Zhongliang Holdings 2019 Annual Results March 2020 0
CONTENT 02 01 Results Business Highlights Operation 03 04 05 Financial Appendix Development Performance Strategies 1 1
01 2019 ANNUAL RESULTS HIGHLIGHTS 2
2019 ANNUAL RESULTS HIGHLIGHTS 102 % 40 40 % 20th 1 90% Robust Growth in High Earnings Dividend Dividend payout Revenue and of 2020 Real Visibility Distribution Estate Top 500 Profitability ▪ ▪ ▪ 2019 contracted sales + 50% yoy to Final dividend of HK32.8 cents Revenue + 88% yoy to RMB 56.6 bn RMB 152.5 bn (equivalent to RMB 29.8 cents) per share ▪ Core net profit attributable to owners ▪ ▪ Unbooked contacted sales was over + 102% yoy to RMB 3.9 bn Dividend payout ratio at 40% of the net RMB 200.0 bn 2 core profit attributable to owners 570 700 200 b 200 65.6 % Stringent Land Solid Financial Position Full-Structured Sq.m Selection Process B+ Offshore Ratings Land bank Net gearing New Saleable With Full-Coverage AA+ Onshore Ratings with Nationwide Resources Coverage ▪ ▪ Aggregate land consideration amounted Total indebtedness amounted to ▪ Total land bank of approx. 57.0 million to RMB76.4 bn 2 , average land cost was sq.m 2 with average land cost of RMB 40.2b with net gearing ratio at 65.6% RMB4,600 per sq.m (attributable RMB 4,000 psm ▪ Obtained issuer's international credit interest >60%) ratings: B+ by Fitch; B1 by Moody's; B+ ▪ Total saleable resources of approx. RMB ▪ Tier-2 and tier-3 accounted for 53% and by S&P and BB by Lianhe Global, all with 443.3bn 3 39% respectively, tier-4 only 8% Stable outlook Note 1: Ranked by China Real Estate Association, E-house China R&D institute (CRIC) and China Real Estate Appraisal Center in 2020 Note 2: Gross amount which includes joint ventures and associated companies Note 3: Excluded presold but unbooked contracted sales 3 3
BUSINESS 02 OPERATION 4
Robust Contracted Sales Growth FY 2019 Contracted ASP FY 2019 Contracted Sales 1 FY 2019 Contracted GFA 1 RMB152.5b 14.9m sqm RMB10,300/ sqm Expects ASP may increase due to urban +50% YoY +46% YoY upgrading to higher-tier cities (000 ’sqm) (RMB mn) (RMB per sqm) 14,851 152,500 11,460 10,300 10,000 10,146 101,500 64,900 5,664 2017 2018 2019 2017 2018 2019 2017 2018 2019 Note1: Include the Group ’ s subsidiaries, joint ventures and associated companies 5 5
Balanced Sales & Strong Execution Capability Contracted Sales Breakdown by Region 2019 Operational Indicators Pearl River Delta Pearl River Delta Western Taiwan Straits 0.3% 2.1% Western Taiwan Straits 12.6% 8.6% 117 % Midwest China Midwest China 23.5% 2019 2018 Exceeded 2019 sales target 20.3% Yangtze River Delta Yangtze River Delta 59.0% Pan Bohai Pan Bohai 59.4% 7.4% 6.8% 90 % Contracted Sales Breakdown by City-tiers Cash collection rate 12% 12% 70 % 53% 64% Sell-through rate 35% 24% 2018 2019 Tier-2 cities Tier-3 cities 6 6
