2014 annual results presentation media briefing2014 annual results presentation media briefing...

27 March 2015

2014 Annual Results Presentation

Media Briefing

Contents

1. 2014 Annual Results

2. 2014 Business Review

3. Outlook for 2015

1

Financial Summary

2

Turnover

3

• Total turnover for 2014 was approximately HK$28.5 billion, basically remained flat when compared to the same period in 2013.

• Profit attributable to shareholders was approximately HK$930 Million, declining 65.8% year-on-year primarily as a result of: - (i) a decrease in the gross profit; (ii) no recognized exchange gain; (iii) a decrease in revaluation gains from investment properties; (iv) an increase in finance costs; (v) an impairment loss on properties under development and properties held for sale; and (vi) a decrease in gain on disposal of interests in subsidiaries.

• Basic EPS was around HK25.49 cents.

2,630 2,716

930

-

500

1,000

1,500

2,000

2,500

3,000

2012 2013 2014

20,695

28,625 28,509

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2012 2013 2014

Turnover

(HK$ million)

Profit Attributable to Shareholders

72.88 74.74

25.49

-

10

20

30

40

50

60

70

80

2012 2013 2014

Basic EPS

(HK cent) (HK$ million)

Consolidated Income Audited

2014 2013 2012

Turnover (HK$ million) 28,509 28,625 20,695

Profit Attributable to Shareholders (HK$ million) 930 2,716 2,630

Basic EPS (HK cent) 25.49 74.74 72.88

Gross Profit (HK$ million) 5,647 6,706 6,287

Overall Gross Profit Margin (%) 19.8 23.4 30.4

Turnover

• Overall gross profit for 2014 was approximately HK$5.6 billion, representing a year-on-year decline

of 15.8%.

• Overall gross profit margin was approximately 19.8%.

4

• Recognized sales and the recognized area sold reached approximately RMB22.0 billion and 1.83 million sq. m., respectively. The Yangtze River Delta Region and Pearl River Delta Region accounted for approximately 61% of total recognized sales. The Recognized average selling price was approximately RMB12,027 per sq. m..

Recognized Sales – Property Development

Note：Including car parking spaces

2014 2013 2012

Recognized Sales (RMB million) 21,995 23,090 16,726

Recognized Area Sold (million sq.m.) 1.83 2.37 1.84

Recognized Average Selling Price (RMB/sq.m.) 12,027 9,758 9,081

39%

22%

20%

19%

Yangtze River Delta Region Pearl River Delta Region

Southwestern Region Other Regions

Property Development Turnover: by Region

2014

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Yangtze RiverDelta Region

Pearl River DeltaRegion

SouthwesternRegion

Other Regions

6,503

4,801 5,035

6,751

8,488

4,915 4,506 4,086

2013 2014

Property Development Turnover by Region: YoY Comparison

(RMB million)

5

Assets and Liabilities

• Year-end total assets grew by almost 17.0% to HK$129.5 billion from approximately HK$110.8 billion at the beginning of 2014. Cash was approximately HK$17.8 billion, up 14.8% compared to the beginning of the year. Shareholders’ Equity reached approximately HK$29.8 billion, remaining flat with the beginning of the year. Net asset value per share was approximately HK$8.14.

Shareholders’ Equity and Total Assets

(HK$ billion)

27.1

107.7

29.6

110.8

29.8

129.5

0

20

40

60

80

100

120

140

Shareholders' equity Total assets

31/12/2012 31/12/2013 31/12/2014

31 Dec

2014

31 Dec

2013

Change

(%)

Total assets (HK$ billion) 129.5 110.8 16.9%

--- inc. cash (HK$ billion) 17.8 15.5 14.8%

Total liabilities (HK$ billion) 95.4 78.2 22.0%

--- inc. borrowings &

bonds from financial

institutions

(HK$ billion) 52.6 42.0 25.2%

Shareholders’ Equity (HK$ billion) 29.8 29.6 0.7%

Net asset value per

share (HK$) 8.14 8.13 0.1%

6

Business Review

7

Management

– “Standardization-focused, hierarchical allocation of work”: continued to improve and strengthen headquarter's control and professional management;

– “Stock clearance, risk prevention”: conducted a comprehensive study on the actual cost of inventory, and focused on accelerating the sell-through rate of key projects;

– “Investment control, profitability enhancement”: reasonably controlled the investment scale, prioritized the development of ordinary residential products that meet genuine housing demands, and explored an “asset-light" development model.

