Zhongliang Holdings Group Company Limited · HKEX:2772
Zhongliang — H1 2019 Earnings Presentation
38 slides from Zhongliang's earnings presentation, Aug 27, 2019
Slide 1: 2019 Interim Results Presentation
2019 Interim Results Presentation August 2019 Create Value For A Better Life
Slide 2: Agenda
01 Results Highlights 02 Development Strategies 03 Operating Performance 04 Financial Performance 05 Appendix
Slide 3: 2019 Interim Results Highlights
2019 Interim Results Highlights
Slide 4: 2019 Interim Results Highlights
2019 Interim Results Highlights Fast-Growing Top 20 Developers with High Earnings Visibility • 1H contracted sales +27% to RMB63.7bn 20th 1 • First 7 months contracted sales +29% to RMB74.9bn of 2019 Real Estate • 1H cash collection rate at 90% Top 500 • As of 30 June 2019, unbook contacted sales ov
Slide 5: 2019 Interim Results Highlights
2019 Interim Results Highlights Declared Interim Dividend with Visible Payout Policy • Interim Dividend of HK15.3 cents (equivalent to RMB13.8 cents ) per share 40% Dividend payout • Total interim dividend of approx. HK$548.0m（approx. RMB492.9m) • Dividend payout ratio at 40% of the net core profit
Slide 6: Development Strategies
Development Strategies
Slide 7: Development Strategies
Development Strategies To become a Leading Comprehensive Real Estate Developer in China ▪ Utilizing public land auctions, private M&A and third-party cooperation to lower land cost and investment risk Investment ▪ Synergy between residential development related opportunities, like investment propert
Slide 8: Product & Customer Experience Enhancements
Product & Customer Experience Enhancements 天津中梁 · 津门首府 南昌中梁·时光天樾 常州中梁 · 衡麓世家 沧州中梁·观沧海 7
Slide 9: Operating Performance
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Slide 10: Robust Contracted Sales Growth
Robust Contracted Sales Growth Contracted Sales 1H 2019 Contracted GFA 1H 2019 +29% First7MsRMB74.9b 6.03m sqm Contracted ASP 1H2018 RMB63.7b+27% +29% RMB10,600/ sqm RMB mn 000 sqm (RMB per sqm) 14,383 10,146 101,500 7Ms 11,458 74,900 10,728 10,565 10,004 7Ms 64,900 58,000 6,027 5,664 4,683 63,700 5
Slide 11: Contracted Sales Breakdown: Strong Execution Capability
Contracted Sales Breakdown: Strong Execution Capability Nationwide coverage, expanded from Yangtze 1H2018 & 1H 2019 Contracted Sales Breakdown by Region River Delta to Pan Bohai Region, Midwest China, Western Taiwan Straits and Pearl River Delta Pearl River Western Taiwan Delta ▪ Strategic coverage
Slide 12: Stringent Land Selection Process
Stringent Land Selection Process • Nationwide coverage • Regional & city-tier rotation in line with economy and policies New Land Acquisitions in 1H 2019 Total land cost GFA RMB32.0bn 8.1M sq.m 3 Inner 3 Liaoning Average Beijing Mongolia 1 New Saleable 1 1 2 Tianjin land cost Resources 3,900/sq.m 2
Slide 13: Rotational Land Selection Strategy
Rotational Land Selection Strategy During market upturn, proactive segment rotation; during market downturn, improving land bank structure with less risks 2016 – 1H 2019 Breakdown of Land Premium of New Land Acquisitions (by City-tier) Expanded into tier-3 & 4 cities and seized Driven by market fund
Slide 14: Scientific Land Selection Approach
Scientific Land Selection Approach Stringent selection process: 1H2019 only less than 1% eventually acquired Tracked Land Parcels 10000+ 3000+ Preliminary Screening Feasibility Studies 1000+ 500+ Bidding Purchase 70 Adhering to "science + probability”, effectively avoiding risks through 4 hedges + d
Slide 15: Full-Structured Landbank with Nationwide Coverage
Full-Structured Landbank with Nationwide Coverage Total land bank of 53mn sq.m1， 385 projects cover 23 provinces and municipalities in 139 cities Unsold saleable resources over RMB 340bn2, balanced 2019 FY saleable resources of RMB 190bn 23.0% Land Bank – by major cities Sqm 15.7% 10.2% 9.3% 5.6% 5.
