2020 investor presentation - nomura now · 2020. 10. 27. · delta cities' land market heat...

2020 Investor Presentation

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2

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Contents 目录Contents

01

02

• PART 01 Macro Market Outlook

• PART 02 Results Highlights

03 • PART 03 Financial Review

04 • PART 04 Future Development Strategy

05 • PART 05 Appendix

01

PART ONE

• Macro Market Outlook

Stable: Policies focusing on stability, one city one policy◆ The government reaffirmed “house is not for speculation” and “the realestate is not used as the short-term incentive to the economy” (MOF, NBS andPBOC in Feb 2020) ◆On July 24, Vice Premier of the State Council interviewedsome cities’ government officials at the real estate meeting, "real estate willnot be used as a short-term means to stimulate the economy", and the policyof limiting purchase and price in heated cities across the country may continueto tighten.

Loose: In respond to COVID-19, monetary policy will be kept accommodative◆ PBOC announced the LPR in Feb. The 1-year LPR was reduced by 10 basis points,while the 5-year LPR saw a 5 basis points deduction. The LPR declines again sincelast time in Nov 2019. ◆ In view of the continued heated phenomenon of sales andland auction in some cities, the financing channels of real estate enterprises havebeen tightened after August.

Declined: Loosening in funding, heated land investment with developers' positiveoutlook◆ From January to August in 2020, due to loose funding and developers'replenishment pressure, most of the first and second tier cities and Yangtze RiverDelta cities' land market heat continued to rise, and many cities issued new landauction regulations. ◆ It is expected that the cities with heated land investment orsales market will gradually launch regulatory policies, and the investment heat ofsome cities will decline in the fourth quarter.◆ Different from previous years, the landinvestment window in some heated cities only last for one month or even half amonth.

Macro Market Outlook: Policies Focusing on Stability, Stabilized House Price, Rebound in Transaction and Heated Land Market in China

Shrink: Overall sales shrank with stabilized house price◆ At the beginning of 2020, affected by COVID-19, the overall transaction areain the first half of 2020 decreased year on year, but the price remained stableand rose slightly, and the market rebounded in the second quarter. It isexpected that the second half of the year will continue to rebound to the sameperiod of last year. ◆ The volume and price of the first and second tier cities arestable as a whole, while the third and fourth tier cities have obvious marketdifferentiation. The total transaction volume of the whole year is affected bythe first quarter, which will shrink by 8-10% year-on-year. 8-10% in 2020.

Growth of National Sales in Volume since 2012

0

20

40

60

80

100

120

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2006

-01

2006

-06

2006

-11

2007

-04

2007

-09

2008

-02

2008

-07

2008

-12

2009

-05

2009

-10

2010

-03

2010

-08

2011

-01

2011

-06

2011

-11

2012

-04

2012

-09

2013

-02

2013

-07

2013

-12

2014

-05

2014

-10

2015

-03

2015

-08

2016

-01

2016

-06

2016

-11

2017

-04

2017

-09

2018

-02

2018

-07

2018

-12

2019

-05

2019

-10

Changes of land transaction heat in first and second tier cities in China

（as of 2020.02.29）

Average Floor Price(rmb/sq.n.) Average Premiun Rate(%)

5

Policy Fundamentals Financial Environment

Sales Market

Land Market

02

PART TWO

• Results Highlights

Results Highlights

7

01 Continuous Improvement in Profitability and Operation Capacity

8

Revenue

Gross ProfitCore Net Profit Attributable

To Equity Owners

112.7

132.9

21.9 31.5

2018A 2019A 2019 1H 2020 1H

25.5 26.9

5.7

9.9

2018A 2019A 2019 1H 2020 1H

10.1 9.0

2.1 3.0

2018A 2019A 2019 1H 2020 1H

RMB ‘00 million

RMB ‘00 millionRMB ‘00 million

01 Continuous Improvement in Profitability and Operation Capacity

9

Contracted Sales

Cash Collection Rate Contracted ASP

• Due to the impact of COVID-19, launch of some projects originally planned 1H was postponed to 2H. As the impact weakened, the sales rebounded rapidly. It is expected that 2020 sales target will be the same as that in 2019.

96.1%93.4%

90.6% 90.4%

110.0%

2016A 2017A 2018A 2019A 2019 1H

21,727 20,81921,168

24,029

2018A 2019A 2019 1H 2020 1H

RMB/sq.m.

