An established property developer in the PRC focusing on developing quality residential properties in the Yangtze River Delta Megalopolis for customers of all ages, Yincheng International Holding Co., Ltd. (“Yincheng International Holding” or the “Company”, together with its subsidiaries, the “Group”, Stock code: 1902.HK) is pleased to announce its unaudited consolidated interim results for the six months ended 30 June 2022 (the “Period”).
During the Period, the Group’s revenue increased by approximately 20.9% YoY to approximately RMB 4.58 billion. While the gross profit increased significantly by approximately 95.9% YoY to approximately RMB 1.35 billion, the gross profit margin increased by 11.3 percentage points YoY to approximately 29.5%. Profit for the Period increased by approximately 11.9% YoY to approximately RMB333.7 million. Net profit margin remained roughly the same as that from the same period last year at approximately 7.3%.
Key projects achieved favourable sales record
The real estate industry in the PRC has undergone a tremendous transition since last year due to various factors including the pandemic, an overall economic decline, industrial downturn and funding difficulties. During the Period, the Group recorded contracted sales of approximately RMB6.57 billion, which drop was in line with the overall trend amongst its peers. In such extremely challenging market conditions, the Group has made great efforts to maintain a stable operation, and vigorous launch for key projects, including Yi He Shan Zhuang in Hangzhou, Dong Wang in Suzhou, Jinlinfu in Taizhou and Huan Le Tian Di in Wenzhou, still bucked the market with excellent performance and became bestselling projects in their respective regions. It indicates that the Group commenced its business in Nanjing and successfully expanded its footprint to other cities in the Yangtze River Delta Megalopolis. During the Period, the contracted sales gross floor area (“GFA”) was approximately 308,597 sq.m. while the average selling price of the contracted sales remained relatively stable at approximately RMB21,277 per sq.m., representing an increase of approximately 4.4% YoY.
All projects delivered on schedule with a record-high cash collection rate
In view of the continuously harsh business environment and facing the common industry problem of tight cash flow just like any other real estate enterprises, the Group has taken a number of measures to maintain sufficient liquidity and stability with its daily operations. There was a comparatively high cash collection rate in the first half of the year with an overall cash collection of approximately RMB8.21 billion, which makes a cash collection rate of 125%. As project delivery has become the focus of the industry and even the entire society, the Group has made “guaranteed delivery” a priority to ensure timely delivery of its projects, so as to protect the interests of home buyers, live up to the market’s confidence in the Group and maintain the good market reputation of its brand. In the first half of the year, the Group delivered properties with a total GFA of approximately 158,000 sq.m.. In particular, all projects were delivered on schedule without any breach on contract delivery. The overall delivery rate of the Group in the first half of the year was approximately 85.8% and the delivery satisfaction rate was approximately 86%, both of which were at benchmark level in the industry.
Precise deployment in key markets with sufficient land reserves supports future development
As a regional deep-cultivation enterprise, the Group has sufficient land reserves and saleable projects to support its future sales. During the Period, the Group had a land bank with an aggregate estimated GFA of approximately 7.19 million sq.m., out of which the land bank with interests attributable to the Group amounted to approximately 4.73 million sq.m, mainly situated in core cities of the Yangtze River Delta Economic Megalopolis and the new first-tier cities, including Nanjing, Zhejiang and southern Jiangsu, accounted for 92% of the total land reserves. As of 30 June 2022, the Group’s total saleable GFA was approximately 2.94 million sq.m., with a total saleable value of RMB 62.3 billion and an ASP of approximately RMB21,200/sq.m., providing solid supports to the Group’s future revenue and long-term sustainable operation. During the Period, the Group had 61 projects located in 10 cities in the PRC, of which 35 projects were developed and owned by the Group and the remaining 26 projects were developed and owned by the Group’s joint ventures and associates.
Effective de-leverage yielded remarkable results with strong operation management
While striving to achieve stable business growth, the Group is committed to optimizing its debt structure and deleveraging. During the Period, the Group reduced its liabilities, hence the size of interest-bearing liabilities decreased by 14.1% to RMB11.7 billion, compared with the end of 2021. Among which, the short-term borrowings remained at a stable level, showing that the Group continued to manage its liabilities in an orderly manner. The Group’s average financing cost was further declined from the end of 2021, and maintained at a relatively low level of 6.7%, maintaining its efficient fund utilization. The financing structure was primarily consisted of bank loans with a lower overall cost, which accounted for 75.6% of the total debt, to safeguard the Group’s sustainable operation.
