Tripartite Development of Real Estate Development, Internet Financing and Real Estate Funds
HONG KONG — Greenland Hong Kong Holdings Limited (“Greenland Hong Kong” or the “Company”, stock code: 337.HK), a subsidiary of Greenland Holdings Corporation Limited (“Greenland Holdings”), which is a leading global real estate company, announced its annual results for the year ended 31 December 2016 (the “year under review”). The Company recorded total revenue of approximately RMB16,919 million, an increase of 197% year-on-year. Profit for the year attributable to owners of the Company was approximately RMB1,113 million, representing a year-on-year growth of 406%. The Board of Directors proposed a 2016 final dividend of HKD0.1 per ordinary share.
Business Highlights (As of 31 December 2016)
– Profit for the year attributable to owners of the Company was approximately RMB1,113 million, a year-on-year growth of 406%
– Total revenue was approximately RMB16,919 million, an increase of 197% year-on-year
– Basic and Diluted EPS was RMB0.39, an increase of 388% year-on-year
– Contracted sales reached approximately RMB18,219 million
– In July 2016, issue of US$120 million of senior perpetual capital securities and US$450 million of 3.875% notes due 2019
– As at 31 December 2016, average financing cost further decreased to approximately 4.35% and net gearing ratio decreased to 121%
– In May and November 2016, acquisition of a piece of land in Wujiang Economic and Technological Development Zone of Suzhou City and a project on Dongge Road in Nanning respectively
– In January 2017, acquired a 90% interest of a development project in respect of a piece a land in Wuxi and won the bid for a piece of land in Gaoxin district in Nanning
Mr. Chen Jun, Chairman of the Board of Directors and Chief Executive Officer of Greenland Hong Kong, said, “In 2016, Greenland Hong Kong adhered to a tripartite development approach of ‘real estate development, internet financing and real estate funds’, confirmed the development strategy as ‘focusing on major business, focusing on areas, focusing on management’, and achieved ‘stable development while looking for transformation, innovation while breakthrough’. After three years of sharpening and exploration, Greenland Hong Kong will take creating a better way of life as its duty and maintain sustainable, stable, high-quality growth.”
Focusing on real estate main business, enhancing overall profitability
Leveraging the influence and brand reputation of its parent company, Greenland Holdings, Greenland Hong Kong skillfully executed its project positioning and pricing strategy, while actively promoting high-end developments, and enhancing overall average selling prices through higher quality products. During the year under review, the Company achieved total contracted sales of approximately RMB18,219 million, with a year-on-year increase of approximately 5%. The bulk of contracted sales derived from projects in the Yangtze River Delta region, including those in Jiangsu, Zhejiang and Shanghai, accounted for 29%, 12% and 12% of total contracted sales, respectively. The Guangxi market has made great progress and projects there accounted for 18% of total contracted sales.
Greenland Hong Kong adhered to enhance profitability through “product + service”. With respect to platform innovation, in 2016, Greenland Hong Kong and Ctrip established a strategic cooperation agreement to jointly launch the first ever self-service hotel apartment series brand, “G-Hotel”. Regarding to professionalized innovation, the concept of “Smart Office” was launched in Nanning, Guangxi, while “Telemedicine” integrated external medical resource management platform by leveraging on exobrain to promote intelligentized health system and widen product’s premium. In the meantime, the Company also actively explored customized innovation, launching “Second Child Living”, “Loft and Guesthouse Design Crowdfunding”, “Face Recognition Technology”, “Safety Healthy Housing”, “Art Demonstration Zone”, etc.
In May 2016, Greenland Hong Kong successfully bid on a land lot located in the Wujiang Economic and Technological Development Zone of Suzhou City, which will form part of a high end residential community. In November 2016, the Company completed the acquisition of the project located on Dongge Road in Nanning and will be designed to be a mix development of residential, commercial and office. Besides, after the year under review, in January 2017, the Company entered into an equity transfer agreement to acquire a 90% interest of a development project in respect of a piece of land in the Wuxi Guang Cheng section connected to the entrance of Subway Line 1 in Wuxi. Meanwhile, the Company jointly won bid for a piece of land located in Gaoxin district in Nanning. As of 31 December 2016, the Company held a land bank of approximately 14 million square meters.
In the future, Greenland Hong Kong will pay more attention to major areas, and mainly focus on Guangxi, Yunnan, the Yangtze River Delta region and the Pearl River Delta region by different investment strategies according to their conditions to acquire land creatively and expand acquisition methods, interact among businesses and complement resources in the industry, as well as acquire high quality projects at a low cost.
Internet financing gaining profit for the first time, platform registered users breaking through one million
Since established Shanghai Greenland Financial Information Services Co., Ltd (“Greenland Financial Services”) in 2015, Greenland Hong Kong entered the internet financing business. After just over a year’s development with continuous innovation, Greenland Financial Services achieved a profit in the first year and has formed a development pattern centered on three major areas of businesses – online wealth management, asset management and data information services.
