HONG KONG, Aug 26, 2022 – (ACN Newswire) – 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."
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