China Vanke Co., Ltd. 2017 Annual Results Presentation€¦ · Highlights 02 Highlights 2017 Best...

2017 Annual Results

Presentation

（000002.SZ ，2202.HK）

China Vanke Co., Ltd.

27 March 2018

Future Prospects

Contents

Highlights

2017 Major Work

Highlights 02

Highlights

2017 Best investor relations company in Asia

529.9billionSales amount of RMB529.9 billion (+45.3%), market share

hit record high of 3.96%

21.14% ROE up 2.61 percentage points, which was a record high

100,000units A leader in the nation’s centralized long-lease apartments

307th Ranked 307th in “Fortune Global 500 List”, up 49 places

SZMC became the largest shareholder

Contents

Highlights

2017Major Work

Future Prospects

1. Financial guidance

2. Business overview

3. Organization

management

4. Social responsibility

04

Realised a revenue of RMB237.3 billion, up by 3.68%.

Net profit attributable to equity shareholders of the Company amounted to RMB28.05 billion, representing a YOY

increase of 33.44%

Revenue (RMB billion) Net profit attributable to equity shareholders

of the Company (RMB billion)

2015 2016 2017 2015 2016 2017

33.44%

Property development business gross

profit margin

26.18%

2015 2016 2017

Gross profit margin of property development business was 26.2%; increased by 5.79 percentage points YOY

2017 Major work / Financial highlights

Revenue amounted to RMB237.3 billion, net profit grew by 33.44%

184.32

228.92237.34

18.12

21.02

28.05

20.39%20.38%

05

Significant increase in earnings per share, return on equity hit record high

Basic earnings per share amounted to RMB2.54, representing a YOY increase of 33.4%

Net return on equity on a fully diluted basis was 21.14%, representing an increase of 2.61 percentage points

(PP) YOY

Basic earnings per share (RMB) ROE

1.64

1.90

2.54

2015 2016 2017 2015 2016 2017

18.09%

18.53%

21.14%2.61PP33.4%


06

Adhering to “creation of true value basing upon cash flow”

Cash and cash equivalents including pledged and restricted deposits held by the Group amounted to RMB174.12 billion,

significantly higher than the sum of bank loans and borrowings from financial institutions, bonds payable in current

liabilities (RMB62.27 billion)

Net cash generated from operational activities of RMB82.32 billion, with relatively abundant capital.

2014 2015 2016 2017

Cash and cash

equivalent

Interest-bearing

borrowings due within one

year

RMB billion


62.7

22.8

53.2

87.0

174.1

62.3

26.6

43.3

07

Rating agency Rating Outlook

Moody’s Baa1 Stable

S&P Global BBB+ Stable

Fitch Ratings BBB+ Stable

CCX AAA Stable


Maintain a healthy financial structure

Net gearing ratio was 8.8% and continued to stay at a relatively low level

in the industry

Interest-bearing liabilities amounted to RMB190.62 billion, accounting for

16.4% of total assets

Overall financing cost controlled at a relatively low level

Bank

borrowings

60.5%

Other

19.3%

Bond

payables

20.2%

Interest-bearing liabilities

by financing sources

Domestic

liabilities

67.3%

Overseas

liabilities

32.7%

Domestic and overseas

interest-bearing liabilities

19.3%

25.9%

2015 2016 2017

8.8%

Net gearing ratio

08

Provide stable returns for shareholders

A cash dividend of RMB9 (including tax) will be distributed for every 10 existing shares held

Total amount of cash dividends for distribution: RMB9,935 million

As a percentage of net profit attributable to equity shareholders of the Company: 35.42%

Profit Appropriation Proposal for 2017

Cash Dividends (RMB million)

2014 2015 2016 20172013

9,935

8,7217,948

5,5244,516

Since listing:

Cumulated cash dividends: RMB45.5 billion (including profit proposed for

distribution for the year 2017)

Far surpass the amount of equity financing in the past years (RMB19.4 billion)


