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Public company info - Yincheng International Holding Co. Ltd. , 01902.HK

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Yincheng International Holding Co. Ltd., 01902.HK - Company Profile
Chairman HUANG Qingping
Share Issued (share) 1,447,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Property Development
Corporate Profile Business Summary: the Group was involved in property development, hotel operations, property investment and exhibition operation. Performance for the year: Revenue in 2020 was approximately RMB10,679.6 million, representing an increase of approximately 17.5% as compared to approximately RMB9,092.5 million in 2019. Profit in 2020 was approximately RMB386.1 million, representing an increase of approximately 7.1% as compared to approximately RMB360.4 million in 2019. Net profit margin in 2020 was approximately 3.6%, indicating a decrease of approximately 0.4 percentage point as compared to that in 2019. Profit attributable to owners of the parent in 2020 was approximately RMB182.6 million, representing an increase of approximately 21.5% as compared to approximately RMB150.3 million in 2019. Earnings per share attributable to ordinary equity holders of the Company in 2020 was approximately RMB0.13 per share. Business Review 2020 was an extraordinary year for the real estate industry. The development of various industries and businesses in the country was hindered by the outbreak of the COVID-19 pandemic at the beginning of the year, commodity properties sales, in particular, were severely and adversely affected. As the COVID-19 pandemic was gradually brought under control, the real estate market began to recover in the second quarter of the year. Following the promulgation of the “three red lines (三道紅線)” policy by regulatory bodies in the second half of the year whereby further regulation and control measures against the real estate market were imposed, real estate developers experienced limited growth in interest-bearing debt financing. The guiding principle of “no speculation of residential properties (房住不炒)” was maintained throughout the year, which aims to encourage stable and healthy development of the real estate market. Notwithstanding the adoption of increasingly stringent control policies in the midst of faltering market and economic conditions, real estate developers have demonstrated great resilience by taking the initiative to deal with the pressure and challenges. According to the latest information released by the National Bureau of Statistics of China, sales gross floor area (“GFA”) of commodity properties in the PRC amounted to approximately 1,761 million sq.m. in 2020, representing a year-on-year increase of approximately 2.6%; meanwhile, sales of commodity properties amounted to approximately RMB17.36 trillion, representing a year-on-year increase of approximately 8.7%. The introduction of the “three red lines (三道紅線)” policy focuses on mitigating financial risks faced by the real estate industry, which resulted in the imposition of positive limitations on market expansion and caused increasingly fierce industry competition. How to ensure long-term stable development notwithstanding the implementation of deleverage exercises, reduced debt financing and stabilised sales has become a question faced by every real estate developer. 2020 has also been a year of preparation for the Group. The Group consistently adhered to the development strategy of “based in Nanjing, cultivate the Yangtze River Delta Megalopolis (立足南京、深耕長三角地區)”, pursued the product philosophy which places equal emphasis on both quality and service, and maintained robust development for the Group’s business in general. With the full resumption of the Group’s business operation at the end of February 2020, various construction projects and sales activities of the Group have been carried out steadily. Over the past year, all of the Group’s employees have gathered together to overcome numerous challenges, and achieved breakthroughs as shown in various business performance indicators. For the year ended 31 December 2020, the Group recorded revenue of approximately RMB10,679.6 million, representing an increase of approximately 17.5% as compared to approximately RMB9,092.5 million for the same period last year; meanwhile, the Group’s profit for the year amounted to approximately RMB386.1 million, representing an increase of approximately 7.1% as compared to approximately RMB360.4 million in 2019. The Group’s heightened turnover strategy has achieved further results, exemplified in a steady growth in profitability, with moderate expansion of the Group’s scale of operations and significant improvement in the quality of operations. Adjusted project launch schedule despite challenges and achieved record high contracted sales Under the influence of the COVID-19 pandemic, commencement of construction, investments and sales of the real estate industry were susceptible to certain constraints. Nevertheless, the Group responded proactively and in a timely manner by adjusting the Group’s project launch schedule and promoting the Group’s business through multiple channels, including the adoption of “cloud property viewing (雲看房)”, “cloud sales (雲銷售)” and “cloud delivery (雲交付)” through online live broadcasting and small applications of the new media. Through such approaches, while property owners could enjoy convenience on the one hand, the Group could develop the Group’s online customer base and undergo digital transformation on the other hand. Along with the improving pandemic conditions, the Group gradually stepped up its project launch effort. During the second half of the year, various project launches were well received and the Group had excellent overall sales performance. Relying on the Group’s steady project launch strategy throughout the year, as well as the Group’s accumulated positive brand image and high market recognition over the years, the Group achieved a historic breakthrough in the total amount of contracted sales for the year. For the year ended 31 December 2020, the Group’s total contracted sales reached