Mr. Huang Qingping, the Chairman of Yincheng International Holding, said “In the second half of the year, although there have been improvements in the operating environment of the real estate industry, and both market confidence and transaction volume are expected to recover or resume to a certain extent, given the uncertainties of the COVID-19 pandemic, the continuing trend of economic downturn and the ongoing tight cash flow problem in the industry, real estate enterprises are still facing an overall unfavorable operating environment. The Group believes that private enterprises can no longer be guided by business scale in the future, they should instead strive to have a full understanding of customer and product needs in regional markets and make business decisions swiftly in response to market changes, so as to secure regional market development opportunities. Looking forward, the Group will take the market recovery and rebound as an opportunity to improve its sales and actively minimize potential risks over the course of its operation. Not only will the Group perfect its overall cash flow management to safeguard its business operations, but it will also require its subsidiaries to audit cash flow records (including sales return records), regulate the use of funds and, in particular, to restore liquidity available for allocation by the Group. At the same time, the Group will properly handle its cooperative relationship with suppliers under the current market situation, balance various payment relationships and ensure that all its business units can carry out various business tasks smoothly. the Group will use its best endeavour to maintain normal project development with timely sales and delivery. It will, as a listed real estate enterprise and a reputable local brand, strive to maintain or carry out an appropriate level of commitment and social responsibility of towards its investors, home buyers and the market.”
An established property developer in the PRC focusing on developing quality residential properties in the Yangtze River Delta Megalopolis for customers of all ages, Yincheng International Holding Co., Ltd. (“Yincheng International Holding” or the “Company”, together with its subsidiaries, the “Group”, Stock code: 1902) is pleased to announce its unaudited consolidated interim results for the six months ended 30 June 2021 (the “Period”). During the Period, the Group achieved contracted sales amount of approximately RMB 16.5 billion, representing an increase of 170% YoY. Revenue of approximately RMB 3.79 billion. The gross profit was approximately RMB 689.3 million with gross profit margin increased by 2.5 percentage points YoY to 18.2%. The profit for the period was approximately RMB 298.1 million, and the net profit margin increased by approximately 1.3 percentage points YoY to 7.9%.
Ample Land Reserve Resources Enable Precise Key Market Deployment
Yincheng International Holding consistently adhered to the development strategy of “based in Nanjing, cultivate the Yangtze River Delta Megalopolis”. During the period, the Group has acquired a total of 12 high-quality land parcels with GFA of over 2.4 million sq.m., which are mainly located in the core cities of the Yangtze River Delta Megalopolis such as Nanjing, Wuxi and Hangzhou, marking its further development in the five regional markets and commitment to its existing strategies. The Group’s first foray into Huai’an at the beginning of the year acquired high-quality land parcels with a total GFA of nearly 130,000 sq.m., achieving more balanced business presence in the Yangtze River Delta Megalopolis. Leveraging on the Group’s efficient development and operation capabilities, some of the projects will be launched within this year, contributing to the contracted sales for the year.
Under “Dual-concentrations” policy, it continues to benefit the expansion of Yincheng International Holdings in such region as a leading enterprise in such region. At the same time, the Group made an early layout, appropriately adjusted its investment and expansion strategy, proactively acquired high-quality land parcels with suitable location which meet the investment criteria in the centralised land supply, in order to prepare for the next development. As at 30 June 2021, the Group had a land bank with an aggregate estimated GFA of over 7.57 million sq.m., out of which the land bank with interests attributable to the Group amounted to approximately 5.22 million sq.m.. As at 30 June 2021, the Group had 58 projects located in 10 cities in the PRC, of which 37 projects were developed and owned by the Group and the remaining 21 projects were developed and owned by the Group’s joint ventures and associates.
Adjusted Project Launch Schedule in a Timely Manner to Achieve Rapid Growth in Business
With the positive results of the epidemic prevention and control measures since 2021, the real estate market has been gradually recovering and has shown a stable growth trend. In response to the recovery of the market, Yincheng International Holding adjusted its project launch schedule in a timely manner and promoted its business through both online and offline channels. The Group has developed the ability of its sales staff to analyse project strengths, discover project highlights and expand customer base. In response to the trend of information transparency in the Internet era, the Group has been using various methods of digital marketing such as online mini-programs, social software and short-video live streaming platforms to achieve rapid growth in contract sales. During the six months ended 30 June 2021, the Group recorded total contracted sales of approximately RMB16,535.5 million, representing a significant increase of approximately 170.1% YoY. The total contracted sales GFA amounted to approximately 811,589 sq. m. with a contracted ASP of approximately RMB20,374 per sq.m., representing an increase of approximately 141.3% and 11.9% YoY, respectively. While Yincheng International Holding continues to cultivate the five regional markets, it has also increased its sales efforts in the first tier cities. The projects in Nanjing and Hangzhou contributed a total contracted sales of over RMB11.5 billion, accounting for approximately 70% of the total contracted sales. Among them, the projects Jin Ling Jiu Yuan and Yunwangfu in Nanjing, Guan Hu Zhi Chen and Qingshanhupan in Hangzhou continued to have good sales performance, with the four projects contributing in aggregate approximately 59% of the total contracted sales.
