Li Xin, President of China Resources Land: I have great confidence in real estate, and there will be no aggressive moves in mergers and acquisitions

The Paper's reporter Li Xiaoqing

On August 26, at China Resources Land (01109. HK) 2021 semi-annual report results meeting, China Resources Land President Li Xin said that from the future in the medium and long term, real estate is still a good industry, "we are very confident in this industry, I believe that the valuation will gradually repair." ”

According to China Resources Land's 2021 semi-annual report, as of June 30, the company's revenue in the first half of 2021 was 73.74 billion yuan, an increase of 63.8% year-on-year; net profit attributable to shareholders was 13.125 billion yuan, an increase of 15.41% year-on-year; interim dividend per share was 0.173 yuan, an increase of 15.3% year-on-year; and comprehensive gross profit margin was 31.3%, down 2.2% year-on-year. Among them, the gross profit margin of development properties decreased from 31.1% in the same period of 2020 to 27.1%; the gross profit margin of investment properties (including hotel operations) increased from 67.9% in the same period of 2020 to 69.8%.

As for how to improve the level of gross profit margin, Li Xin said that China Resources Land will continue to improve gross profit margin by strengthening internal control and efficiency improvement, that is, improving quality and efficiency. Li Xin further explained from two aspects, from the company's strategic point of view, first, through the diversification of land acquisition channels in the investment side can achieve the development of sales of business gross margin improvement, that is, the company to get good land, cost-effective land, thereby improving the company's gross profit margin. In addition, China Resources Land improved gross profit margin by strengthening the refined management and system construction of production operations. "Referring to the industry benchmark, China Resources Land still has great potential to tap in the control of two fees - sales expenses and management expenses, in the cost management of residential buildings and the management of complex costs."

In the first half of 2021, The settlement area of China Resources Land was 5.14 million square meters, an increase of 75.6% year-on-year. The Group achieved a signed contract amount of 164.8 billion yuan, an increase of 48.7% year-on-year, and achieved a signed area of 9.63 million square meters, an increase of 52.4% year-on-year. As of the end of June, the unsettled contract amount of China Resources Land's sales was 236.95 billion yuan, which needs to be settled successively. Among them, the turnover of development properties that have been locked in the settlement in the second half of 2021 reached 116.29 billion yuan.

In terms of land reserves, in the first half of this year, China Resources Land acquired 33 new projects, with a new equity land reserve of 7.14 million square meters. Among them, first- and second-tier cities accounted for 86% of investment, and focused on obtaining a number of city-level TOD commercial complex projects in Hangzhou, Nanjing, Changsha, Zhengzhou and other cities. At present, the total land reserve area of China Resources Land is 70.98 million square meters, and the equity land reserve area is 51.16 million square meters, which can ensure the company's development in the next 3-5 years.

Regarding the rhythm of land acquisition in the second half of the year, Li Xin believes that it cannot be simply described as fast and slow, because the rules for land acquisition are changing. Li Xin said that China Resources Land needs to form its own play style as soon as possible in the investment mechanism, and the playing style in the second half of the year is still to adhere to the living standard, adhere to the bottom line of return, and the land that conforms to the focus area, product direction and rate of return of China Resources Land will be considered. In addition, there are many opportunities for mergers and acquisitions in mixed reform, and At present, China Resources Land has also contacted a lot, but the main direction of the future is still at the project end. Li Xin stressed that China Resources Land will never have an aggressive move in mergers and acquisitions, and will be stable and expanding.

For the development of the second half of the year, Chief Financial Officer Guo Shiqing said that China Resources Land has sufficient sellable resources in 2021. In the second half of the year, the saleable sources were 354 billion yuan, of which the first and second lines accounted for up to 86%, residential products accounted for 67%, and the newly pushed saleable resources accounted for 40%, and the push goods were evenly arranged in the third and fourth quarters, which strongly supported the realization of the annual signing target. In terms of shopping malls, it is expected that the number of shopping malls in operation will reach 54 by the end of 2021 and more than 100 in 2025, with a total area of more than 12 million square meters. As of June 30, 48 Vientiane series shopping malls and about 60 reserve projects have been opened.

As of the close of trading on April 26, China Resources Land was trading at HK$27.45 per share, down 0.54%.

Editor-in-Charge: Liu Xiuhao

Proofreader: Yan Zhang