Business Review

8

Investment Management

Product Management

Cost Management

Brand Management

Finance Management

Internal Audit

• In 2014, the Group focused on “Inventory clearance, structural adjustments, investment control, and efficiency enhancement " to undertake its key objectives:

• In 2014, the Group focused on “Inventory clearance, structural adjustments, investment control, and efficiency enhancement " to undertake its key objectives:

Branding and Marketing

– The Group upheld its “market-oriented and quality-focused” philosophy. While focusing on the product quality, the Group strengthened its branding philosophy and promotions, and carefully developed quality property projects.

– Taking the 30th anniversary of China Poly Group as an opportunity, the Group carried out a number of branding and marketing campaigns, including “Independent in your 30s; Build Dreams at Home and Homeland", “Experiencing Quality Life of Poly", “Integrate Life with Culture".

9

Business Review

Shanghai Suzhou Shandong Shenzhen

• In 2014, contracted sales amounted to approximately RMB24.1 billion and the contracted area sold amounted to 2.35 million sq.m..

• A total of 48 projects were put up for sale with 10 debut launches.

Contracted Sales and Contracted Area Sold

(million sq.m.)

2011 2012 2013 2014

Contracted Area Sold 2.15 2.51 2.5 2.35

Contracted Sales 15.8 23.4 26.7 24.1

0

5

10

15

20

25

30

1.9

2

2.1

2.2

2.3

2.4

2.5

2.6

(RMB billion)

Contracted Sales

2.4

1.7 2.0

1.8 2.1 2.2

1.1

1.9

2.4 2.2

1.5

2.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

(RMB billion)

10

Shanghai Poly Deluxe Mansion

Shanghai Poly Phili House

Guangzhou Poly Up House

Guangzhou Nansha Poly City

Foshan Poly Central Park

Guiyang Poly Phoenix Bay

Nanning Poly Hearty

Wuhan Poly City Harbin Poly Up Town Yantai Poly Blossom

Garden

New Launches

11

32%

20%

26%

22%

Yangtze River Delta Region Pearl River Delta Region

Southwestern Region Other Regions

Contracted Sales – by Region

• The Group continued to carry out product positioning underlined by “genuine housing demand” and “first-time home buyers and upgraders”, steadily pushing forward the contracted sales across different regions through a variety of branding strategies. During the period, the top five cities by contracted sales were Shanghai, Jinan, Guangzhou, Guiyang and Liuzhou.

2014 Contracted Sales: by Region

2014

2014 ASP of Contracted Sales: by Region

Region 2014

(RMB/sq.m.) 2013

(RMB/sq.m.)

Yangtze River Delta 14,598 14,819

Pearl River Delta 10,255 10,913

Southwestern 7,657 8,078

Others 8,716 9,505

Average 9,962 10,408

Note：excluding car parking spaces

12

• During the period, the Group continued to adopt a market-oriented strategy and focused on small-to-medium sized units and ordinary residential housing.

• Residential units accounted for approximately 87% of the Group’s total contracted sales. By contracted area sold, residential units smaller than 90 sq.m. accounted for 27% of the total area sold; residential units 90-144 sq.m. in size accounted for 65% (small-to-medium sized units accounted for 92% in total); and units larger than 144 sq.m. in size accounted for 8%.

87%

5% 7%

1%

ResidentialVillaCommercialsOffice

13

Contracted Sales – by Product

27%

65%

8%

<90 sq. m.

90-144 sq. m.

>144 sq. m.

