Monday, November 30, 2020
 
Columnist
Martin Hennecke
 
CIFI HOLD GP
HKEx Stock Code : 00884 
 
Corporate Profile
The Group is engaged in the property development, property investment and property management business in the PRC. The Group is a strategy-oriented and shareholder value-focused real estate enterprise. The Group develops its business strategies in line with government policies related to the real estate sector in the PRC.

Business Review - For the year ended December 31, 2012

Properties delivered and commencing construction

In 2012, we delivered completed properties with a total GFA amounting to approximately 735,000 sq.m. (2011: 354,000 sq.m.), representing a massive increase of 107.6%. Accordingly, we derived recognized revenue of RMB7,991.5 million from sales of properties in 2012. Our major completed property projects in 2012 included Shanghai CIFI Rose Bay, Beijing CIFI Private Mansion, Beijing CIFI Purple County, Suzhou CIFI Canal County, Suzhou CIFI Ronchamp Town, Hefei CIFI Central Park, and Changsha CIFI Luxury Courtyard.

In 2012, we commenced construction of new properties projects which will amount to a total planned GFA of approximately 1.5 million sq.m. (2011: 1.1 million sq.m.).

Land acquisition

In 2012, we adhered to our strategy-driven, disciplined and systematic land acquisition approach. During the year, we purchased 12 new projects in Shanghai, Suzhou and Tianjin with a total planned GFA of approximately 1,500,000 sq.m. for a total contracted consideration of RMB3,431.7 million. Based on the contracted land acquisition prices, the average cost of our land acquisitions in 2012 was approximately RMB2,300 per sq.m. Of the 12 newly acquired projects, nine new projects were acquired at the lowest bidding price. During the year, our cash outflow for the land acquisition and related payments amounted to RMB3,157 million.

We strived to evaluate every government land auction opportunity in cities we follow, to follow disciplined investment-decision procedures, and to be cautious in bidding. We focused our land acquisition resources on two main stream products: mass market residential projects and office-for-sale projects. We placed strong emphasis on expanding our land bank in the affluent first- and second-tier cities under our existing operational coverage with the objectives of maximising our scale and strengthening our operations in these existing cities.

As at 31 December 2012, the Group's overall land bank amounted to a total GFA of approximately 6.23 million sq.m., of which attributable GFA amounted to approximately 5.90 million sq.m. The average unit cost of our overall land bank was approximately RMB2,200 per sq.m.

Business Outlook - For the year ended December 31, 2012

Driven by three major forces (urbanization, sustainable economic growth and population growth in first-tier and key second-tier cities), we believe that the real estate industry in China is still in a long term growth phase. Despite the market volatility due to government control measures, high quality properties catering to end-users' demand will remain strong for some time. We expect government administrative policies in the real estate sector to remain in place for the foreseeable future. Product reversion to livable housing and end-users' demand as a result of the current series of government control measures will lead to a healthier path of development for the industry over the long term.

Looking forward, the Group will strive to achieve sustainable, stable and high quality growth for the sake of developing our core business. The Group will concentrate on development projects characterized by fast turnaround, high sell-through and improving prospects. We will continue to emphasise and strengthen our asset turnover, return-on-equity and cash flow management.

Regarding our land reserves, we will follow our disciplined investment criteria and selectively acquire quality sites as and when investment opportunities arise so as to ensure growth in saleable resources. The Group will focus on expanding in China's first- and second-tier cities with large populations, are of substantial market size, and with sustainable inflow of residents and investment capital. We will prioritize our resources to fully cover our existing three operating regions and will enlarge the scale and strengthen our existing cities in which we have entered with the aim of enhancing our economies of scale and operational efficiency.

Source: CIFI Holdings (00884) Annual Results Announcement
Chairman LIN Zhong Issued Capital (shares) 5,770M
Par Value HKD 0.1 Market Capitalisation (HKD) 8,078M
 
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