a record high of approximately RMB23,208.3 million, representing a year-on-year increase of approximately 17.1%. The total contracted sales GFA amounted to approximately 1,153,237 sq. m. with a contracted average selling price (“ASP”) of approximately RMB20,125 per sq.m., representing a year-on-year increase of approximately 14.6%. As regards the breakdown of contracted sales of the Group by cities, nearly 60% of such sales for the year were derived from two new first-tier cities, namely Nanjing and Hangzhou, which are under the Group’s key market establishment strategy. The Group had excellent performance in generating contracted sales of more than RMB2,443.4 million (representing approximately 10.5% of total contracted sales) from and after its first entry in Wenzhou in 2020 . As regards the breakdown by projects, Lanshili (瀾仕里) and Qingshanhupan (青山湖畔) in Hangzhou and Bejoy Villa (鉑悅源墅) in Nanjing, were the top three projects of the Group which contributed the highest amount of contracted sales. It is worth noting that sales of approximately RMB11,212.1 million were generated in the fourth quarter, being a record high for one single quarter, due to the collective endeavour of all members of the Group. Among which, the initial launch of the Zhi Lu (知廬) in Hefei and Jin Ling Jiu Yuan (金陵玖園) in Nanjing were well received by the market as demonstrated by their respective overall sales rates of 80% and 92%. Other projects which were subsequently delivered, namely Huijian Weilai (薈見未來) in Nanjing, Sheltered Mansion (東樾府) in Wuxi and Town City (依瀾郡) in Ma’anshan, also reached a delivery rate upon property purchasers’ visits of 100%, 99.5% and 96%, respectively. Continue to maintain the Group’s regional market penetration strategy with ample land reserve resources In 2020, the Group was committed to the Group’s existing strategies of serving the markets in the Yangtze River Delta Megalopolis. During the year, the Group extended the Group’s business presence to Wenzhou to further develop the five regional markets of Nanjing, Southern Jiangsu, Zhejiang, Huaihai and Anhui. The Group had acquired a total of 17 land parcels within the year through various means, including tendering, mergers and acquisitions, and bidding at property exchange centres, which contributed to an increase of approximately 2.16 million sq.m. and over RMB33,148 million in total GFA and sales, respectively. As at 31 December 2020, the GFA of the Group’s total land bank amounted to approximately 5.99 million sq.m., of which, approximately 4.78 million sq.m. was attributable to the Group, and the sales value of such completed properties held for sale was approximately RMB55,484 million. The Group’s land bank is mainly situated in core land parcels in the core cities of the Yangtze River Delta Megalopolis, including Nanjing, Hangzhou and Wuxi. Such geographical advantage has provided strong support for the Group’s future development and continued growth in contracted sales. Significant improvement in operating efficiency and maintenance of quality services The Group has adopted standardised property development procedures in order to speed up property turnover and promote efficient operations. In 2020, both the average duration for the obtaining of the four certificates and the average initial sales period were shortened by approximately one month to approximately 3.8 months and 6.1 months, respectively, as compared with that in 2019. Development efficiency has improved significantly and the pace of the Group’s operation has been further accelerated. As the Group acknowledges that product quality is the foundation of the Group’s success and the cornerstone of the Group’s sound development, in addition to improving efficiency, the Group has always focused on the development of quality residential properties, and quality, livable and environmentally friendly property products for customers of all ages. The Group constantly perfect the Group’s product design system and enhance customer service. The Group’s score for overall customer satisfaction in 2020 was 88, which was close to industry benchmark. The Group delivered more than 4,300 properties throughout the year with a delivery satisfaction rate of 82%. In the meantime, the Group’s physical examination initiative including the performance of annual inspections and maintenance for the extension of properties’ service lives, was well received by property owners. During the year, the Group completed physical examinations on properties in 22 communities, served over 20,000 households, and obtained an overall satisfaction rate of 92%. The Group is committed to providing better products and services to the Group’s customers, and growing together with the communities. Successful issuance of US$ senior notes and more diversified financing channels Since the Group’s listing in 2019, with the aim to become a leading real estate enterprise in the region, the Group has been striving to enhance the Group’s capabilities in all aspects. Relying on the Group’s stable business growth, excellent financial performance and results of operations, the Group have gradually gained recognition and reputation from the capital market. In 2020, the Group was rated by two major international authoritative credit rating agencies, namely Moody’s Investors Service, Inc. and Lianhe Ratings Global Limited, as having a stable outlook with an issuer credit rating of “B2” and “B+” respectively. During the year, the Group actively expanded the Group’s external financing channels and enhanced the Group’s overseas financing capabilities. The Group successfully issued US$140 million and US$200 million senior notes, all of which were over-subscribed. With the Group’s solid corporate strength and stable and substantial investment returns on US$ denominated senior notes, the Group was awarded the “2020 Outstanding Chinese Offshore Bonds Issuer — Real Estate Category* (2020年度中資離岸債券傑出發行人 — 地產類)” prize from Golden Duration* (金久期) and was listed by BNP Paribas as one of the recommended investment targets for US$ denominated bonds in the real estate sector. The shares of the Group’s Company were