“I am confident of completing the annual sales target of 150 billion yuan, and will continue to increase the company’s shares in the future.” Under the industry cycle, although Aoyuan’s growth rate has slowed down and policy adjustments have become more frequent, Guo Ziwen remains To convey confidence to the outside world.
On the morning of August 23, China Aoyuan (03883.HK) held the 2021 interim online results meeting. China Aoyuan Executive Director and Chairman Guo Ziwen, Group Party Secretary and President Guo Zining, Executive Director and Co-President Ma Jun, Aoyuan Executive Director, Co-President and CFO Chen Zhibin, Executive Director and Senior Vice President Chen Jiayang and other management attended the performance meeting.
According to data from the semi-annual report, in the first July of this year, China Aoyuan achieved contracted sales of 77.2 billion yuan, a year-on-year increase of 28%. ; In the first half of the year, operating income was RMB 32.51 billion, a year-on-year increase of 15%; net profit was RMB 2.84 billion, with a net profit rate of 8.7%; core net profit was RMB 2.87 billion, with a core net profit rate of 8.8%.
According to data, Aoyuan’s compound annual growth rate from 2015 to 2019 reached 67%. In 2021, Aoyuan’s total saleable resources are estimated to be approximately RMB 220 billion, with sufficient supply.
In addition, regarding the “three red lines” that have received much attention, Aoyuan’s management pointed out that it will achieve positive operating cash flow in the next three years through payment promotion, adjustment, cost reduction, and faster delivery, so as to reduce debt and increase net profit. Assets, and strive to achieve all three red lines in 2020.
Aoyuan’s current real estate setting is that the industry has shifted from “full speed running” in the era of scale dividends to “rhythmic running” in the era of management dividends. In other words, in the post-100 billion era, optimizing organizational operations, improving refined management, and maintaining a moderate growth rate are the foundation for maintaining self-development.
In the first half of this year, Aoyuan carried out a series of optimization adjustments, including strengthening large-scale operations and lean management and control to achieve organizational optimization management. The main real estate business has strengthened the direct management and control of the headquarters over regional companies through the optimization of the organizational structure; in addition, the establishment of Yuekang Holdings has comprehensively coordinated non-real estate industries such as property management, commercial operations, cultural tourism, beauty and health, and empowered the main real estate business to promote happiness The residential sector (main business of real estate) and the Yuekang lifestyle sector (non-house business) enable two-way empowerment and coordinated development.
According to the management, in the future, Aoyuan will concentrate resources to build a core city company with annual sales of 10-20 billion yuan, and continue to improve operating efficiency and influence.
Nowadays, the real estate bid farewell to the period of unilateral rapid growth in housing prices. What the industry has to face is the slowdown in sales growth.
Regarding the current real estate market environment, Ma Jun believes that this year’s regulation and control are different from previous years. The regulation and control policies are high-frequency, precise and effective, and the overall regulation is more reasonable. In the future, the transaction volume of the real estate industry will remain relatively stable and healthy. China Aoyuan holds a long-term optimistic view on the prospects of the real estate market and will maintain a moderate growth rate of scale.
“The development model of real estate companies has changed from scale expansion to quality development. Aoyuan will embrace the Greater Bay Area, the Yangtze River Delta and other urban agglomerations, actively expand urban renewal, focus on high-energy cities, build tens of billions of city companies, and continue to cultivate areas. Fully integrate the real estate sector, achieve flat management and control, implement and strengthen large-scale operations, lean management and control, and release management dividends.”
It is worth mentioning that, in accordance with the development pace of the industry’s spin-off and listing boom, the outside world‘s focus on Aoyuan is whether there are plans to spin off other non-real estate industry sectors.
In this regard, the management stated that there is no plan to spin off other non-housing business segments for the time being. It is understood that there are currently three major platforms under Aoyuan’s listings, namely China Aoyuan (3883.HK), Aoyuan Health (3662.HK), and Aoyuan Meigu (000615.SZ).
At present, the market performance of Aoyuan Health continues to improve. According to data, in the first half of 2021, Aoyuan Health’s total revenue exceeded 1 billion yuan, a year-on-year increase of 83%; gross profit was approximately 350 million yuan, a year-on-year increase of 57.2%; net profit was approximately 190 million yuan, a year-on-year increase of 66.3%; core net profit was approximately 180 million yuan, an increase of 70.4% year-on-year.
“Three Red Lines” Reach All Green Standards in 2022
Operation and lean management and control are not only reflected in profitability, but in terms of three red line indicators, China Aoyuan has realized the segmentation and optimization of relevant indicators in the first half of this year: the net debt ratio has further decreased, the cash short-term debt ratio has maintained 1.3, and the cash liquidity is abundant. .
