million senior notes at the end of 2019, the Group successfully issued senior notes in June 2020, which was oversubscribed by two times, reflecting the market’s recognition on the Group’s comprehensive strength and financial condition.
During the Period, the Group received various awards, including “Top 100 Real Estate Developers in China in 2020”,“Specialized Chinese Real Estate Enterprise with Excellence in Operation in 2020” and “Top 100 Listed Property Companies in China in 2020”. The Group’sproject, Yuan Stream Mansion (原溪), was also awarded “ICONIC AWARDS:Innovative Architecture” in Germany. Such awards were indications ofrecognition from authoritative organizations and industry experts on theGroup’s performance and its projects.
Enhancing comprehensive development and operation capabilities to build core competitiveness
Mr. Huang Qingping, the Chairman of Yincheng International, said “Currently, the market is still under recovery with uncertainties brought by the prevail of COVID-19 epidemic. The Group remains cautiously optimistic about the property market in the second half of the year. While the industry is facing pressure on property sales as a whole in the second half of the year, we will promptly adjust our sales strategies according to market needs without compromising on our high quality, seize market opportunities and set ‘promoting sales and grasping returns’ (「促銷售、抓回款」)as a principal goal. We will continue our expansion in the Yangtze River Delta Megalopolis and focus on core cities such as Nanjing and Hangzhou and expand the breadth of projects by various means such as tendering land parcels,engaging in cooperative initiatives and mergers and acquisitions so as to achieve rapid growth in scale. The Group will also continue to cooperate with experienced local developers in joint development projects, so as to leverage their respective strengths, lower risks and create win-win situations.
Looking forward, the Group will enhance its comprehensive development and operation capabilities in respect of investment and financing, business development, sales and internal management to build its core competitiveness and accelerate sales for the realization ofbetter project gains in a more efficient manner; as well as to showcase benefits of the Group’s unique collaborative business development model. Inview of the uncertainty in both domestic and foreign economic situation,Yincheng International is determined to enhance its capabilities in all aspects according to its long-term development strategies. We shall continue to strive with the goal of becoming a leading regional real estate enterprise and generating more fruitful returns for our shareholders.”
Today, Yincheng International held the 2020 interim results presentation in Nanjing headquarter. Over 200 fund managers, equity analysts and reporters participated in the event. The management gave the introduction of interim results and answered the participants' questions.
(From left to right: Mr. Hu Zhuang - Senior General Manager of FinancialCapital Centre, Mr. Zhu Li - Executive Director and Vice President, Mr. HuangQingping - Chairman and Non-executive Director, Mr. Ma Baohua - ExecutiveDirector and President, Ms. Shao Le - Executive Director, Vice President andChief Financial Officer)