Benefits from the Urban Renewal Business Assist Times China in Achieving Steadily Growing Results in 2019
Times Property Holdings Limited (Times China, stock code 01233.HK) published its 2019 annual results announcement via the Internet on March 10, 2020. In 2019, the company rode an upward trend of rapid but strategically prudent growth, bringing contracted sales revenues, turnover, profit stepping and other indicators to new levels.
▲ Times China Chairman Shum Chiu Hung answers reporters' questions during an online press conference in Guangzhou
▲ Times China CFO William Wong announces the results at the online press conference in Hong Kong
Core Indicators Show Impressive Growth
In 2019, the domestic real-estate regulation became normal, the policy remained stable on the whole, and the industry growth rate slowed. With its excellent operating abilities, Times China achieved steady improvement in multiple core indicators.
In 2019, Times China recorded a contracted sales revenue of RMB 78.36 billion, a year-on-year increase of 29.3% as compared with 2018 (RMB 60,595 million) and exceeding the annual sales target of RMB 75 billion.
The Company's profitability grew steadily, and the turnover of 2019 reached RMB 42.43 billion, an increase of 23.4% from the same period last year. The annual gross profit was RMB 12.44 billion for a year-on-year increase of 17.1%, and the gross margin was 29.3%. The net profit was RMB 5.56 billion, a year-on-year increase of 15.6%. The annual core net profit was RMB 5.81 billion, representing a year-on-year increase of 27.4%. The core net profit attributable to shareholders was RMB 5.47 billion, a year-on-year increase of 30.0%. The rate of core net profit attributable to shareholders was 12.9% for a year-on-year increase of 0.7%, and the dividend per share was RMB 0.8445, a year-on-year increase of 22.8% relative to the RMB 0.6877 figure of 2018. Additionally, on November 15, 2019, Times China distributed shares of Times Neighborhood. One Times Neighborhood share was distributed for every 2.6 Times China shares, thus bringing considerable added income to shareholders.
As of the end of 2019, the net debt ratio of Times China was 67.17%, being indicative of prudent and stable control. The cash balance owned was RMB 29,279 million and the cash-to-short-term liabilities ratio was 1.6, indicating good liquidity.
The Urban Renewal Business Takes Shape
Times Neighborhood Is Split and Listed
Since its renaming and the establishment of the positioning as an "urban development service provider" in 2018, and on the basis of ensuring the continuous and rapid development of its core business, residential project development, Times China has actively developed urban renewal, industry, commerce, community service, building, home improvement, education and other businesses, and in each of them it has progressed with remarkable breakthroughs.
Significantly, as a forerunner of urban renewal in China, Times China's urban renewal business grows rapidly and creates benefits, making it a new engine for the Company's development. Data showed that in 2019, Times China successfully transformed 10 urban renewal projects, with a total floor area of 3.68 million square meters, among which, eight were converted into new land reserves with a total floor area of 3.49 million square meters, accounting for 46% of new land reserves in 2019.
Moreover, on December 19, 2019, Times Neighborhood was split and listed on the Stock Exchange of Hong Kong Limited. Thus, Times China and Times Neighborhood could focus more on their respective strengths and create more value for shareholders.
Regional Layout Is Superior
Laying a Solid Foundation for Future Growth
In 2019, Times China acquired a total of 28 new land plots, with a floor area of approximately 7.57 million square meters. As of December 31, 2019, Times China had a land reserve of 23 million square meters, an increase of 25%. Moreover, the total number of urban renewal projects of Times China surpassed 120, with an estimated potential gross floor area of 43 million square meters. The majority of such land reserves and urban renewal projects are distributed in the Greater Bay Area, laying a solid foundation for the company's next five years of steady development.
While making continuous and in-depth development in the Greater Bay Area and vigorously raising the market share in the region, Times China starts to set foot in the Yangtze River Delta, the middle reaches of the Yangtze River, the Chengdu-Chongqing urban region and other regions with high growth potential. In 2019, Times China also enhanced its regional presence by launching operations in Hangzhou and Wuhan.
Times China Chairman Shum Chiu Hung stated at the conference that, in 2020, the monetary policy was expected to be more flexible, adding that the fiscal policy would be more active and the real-estate market would remain stable. Due to the epidemic of novel coronavirus (COVID-19) and the uncertainty with respect to the Chinese and global economies, the industry's market transactions throughout the year will be characterized as "low during the first half and stable in the second half." Times China will insist on quality growth as it ensures a healthy balance between risks and benefits, thus ensuring the growth of the residential development business while increasing the competitive advantages of its urban renewal business. Additionally, Times China will endeavor to develop its business activities in regard to industry, commerce, building, home decoration and education.