Stringent Land Selection Process Full-structured land bank with nationwide coverage, allowing regional & city-tier rotation in line with economy and policies Entered 20 new cities, including Nanjing, Nangchang, Tianjin, Dalian, Guiyang, Xian, Fuzhou, Xiamen, Weifang, etc. Focused on small to middle sized projects to diversify risks effectively New Land Acquisitions in 2019 1 Newly added Total land cost Saleable Resources RMB76.4bn RMB201.5bn Average GFA land cost 16.6m sq.m 4,600/sq.m 24 Liaoning 4 Inner Beijing Mongolia 2 2 Tianjin 3 Tier-2 & tier-3 2 2 Tier-2 cities 8 Ningxia Hebei Shandong cities 53% Shanxi Gansu 92% 7 24 Jiangsu Henan 64 Shaanxi 34 10 Attributable Yangtze River Headquatrer - 11 11 Shanghai Anhui interest Hubei Delta Chongqing Sichuan 141 Zhejiang >60% 63% 16 35 2 17 Hunan Jiangxi Fujian Midwest China Guizhou Number of Newly entered 13 9 11 Pan Bohai Rim Yunnan projects cities Guangdong Guangxi 139 20 Yangtze River Delta West Taiwan Straits Pearl River Delta Note 1 Gross aggregate amount Note 2: Map shows project distribution as at 31 December 2019 7 7
Rotational Land Selection Strategy Adopts varied strategies to control risk and manage cash flow. During market upturn, executing proactive segment rotation; during market downturn, improving land bank structure with less risks. Breakdown of Land Premium of New Land Acquisitions (by City-tier) 8% 14% 39% Driven by market fundamentals, increased exposure of tier-2 & 54% strong tier-3 cities 53% 32% 2018 2019 Tier -2 Tier-3 Tier-4 ▪ Led the market by rotating into tier-3 & 4 cities in 2016-18, seizing the shantytown policy opportunities ▪ Responded quickly to market slowdown, shifted back to tier-2 and strong tier-3 since 2H 2018 ▪ Tier-2 cities land acquisitions proportion increased to 53% in 2019 8 8
Scientific Land Selection Approach Stringent selection process: only less than 1.4% of tracked land parcels eventually acquired in 2019 10000+ Tracked Land Parcels 6000+ 6000+ Preliminary Screening 2000+ Feasibility Studies 2000+ 800+ 800+ Bidding 139 139 Purchase Strategic Market Financial funnel funnel funnel o Long-term development o Ensure sell-thro + o Ensure profit + potential of cities fast asset turn capital efficiency o In line with the Zhongliang’s strategy 9 9
Full-Structured Land bank with Nationwide Coverage Total land bank of 57.0mn sq.m 1 ， 458 projects cover 23 provinces and municipalities in 142 cities Land Bank by provinces 22.1% (sqm) 16.8% 7.6% 7.2% 6.0% 6.1% 5.7% 3.4% 3.0% 3.4% 3.2% 2.3% 2.7% 1.9% 2.6% 1.9% 0.9% 0.9% 0.5% 0.7% 0.5% 0.4% 0.3% Land Bank as of 31 Dec Land Bank as of 31 December 2019 by Region Target by City tier 2019 by City tier （ sqm ） （ by expected salable values ） (by expected salable values) Pearl River Delta 3% Western Tier 4 Others Tier 4 Taiwan Straits T2 in YRD 14% 10% 10% Other T2&3 cities 15% 10% Yangtze 7% Tier 2 Tier 2 River 36% 40-50% T2&3 in Pan Bohai Delta Tier 3 Midwest China T3&4 in YRD Tier 3 8% 46% 40-50% 34% 31% 54% T2&3 in Pan Bohai Midwest China 8% 25% Note1 ： As at 31 December 2019, aggregate land bank includes joint ventures and associated companies, including presold but unbooked land bank which is approx. 19mn sq.m or equivalent to expected salable resources of RMB200.0bn 10 Note 2: YRD refers to Yangtze River Delta 10
