(Hong Kong – March 11, 2019) Beijing Capital Land Ltd. (“BCL” or the “Company”, together with its subsidiaries (collectively the “Group”); stock code: 2868.HK), one of the leading integrated property developers in China, today announced the Group’s annual results for the year ended 31 December 2018.
In 2018, the Group’s revenue totaled RMB23,257,053,000, representing an increase of approximately 9% compared with the previous year. Operating profit decreased approximately 18% year-over-year to RMB3,160,047,000. Net profit attributable to interests of the Company totaled RMB1,922,932,000, representing a decrease of approximately 9% compared with the previous year. Basic earnings per share (EPS) totaled RMB0.45, compared with RMB0.67 in 2017. The board resolved to recommend the payment of a final dividend for the year ended 31 December 2018 of RMB0.22 per share (2017: RMB0.21 per share).
During the year, the Group continued to adhere to its mission of achieving “quality growth,” proactively responded to policy and market changes, and effectively implemented its “fast turnover” and “increase investment” strategies. These efforts enabled the Group to raise its operating performance and realize significant breakthroughs in many areas.
Record high contracted sales; Implemented “Increase Investment” strategy
-During the year, the Group took a number of city-specific measures to implement its “fast turnover” strategy. Projects in core cities met the “369 construction time limit standards” and the deployment of high-end product lines was accelerated. Meanwhile, in non-core cities, the Group accelerated destocking and successfully expanded its inhouse sales team. As a result, total contracted sales rose 26.5% from the same period last year to RMB70.64 billion, which was a new record high for contracted sales. Total contracted sales area was 3.063 million sq.m., up 27.6% from the same period last year. Specifically, the Group witnessed significant sales growth in Beijing as contracted sales rose 73.7% year-over-year to RMB39.24 billion, accounting for 55.5% of total contracted sales.
-During the period, the Group focused its investment on the three key metropolitan areas. It took advantage of favorable conditions for land supply, leveraged synergies in primary and secondary land development and executed M&A and other cooperative development deals to acquire 27 premium secondary land development projects at low land premiums. The projects have a total GFA of 4,093,000 sq.m. and are expected to be worth over RMB100 billion in product value. In total, the Group made an investment of RMB40.9 billion, an increase of 11.3% year-over-year. The Group also successfully expanded its presence by tapping the markets of Guangzhou, Foshan and Suzhou, as of January 2019. To strengthen its primary land development business in the Beijing-Tianjin-Hebei region and create more synergies, the Group acquired two primary development projects in Zhangjiakou, Hebei Province and Fumazhuang in the Huairou District of Beijing, with a total GFA of approximately 1.3 million sq.m.
Upgraded product and service quality with the effective implementation of business innovations
-In 2018, the Group pushed forward its “BCL Made 2020” product strategy and upgraded its high-end “Tian Yue” and “Xi Rui” brands with 26 product patent applications, and accumulated 20 high-end projects across China. In addition, the Group further carried out standard cost controls process to continuously improve its operating quality and efficiency. . In particular, the Group saved RMB6.3 billion through its “3300” cost control initiative.
-During the year, the Group vigorously developed cultural and creative industry and industrial property projects. It acquired the Beijing Sanluchang project, the Beijing Media Elite Headquarters project, and the Beijing Langyuan Park and Langyuan Station projects. The Group also successfully launched its new development platform for intangible cultural heritage. The grand opening of the Zhongguancun Integrated Circuit Park (IC Park) attracted over 30 high-tech enterprises to move in, expecting the total value of output to exceed RMB27 billion or RMB4 billion per hectare. , This is going to be five times higher than the industry benchmark.
-During the year, the Group expanded its rental housing business. The Group successfully launched the Fangshan Heyuan Project in Beijing and the Shuanggang Heyuan Project in Tianjin. The Group also took advantage of a policy related to collectively-owned land leasing and acquired the Shibalidian Project in the Chaoyang District of Beijing. The project, the largest rental housing project developed on collectively owned land in Beijing, willcover a total construction area of 430,000 sq.m. and will eventually offer approximately 10,000 rental housing units.
Outlet sales top the industry; Four more outlet projects launched, boosting business performance
-During the year, Beijing Capital Grand Limited (“Capital Grand”, stock code: 1329.HK), the commercial property arm of the Group, continued to expand its presence and implement its strategic goal of deploying outlet projects in “Twenty Cities in Five Years”. as of January 2019, the Group has further broadened its strategic footprint in key cities with the deployment of outlet projects in 17 cities and now has 10 outlet projects in operation, ranking no. 1 nationwide in terms of the number of projects deployed and opened in the industry. The Group’s outlets generated annual turnover of RMB5.1 billion, up 58% year-over year, and customer traffic hit 31.2 million, representing an increase of approximately 23% year-over-year. In particular, the Beijing Fangshan Capital Outlets project ranked in the top 3 in the industry.
Diversified financing channels; Established innovative financing platform
-The Company took advantage of various financing channels such as bonds, insurer investments, asset securitization and supply chain finance. The Group issued a 3-year offshore senior note for an aggregate nominal amount of USD500 million a corporate bond with an aggregate principal amount of RMB10 billion and completed the first supply chain financing. As of the end of year, 2018, the weighted average financing cost of the Company was 5.45%.
-During the year, with premium commercial assets and excellent operating capabilities, the Group took advantage of a new policy and received approval for a RMB10 billion asset backed securities (ABS) shelf offering, which is the first ABS offering that uses outlets as colleterial in China.
-During the year, the Group officially launched its Prime Golden Capital Management (Tianjin) Company Limited (“Prime Golden Capital”) financing platform. As a critical part of the Group’s “RMB100 Billion Value Ecosystem” strategy, Prime Golden Capital concentrates on “property X finance” and primarily provides funding in five major areas for BCL, namely real estate development, asset management, cultural and creative industries, private equity and overseas real estate. This new platform aims to boost the rapid development of BCL’s main business as well as to speed up BCL’s strategic transformation.
In the next three years, the Group will strengthen its four core business lines of residential property development, primary land development, integrated outlets and urban core integrated complex. It will also continue to push forward its innovative business lines of cultural and creative industries, high-tech industrial property and rental housing. The Group will also develop its financing platform Prime Golden Capital to achieve diversified business growth.
The Group will continue to strive to achieve “quality growth”, adhere to a “fast turnover” strategy, and improve its operating capabilities on all fronts by executing the “369 construction time limit standards”. Leveraging the Group’s in-house salesforce, the Group aims to achieve contracted sales target of RMB80 billion in 2019 and speed up its cash collection. With momentum from the fast turnover, the Group will be able to increase its investments, primarily in its three key metropolitan areas. The Group will expand its regional investments and acquire strategic resources by taking advantage of its RMB100 billion value primary land development platform in the Beijing-Tianjin-Hebei Area, as well as by creating synergies across different industries and seeking cooperation and M&A opportunities.
The Group will implement its “BCL Made 2020” product strategy, where the “Tian Yue” and “Xi Rui” product brands will set a benchmark for exquisite craftmanship and be used to drive high-quality standard products in more regions. As a part of the Group’s ongoing transformation strategy, it will proactively develop three major innovative businesses, namely the cultural and creative industries, high-tech industrial property and rental housing. For the outlets business, the Group aims to deploy outlet projects in “Twenty Cities in Five Years” and leverage its integrated online-to-offline sales platform to drive the operating performance. The Group will build and maintain diversified financing channels, explore various equity financing opportunities, and accelerate the development of Prime Golden Capital to implement the “RMB100 Billion Value Ecosystem” strategy.