Obtained High Recognition from the Capital Market by Stable Comprehensive Strength and Excellent Projects
Yincheng International Holding maintains diversified financing channels and continues to strengthen and enhance both of our domestic financing strength and overseas financing capability to reduce financing risks. Relying on the stable business growth, excellent financial performance and results of operations, the Group has gained recognition from the capital market. On the second anniversary of its listing, the Group successfully issued US$165 million one-year senior notes in March 2021, marking the third successful issuance of US$ debt financing instrument. While the cost of such issuance continues to decline, the subscriber base has become more diversified, which fully reflected market’s recognition of the Company’s comprehensive strength and financial position. With the solid corporate strength and stable and substantial investment returns on US$ denominated senior notes, the Group was listed by BNP Paribas as one of the five recommended investment targets for US$ denominated bonds in the real estate sector and the shares of the Company were also given “buy” ratings among B-rated real estate companies, which fully demonstrated the affirmation of the capital market to the Group’s future development prospects.
The Group pursued placing equal emphasis on both quality and service and received various awards during the period, including “2021 Top 100 Listed Real Estate Enterprise in China” and “2021 Outstanding Human Resources Management Award”. In addition, a number of projects of the Group, including Peaceful Paradise and KINMA Q + Community, were granted various rewards in the selection of the “2020 Provincial Urban and Rural Construction System Outstanding Survey and Design Award” as announced by Housing and Urban-Rural Development Office of Jiangsu Province, which reflected excellent design quality and engineering capabilities of the Group, as well as its determination to develop quality residential properties for customers of all ages.
Strive to Achieve All of the “Three Red Lines” and Insist on Optimising Financial Indicators
Mr. Huang Qingping, the Chairman of Yincheng International, said “In 2021, under the complex economic environment and increasingly stringent regulatory requirements, our group member collectively endeavour to enhance our strengths as a regional real estate enterprise and maintain a rapid and steady growth. In the first half of the year, our sales achieved robust growth while the contracted amount and payment collection marked a record high. In addition, we continued to cultivate the deployment of the new first-tier cities such as Nanjing and Hangzhou, thus acquired profitable core land parcel. At the same time we expanded into Huai’an, achieved a breakthrough in cultivation and coverage, to further consolidated our leading position in the Yangtze River Delta Megalopolis. Following the promulgation of the ‘three red lines’ policy, the introduction of the ‘dual-concentrations’ policy further encouraged the plan to stabilise land prices, housing prices and market expectations’. Looking forward, we will continue to reduce and control leverage levels, reduce financing costs and optimise the debt structure, in order to gradually meet the control requirements under the ‘three red lines’ policy. We will actively adjust our development under the ‘dual-concentrations’ policy, maintain our existing land acquisition strategy to acquire high-quality land through the use of both pre-investment analysis and post-investment control, and making use of our diversified land acquisition experience to continuously improve project profitability. At the same time, we will focus on the rate of project realisation and improve the collection of receivables, gradually slow down the pace of land acquisition after achieving stable growth in scale to improve cashflow turnover. Furthermore, our Group is determined to enhance capabilities in all aspects according to our long-term development strategies, and shall continue to strive with the goal of becoming a leading real estate enterprise and generating more fruitful returns for our Shareholders.”
Today, Yincheng International held the 2021 interim results presentation online. Total of 115 fund managers, equity analysts and reporters participated in the event. The management gave the introduction of annual results and answered the participants’ questions.
About Yincheng International Holding Co., Ltd. As an established property developer in the PRC focusing on developing quality residential properties in the Yangtze River Delta Megalopolis for customers of all ages, Yincheng International commenced its property development operations in Nanjing and successfully expanded its footprint to other cities in the Yangtze River Delta Megalopolis, including Wuxi, Suzhou, Zhenjiang, Hangzhou, Ma’anshan, Hefei, Xuzhou, and Taizhou. Adhering to the core development strategy of “leading quality, excellent services and Innovation” with an aim to developing quality property products “with healthy, comfortable, smart and convenient living environment for customers of all ages”, Yincheng International has been recognized by the Jiangsu Real Estate Association as one of the top 50 enterprises in the property development industry of Jiangsu Province in terms of comprehensive strength consecutively for 18 years since 2002 and ranked 1st on such list in 2019.