RMB ‘00 million RMB ‘00 million

252.4 251.6

101.4 76.7

153.6 156.4

2018A 2019A 2019 1H 2020 1H 2019 9M 2020 9M

5.4 3.2

16.8

11.4

17.8 22.1

19.9

35.2

24.6

2020.1 2020.2 2020.3 2020.4 2020.5 2020.6 2020.7 2020.8 2020.9

02 Prudent Financial Management

10

Net Gearing Ratio

Total Debt Bank and Cash on Hand*

Note: Bank and cash on hand (including restricted cash)

RMB ‘00 million

64%58%

72% 68%

2018A 2019A 2019 1H 2020 1H

187 190210

193

2018A 2019A 2019 1H 2020 1H

RMB ‘00 million

131 137 142120

2018A 2019A 2019 1H 2020 1H

03 Focusing on Core City Clusters with High-quality Land Bank

11

Saleable property value by region

Note: First-tier cities: Beijing, Shanghai；Second-tier cities: Tianjin, Chongqing, Hangzhou, Ningbo, Suzhou, Nanjing, Wuhan, Taicang, Changshu; Third-tier cities: Jiaxing, Shaoxing, Wuxi, Taizhou, Huzhou, Zhoushan, Taizhou, Changzhou, Nantong, Yangzhou.

Profile of the saleable value (As of end-June 2020)Land Bank10,000 sq.m.

Hangzhou Urban Circle

Hangzhou: RMB4.6 billion

Ningbo: RMB3.6 billion

Others: RMB300 million

➢ In 1H 2020, five new projects were acquired with ~RMB5.7 billion saleable resources, in 9M 2020, nine new projects were acquired with ~RMB12.9 billion

saleable resources

➢ As of end-June 2020, the total value of development properties and investment properties were ~RMB68.3 billion and ~RMB8.6 billion respectively

➢ As of end-Sep 2020, the total value of development properties and investment properties were ~RMB75.4 billion and ~RMB8.6 billion respectively

➢ 96% of the saleable resources were located in first-tier and second-tier cities. The core areas of the saleable resources have strong resilience,

lower downside risks and considerable profitability, which provide reliable source of funding to support debt repayments.

The liquidity of core assets serves as a solid ground for the principal and interest repayment of the Company’s indebtedness.

Chengyu City Cluster

Chongqing: RMB1.0 billion

Nanjing Urban Circle

Nanjing: RMB7.3 billion

Yangtze River Mid-reach

Cluster

Wuhan: RMB8.8 billion

Beijing & Tianjin

Urban Cycle

Tianjin: RMB7.3 billion

Shanghai Urban Circle

Shanghai: RMB3.3 billion

Jiaxing: RMB1.6 billion

Taicang: RMB1.8 billion

Changshu: RMB5.7 billion

Others: RMB190 million

441 480 471 492

2017A 2018A 2019A 2020 1H

13% 11% 8% 7%

82% 87% 87% 89%

5% 2% 5% 4%

2017A 2018A 2019A 2020 1H

First-tier cities Second-tier cities Third and fourth-tier cities

03 Focusing on Core City Clusters with High-quality Land Bank

➢ In 2020, the overall saleable resources are RMB33.6 billion, including RMB10.6 billion from last year. The new saleable

resources in 2020 are RMB23.0bn, including RMB5.4 billion in the first half and RMB17.6 billion in the second half.

Saleable Resources

(RMB’00 million)

Sales

(RMB’00 million) Sell-through Rate

1H2020 160 71.9 44.9%

2H2020 264.1 178.1 67.4%

FY2020 336 250 74.4%

Allocation of 2020 Saleable Resources（by City）

City2019 Inventory

(RMB’00 million)

2020 New

(RMB’00 million)

2020 In Total

(RMB’00 million)

Hangzhou 11.35 34.93 46.28

Ningbo 18.66 11.03 29.69

Suzhou 16.34 25.25 41.59

Nanjing 4.21 45.73 49.94

Tianjin 25.79 41.04 66.83

Shanghai 21.96 19.84 41.80

Wuhan 7.35 51.14 58.49

Chengdu 0 0.95 0.95

Total 106 230 336

Allocation of 2020 Saleable Resources（by Property Type）

Property Type

2020 Saleable

Resources

(RMB’00 million)%

Rigid Demand 168 50%

Upgrade 50 15%

Premium 66 20%

Car Park and Commercial

Properties52 15%

Total 336 100%

12

04 Improving Asset Management Capability of Investment Properties

13

Consideration: RMB1.28 billion Total GFA: 24,300 sq.m. Operating status: Leasing

Consideration: RMB234 million Total GFA: 8,883 sq.m. Operating status : Leasing

Consideration: RMB395 million Total GFA: 9,916 sq.m. Operating status: Leasing



Consideration: RMB2.7 billion Total GFA: 112,013 sq.m. Operating status : Under

renovation Expected leasing time：2H20

Beijing Jingrui San Quan Apartments Project(Joyride Beijing Yansha Branch)