2014 Contracted Sales – by Product Mix

2014 Contracted Sales – Residential Units by Size

• In 2014, construction commenced on 24 projects with an approximate GFA of 3.56 million sq.m., 2 of which were newly acquired projects in 2014 and had commenced construction for the first time, namely Ningbo Poly Wonderland and Nanning Poly Hearty.

26%

21% 27%

26%

Yangtze River Delta Region

Pearl River Delta Region

Southwestern Region

Other Regions

Newly Commenced Construction Area

2014 Newly Commenced Construction Area: by Region

2014

14


Shanghai Poly Phili Mansion

Shanghai Poly Phili House

Suzhou Poly Lake Mansion

Suzhou Poly West Bank Villa

Ningbo Poly Wonderland


Guangzhou Poly Gratified West Bay

Guangzhou Poly Up House

Guangzhou Nansha Poly City

Foshan Poly Central Park

Foshan Poly Prestige City

Huizhou Poly Deutch Kultur

Southwestern Region

Guiyang Poly The Place of A Lake

Guiyang Poly Phoenix Bay

Zunyi Poly Metropolis of Future

Nanning Poly Dream River

Nanning Poly Hearty

Liuzhou Poly Merization World

Other Regions Wuhan Poly City

Wuhan Poly Up Town

Harbin Poly Up Town

Jinan Poly Hyde Mansion

Jinan Poly Elegant Garden

Jinan Poly Center

Hainan Poly Peninsula No.1

32%

16%

40%

12%



Southwestern Region

Other Regions

• In 2014, completed gross floor area amounted to 4.01 million sq.m., exceeding the annual target set at the beginning of the year.

Completed Construction Area

Completed Construction Area: by Region

2014

15

• During the period, the Group obtained 11 land parcels through listing, acquisition and auctioning. They are located in Shanghai, Ningbo, Guangzhou, Guiyang, Nanning, Guilin, Jinan, Harbin and Hong Kong, with a total gross floor area of approximately 3.93 million sq.m..

16

New Land Reserves / Projects Usage Total

Planned GFA (‘000 sq.m.)

Interest Attributable to

the Group Current Status*

1. Shanghai Yang Pu Bin Jiang Project Commercial 94 50% Under Preparation

2. Shanghai Yang Pu Ping Liang Project Residential 110 50% Under Preparation

3. Ningbo Poly Wonderland Residential 325 100% Under Construction

4. Guangzhou Huadu Jianshe Beilu Project Residential 99 100% Under Preparation

5. Guiyang Poly Phoenix Bay, Phase II Residential 596 51% Under Preparation

6. Nanning Poly Hearty Residential 114 100% Under Construction

7. Nanning Poly Ling Xiu Qian Cheng Residential 1,631 38% Under Preparation

8. Guilin Poly Culture and Arts Center Commercial 88 50% Under Preparation

9. Jinan Poly Center, Phase III Residential 261 85% Under Construction

10. Harbin Poly City Residential 541 100% Under Preparation

11. Hong Kong Kai Tak Project Residential 70 100% Under Construction

Total 3,929

Note：* as of March 27 2015

New Land Reserves

16%

16%

45%

23%

20%

17%

47%

21%



Southwestern Region

Other Regions

0.00

5.00

10.00

15.00

20.00

25.00

2013 2014

14.06 14.94

8.81 8.23

under development for future development

Land Bank Portfolio

• As at the end of 2014, the total land bank for projects under development and land reserved for future development was approximately 23.17 million sq.m., with the former accounting for 8.23 million sq.m. and the latter 14.94 million sq.m..

17

As at the end of 2014

As at the end of 2013

Land Bank Under Development & for Future Development

Total Land bank: by Region

(million sq.m.)

Outlook for 2015

18

• Facing uncertainties brought about by severe inventory risk and diversification across different

cities, the Group will strive to maintain steady growth of contracted sales based on its overall

target of “inventory clearance and risk prevention”.