Slide 16: Financial Performance
Financial Performance
Slide 17: Profit & Loss Statement
Profit & Loss Statement 1H 2019 1H 2018 YoY FY 2018 (RMB M) (RMB M) changes (RMB M) Revenue 20,557 9,731 +111% 30,214 Gross profit 5,035 2,660 +89% 6,911 Gross profit margin 24.5% 27.3% -2.8ppt 22.9% SG&A （2,063) (1,059) +95% (2,982) Finance costs (251) (144) +74% (433) Share of profits and losses o
Slide 18: Revenue Breakdown
Revenue Breakdown Revenue Recognised GFA RMB’m Sqm 30,215 2,696,799 20,557 1,816,690 14,026 1,062,659 9,731 790,437 2,925 183,024 2016 2017 2018 1H 2018 1H 2019 2016 2017 2018 1H 2018 1H 2019 1H2019 Recognised revenue – by major cities and cities tier 1H2018 Recognised revenue – by major cities and
Slide 19: Costs of Sales & Deposits from Customers
Costs of Sales & Deposits from Customers Cost of sales (per recognised GFA)1 (RMB/ Sqm) Total:12,560 802 Total: 10,460 Total: 8,605 Total: 8,836 Total: 8,487 4,675 938 512 634 316 4,226 3,487 3,508 3,422 7,083 5,296 4,606 4,694 4,749 2016 2017 2018 1H 2018 1H 2019 Land use right Construction cost Ca
Slide 20: Robust Growth in Revenue and Profits
Robust Growth in Revenue and Profits Gross Profit and Gross Profit Margin EBITDA and EBITDA Margin RMB’m,% RMB’m,% 12,000 27.3% 12,000 24.5% 23.4% 20.4% 22.9% 25% 25% 21.1% 20.6% 19.9% 9,000 9,000 17.0% 20% 20% 6,911 6,229 15% 15% 6,000 5,035 6,000 4,097 10% 10% 2,860 2,660 4.4% 2,382 2,274 3,000 3,
Slide 21: Key Balance Sheet Figures
Key Balance Sheet Figures 1H 2019 1H 2018 YoY changes (RMB M) (RMB M) Total assets 197,691 168,074 +18% Total liabilities 188,303 161,320 +17% Total indebtedness1 28,802 27,005 +7% Total equity 9,388 6,754 +39% Equity attributable to owners of the Company 3,873 2,579 +50% Bank balances and cash2 24,
Slide 22: Strong Financial Position
Strong Financial Position Total Assets Total Equity RMB’m RMB’m 9,388 197,691 168,075 6,754 99,210 2,354 46,325 655 2016.12.31 2017.12.31 2018.12.31 2019.6.30 2016.12.31 2017.12.31 2018.12.31 2019.6.30 Bank Balances and Cash1 Interest Bearing Borrowings and Net Borrowings 2 RMB’m RMB’m Total:23,080
Slide 23: Improving Financial Metrics
Improving Financial Metrics Net Debt ratio 1 Interest Bearing Borrowings/EBITDA 2 (%) (Times) 4.3 58.1% 43.5% 3.6 2018.12.31 2019.6.30 2018.12.31 2019.6.30 EBITDA/interest expense 3 Weighted Average Borrowing Costs (Times) (%) 2.8 9.9% 10.0% 2.6 2018.12.31 2019.6.30 2018.12.31 2019.6.30 Note 1：The c
Slide 24: Improving Debt Structure
Improving Debt Structure Debt Structure Long-term relationship with large banks Cash ratio Weighted average interest costs: and trust companies 10.0% (as of 30 June 2019) 1.7x 12.4% 1.6x 11.7% Access to capital markets after IPO, including low-cost offshore and onshore 7.6% 7.5% bond market
Slide 25: Prudent Financial Disciplines
Prudent Financial Disciplines High asset turnover ratio and abundant liquidity Emphasis on project cash flow, rate of return & efficient recycling of operating cash flow Overall Financial Prudent land acquisition, stringent control of construction costs, Close monitoring of Disciplines group c
Slide 26: Thank You!