In terms of asset management, Dao Kun Asset Management Company (“Dao Kun Asset”), a subsidiary of Greenland Financial Services, completed its strategic layout in 2016. Through innovative real estate funds and structured financing, the company has built up a unique “asset-product” line while providing specialised financing services to real estate business customers in vertical development markets, and continuing to expand the total amount of assets under proactive management. As at the end of 2016, the accumulative assets under management of Dao Kun Asset totalled approximately RMB7,288 million, and the scale of existing assets amounted to approximately RMB6,034 million. Dao Kun Asset also made it onto the China Index Academy’s “Top 10 Growth Rate of China’s Real Estate Fund Management Scale.”
In terms of platform construction, Greenland Guangcai, which is responsible for online wealth management, has enabled Greenland Financial Services to maintain a leading position within the industry by establishing a comprehensive system of products, operations and payment. The products issued by Greenland Guangcai in 2016 amounted to RMB10,060 million, with the number of registered customers on the platform exceeding one million, and total turnover of the secondary market amounting to RMB137 million. Benefiting from strict risk controls, Greenland Guangcai has been free of any penalties for breach of contract, bad debts or deferred payments since it started operations in August 2015.
In terms of product releases, Greenland Guangcai continued to innovate. Customers were attracted by new products and low costs. Asset hedge platform, as well as value added and overseas allocating for customers were also provided for customers, which enhanced customers’ activities at the same time. In terms of institutional business expansion, Greenland Financial Services boasts more than 40 external partners (banks, funds, trusts, securities, insurance, payment, etc.). In addition to further solidifying its collaboration with 360 on “Your Wealth Platform”, Greenland Financial Services also seized opportunities for strategic cross-industrial cooperation with partners in different industries such as the G-super brand under the Greenland Group. At the same time, Greenland Financial Services actively nurtured close communications with the marketing department and various business divisions of the Greenland Group complementing each other with unique advantages and initially established the Greenland wealth and life ecological circle.
In the next stage, Greenland Financial Services will continue to make strenuous efforts to implement its three core strategies. The company will also strive diligently to develop real estate internet financing while continuing to optimize our online wealth management platform as well as actively replace and enrich platform product lines to maintain product competitiveness without compromising safe and sound operations. The company will also enrich its asset sources and quicken the pace of management-scale assets expansion; while fully leveraging its leading technological strengths to actively develop its data information services business. The company also has plans for deepening its cooperation with various Greenland business units to improve the overall formation of the business cycle.
Actively exploring light assets transformations with initial achievements
During the year under review, Greenland Hong Kong actively explored light asset transformations, conducted strategic cooperation with partners with respect to real estate funds, and received initial achievements. The Company and Cinda (HK) Holdings Company Limited (“Cinda”) jointly set up an equity investment partnership (limited partnership) (the “Fund”) as co-general partners. The Company and Cinda will carry out the joint investment real estate projects by means of asset restructuring, mergers and acquisitions and etc. The Company believes that the Fund was conducive to further expanding its real estate business.
In addition, the Company and Guangxi Railway Investment (Group) Co., Limited (“Guangxi Railway Investment”) entered into a strategic cooperation agreement, pursuant to which a city development fund was established to jointly develop the urbanization project in Guangxi. According to such strategic cooperation agreement, the Company and Guangxi Railway Investment will further collaborate in various sectors, including primary and secondary land development, tourism and leisure, elderly healthcare, warehousing and logistics, industrial projects and infrastructure, demonstrating the Company’s determination in focusing on key strategic areas and promoting the economic development of Guangxi.
After the year under review, in March 2017, the Company entered into the agreement with Kuwait Silk Road Integrated Real Estate GP Ltd. (“KSL”) and the Silk Road Integrated Real Estate GP Ltd. (which is owned as to 50% by Greenland Hong Kong and 50% by KSI (as holding company of the General Partner)) to establish a real estate fund. The fund will primarily focus on investment in top-tier world class real estate in prime locations in major cities globally.
Looking forward, the Company will adhere to the development principle of “light assets and accelerated growth”. While identifying suitable projects through the “SRIREF”, jointly established with Kuwait Strategic Investor, Cinda Hong Kong Property Fund, and the Guangxi Railway Investment City Development Fund, the Group will also explore more cooperative opportunities for establishing real estate funds.
In addition, in July 2016, the Company issued US$120 million of senior perpetual capital securities and US$450 million of 3.875% notes due 2019. The gross total was used for the repayment of US$700 million bonds due in October 2016 and the shortfall was complemented with the internal fund of the Company, which represented the Company’s ample liquidity, sound operation and active strategy to reduce debt ratio. The Company believes that the notes and securities issued are beneficial to the Company, as it obtains long-term financing from international investors, which will improve and integrate capital structure. In the future, the Company will continue to obtain low cost financing through various channels in order to continuously improve and optimize the Company’s capital structure.