Yuzhou Group Holdings Co., Ltd. · HKEX:1628
Yuzhou — Yuzhou Properties Company — Investor Presentation (November 2012)
39 slides from Yuzhou's investor presentation, November 2012
Slide 1: Corporate Presentation
Corporate Presentation November 2012
Slide 2: Disclaimer
Disclaimer These materials have been prepared by Yuzhou Properties Company Limited (the “Company”) solely for informational use during its presentation to current and/or prospective investors to provide an update on the business performance and development of the Company. No representation or warran
Slide 3: Company Overview
(=> Fa iN Sth EAS ta PRS] Sn YUZHOU PROPERTIES COMPANY LIMITED Stock Code: 01628. HK Company Overview
Slide 4: A leading property developer in Fujian province
A leading property developer in Fujian province A leading property developer in Fujian province with footprints in Xiamen, Quanzhou and Fuzhou, Key Focus the 3 largest cities in Fujian province Successful expansion into Shanghai, Hefei and Tianjin Well-established market leader in Xiamen with
Slide 5: Corporate milestones and property development track record
Corporate milestones and property development track record Yuzhou projects Key milestones and highlights XIAMEN YUZHOU WORLD XIAMEN YUZHOU XIAMEN YUZHOU CASTLE TRADE CENTER UNIVERSITY CITY ABOVE CITY 2012: Acquired 3 projects YTD 2012 in Quanzhou, Hefei and Longyan, with a total GFA of 1.4m sq.m. 20
Slide 6: Land bank overview
Land bank overview A total land bank of 6.52m sq.m. consists of 34 projects in 7 cities as at 30 September 2012, sufficient for at least 5 years Established footprint in Xiamen, Quanzhou and Fuzhou, the 3 largest cities in Fujian province Largest land bank in Xiamen: 2.2m sq.m. vs. average 0.5m
Slide 7: Simplified shareholding structure
Simplified shareholding structure Lam Lung On & China Life Franklin Other public Xiamen C&D Hui Wing Mau Xiamen ITG Kwok Ying Lan Asset Management shareholders 75.0% 2.5% 1.2% 1.2% 1.0% 19.1% Yuzhou Properties Company Limited (Cayman Islands) (01628.HK) 100% Yuzhou International Holdings Co. (BVI) 6
Slide 8: Competitive Edges
(=> Fa iN Sth EAS ta PRS] Sn YUZHOU PROPERTIES COMPANY LIMITED Stock Code: 01628. HK COMPETITIVE EDGES
Slide 9: Competitive edges summary
1 Leading property developer in Fujian province 2 Prudent land acquisition and defensive land cost 3 Solid execution capability with proven track record 4 Healthy financial position with diversified funding channels 5 Outstanding management and strong corporate governance 9
Slide 10: Leading property developer in Fujian province
1 Leading property developer in Fujian province Established footprints in the 3 largest cities in Fujian province1 Yangtze River Xiamen Delta (YRD) Land bank breakdown by city Bohai Rim Shanghai 7% Tianjin 7% West Strait Economic Xiamen Hefei 33% Zone Yangtze 22% Fujian Fuzhou River Delta • Establis
Slide 11: Unparalleled market leadership in Xiamen
1 Leading property developer in Fujian province Unparalleled market leadership in Xiamen with 18 years of track record and experience 7 4 Largest land bank in Xiamen among major listed developers 1 m sq.m. 3.0 Fuzhou 8 2.2 2.0 5 1.4 Quanzhou 6 0.9 1.0 0.5 0.3 Average: 0.5 Xiamen 3 9 0.3 0.3 2 0.2 0.
