Fantasia Holdings Group Co. Ltd. · HKEX:1777
Fantasia — H1 2020 Earnings Presentation
67 slides from Fantasia's earnings presentation, Aug 18, 2020
Slide 1: Slide 1
Slide 2: Slide 2
Slide 3: Fantasia Holdings Group 2020 Interim Results Presentation
F a n t a s i a Ho l d i n g s G r o u p C o . , L i m i t e d 2 0 2 0 I n t e r i m R e s u l t s Pr e s e n t a t i o n Au g u s t 2020 3
Slide 4: Disclaimer
Disclaimer This document is prepared by Fantasia Holdings Group Co., Ltd. (the "Company") and is only used for presentation by the Compa ny and its subsidiaries (collectively the "Group"). No representations or warranties regarding the impartiality, accuracy, completeness or correctness of the infor
Slide 5: Contents
I. Results Highlights Contents II. Results Review 1) Operating Results: Outstanding Performance 2) Financial Strategy: Sound Policy 3) Investment Strategy: Targeted Investment 4) Operation Strategy: High Efficiency III. Pandemic Relief Efforts IV. Human Resources Strategy V. Land Bank and Urban Rene
Slide 6: Part 1 Results Highlights
Part 1 Results Highlights
Slide 7: 2020 Interim Results Highlights
2020 Interim Results Highlights Contracted Sales Total Revenue Community Service and Other Income RMB 17.51 Bn RMB 9.24 Bn RMB 2.61 Bn up 33.0% YoY up 7.7% YoY Provides stable cash flow Gross Margin Core Net Profit (1) Net Gearing Ratio 33.6% RMB 558 MM 78.3% Maintains a good level up 97.6% YoY Soun
Slide 8: Part 2 Results Review
Part 2 Results Review
Slide 9: Operating Results: Outstanding Performance
1 Op e r a t i n g R e s u l t s : Ou t s t a n d i n g Pe r f o r m a n c e
Slide 10: Sales and Industry Ranking in Recent Years
Sales and Industry Ranking in Recent Years Breakdown of Contracted Sales in 2020 1H by Region (1) 2020 1H contracted sales of RMB 17.51Bn Central China Bohai Rim up 33.0% YoY Metropolitan Area Metropolitan Area RMB 1.0 Bn RMB2.42 Bn 2020 1H contracted area of 1.35MM m2 up 21.1% YoY 5.7% of total 13.
Slide 11: Steady Increase in Revenue and Earnings
Steady Increase in Revenue and Earnings Total Revenue Gross Margin RMB MM % 19,082 YOY growth: 7.7% 13,986 33.6% 29.6% 29.9% 29.6% 28.0% 9,783 9,241 8,577 2017 2018 2019 1H2019 1H2020 2017 2018 2019 1H2019 1H2020 Net Profit Net Profit Excluding Net Exchange Losses RMB MM RMB MM 1,502 1,409 1,909 1,1
Slide 12: Simultaneous Advancement of Property Development + Community Service
Simultaneous Advancement of “Property Development + Community Service” Property Development Revenue Community Service and Other Income (1) • 71.8% of total revenue • 28.2% of total revenue • Becomes the "power source" of future • Becomes the "stabilizer" of cash inflow income growth RMB MM 13,226 8,
Slide 13: Financial Strategy: Sound Policy
2 Financial Strategy : S o u n d Po l i c y
Slide 14: Solid Financials with Positive Rating Actions
Solid Financials with Positive Rating Actions RMB MM 2018 2019 1H 2019 1H 2020 Bank balances and cash 28,570 23,044 25,064 25,191 Total debt 436,24 38,173 40,547 41,151 Net assets 194,55 20,592 19,485 20,377 Net debt / net assets 77.4% 73.5% 79.5% 78.3% Net Debt / Net Assets % 76.0% 77.4% 79.5% 78.3
Slide 15: Decrease in Financing Costs
Decrease in Financing Costs Through effective bond management, the yield rate at the secondary market has dropped to a low level, significantly Financing costs outperforming the market of offshore The Group’s financing costs decreased from 15% at the end of 2018 to 7.95% in August 2020 bonds dec
Slide 16: Optimizing Debt Structure
Optimizing Debt Structure Debt Structure by Currency Debt Structure by Type % % 0.4% 0.3% 14.0% 15.2% 12.2% 20.5% 38.0% 38.1% 16.6% 47.3% 19.7% 21.7% 54.9% 24.0% 13.9% 22.5% 15.2% 13.7% 62.0% 61.9% 57.3% 52.3% 47.9% 44.8% 43.8% 41.8% 2017 2018 2019 1H2020 2017 2018 2019 1H2020 (1) RMB USD HKD Offsho
Slide 17: Investment Strategy: Targeted Investment
3 Investment Strategy : T argeted Investment