“Aoyuan is confident that it will reach the three red lines and all-green standards by the end of 2022.” Aoyuan’s management said. To this end, on the one hand, Aoyuan accelerated the return of sales funds, greatly improved operating cash flow, and ensured the safety of cash flow; on the other hand, Aoyuan maintained prudent land purchases and controlled its annual land purchase budget within 20% of the contracted sales of the year.
In order to ensure sufficient liquidity, China Aoyuan tightened the financing window period and optimized its debt structure in the first half of the year.
Since the beginning of this year, China Aoyuan has seized the market window, arranged refinancing through multiple channels at home and abroad, issued a total of US$738 million in senior notes, completed a three-year overseas syndicated loan of more than HK$2.1 billion, and successfully issued RMB 1.82 billion in domestic companies Debt.
Among them, the US$188 million issued in January of this year’s 4.2% senior notes due in 2022 set a new low for corporate bond issuance costs. At the same time, China Aoyuan has fully redeemed publicly offered offshore senior notes due within this year, and continued to optimize its debt structure.
The semi-annual report shows that as of June 30, China Aoyuan’s total credit line was approximately RMB 242.6 billion, of which the unused credit balance was RMB 128.3 billion. In addition, China Aoyuan’s cash collection rate in the first half of the year reached 87%, with total cash of approximately RMB 68.3 billion, 1.3 times the short-term loan of RMB 51.7 billion, sufficient to cover short-term liabilities due within one year; at the end of July 2021 , Has repaid and renewed short-term loans of approximately RMB 2.5 billion, further reducing the pressure on short-term debt.
Urban renewal and thickening of land reserves are still dominated by mergers and acquisitions
The first batch of centralized land supply has come to an end, and the second batch of centralized land supply in some cities welcomes the suspension and policy “patching”, which also brings challenges to real estate companies in acquiring land.
In response to the problem of centralized land supply and the land market, Ma Jun said that the land market is in a state of differentiation. For a long time, China Aoyuan’s land acquisition method has mainly relied on mergers and acquisitions and the transformation of old reform projects. In the first half of this year, China Aoyuan also paid attention to the centralized land supply market in its land acquisition strategy. On the whole, the overall premium rate of the land market is relatively high, and the cost of land has increased significantly.
“The operation of the company pays close attention to the compliance of the three red lines. In the future, it will focus more on the conversion of old land. It is estimated that the annual land purchase amount will not exceed 30 billion yuan. In the second half of the year, it will wait and see the land acquisition opportunities in the land market.”
As of June 30, China Aoyuan has a land bank with a total construction area of approximately 53.58 million square meters, with a total value of approximately RMB 593.9 billion. The total value after urban renewal projects is approximately RMB 1,348.2 billion. The ratio is about 84%, and the land bank structure is continuously optimized to meet the development of the next four to five years.
Among them, urban renewal has accelerated the transformation. In the first half of 2021, the converted saleable value of RMB 13.5 billion is expected to be converted into the saleable value of 40 billion yuan this year. From 2021 to 2024, the converted saleable value is expected to be RMB 242 billion. Continue to increase land reserves.
For future land strategies, Aoyuan will continue to balance land reserves and financial indicators, leverage the traditional advantages of mergers and acquisitions and urban renewal, strategically supplement land reserves and prudent land purchases, leverage traditional advantages such as mergers and acquisitions, urban renewal, and focus on first- and second-tier cities. Keep buying land cautiously.
In recent years, urban renewal has become a new battlefield for real estate companies, and policies on urban renewal are also frequent.
In response to the current urban renewal policy to avoid major demolition and reform, Guo Zining responded that Aoyuan’s transformation of old villages and old factories mainly does not involve the transformation of old urban areas, and the ratio of demolition to construction meets the policy requirements. . At the same time, in terms of additional construction, public service facilities will be built to improve the functional quality of the area. In terms of resettlement, the residents’ willingness to resettlement shall be respected and local resettlement shall be adopted.
It is understood that since this year, China Aoyuan has successively become the main body of cooperation in urban renewal projects in Guangzhou Liwan Donglong Village, Huangpuwang Village, and Xintian Village. In Dongguan, there are 16 projects that have obtained the status of early service provider, with a total area of more than 3 million square meters; and one project that has won the bid of integrated operation service provider status, with an area of 10.06 square kilometers. The project is spread across Dongguan Nancheng Street, Dongcheng Street, Wanjiang Street, Chang’an Town, Qiaotou Town, Qishi Town and other places in Aoyuan, ranking first in terms of accumulated area.Return to Sohu to see more
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