Shanghai Jingrui ·Yingqiao Project(Joyride Shanghai Biyun Branch)

Shanghai Jingrui Elite Project(Joyride Shanghai Zhongshan Park Branch)

Beijing Jingrui ZhongguancunProject

Shanghai Jingrui Zhangjiangkeyuan Project Shanghai Jingrui MagLink Project


14

Project Name

Occupancy

rate

(30 June 2020)

Joyride | Shanghai Biyun Branch 97%

Joyride | Shanghai Xiaomuqiao Branch 97%

Joyride | Shanghai Yangti Branch 97%

Joyride | Shanghai ECNU Branch 97%

Joyride | Shanghai Huangpu Binjiang Branch 95%

Joyride | Shanghai Daning Branch 95%

Joyride | Shanghai Yingao West Branch 92%

Joyride Elite | Shanghai Zhongshan Park Branch 90%

Joyride | Hangzhou Yintai Branch 95%

Joyride | Suzhou Gusu Branch 93%

Joyride Elite | Beijing Yansha Branch 86%

Beijing Zhonguancun Project 100%

Shanghai Jingrui Zhangjiang Project 80%

Shanghai MagLink Project Launch in 2H 2020

1.34

2.39

0.510.79

1.15

2018 2019 2020

FY 1H

Rental Income

RMB ‘00 million

➢ In the first half of 2020, Jingrui Capital overcame the impact of COVID-19. Except for MagLink project, all the other projects were in

normal operation. Among them, the average occupancy rate of service apartments was 93.6%, and that of office was 91.1%.


15

Beijing Jingrui · ChengyuanProject

Project Type：Service Apartment

Total GFA：9,699sq.m. Exit Time：2019.12

Beijing Jingrui· ShangyuanProject

Project Type：OfficeTotal GFA：5,768sq.m.Exit Time：2020.3

05 Continuous Improving of Customer Satisfaction

⚫ In the first half of 2020, all of Jingrui’s companies in 8 cities have implemented epidemic prevention work, ensuring the health and safety of nearly

50,000 families. Jingrui has also organized 22 community activities and 7 construction site open day events (5 of which were online events), all of which

highly recognized by the customers. The Group also organized 4 delivery of possession ceremonies, which have had on-site epidemic prevention

measures implemented to ensure smooth and orderly completion the process. 1,350 units were successfully delivered to the customers.

⚫ 1H2020, the overall customer satisfaction of Jingrui is 87 points, increased by 4 points from the end of 2019 and increasing

by 6 points year-on-year. The gap with industry benchmarks has been narrowed.

67 6560

65 6670 71

7578

83 8178

8488 89 90 92 94

73

8176

52

75

82 83 8287

40

60

80

100

2012 2013 2014 2015 2016 2017 2018 2019 1H2020

Customer Satisfaction：Jingrui VS Industry

Industry Average

Industry benchmark

Jingrui

Epidemic Prevention Community Events Construction Site Delivery

06 Expanding Property Management Sector

17

Contracted GFA 2 6 . 3 9 million sq.m. (increased by 5%)

Newly added GFA 1 . 1 1 million sq.m.

Strategic layout in 3 regions

With 1 8 1 8 employees

Covering 3 6 cities nationwide (increased by 3%)

Providing service to 1 9 9 projects (increased by 8%)

➢ Contracted GFA recorded approximately 26.39 million

sq.m., among which the external extension projects

accounted for about 55.5%.

➢ Newly acquired contracted GFA 1.10million sq.m. in

1H2020.

➢ Newly acquired contracted amount RMB 61.35million.

Management Scale

➢ Relying on the Yangtze River Delta，with strategic

layout in Southwest China and the Jing-Jin-Ji

Metropolitan Region, serving 36 provinces/cities in the

country

➢ Focusing on residential projects which makes up 80%

of our business, while also working on various space

formats including villas, office buildings and industrial

complexes

➢ Planning by setting up business centers and laying out

plans on commercial property servicing

Nation-wide Development in Various Formats

Awards & Market Recognition

➢ 2020 Property Service Capability Top 50

in China

➢ 2020 Property Service Top 100 in China

➢ 2020 Leading Service Quality among Top

100 Property Service Firms

➢ 2020 Potential Unicorn in Property

Service

03

PART THREE

• Financial Review

The recognized sales from first-tier and second-tier cities accounted for ~80% in 1H2020, staying at the same

level compared with FY2019.