As at 30 June 2021, the Group had 58 projects located in 10 cities in the PRC, including Nanjing, Wuxi, Hefei, Suzhou, Hangzhou, Zhenjiang, Ma’anshan, Xuzhou, Taizhou, Wenzhou and Huai’an). The Group’s land bank with an aggregate estimated GFA of over 7.57 million sq.m., out of which the land bank with interests attributable to the Group amounted to approximately 5.22 million sq.m.. The high-quality land bank has laid a solid foundation for the Company’s future growth.
Yincheng Life Service CO., Ltd. (“Yincheng Life Service” or “the Company”, together with its subsidiaries, “the Group”) (Stock code: 1922) announced its interim results for the six months ended 30 June 2021 (the “Period”).
From left to right: Executive Director, Deputy Director and CFO, Huang Xuemei, Chairman and Non-executive Director, Xie Chenguang, Executive Director and President, Li Chunling, Director of the Center of Capital Market, Xu Zan
Results performance has risen steadily with revenue and profit increasing over 40% During the Period, the Group’s revenue increased by approximately 41.0% period-on-period from approximately RMB416.9 million to approximately RMB587.7 million. The revenue from the property management services reached RMB461.8 million, representing an increase of 37.3% period-on-period and accounting for 78.6% of total revenue. The revenue from community value-added services increased by 56.3% period-on-period to RMB125.7 million, accounting for 21.4% of total revenue.
As compared with the corresponding period in 2020, Profit for the Period increased by 47.2% period-on-period to RMB44.0 million and profits attributable to owners of the Company amounted to approximately RMB40.2 million, representing an increase of approximately 36.1% period-on-period. The net profit margin was 7.5%, up 0.3 percentage points period-on-period. The gross profit increased by 20.1% period-on-period to RMB97.8 million. Gross profit margin was approximately 16.6%.
Adopted a two-pronged strategy, further expanded the market presence Yincheng Life Service is stabilising its inventory meanwhile actively expanding its contract volume, to ensure a stable and orderly development of its business. In terms of stabilising inventory, the renewal rate of the Group’s existing customers has maintained a high level of 92.9% for its quality services and good operational strength. The integrated collection rate of residential properties’ customers reached 64.9% (the proportion of the amount paid to the property management fees receivable for the year) during the Period. The Group is confident to maintain a collection rate of more than 90% and a prepayment rate of about 40% throughout the year, as it enters the peak period of collection during 2H2021. For expanding contract volume, the Group secured a net addition of 267 new residential properties projects during the Period through multiple channels, including direct engagement by customers, acquisition and winning public tenders.
Yincheng Life Service has been adhering to the strategy of further developing the market in Yangtze River Delta Megalopolis and bringing the advantage of its centralised regional development strategy into full play, and the Group has been expanding its business coverage with the strategy of “increasing the presence in Nanjing, expanding the market in the southern part of the Jiangsu Province and exploring the market in Huaihai district”. As of 30 June 2021, the Group’s contracted GFA and GFA under management were approximately 50.9 million sq.m. and approximately 49.0 million sq.m., representing a period-on-period increase of 36.5% and 45.4% respectively. The Group’s business covered 19 cities in China and managed 636 properties, including 385 residential properties and 251 non-residential properties, serving over 450,000households which covers over 1.4 million customers.
External expansion scale was better than expected and further enhanced the proportion of third-party Leveraging its advantages in business model, quality services and reputation, as well as strong market expansion capabilities, the Group further consolidated its position as a regional leader in the industry. During the Period, GFA under management of the Group increased by approximately 10 million sq.m.. Among which, the proportion of GFA under management secured from third-party property developers further increased to a high level of 84.2% (1H2020: 81.8%). As an expert in the operation of Second-hand Projects, most of the Group’s new expansion projects have quickly converted from contracted projects to GFA under management a few months after engaged from property owners’ associations, and starts to contribute revenue within the year.
It is worth mentioning that Yincheng Life Service has stepped up its efforts in expanding its business in regions other than Nanjing since last year, and has achieved remarkable results. Currently, the Group’s GFA under management in regions other than Nanjing has exceeded 18 million sq.m., representing a significant period-on-period increase of 75.6%, and has further increased its proportion to the total GFA under management to 37.4% (1H2020: 31.0%), showing that the Group was able to replicate its success in Nanjing to other regions.