092017 Major work / Business overview

Focus on better life for people, creating an ecological platform

Elderly careSkiingResort Education

Sychronises its

development with those

of cities and rural area

Logistics

warehousing

Rental housing

Commercial and office

property development

and operation

Housing for self-

occupation

Property

services

Sychronises its

development with those

of customers

Sales amount increased by 45.3%

Realized sales area and sales amount of 35.95 million sq m (+30%) and RMB529.88 billion (+45.3%)

The Group’s share in commodity housing market in China had risen to 3.96% (2016: 3.10%)

2014 2015 2016 2017

The Group’s various geographical regions, in descending order of sales amount, were Southern Region (28.60%), Shanghai

Region (28.33%), Northern Region (23.88%), Central and Western Region (18.81%), Other Region (0.38%)

Sales amount

(RMB billion)

18.81%28.60%

28.33%

10

2011 2012 2013

45.3%

Sales by region

0.38%

23.88%

2017 Major work / Business overview / Property development

141.2170.9

529.9

364.8

261.5215.1

121.5

Southern Region

Shanghai Region

Northern Region

Central & Western Region

Other Region

Sales amount ranked first in 22 cities

11

4 2

5 4

3 7

8

4

Ranked 1st

Ranked 2nd & 3rd

37citiesSales amounts ranked top 3

Central &

Western

Region

Northern

Region

Shanghai

Region

Southern

Region

Sales amounts exceeded RMB10 billion in 22 cities

Sales amounts ranked among top three in 37 cities and ranked first in

22 cities


12

82.7%

13.6%

3.7%

37.0% 56.0% 7.0%

42.1% 52.9% 5.0%

42.9% 50.9% 6.2%

53.0% 38.2% 8.8%

47.3% 44.2% 8.5%

45.9% 43.7% 10.3%

52.2% 35.8% 12.0%

2017

2016

2015

2014

2013

2012

2011


Products focus on satisfying self-occupation demand of ordinary people

Among the products sold in 2017, residential, commercial and office properties, and other ancillary facilities accounted for 82.7%, 13.6%

and 3.7% respectively.

Small and medium-sized units under 144 sq m accounted for 93% of residential properties.

90-144 sq m >144 sq m<90 sq m

Residential

Commercial & office properties

Other ancillary facilities

Be a quality leader, value customer experience

13

Green Building Standardisation in

residential developmentTechnology empowerment Efficient customer

communications

Green building construction

area of the Group amounted

to 43.72 million sq m,

reaching a total of 112 million

sq m (since 2009)

New construction area

applying prefabrication

technology accounted for

84% of total, improved

efficiency by 20%

Promote BIM technological application,

developing BIM 5D engineering

management platform

Launch engineering management

APP, “Wisdom" (delicacy

management)

Apply energy management system

on commercial projects, realize

green energy-saving operation

Mobile Home

Inspection APP and

Online Customer

Service Product “Home

Service"


14

New construction area Completed area

36.52

29.2431.37

22.3724.48

23.01

2016 actual

2017 planned

2017 actual

million sq m


Steady growth in new construction floor area, completed area increased

slightly year-on-year

New construction floor area was approximately 36.52 million sq m (＋16.4%), a 24.9% higher than planned in the beginning of the year

Completed area was 23.01 million sq m (+2.9) (Certain projects were slightly delayed. The area completed during the year was slightly lower than the area

scheduled for completion in the beginning of the year)

Realised booked area of 19.81 million sq m (-3.5%); realised a booked revenue of RMB227.7 billion (+2.15%)

15

Geographical breakdown of floor area of

resources sold but not yet booked

Geographical breakdown of amount of resources sold

but not yet booked

26.9%

26.6%

23.1%

23.4%

30.5%

27.5%

20.2%

21.8%


The amount of resources sold but not yet booked grew to RMB414.32 billion

As at the end of 2017, the amount of resources sold but not completed for recognition

29.63 million sq m (+30%),

RMB414.32 billion (+48.9%)

Southern Region

Shanghai Region

Northern Region

Central and WesternRegion

Southern Region

Shanghai Region

Northern Region

Central and WesternRegion

16

RegionNumber of

projects

The aggregate GFA

(’000 sq m)

Southern

Region48 9,200

Shanghai

Region68 11,830

Northern

Region52 10,070

Central and

Western

Region

48 15,050

Total 216 46,150

南方区域

上海区域

北方区域

中西部区域


Focused on the core urban economic circle, with prudent investment

approach

The Group acquired 216 new projects with a planned gross floor area (“GFA”) of 46.15 million sq m and a planned

GFA attributable to the Company’s equity holding of 27.68 million sq m,

Actively expanded acquisition channels such as cooperation, equity acquisition and project management. In

terms of GFA, 72.3% of the new projects were cooperation projects.