also given “buy* (增持/買入)” ratings by numerous brokerages, which were optimistic about the Group’s future growth in sales, performance and development potential. Gradually improved industry rankings and receipt of multiple honours on comprehensive strengths In 2020, the Group has enhanced the Group’s comprehensive development and operation capabilities in four aspects, namely, investment and financing, business development, sales, and internal management, which contributed to the growth in sales, and brought about recognition from all walks of life and numerous awards. During the year, the Group was awarded “2020 Top 100 Listed Real Estate Enterprise in China* (2020中國上市房企百強)”, “2020 China Specialised Real Estate Company* (2020中國特色地產運營優秀企業)”, “The Best Small and Medium Sized Enterprise* (最佳中小市值公司)”, and “The Best IR Team of the Year* (年度最佳IR團隊)”, and ranked first on the list of the “Top 50 Enterprises with Comprehensive Strength in Jiangsu Real Estate Development Industry* (江蘇省房地產開發行業綜合實力50強)” for the first time. In addition, with excellent design and quality engineering capabilities, residential projects as developed by the Group have won 12 major local and international awards, including a total of four design awards in respect of architectural engineering design, urban housing and residential community design in the selection of the “2020 Provincial Urban and Rural Construction System Outstanding Survey and Design Award* (2020年度省城鄉建設系統優秀勘察設計獎)” as announced by Housing and Urban-Rural Development Office of Jiangsu Province* (江蘇省住房和城鄉建設廳) in early January 2021. These awards will inspire the Group to make persistent efforts to maintain the Group’s excellent product or service specification, standard and quality. Prospects: Looking forward, even though there may be uncertainties as regards policy adoption and the macro environment, the Group will actively overcome challenges, seize opportunities and strive to pursue better results. In terms of policies, in November 2020, the central government once again highlighted in its 14th Five-Year Plan the principle of “no speculation of residential properties (房住不炒)”, the maintenance of balance between leases and purchases, and the implementation of policies according to the actual situation in different cities, which set the basis for real estate development in the coming few years, and the policy to “stabilise housing prices, land prices and market expectations (穩房價、穩地價、穩預期)” shall remain as the key of real estate regulation. With the introduction of the “three red lines (三道紅線)” policy, the central government made great efforts to reduce the financing leverage and debt level of real estate enterprises, which means, in the next two to three years, development models which depend on financing leverage for business expansion as adopted by real estate enterprises will no longer be sustainable. Instead, sales proceeds and operating cashflow would gradually return as the driving force for development of real estate enterprises. As far as the market is concerned, according to the National Bureau of Statistics, although the large market size of the industry was remained in 2020 with sales area of 1.7 billion sq.m. and sales amount of RMB17 trillion, there was clear market differentiation and more intense market competition. The prevalence of market challenges, such as the difficulty in land acquisition and declining overall profit margins of investment projects, will be normalised. The realization of profits for future developments will require better investment judgement and development management capabilities from enterprises. While the Group shall continue to adopt a prudent management style and control the Group’s operation risks in the Group’s future development, the Group shall also strike a balance between survival and development in the regional market at the same time by leveraging the Group’s brand image and competitive edge in the Group’s products and services. The Group believes that only steady and healthy development will sustain in the long run. In the future, and on the basis that the Group’s Company has sufficient capital, the Group will continue to employ a combination of measures to pursue reasonable expansion, improve operating quality, and achieve stable growth in profitability. To these ends, the Group will continue to focus on the Yangtze River Delta Megalopolis, and based on the five major regional markets, expand the Group’s business presence in new cities when opportunities arise. The Group will persist in making targeted investments, exercise strict control over project quality by reference to multiple indicators, including net profit margin and operating cashflow, and maintain diversified channels for the acquisition of land parcels, so as to promote sound development of the Group’s investment projects and business operations. The Group will also persist in optimising the financial indicators, maintain the current size of debt and debt ratio, lower the net debt ratio and achieve stable development under the “three red lines (三道紅線)” policy. Further, the Group will improve the Group’s level of cashflow, promote sales, collect receivables, enhance operation and management efficiency with lower costs, improve cashflow turnover and maintain stable operations. The Group will also expand the Group’s financing channels, minimise financing costs, and proactively look for both local and international financing sources. The Group will continue to optimise and improve product offerings and services, put forward upgraded product series, enhance engineering quality and maintain the Group’s benchmarked customer satisfaction rate. At the same time, the Group will continue to improve the Group’s operation and management efficiency, further practise the Group’s culture of “honesty, responsibility, cooperation and innovation (誠實、擔當、合作、創新)”, endeavour and grow together with all employees of the Group. The Group will certainly live up to expectations, strive to become a leading real estate enterprise and bring continuous and stable returns to the Group’s Shareholders.

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