Redsun Properties Group Limited, a leading integrated property developer in China, (“Redsun Properties” or “Group”; stock code: 1996) announced today its interim results for the six months ended 30 June 2019 (“2019 1H” or “Period”). Thanks to its “Property + Commercial” dual-driver strategy, the financial status of the Group remained sound and it recorded sustainable growth with high quality differentiated development.
Results highlights:
– Business kept growing powered by its “Property + Commercial” dual-driver strategy. Total contracted sales for the first half of 2019 increased by approximately 43% to RMB30.25 billion
– Net profit climbed by 15.2% to approximately RMB720 million, net profit margin was 18.5%, up 2.2 percentage points against the same period last year, realizing high quality differentiated development
– Sound financial position with net gearing ratio at 76.0%, while cash and bank balance was approximately RMB16.95 billion
– Land bank was approximately 15.69 million sq.m., up 19.9% against the figure as of 31 December 2018. Among which 83% is located at 1st and 2nd tier cities, providing sufficient resources to support development of the Group in the future
– Benefiting from business innovation and stronger operational efficiency, rental income from commercial operations recorded substantial year-on-year growth of 22.6%. The Group has opened three Hong Yang Plazas and another 12 are being planned to draw limelight on to the “Hong Yang Plaza” brand
High operational efficiency: Businesses grew continuously
Commercial segment prided rapid development
The Group delivered sustainable growth in 2019 1H. Its total contracted sales reached RMB30.25 billion, representing an increase of 42.7% as compared to the same period last year. Net profit amounted to RMB720 million, up 15.2% (2018 1H: RMB630 million). Net profit attributable to owners rose by 14.1% year-on-year to approximately RMB740 million (2018 1H: RMB650 million), and earnings per share were RMB0.22.
Total assets of the Group amounted to RMB86.46 billion, 27.3% higher than the amount at the end of 2018. Net profit margin climbed by 2.2 percentage points against the last corresponding period to 18.5%, thanks to the Group’s constantly improving operational efficiency.
The Group’s three major businesses (property business, commercial operations and hotel operations) kept growing. Property business segment contributed 94.8% of the Group’s total revenue and reported contracted sales amount of RMB30.25 billion in the Period, 42.7% higher than in the same period last year. The contracted sales area amounted to approximately 2.29 million sq.m., an increase of 48.3% when compared with the same period last year. The good performances were owed to the fast expansion of the Group in the gradual realization of sales from the projects acquired before. The commercial segments grew rapidly, with rental income and hotel operation income at approximately RMB190 million and RMB17.9 million, representing an increase of 22.6% and 2.3%, respectively. The rental income increase was mainly attributable to the higher rental income levels from Nanjing Hong Yang Plaza and Changzhou Hong Yang Plaza, and the income increase of hotel operations was the result of the improvement of performance of Nanjing Hong Yang Hotel and Wuxi Rsun The Lakefort Hotel.
Reinforced position in Yangtze River Delta region
Managed regional property market deployment
During the Period, the Group’s land bank expanded by 19.9% to 15.69 million sq.m. (2018 1H: 13.08 million sq.m.), of which 83% is located at 1st and 2nd tier cities, providing sufficient resources to support development of the Group in the future.
The Group has been diligent in implementing its “penetrating Jiangsu, strengthening foothold in the Yangtze River Delta region and expanding into metropolitan areas” regional deployment strategy, focusing on the existing areas and exploring other dynamic key hub cities. In the first half of 2019, it set foot in Xi’an, Changsha, Wenzhou, Xiangyang, Jiangmen, Yancheng and Fuyang.
Highly efficient commercial operations
Highly innovative and efficient, the Group’s commercial segments brought in 22.6% more rental income year-on-year. Enhancement of Hall B and C of Nanjing Hong Yang Plaza, the Group’s flagship project, was completed last year and this year respectively and saw visitor traffic to the Plaza surged, making the project in effect a commercial and cultural hub in the Qiaobei District, Nanjing. To date, the Group has in operation three Hong Yang Plazas, which are in Nanjing and Changzhou in Jiangsu and Yantai in Shandong. It plans to open 12 Hong Yang Plazas in Hefei, Hengyang, Yangzhou, Xuzhou, Yanjiao, Tianjin, Liu’an, Jining, Tengzhou, Yantai and Changzhou, signifying a promotion of the “Hong Yang Plaza” brand.
Sound financial position
Maintained ratings by credit rating agencies
Regarding financing, in the first half year, the Group successfully issued three batches of USD bonds. The Group’s net gearing ratio was approximately 76.0% and its cash position was strong with cash and bank balances increased substantially to approximately RMB16.95 billion in six months (31 December 2018: RMB12.46 billion). As the Group delivered stable operational and financial performances, Redsun Properties in China was granted “AA+” rating with stable outlook by China Chengxin Securities Rating Co., Ltd. and United Ratings Co.. Meanwhile, the Group was granted “BB-” rating with stable outlook by Lianhe Ratings Global Limited.
Quality and differentiated development: Continued to promote dual-driver strategy
The Group is one of the few real estate companies in China that offers comprehensive urban renewal services. Its “Property + Commercial” dual-driver strategy is born exactly of the unique genome of the Group as a business and what guides its high quality differentiated development.
In the second half of 2019, the Group will continue to implement its proven dual-driver strategy. On the property development front, the Group will continue to implement regional deployment based on the “penetrating Jiangsu, strengthening foothold in the Yangtze River Delta region and expanding into metropolitan areas” strategy, focusing on the existing areas and exploring other dynamic key hub cities. Through bidding invitation, auction or listing, merger and acquisition and joint venture cooperation, the Group will implement sound investment policies and realize high-quality rapid growth. In terms of the commercial real estate, the Group will expand its business through diversified models such as entrusted management, self-leasing and holding. Armed with extensive asset management experience and advanced management tools, the Group enhances its return on assets by continuously benefiting our merchants and improving customers’ shopping experience. Meanwhile, it endeavors to enhance its linkage with the property development business to make the best of its dual-driver to achieve synergistic development.
About Redsun Properties Group Limited (“Redsun Properties”) (stock code: 1996)
Redsun Properties Group Limited (“Redsun Properties” or “The Group”) is a leading comprehensive developer in China, focusing on development of residential properties and the development, operation and management of commercial and comprehensive properties. The Group has established a steady regional leading position in Jiangsu Province by taking root in Nanjing, Jiangsu and Yangtze River Delta. Since the incorporation of Nanjing Redsun in 1999, Redsun Properties has worked in the sector of property development and sales for 20 years, established the Hong Yang brand and received widespread recognition for the development capacity and industry position.
While developing residential properties, Redsun Properties also operates commercial complexes covering shopping malls, amusement parks and community centers, hotels and office buildings. Most of the commercial property buildings are adjacent to the Group’s residential property projects, providing ancillary services for the residents and also increasing the value of the Group’s residential property projects.