19

Recognized Sales Breakdown

Hangzhou25%

Ningbo29%Suzhou

20%

Shanghai4%

Shaoxing4%

Nantong10%

Nanjing5%

Others3% Suzhou

13.5%

Hangzhou27.3%

Ningbo21.3%

Shanghai10.5%

Tianjin8.4%

Changzhou11.2%

Taizhou5.5%

Others2.3%

Suzhou4.8% Hangzhou

8.1%

Ningbo2.3%

Shanghai34.8%

Tianjin28.8%

Zhoushan19.1%

Chongqing1.4%

Others0.7%

20

Stable Profitability

10.3 9.0

2.8 2.9

2018A 2019A 2019 1H 2020 1H

10.1 9.0

2.1 3.0

2018A 2019A 2019 1H 2020 1H

Revenue Gross Profit

Net Profit Attributable To Equity Owners

Core Net Profit Attributable To Equity Owners

112.7

132.9

21.9 31.5

2018A 2019A 2019 1H 2020 1H

25.5 26.9

5.7

9.9

2018A 2019A 2019 1H 2020 1H

RMB ‘00 millionRMB ‘00 million

RMB ‘00 million RMB ‘00 million

21

Stable Profitability

Net Profit Margin Attributable To Equity Owners

9.2%6.8%

12.8%

9.3%

2018A 2019A 2019 1H 2020 1H

EBITDA Margin

22.8%23.4%

18.4%

26.4%

2018A 2019A 2019 1H 2020 1H

Gross Profit Margin

22.6%20.2%

25.9%

31.4%

2018A 2019A 2019 1H 2020 1H

22

Optimized Debt Structure

◆ Jingrui succeeded in maintaining a stable and sound debt level despite the expansion of the business.

As at the end of June 2020, the total liability with interest was RMB19.3 billion. Excluding offshore bank

loans guaranteed with onshore deposit, the adjusted total liability with interest was RMB18.2 billion.

◆ We have diversified our financing platform. The proportion of trust borrowings saw a gradual drop in

recent years and financing in the capital market increased, further optimizing the debt structure.

Jingrui took on a sound financing strategy to optimize its debt structure

Optimizing debt structure in 2020 to extend the debt maturity profile

49.5%

31.1%

16.7%

2.7%

1 year 1-2years 2-5years ＞5years

% of total debt

Debt maturity profile as at end-2019

45.2%

28.8%23.8%

2.2%


% of total debt

Debt maturity profile as at end-June 2020

35.3%

26.1%

36.1%

2.6%


% of total debt

Debt maturity profile as at end-July 2020

23

Optimized Debt Structure

98.3 53%

24.4 13%

51.1 27%

13.3 7%

Bank Loans Corporate Bonds Senior Notes Trust Loans

82.5 44%

9.9 5%

93.8 49%

3.8 2%

Debt structure as at end-2019

90.1 46%

11.1 6%

90.8 47%

1.5 1%

85.3 44%

105.3 54%

2.9 2%

RMB USD HKD

Debt structure as at end-2018

Debt structure as at end-June 2020 Debt structure as at end-June 2020(by currency)