Saleable Resources in 2020 Unsold saleable resources over RMB443.3 bn 1,2 ,unbook contacted sales over RMB200.0 bn 1 2020 saleable resources of RMB260.0 bn 1 Expected ASP Expected ASP Pearl River Delta 2% RMB/sqm RMB/sqm Western Taiwan Straits Tier 4 9% 16% WTSMidwest 8,070 Tier 4 8,920 Tier 2 2020 Saleable 9,650 2020 Saleable 39% Resources Resources Bohai Midwest China Pan Tier 3 Tier 3 10,810 By region By tiers 10,370 30% Yangtze River Delta 45% 49% PRD 11,210 YRD Pan Bohai 15,440 Tier 2 14,530 9% 2020 Saleable Resources Distribution Operation indicator 1 (0000sqm) 2019 2020 Completed Planning GFA under construction 4,350 5,500 New construction 2,000 2,150 40% 28% Completed floor area 850 1,000 19% 13% Q1 Q2 Q3 Q4 Note 1: Gross amount which includes joint ventures and associated companies 11 Note 2: Deducted unbooked contracted sales 11
Strategic coverage – List of Cities Entered As of 31 Dec 2019, has entered 25 second-tier cities, 78 third-tier cities and 39 fourth-tier cities, with a total of 142 cities. Region Province City-tier City List Region Province City-tier City List Tier-2 Chongqing Chongqing Tier-2 Suzhou, Wuxi, Nanjing Tier-2 Zhengzhou Jiangsu Xuzhou, Changzhou, Yangzhou, Taizhou, Tier-3 Henan Tier-3 Xinyang, Shangqiu, Xuchang, Nanyang, Luoyang Yancheng, Lianyungang, Suqian, Nantong, Huai’an Tier-4 Puyang, Xinxiang, Pingdingshan, Jiaozuo, Jiyuan Tier-2 Hangzhou, Ningbo, Wenzhou Tier-2 Chengdu Yangtze Sichuan Tier-3 Nanchong, Mianyang, Dazhou, Meishan, Suining Zhejiang River Jiaxing, Jinhua, Taizhou, Shaoxing, Huzhou, Tier-3 Delta Tier-4 Zigong, Yibin Zhoushan, Quzhou, Lishui Tier-2 Wuhan Tier-2 Hefei Tier-3 Huanggang, Xiangyang, Yichang Hubei Wuhu, Liuan, Bozhou, Tongling, Anqing, Tier-4 Ezhou, Enshi, Suizhou, Huangshi Tier-3 Anhui Xuancheng Tier-2 Changsha Suzhou, Chizhou, Huaibei, Chuzhou, Bengbo, Zhuzhou, Yiyang, Loudi, Yueyang, Changde, Tier-4 Hunan Tier-3 Fuyang Hengyang, Chenzhou Tier-2 Fuzhou, Xiamen Tier-4 Shaoyang Fujian Xi’an Tier-2 Tier-3 Zhangzhou, Ningde, Sanming, Longyan, Quanzhou Midwest Western Tier-3 Yulin Shaanxi Taiwan Tier-2 Nanchang Tier-4 Ankang, Tongchuan Straits Tier-3 Baotou, Hohhot, Chifeng Inner Mongolia Fuzhou 、 Ganzhou Jiangxi Tier-3 Tier-2 Nanning Ji’an , Shangrao, Jiujiang, Pingxiang, Jingdezhen Tier-4 Tier-3 Liuzhou, Qinzhou Guangxi Tier-4 Guigang, Beihai Tier-2 Tianjin Tianjin Tier-2 Kunming Tier-2 Qingdao, Jinan Tier-3 Yuxi, Chuxiong Yunnan Shandong Liaocheng, Weihai, Linyi, Dezhou, Jining, Tai’an , Baoshan, Dali, Pu’er , Shaotong Tier-4 Bohai Rim Tier-3 Yantai, Bingzhou, Zaozhuang, Zibo, Weifang Tier-2 Taiyuan Shanxi Tier-4 Linfen Hebei Tier-3 Tangshan, Cangzhou Tier-2 Guiyang Liaoning Tier-2 Shenyang, Dalian Tier-3 Zunyi Guizhou Tier-4 Bijie Pearl Tier-3 Zhaoqing, Jiangmen, Foshan, Shaoguan, Maoming River Guangdong Gansu Tier-4 Pingliang, Tianshui Delta Tier-4 Chaozhou, Heyuan, Jieyang, Qingyuan Tier-3 Yinchuan Ningxia Newly entered cities in 2019 are marked in red 12 12
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