Slide 12: West Strait Economic Zone: fast-growing region
1 Leading property developer in Fujian province West Strait Economic Zone — one of China's fastest growing regions with strong economic development and rising purchasing power GDP Disposable income per capita Average residential price RMB bn RMB '000 RMB/sq.m. 427 34 450 35 373 12,000 11,589 356 29
Slide 13: Strong corporate brand differentiates from competitors
1 Leading property developer in Fujian province Strong corporate brand meaningfully differentiates us from competitors in the market 2012 Top 10 Brand of Regional Real Estate 2012 Top 50 China Real Estate Listed Companies 2012 China Top 100 Listed Real Estate Companies China Famous Brand Companies w
Slide 14: Prudent land acquisition and defensive land cost
2 Prudent land acquisition and defensive land cost We adhere to prudent land acquisition policies and have managed to keep land cost at c.15% of average selling price Principles on land acquisitions Cost effective and sustainable expansion Unit land cost RMB/sq.m. Sustaining low • Ensure land cost t
Slide 15: Prudent land replenishment in 2012
2 Prudent land acquisition and defensive land cost Prudent land replenishment in 2012 at an average cost of RMB975/sq.m. Date of Site area Total saleable GFA Average cost per GFA City Project type Methodology acquisition (sq.m.) (sq.m.) (RMB/sq.m.) April 2012 Quanzhou Residential/Commercial/Retail P
Slide 16: Solid execution capability with proven track record
3 Solid execution capability with proven track record Successful expansion into Yangtze River Delta and Bohai Rim Region by replicating proven business model in Fujian, while further penetrating into Fujian Increasing contribution from new markets Contracted sales 2009 2010 2011 15.0% 31.1% 35.9% Ti
Slide 17: Strong growth since IPO with stable profit margins
3 Solid execution capability with proven track record Strong growth achieved since IPO with stable profit margins Revenue, gross profit and gross margin Recognized GFA & ASP RMB m '000 sq.m. RMB'000/sq.m. 50% 49% 48% 6,000 45% 50% 11 11 43% 42% 600 10 528 10 12 9 40% 500 8 10 4,266 3,839 4,000 400 3
Slide 18: Outstanding contracted sales despite policy headwinds
3 Solid execution capability with proven track record Outstanding contracted sales despite policy headwinds in the past 18 months 1H2012 sell-through rate Contracted sales 80% RMB m 74% 70% 6,000 67% Average: 68% 5,217 70% 5,000 4,296 60% 3,852 3,799 4,000 50% 3,000 42% 2,067 2,000 1,110 40% 1,000 3
Slide 19: Effective cost control leads to outstanding profit margin
3 Solid execution capability with proven track record Effective cost control leads to outstanding profit margin 7 projects launched for sale in Xiamen in 1H2012 • Lower fixed costs through economies of scale, by concurrently marketing multiple projects in one city Yuzhou Central Yuzhou Castle • Stri
Slide 20: Defensive strategies to weather the market downturn
3 Solid execution capability with proven track record Defensive strategies to weather the market downturn Product and pricing flexibility Experienced management Diversify product mix to mid end, better catered to current market Highly experienced management team with strong execution demands cap
Slide 21: Healthy financial position and well diversified funding channels
4 Healthy financial position and well diversified funding channels Strong balance sheet with healthy debt profile and limited outstanding land premium Healthy net gearing¹ amongst B-rated peers Well-staggered debt maturity profile % of total debt 90% < 1 year 1.6 27.2% 79% 80% 73% 71% Average: 65.4%
Slide 22: Steadily improving cash flow position
4 Healthy financial position and multiple funding channels Steadily improving cash flow position as a result of prudent financial management RMB bn RMB bn (Unaudited) 7.03 (5.93) FY2011 9M2012 FY2012 (A) (A) (E) Debt Repayment New Debt JV Project Capex Rental, 1.23 Beginning Balance 2.73 1.96 1.96 2
Slide 23: Sufficient liquidity with undrawn facilities
4 Healthy financial position and multiple funding channels Sufficient liquidity with undrawn facilities of over RMB2.9bn as at 30 June 2012 Credit Facilities Used Facilities Remaining Facilities # Lending Banks City (as of 30 June 2012, RMB m) (as of 30 June 2012 RMB m) (as of 30 June 2012 RMB m) 1
Slide 24: Outstanding management: senior management
5 Outstanding management and strong corporate governance Senior Management Mr. LAM Lung On Chairman, CEO • Founded Yuzhou Properties in 1994 • Over 17 years of experience in residential, commercial and hotel property development and investment Ms. KWOK Ying Lan Mr. CAI Ming Hui Mr. LIN Longzhi Vice