141

187 190 193

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

-10

40

90

140

190

240

2017A 2018A 2019A 2020 1H

24

Stable Credit Metrics

392479

524 541

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0

100

200

300

400

500

600

2017A 2018A 2019A 2020 1H

61

88 91 94

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0

20

40

60

80

100

120

2017A 2018A 2019A 2020 1H

2.0 2.01.5 1.4

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2017A 2018A 2019A 2020 1H

Total Assets Net Assets

Cash Coverage RatioTotal Debt

RMB‘00 million RMB‘00 million

RMB‘00 million RMB‘00 million

163

247

359337

64 77 81 95

2017A 2018A 2019A 2020 1H

Total Utilized25

Stable Credit Metrics

25

Net Gearing Ratio Debt Asset Ratio

Average Financing Cost Bank Facilities

68% 64%58%

68%

2017A 2018A 2019A 2020 1H

84% 82% 83% 83%

2017A 2018A 2019A 2020 1H

6.98%7.88% 8.36% 8.61%

2017A 2018A 2019A 2020 1H

RMB‘00 million

04

PART FOUR

• Future Development

Strategy

27

Investment Strategy in 2020

✔% of Investment

◆Land acquisition budget: 40% of cash collection from sales

Prioritize cash safety, diligence in land bank expansion

DistributionFocus on “high-profile” markets

◆ Focus in existing bases including ShanghaiUrban Circle (Shanghai and Suzhou), HangzhouUrban Circle (Hangzhou and Nanning), NanjingUrban Circle (Ningbo and Hefei), Beijing &Tianjin Urban Circle and Yangtze River Mid-reachCluster (Wuhan, Changsha & Nanchang).Continuous land acquisition with increased landbank, market share and brand influence.◆ Expanding landbank in core cities like Chengduand Hefei

Project selection

Focus on projects targeting for

rigid demandKey urban circles are expected to have largeincrease in population after the populationpolicy is launched, and will mainly focus onprojects with rigid demand in response todemographic change, to further increase thehouse and land ratio and turnover rate

TimingMainly in 2H20

◆ In 1H2020, five projects located in Shanghai,Chongqing, Wuhan, Suzhou and Hangzhou wereacquired, taking ~40% of total land investmentbudget in 2020.◆ As the housing market would decline in the4Q20, the best investment window may emergein 2H, where the investment is expectedto account for ~60% of the total land investmentbudget in 2020.

Increased M&AAffected by COVID-19 and possibletightened funding resources in 2H,some reginal or smaller developerswill have to face tighter liquidity. Oneof the major strategic moves is toincrease M&A in 2H20 while takingstrict controls both financially andlegally.

28

Future Development Strategy

Jingrui PropertiesConcentrate on city clusters and metropolitan areas. Focus on high quality growth in scale and serve customers with necessary & improved demand

Jingrui CapitalGrasp investment opportunities of stock and non-performing assets

in Beijing, Shanghai and other core tier-2 cities, create added value

with superior capability of renovation & management capacity

Jingrui ServiceBy adhering to the management concept of “focusing on ideal life” and

taking the “promoter of ideal life in Chinese cities” as its development

objective, Jingrui Services pursues continuous improvement of

management services

Yan Capital ManagmentOffer end-to-end real estate asset management services,

continuously set up different types of funds, achieve win-

win with excellent returns

05

PART FIVE

• Appendix

30

No. City Project Type Time Acquire Land use EquityTotal GFA

(sq.m.)

Total landcost

(RMB million）

Attributableland cost

（RMB million）

1 ChongqingLot District C, Jiulongyuan,

Jiulongpo DistrictDevelopment 2020.4 M&A Residential 54% 144,235 218 117

2 Shanghai

No. 37-01, Unit SJC10010,

Zhongshan Street,

Songjiang District

Development 2020.5Public

BiddingResidential 36% 35,326 589 210

3 WuhanCaidian Sino-French P (2019)

080 ProjectDevelopment 2020.5 M&A

Residential &

commercial 60% 106,653 313 188

4 HangzhouLot XSCQ1402-08, Ningwei Unit,

XiaoshanDevelopment 2020.5

Public

Bidding

Residential &

commercial 100% 80,522 1,054 1,054

5 Suzhou Lot 15-2, Taicang Chengxiang Development 2020.6Public


As at end-June 2020 441,119 2,529 1,686

6 Wuxi Lot 2020-42, Binhu District Development 2020.9Public


7 ChangzhouJuhu Street North Lot,

Wujin DistrictDevelopment 2020.9

Public

BiddingResidential 60% 179,226 2,212 1,327

8 ChongqingLot L66, Xiyong Unit,

Shapingba DistrictDevelopment 2020.9

Public


9 YangzhouTangwang High School Lot,

Guangling DistrictDevelopment 2020.9

Public


As at end-Sep 2020 838,818 6,374 4,132

Land Acquisition Breakdown in 2020

Operating Cash Flow

31

Operating Cash Flow Guidance

（RMB ‘00 million) FY19 Actual 1H20 Actual FY20 Forecast

Cash inflow

-Contracted sales collection, plus

other revenues 135.00 54.19 144.52

Cash outflow

-Land acquisition payment -38.33 -23.75 -52.25

-Capex for construction -37.98 -19.22 -34.75

-Other charges - Interests, taxes,

dividends and others -49.86 -28.93 -47.48

2020 investor presentation - nomura now · 2020. 10. 27. · delta cities' land market heat...

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