—_ IE ZHONGLIANG HOLDINGS GROUP Thank You!
Slide 27: Appendix
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Slide 28: Strategic coverage – List of Cities Entered
Strategic coverage – List of Cities Entered As of 30 June 2019, has entered 23 second-tier cities, 77 third-tier cities and 39 fourth-tier cities Region Province City-tier City List Region Province City-tier City List Tier-2 Suzhou, Wuxi, Nanjing Chongqing Tier-2 Chongqing Tier-2 Zhengzhou Jiangsu X
Slide 29: Land Bank Details as of 30 June 2019
Land Bank Details as of 30 June 2019 Completed GFA Planned GFA % of Projects Number Estimated GFA for Attributable Total Land Available for under Attributable developed by of Future Development Land Bank Bank Sale/Leasable GFA development Land Bank Subsidiaries Projects (sq.m.) (sq.m.) (sq.m.) (sq.m
Slide 30: Land Bank Details as of 30 June 2019
Land Bank Details as of 30 June 2019 Completed GFA Planned GFA % of Projects Number Estimated GFA for Attributable Total Land Available for under Attributable developed by of Future Development Land Bank Bank Sale/Leasable GFA development Land Bank Subsidiaries Projects (sq.m.) (sq.m.) (sq.m.) (sq.m
Slide 31: Land Bank Details as of 30 June 2019
Land Bank Details as of 30 June 2019 Projects Completed GFA Planned GFA % of Number Estimated GFA for Attributable Total Land developed by Available for under Attributable of Future Development Land Bank Bank JVs and Sale/Leasable GFA development Land Bank Projects (sq.m.) (sq.m.) (sq.m.) Associates
Slide 32: Land Bank Details as of 30 June 2019
Land Bank Details as of 30 June 2019 Projects Completed GFA Planned GFA % of Number Estimated GFA for Attributable Total Land developed by Available for under Attributable of Future Development Land Bank Bank JVs and Sale/Leasable GFA development Land Bank Projects (sq.m.) (sq.m.) (sq.m.) Associates
Slide 33: Development Milestones
Development Milestones Evolved from a regional residential developer to a nationwide comprehensive real estate developer with strategic vision and efficient execution capabilities Relocated headquarters to Shanghai Expanded to Anhui, Expanded to Guizhou, Expanded Shanxi, Gansu, Inner Fujian an
Slide 34: Outstanding Brand Name
Outstanding Brand Name Strong market recognitions in business scale, brand value and product capabilities Leading real estate operations in China Ranked Top 20 Real Estate Developers in 20191 Ranked Top 10 Growth Potential Developers in 20191 Ranked 1st among the Top 10 Real Estate Developers in ter
Slide 35: Product Capabilities
Product Capabilities Over 700 professionals dedicated to product design & development fulfilling needs of target customers Fulfilling requirements of different customers; more than 70 standardized product design models for different cities Standardized product modules covering floor plan, buildi
Slide 36: Experienced Management Team
Experienced Management Team Professional management team to lead long-term development Mr. YANG Jian Mr. HUANG Chunlei Mr. XU Liangqiong Mr. Albert YAU Mr. LING Xinyu Founder, chairman of board, Executive director, chief Executive director, senior Vice president Executive director, executi
Slide 37: Experienced Management Team
Experienced Management Team Over 10 years of experience in real estate industry on average, extensive experience in various areas such as investment, development, planning and financing Mr. CHEN Hongliang Mr. LI Heli Vice president Vice president Responsible for investment development Respon
Slide 38: Disclaimer
Disclaimer ◼ This presentation may contain forward-looking statements. Any such forward-looking statements are based on a number of assumptions about the operations of the Zhongliang Holdings Group Limited (the “Company”) and factors beyond the Company's control and are subject to significant risks
Zhongliang Holdings Group Company — H1 2019 Earnings Presentation on 6ix