Slide 18: Strategy of Emphasizing Investment: Emphasizing Quality
Strategy of Emphasizing Investment: Emphasizing Quality Emphasizing quality Focusing on the front end Controlling the middle end Following up the back end Standardize the investment decision- Strengthen urban research capabilities Enhance post-investment management making process • Cities already en
Slide 19: Seizing Market Opportunities to Increase Land Bank
Seizing Market Opportunities to Increase Land Bank • Since 2020, sticking to the strategy that emphasizes steady and moderate progress, the Group seized market opportunities arising from the overall economic and industry situation in the first half of the year to replenish its land bank • As of 18 A
Slide 20: Taking Root in Strategic Cities with Targeted Land Bank
Taking Root in Strategic Cities with Targeted Land Bank • Continue to expand strategic presence in the five major metropolitan areas by exploring key targeted areas • Extend its business presence to new strategic cities including Foshan, Shaoxing, Zhengzhou, Nantong and Chongqing • Acquire land plot
Slide 21: Enhancing Strategic Cooperation to Achieve Complementary Advantages
Enhancing Strategic Cooperation to Achieve Complementary Advantages • Enhance cooperation with outstanding peer companies to form strong alliance and achieve complementary advantages: Cooperate with state-owned enterprises: learn from them their sophisticated operation and management experiences a
Slide 22: Operation Strategy: High Efficiency
3 Op e r a t i o n S t r a t e g y : Hi g h Efficiency
Slide 23: Implementing Goal-oriented Integrated Operation Mechanism
Implementing Goal-oriented Integrated Operation Mechanism • Integrated operation management to improve ”cashflow + profit” Focus on integrated • Digital project password consisting of ”process + meeting + operation results” management • Effective collaboration and decision-making mechanism to ensure
Slide 24: Expedite Project Development to Accelerate Project Turnover
Expedite Project Development to Accelerate Project Turnover • During the period, operation efficiency was significantly improved by enhancing schedule control of projects, with the cycle from land acquisition to commencement of construction for new projects shortened to 2.7 months and the cycle from
Slide 25: Enhance Operation Efficiency
Enhance Operation Efficiency • Through measures such as enhanced process and efficient operation, the Group achieved quality improvement, efficiency enhancement and quality growth, leading to a reduction in ratio of sales and management expenses to revenue and contracted sales • In order to enhance
Slide 26: Improving Marketing Capability
Improving Marketing Capability Implement institutionalised and systematic management model: 1 Facilitate significant improvement in the institution and system through prompt adjustment to the structure of the marketing organisation Establish standardised workflow and toolkit: 2 Culture Significantly
Slide 27: Product Quality: Clear Improvement in Overall Performance and Efficiency
Product Quality: Clear Improvement in Overall Performance and Efficiency • In the first half of 2020, the product center underwent management enhancement from the perspectivesof the “team”, “structure”, “system” and “product” • Positive results have been achieved in these four perspectives, which in
Slide 28: Customer Research: Accurate Product Positioning Driven by Customer Segmentation
Customer Research: Accurate Product Positioning Driven by Customer Segmentation • To achieve the goal of “different product strategy for various customer segmentations”, urban customers are categorized into 8+2 groups by “purchase power, lifecycle and intended residence plan” • Customer segmentation
Slide 29: Launch the Product Lines of Joyful-Tasteful-Meaningful Series
