Profit for the Year Soared 41.3% to RMB3.45 Billion;
Proactively Expanding Land Bank for Future Growth
HONG KONG — China SCE Property Holdings Limited (the “Company”, together with its subsidiaries, the “Group”) (stock code: 1966), announced its annual results for the year ended 31 December 2017. Throughout 2017, the PRC real estate market was full of opportunities and challenges. Tightening of real estate policies has created a “spillover effect” which purchase demand flowed to nearby third- or fourth-tier cities.
With the effective implementation of the nationwide development strategy of “Focusing on Fist-tier Cities and Quality Second-tier Cities”, the Group has an aggregate of over 60 projects for sales which contributed to the soaring contracted sales. The Group outperformed its annual sales target of RMB28.0 billion, achieved a record-high contracted sales amounting to RMB33.2 billion with the contracted sales area of 1.91 million sq.m., representing a year-on-year increase of 41.3% and 15.1% respectively. The average selling price was approximately RMB17,365 per sq.m.. an increase of 22.5% compared to the previous year.
Revenue increased by 29.0% to RMB16.1 billion in 2017. Gross profit margin increased significantly from 25.0% in 2016 to 34.1%, mainly attributable to the products with relatively higher gross profit margin being delivered within the year. Profit for the year rose by 41.3% to RMB3.45 billion. Profit attributable to owners of the parent increased significantly by 37.0% to RMB2.84 billion. Basic earnings per share were RMB 79.9 cents.
The Group maintained a healthy financial position. As at 31 December 2017, the Group had cash and cash equivalents of RMB9.6 billion. The Board resolved to declare a final dividend of HK13 cents per ordinary share for the year ended 31 December 2017. Together with the paid interim dividend, full-year dividend will be HK19 cents per ordinary share. Full-year dividend payout ratio amounted to 32% of the core profit attributable to owners of the parent.
The Group enriched its land bank by acquiring 38 projects in 2017, with an aggregate above-ground gross floor area (GFA) of 6.45 million sq.m., at an aggregate land costs of approximately RMB32.2 billion. As at 31 December 2017, the land bank of the Group had a GFA of 15.57 million sq.m., with an average land cost of RMB3,611 per sq.m.
The Group closely tracks the property market development and proactively conduct property launch in second-tier and strong third-tier cities. As such, the Group plans to launch over 30 new projects in 2018, which are mainly located in Shanghai, Tianjin, Nanjing, Jinan, Foshan, Quanzhou, Xuzhou and Huizhou.
The Group remains optimistic about the prospects of real estate markets in first- and quality second-tier cities in the long run. Thus, the Group will adhere to its strategies, and selectively entering into strong third-tier cities. Without affecting liquidity security, the Group will actively expand land bank in the targeted cities for future growth.
Upholding the key concept of “the future determines the present”, the Group is committed to develop new business to satisfy its customers by establishing a FUN+ ecosystem. In August 2017, the Group has signed a strategic cooperation agreement with Greystar Capital, the largest long-term rental apartments property platform in the United States. Under this agreement, the Group plans to roll out long-term rental apartments in first-tier cities and quality second-tier cities including Beijing, Shanghai, Shenzhen, Tianjin, Hangzhou, Nanjing and Xiamen. The Group will also substantially invest in the iFun smart technology system, an artificial intelligence system to establish links between living space, office space, commercial buildings, property management, fitness and health space, medical and educational space, in the coming years with an aim to deliver the most comfortable and convenient accommodation experience to residents.