Slide 25: Strong corporate governance
5 Outstanding management and strong corporate governance Strong corporate governance Yuzhou's corporate governance The Board principles emphasise a quality Board, LAM Lung On (Chairman and CEO) sound internal controls, transparency and accountability to all shareholders Delegation of power Reporti
Slide 26: Financial Overview
(=> Fa iN Sth EAS ta PRS] Sn YUZHOU PROPERTIES COMPANY LIMITED Stock Code: 01628. HK Financial Overview
Slide 27: Key financial highlights for 1H2012 and FY2011
Key financial highlights for the first half of 2012 and full year 2011 Total assets: RMB20.5bn Balance Sheet Cash: RMB2.9bn (As of 30 June 2012) Total debt: RMB6.0bn Net debt1: RMB3.1bn Revenue: RMB955m for six months ended June 2012; RMB3.8bn for full year 2011 Core net profit2: RMB161m
Slide 28: Robust growth
Robust growth Sales of Properties Contracted Sales RMB m RMB m 5,000 6,000 5,217 4,198 3,735 5,000 4,296 4,000 3,852 3,799 4,000 3,000 1,720 1,941 3,000 2,000 2,067 898 2,000 724 1,110 1,000 1,000 0 0 2008 2009 2010 2011 1H2011 1H2012 2008 2009 2010 2011 1H2011 1H2012 Recognized GFA & ASP Rental Inc
Slide 29: Stable profitability
Stable profitability Revenue Gross profit / Gross margin RMB m RMB m 4,266 4,500 3,839 3,500 60.0% 4,000 50% 49% 48% 3,000 43% 42% 45% 3,500 50.0% 3,000 2,500 40.0% 1,884 2,500 1,992 2,000 1,777 1,760 30.0% 2,000 1,500 1,500 955 750 988 20.0% 766 1,000 1,000 431 500 366 10.0% 500 0 0 0.0% 2008 2009
Slide 30: Capitalization and debt profile
Capitalization and debt profile Capitalization as of June 30 2012 Debt Profile by Maturity RMB m % of Total Cap 4% Cash and cash equivalents1 2,907 Total debt 6,038 51.9% 27% Total short-term borrowings -Bank loans 1,170 10.1% -Other loans 470 4.0% 33% Borrowings – due after one year -Bank loans 2,2
Slide 31: Credit ratios
Credit ratios Total debt / EBITDA1 and Net debt / EBITDA EBITDA / Total Interest2 4 3.2x 12 3.0x 2.7x 9.8x 3 10 2.4x 3 7.7x 1.9x 8 2 1.6x 6 2 1.2x 3.6x 3.5x 1 0.7x 4 1 2 0 0 2009 2010 2011 2012LTM 2009 2010 2011 2012LTM Total debt/EBITDA Net debt/EBITDA Total debt / Total equity and Net debt / Total
Slide 32: Prudent financial policy
Prudent financial policy Investment Criteria Maintain land cost at c.20% of average selling price Liquidity Maintain target minimum cash reserves at c. RMB2bn Financial Leverage Maintain Net Debt/Total Equity at c. 60% Dividend Payout Ratio Maintain dividend payout at predetermined 20-30% of
Slide 33: Appendix
(=> Fa iN Sth EAS ta PRS] Sn YUZHOU PROPERTIES COMPANY LIMITED Stock Code: 01628. HK Appendix
Slide 34: Detailed land bank table
Detailed land bank table Total Saleable Sold and Delivered Pre-sold Held for Interest in the Project Site Area Location Unit Land Cost Total GFA Held for Sale Only Land Reserve GFA Saleable GFA Saleable GFA Investment Only Project （sq.m.） （RMB/sq.m.） （sq.m.） （sq.m.） （sq.m.） （sq.m.） （sq.m.） （sq.m.） （
Slide 35: Detailed land bank table
Detailed land bank table Total Saleable Sold and Delivered Pre-sold Held for Interest in the Project Site Area Location Unit Land Cost Total GFA Held for Sale Only Land Reserve GFA Saleable GFA Saleable GFA Investment Only Project （sq.m.） （RMB/sq.m.） （sq.m.） （sq.m.） （sq.m.） （sq.m.） （sq.m.） （sq.m.） （
Slide 36: Xiamen property market overview
Xiamen property market overview '000sq.m RMB/sq.m. 8,000 13,973 16,000 13,247 7,000 11,600 14,000 6,000 8,854 6,743 12,000 9,708 9,891 6,055 5,000 10,000 4,000 6,601 8,000 4,744 3,894 4,109 3,000 5,726 6,000 3,174 3,159 3,810 3,397 2,000 2,723 4,032 4,348 2,644 4,000 3,229 2,274 2,247 2,472 1,000 1,
Slide 37: Fuzhou property market overview
Fuzhou property market overview '000sq.m RMB/sq.m. 12,000 14,243 16,000 13,080 11,322 14,000 10,000 10,435 12,000 8,000 7,619 10,000 7,963 7,244 6,000 6,214 5,813 8,000 3,976 5,634 6,000 4,000 2,981 5,138 4,263 4,400 4,000 2,000 2,990 3,431 2,841 3,178 3,174 3,109 2,795 2,000 612 1,655 1,017 1,052 9
Slide 38: Shanghai property market overview
Shanghai property market overview Residential Land Supply and Property Transactions in Shanghai '000sq.m RMB/sq.m. 40,000 21,728 22,278 23,035 25,000 34,809 20,000 30,000 16,039 13,971 9,655 15,000 10,556 20,000 23,421 7,767 20,128 10,000 17,941 17,776 18,999 16,151 7,944 16,914 3,215 14,565 6,632 1
Slide 39: Hefei property market overview
Hefei property market overview Residential Land Supply and Property Transactions in Hefei '000sq.m RMB/sq.m. 12,000 6,259 6,454 7,000 6,007 10,000 10,684 6,000 10,256 4,635 9,531 4,100 9,619 9,403 5,000 8,000 8,900 3,154 7,754 4,000 6,000 2,799 2,874 5,833 6,256 3,000 5,374 5,413 5,783 4,000 4,879 2
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