Launch the Product Lines of Joyful-Tasteful-Meaningful Series As a contemporary oriental brand, Fantasia has unique insights into human nature and is keen to seize the Tasteful Shaoxing Guandu Project development trend. Fantasia is committed to becoming a leader in providing joyful, tasteful and mea
Slide 30: Brand Strategy: Emphasis on Value Concept
Brand Strategy: Emphasis on Value Concept • Brand strategy of Fantasia: emphasis on value concept - based on the new brand center structure of Fantasia in 2020, establish value concept before creation of product portfolio • Brand team of Fantasia for 2020: the founder also acts as the general manage
Slide 31: Strengthen Brand Proposition and Enhance Brand Influence
Strengthen Brand Proposition and Enhance Brand Influence • During the period, Fantasia continued to promote its brand concept of “joyful, tasteful and meaningful” through diverse ways to strengthen its brand proposition, improve its market reputation and enhance its influence in the industry • Fanta
Slide 32: Part 3 Pandemic Relief Efforts
PART 3 Pa n d e m i c R e l i e f E f f o r t s
Slide 33: Fight Against COVID-19: an All-out Battle
Fight Against COVID-19: an All-out Battle • In active response to the central government’s call for resumption of work and production, and while ensuring the safety of our staff and customers, the property development segment of Fantasia bucked the trend to achieve sales growth and accelerate projec
Slide 34: Our Fight against the Pandemic: Outstanding Performance as Industry Leader
Our Fight against the Pandemic: Outstanding Performance as a Demonstration of Notable Advantages as Industry Leader • Colour Life and Home E&E, subsidiaries of Fantasia, played an active role in the fight against the pandemic at the community level. Their efforts have achieved remarkable results and
Slide 35: Playing a Frontline Role in Pandemic Prevention and Control
Staying Committed to Providing Quality Community Services – Playing a Frontline Role in Pandemic Prevention and Control On 10 March, President Xi Jinping paid a visit to Donghu New Town community and had a cordial exchange with the community workers, base-level policemen, doctors at the health servi
Slide 36: Part 4 Human Resources Strategy
PART 4 Hu m a n R e s o u r c e s S t r a t e g y
Slide 37: Human Resources Strategy
Human Resources Strategy • 2019: by means of turnover, system changes, recruitment selection and training, we focused on training employees via strengthening the cultural essence and enhancing the organisational value • 2020: we built up a strong workforce with accurate talent profile and continuous
Slide 38: Team Building and Integration
Team Building and Integration • Since 2020, the Company continued to review and develop the talent profile of Fantasia and introduce leading industry talents. Meanwhile, the Company continued to recruit new key talents to attend trainings with clear criteria and common language, so as to accelerate
Slide 39: Implement Profit-sharing System to Inspire Employees
Implement Profit-sharing System to Inspire Employees to Create Greater Profit • In order to stimulate the work enthusiasm of frontline staff and management team, the Group launched two incentives measuresin the first half of the year, namely the employee co-investment system and excessive profit inc
Slide 40: Part 5 Land Bank and Urban Renewal Projects
PART 5 L a n d Ba n k a n d Ur b a n R e n e wa l Pr o j e c t s
Slide 41: Abundant Land Bank to Support Future Growth
Abundant Land Bank to Support Future Growth • As of June 30, 2020, the planned land bank GFA of the Group was 37.31MM m2., including 17.77 MM m 2 of confirmed GFA, and 19.54MM m 2 of urban renewal projects expected to be converted into land bank in the future • The land bank is concentrated in five
Slide 42: Evolvement of Shenzhen Urban Renewal Policy
Evolvement of Shenzhen Urban Renewal Policy • It has been 10 years since the promulgation of the Shenzhen Urban Renewal Measures (《深圳城市更新办法》) in 2009, marking the beginning of a series of urban renewal policies in Shenzhen which played a pioneering role in this area in China • Over the past three ye