Intensive cultivation of competitive products in non-residential properties, achieving good results in subdivisions Non-residential projects with higher gross profit margin have become the focus segment of the Group in recent years. As of 30 June 2021, non-residential GFA under management of the Group amounted to 10.6 million sq.m., representing a period-on-period increase of 52.1% to 251 projects, and the total annualized contract value amounted to approximately RMB470.0 million. During the Period, the contribution from non-residential properties recorded a revenue of approximately RMB218.8 million, almost reached 5:5 in comparison to the revenue contribution from residential properties, with a more outstanding growth rate of 41.3%
The Group’s non-residential projects cover 11 types of properties, and has intensively cultivated leading products such as hospitals, financial institutions, government facilities, and landmark buildings to build benchmark projects, striving to become an expert in these subdivisions and gain a considerable market share in the high-quality non-residential market. The Group successfully acquired Huiren HengAn last year, which secured new engagements from five hospital institutions during the Period, hence further consolidated the Group’s leading position in hospital property management market. The Group has also won the property management projects for various landmarks, such as the Nanjing City Wall and Jinling Museum, which will help to enhance the Group’s reputation and brand image. In February this year, the Group also established a joint venture company to tap into the property management market of large shopping malls and commercial streets, the Group expects to accumulate experience from these projects which can help acquire more customers of similar type in the future and expand source of revenue.
Diversified community value-added services have great growth potential In terms of community value-added services, the main purpose of which is to maintain customer satisfaction, so the Group is determined to provide value-added services only where there is a strong demand, of which successful examples include fitness training, pick-up lockers, electric vehicle charging, home renovation, group catering and other services. During the first half of 2021, Yincheng Life Service launched live-in elderly care services in response to the favourable “property + elderly care” policy and the needs of property owners, and has become a pilot entity in Nanjing. At the same time, benefiting from the presence of its projects in Nanjing, the Group’s electric scooter battery swap services launched at the end of 2020 developed rapidly during the first half of the year. At present, the Group has built more than 270 smart battery swapping stations in Nanjing, with more than 2,700 registered active riders, which the Group believe this business can start generating considerable profit after one to two years of implementation period.
In recent years, as the social value and contribution of the property management industry have been highly recognised by the whole society, the property management industry is in a golden period of rapid growth and development, with its prospects being highly recognised. The Group is highly recognised in society for its significant growth in management scale, industry-leading service quality, excellent customer reputation and business development, and was ranked 18th among the top 100 property service enterprises in China in 2021 and topped the 2020 Nanjing Property Credit List.
XIE Chenguang, Chairman of Yincheng Life Service CO., Ltd., said: “Looking ahead to the second half of the year, we will strive to achieve the annual performance target in accordance with the established strategy. In terms of business development, the Group will continue to focus on market expansion and identify high-quality merger and acquisition targets that can bring along real synergies for expanding our business scale; we will strive to acquire more projects outside Nanjing and quickly develop economy of scale and brand impact in the local areas; incorporate more residential projects into our community value-added services to enhance the residents’ well-being, while different types of ‘Industry +’ services are sought to be offered to customers of non-residential projects in order to provide protection for non-residential customers, allowing them to realise greater business value. We believe that, by adhering to the concept of ‘reputation comes first, operation is the key’, establishing presence in Yangtze River Delta Megalopolis to give full play to the strategic advantages of regional centralisation, and adopting the multi-pronged management approach, the Group will be able to seize the favourable policy and market opportunities. As such, the Group can expand its scale, maintain long-term sustainable development, improve profitability and deliver greater returns to the shareholders of the Company.”
About Yincheng Life Service CO., Ltd. Yincheng Life Service CO., Ltd is an established property management service provider in China, with over 20 years’ industry experience for the provision of diversified property management services and community value-added services. Through the high-quality property management services provided by the Company, Yincheng Life Service successfully translated into one of the leading property management service providers in Nanjing and Jiangsu Province, the PRC from a local property management service provider in Nanjing. The Company ranked the 18th among the top 100 property service enterprises in China in 2021.
The business scope of Yincheng Life Service covers a wide spectrum of properties, including residential properties and non-residential properties covering government facilities, financial institutions, property sales offices, hospitals, commercial complex, parks, highway service area, industrial parks, mixed-use properties, schools and office buildings. As at 30 June 2021, the Group provided property management services in 19 cities of the Yangtze River Delta, which has approximately 50.9 million sq.m. contracted GFA and GFA under management were approximately 49.0 million sq.m., and more than 636 properties under managed.
For more information about the Company: www.yinchenglife.hk
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