• In 2015, the target for contracted sales and contracted area sold is set at approximately RMB26

billion and 2.45 million sq.m., representing a year-on-year growth of 8% and 4%, respectively.

2015 Contracted Sales Target

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2012 2013 2014 2015T

Contracted GFA 2.51 2.50 2.35 2.45

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2012 2013 2014 2015T

Contracted Sales 23.4 26.7 24.1 26.0

Recent and Target Contracted Sales Recent and Target Contracted GFA

(RMB billion) (million sq.m.)

19

20

Shanghai

Ningbo

Shenzhen

Nanning

Wuhan

Harbin

Guangzhou

• Saleable resources in 2015 will be approximately 4.05 million sq. m. including 9 debut launches in the sales pipeline.

Harbin Poly City Shanghai Poly Greenland Plaza

Shenzhen Poly Joy-Zone

Guangzhou Poly Gratified West Bay

Nanning Poly Ling Xiu Qian Cheng

Wuhan Poly Up Town


Nanning Poly Dream River

Shanghai Poly International Plaza

2015 Saleable Resources and Sales Pipeline

2015 Saleable Resources and Sales Pipeline

• In 2015, 9 debut launches and 42 continuing launches are expected to be rolled out, with a total saleable GFA of approximately 4.05 million sq.m..

Region Projects

Yangtze River Delta Shanghai Poly Greenland Plaza (Offices and commercials of Phili Mansion)

Shanghai Poly International Plaza (Commercials of Star Island)


Pearl River Delta Guangzhou Poly Gratified West Bay

Shenzhen Poly Joy-Zone

Southwestern Nanning Poly Dream River

Nanning Poly Ling Xiu Qian Cheng

Other Wuhan Poly Up Town

Harbin Poly City

2015 Sales Pipeline: New Project Launches

21

27%

16%

31%

26%

Yangtze River Delta Pearl River Delta

Southwestern Others

2015

2015 Saleable GFA: by Region

•Standardize fundamental management work

•Improve management systems

•Enhance professional services

•Make an innovative project operation model

•Prepare development plans carefully

•Expand financing channels actively

•Strengthen investment co-ordination in a paced and suitable manner

•Focus on co-ordination and standardization of onshore and offshore financial management

•Improve the marketing co-ordination and professionalism

•Strengthen human resource co-ordination

•Accelerate the sell-through rate of large-sized and expensive products

•Implement the centralized sales of commercial products

•Enhance sales management efficiency

•Implement strict cost control to enhance cost efficiency

Strengthen management and ensure inventory

clearance

Strengthen coordination and facilitate scientific

development

Strengthen management practices and

improve management level

Strengthen innovation-driven

development model and accelerate

transformation

• Looking into 2015, the China property market will gradually progress into a “new norm” with stable and rational growth. Although favorable policies including the removal of HPR, loosening of first mortgages and a cut in interest rate were introduced in 2014, the market is still expected to be dominated by a self-adjustment model of inventory clearance and risk prevention as a result of uncertainties arising from market competition and diversification across different cities.

• Key missions of 2015:

“Four Strengthens”

2015 Key Missions

22

Thank you !

Disclaimer:

The information contained in this presentation has been prepared using the information available to Poly Property Group Co., Ltd. (“Poly Property” or the

“Group") at the time of preparation and may not include all relevant information regarding the Group. These materials have been prepared for general

information purposes, and are not, and should not be construed as an offer to sell, or a solicitation of an offer to buy any securities.

Information contained and opinions expressed herein have been compiled in good faith by the Group from a number of internal and external sources and

have not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy,

fairness, correctness or completeness of the information presented or contained in these materials. Poly Property, its affiliates, advisers, officers or

representatives accept no liability whatsoever for any loss howsoever arising from any information presented or contained in these materials. The

information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed.

These materials are highly confidential, are being given solely for your information and for your use and may not be copied, reproduced or redistributed to

any other person in any manner. Accordingly, you agree to keep the contents of this presentation and these materials strictly confidential.

23

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