Slide 43: Launch of the Draft Urban Renewal Regulation of Shenzhen Special Economic Zone
Launch of the Draft Urban Renewal Regulation of Shenzhen Special Economic Zone • On 28 June 2020, the Draft Urban Renewal Regulations of Shenzhen Special Economic Zone (the “Regulations”) was submitted for consideration and approval for the first time, which is designed to promote the vertical in-de
Slide 44: Urban Renewal Strategy: Rooted in the High-potential Greater Bay Area
Urban Renewal Strategy: Rooted in the High-potential Greater Bay Area • The Group has 46 urban renewal projects under different stages of development in the Greater Bay Area, most of which are located in Shenzhen, and also covering areas across Huizhou, Dongguan, Zhongshan, Foshan and Guangzhou. The
Slide 45: Well Positioned in Urban Renewal Projects in Shenzhen
Well Positioned in Urban Renewal Projects in Shenzhen • The 27 projects cover virtually all districts of Shenzhen, including all the downtown districts, namely Futian, Nanshan, Luohu and Yantian • The planned GFA is ~7.32MM m 2, accounting for ~37% of the total planned GFA of all urban renewal proje
Slide 46: Plan for Delivery of Urban Renewal Projects from 2020 to 2022
Plan for Delivery(1) of Urban Renewal Projects from 2020 to 2022 • It is expected that 17 urban renewal projects will be converted into development land in the next 3 years, with a total GFA of ~4.12MM m2 and a total inventory value of ~RMB118.6bn • 16 projects are located in Shenzhen, and 1 in Huiz
Slide 47: Projects Expected to be Delivered in 2020
Projects Expected to be Delivered in 2020 Name Futian Meilin Yuehua Project Pingshan World Plastic Factory Phase II Name Project At the intersection of Caitian Road and Beihuan Road, which is the north gateway to Futian CBD At the southwest of the intersection of Dongzong Location Location and a sta
Slide 48: Six Advantages of Fantasia in Urban Renewal
Six Advantages of Fantasia in Urban Renewal As a pioneer in urban renewal, Fantasia has built up six advantages by developing urban renewal projects in the Guangdong-Hong Kong-Macao Greater Bay Area, especially in Shenzhen • With 21 years of development in the Greater Bay Area, Fantasia has deep ins
Slide 49: Part 6 Community Service Strategy
Part 6 Community Service Strategy
Slide 50: Colour Life is Well-Positioned for Business Growth with its Leading Advantages
Colour Life is Well-Positioned for Business Growth with its Leading Advantages Size advantage 1 Serving the management areas of 564 million m 2, and over 10 million property owners Workforce advantage 2 We have a team of over 50,000 employees with extensive experience and good track record Market-or
Slide 51: 2020 Strategy: Consolidate Offline and Develop Online Value-added Services
2020 Strategy: Consolidate Offline and Develop Online Value-added Services Empowering Consolidating business with offline basic online value- services added services Enhance basic property management service, improve Propel implementation of projects in cooperation with service quality, promote
Slide 52: Future Development Strategy
Future Development Strategy Largest scale, most diversified product portfolio and best service quality Community Community Community 1.0 2.0 3.0 Consolidating Building Caring Exploring Basic Services Community Consumption Scenarios Providing “security, cleaning, Carrying out a wide variety of With a
Slide 53: Part 7 Outlook
PART 7 Ou t l o o k
Slide 54: Important Development Advantages
Important Development Advantages Balancing the Development of Asset-heavy and Asset-light Business Models with a Focus on Core Business • Abundant land bank with a focus on the Greater Area: the land bank was 37.31 million m 2 , with over 50% of land bank situated in the Guangdong-Hong Kong-Macao Gr
Slide 55: 2020 Strategies
2020 Strategies Operational Strategy: Speed Investment Strategy: Focused 1） Fast sales in small steps to enhance sales turnover 1） Build presence in high-potential cities in 2） Fast construction to complete land acquisition 5 major city hubs and property sales in the same year 2） Prioritize fast tur
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Slide 57: Appendix
Appendix
Slide 58: Group Structure
Group Structure Fantasia Holdings Group Co., Limited (1777.HK) 51.69% 100.0% Colour Life Services Group Co., Fantastic Victory Limited Limited (1778.HK) 100.0% 100.0% Tong Yuan Holdings Limited Fantasia Investment Holdings Company Limited 100.0% 100.0% Offshore Onshore Shenzhen Colour Life Service G
Slide 59: Introduction to the General Process of Shenzhen Urban Renewal Project
Introduction to the General Process of Shenzhen Urban Renewal Project 1 2 3 4 5 Collectiv e Urban Renew al Conv ening The Assets Proj ect Approv al & Intention Specific Planning Application Four Meetings Transaction Initiation Collection Filing(1) Time Required 0.5 year 0.5 year 0.5 year 1.5 year 2
Slide 60: Introduction to the General Process of Huizhou Urban Renewal Project
Introduction to the General Process of Huizhou Urban Renewal Project 1 2 3 4 5 6 Determination Compilation of Planning Plotting and of Public selection Preliminary rev iew of draft Design Conditions Notice Storage in Due Diligence renov ation of partner units implementation plan or Planning for Rene
Slide 61: Introduction to the General Process of Dongguan Urban Renewal Project
Introduction to the General Process of Dongguan Urban Renewal Project 1 Public 2 Upgrade objectives of 3 W illingness 4 Draft public 5 Attracting 6 Acquisition contracts with real estate consultation with selection of tendering early partners local units real estate owners process Partners owners Ti
Slide 62: Introduction to the General Process of Dongguan Urban Renewal Project
Introduction to the General Process of Dongguan Urban Renewal Project 1 2 3 4 5 Consultation Compilation of a Listing for on intention scheme for the inv estment by Renew al Unit Delimitation Offer to acquire the real estate interests of real estate listing for the single interest ow ners inv estmen
Slide 63: Introduction to the General Process of Zhongshan Urban Renewal Project (Scenario 1)
Introduction to the General Process of Zhongshan Urban Renewal Project (Scenario 1: Previously Selected Cooperative Enterprises) 1 2 3 4 5 6 Declaration of the Surv ey of Public selection Submission for approv al Public selection transformation proj ect Public Voting for transformation of upfront an
Slide 64: Introduction to the General Process of Zhongshan Urban Renewal Project (Scenario 2)
Introduction to the General Process of Zhongshan Urban Renewal Project (Scenario 2: Later Selected Cooperative Enterprises) 1 2 3 4 5 6 Carrying out Formulation of Compilation of inv estigation Public selection transformation proj ect transformation proj ect plan, Dev elopment of and v oting Public
Slide 65: Introduction to the General Process of Foshan Urban Renewal Project
Introduction to the General Process of Foshan Urban Renewal Project (Refer to Nanhai Region) 1 2 3 4 5 6 Determination of Plotting and Voting of the Declaration of Public selection of and Compilation of Planning for renov ation storage in intention of urban renew al v oting on the cooperativ e Urban
Slide 66: Introduction to the General Process of Guangzhou Urban Renewal Project
Introduction to the General Process of Guangzhou Urban Renewal Project 1 2 3 4 5 6 Village Collectiv e Application for Collection of Include Urban Public Selection of Renew al Scope Preparation and rev iew of Plotting and intention to Renew al Annual Cooperativ e Determination the implementation pla
Slide 67: Creating Value with Aspirations
46 FF ll i HT 1B CREATING VALUE WITH ASPIRATIONS. = I bikes
Fantasia Holdings Group — H1 2020 Earnings Presentation on 6ix