90.0% of the new projects (amount of investment) were in first and second tier cities. Average land premium

of available floor area was RMB7,908 / sq m

The Group entered Harbin, Shijiazhuang, Lanzhou, Xichang, Yichang during the year. In overseas, the

Group entered Kuala Lumpur.

Newly acquired projects in 2017

Southern

Region

Shanghai

Region

Central and Western

Region

Northern

Region

17

As at the end of 2017, there were 750 major projects under construction and planning, with a total GFA of 135.57 million sq m, the aggregate GFA

attributable to the Company’s equity holding was 87.17 million sq m, including completed GFA of 3.83 million sq m, GFA under construction of 68.53 million

sq m and GFA under planning of 63.22 million sq m

Participation in redevelopment projects with a GFA attributable to the Company’s equity holding of approx. 2.89 million sq m

Types Amount (RMB billion) Percentage

Completed properties for

sale49.98 8.4%

Properties under

development329.15 55.1%

Properties held for

development217.66 36.4%

Others 0.70 0.1%

Total 597.49 100%

28.2 %28.1%

19.6

24.1%


Project resources met the requirements for ongoing development

Inventory amount and breakdown in the consolidated

statements at the end of 2017Geographical breakdown of GFA attributable to the

Company’s equity holding

Southern Region

Shanghai Region

Northern Region

Central and Western Region

182017 Major work / Business overview / Rental housing

Rental housing: Port Apartment has accumulated over 100,000 units

Port Apartment covered 29 first and second tier cities, with over 100,000 units obtained and more than 30,000 units in service.

Wan Cun Plan: participates in comprehensive improvement and leasing operations of urban villages

Talent housing: entered into a strategic cooperation agreement with Shenzhen Talents Housing Group Co., Ltd., for cooperation in development

and construction, property leasing, decoration and property management of talent housing and social rental housing.

19

Alibaba Green Land Centre

2017 Major work / Business overview / Property services

Vanke Property Service: revenue increase by 71.7%

Revenue in consolidated statement amounted to RMB6.96 billion, increased by 71.7% YOY

As at the end of 2017，Vanke had entered 80 cities

Ranked number one in terms of comprehensive strength, among China’s Top 100 Property Service Providers” rated by the China Property Management

Institute and China Index Academy for the eighth consecutive year, and won the honours of Number One Leading Brand of 2017 China Property Services

Quality, the “Leading Enterprises of 2017 China Top 100 Property Service Providers – Customer Satisfaction” and “2017 Leading Enterprise of Specialty

Property Services in China – Corporate Headquarters Base”

Undertake property services for

headquarters of emerging companies

Tencent’s Shenzhen

headquartersJD.com China headquarters

Self-development of

equipment and

facilities

Operat ion

monitor ing

platform

20

Commercial development and operation: area under

management ranked second in the industry

As at the end of 2017, there were a total of 172 projects under management, with a total GFA of more than 10 million sq m;

the Group uses SCPG as its commercial property development and operation platform

In October 2017, SCPG promoted and established Szitic Plaza Beneficiary Rights Asset Support Scheme (officially listed on

the Shenzhen Stock Exchange in December 2017), realising the securitization of commercial property assets.

In January 2018, SCPG purchased 20 shopping centers from CapitaLand.

Xixi Incity, Hangzhou Shenzhen Vanke Plaza Vanke Life Plaza,

Songshanhu, DongguanQibao Vanke Plaza Wuhan Incity

2017 Major work / Business overview / Commercial property development and operation

212017 Major work / Business overview / Logistics warehousing

Logistics warehousing: participation in the privatisation of Global Logistic Properties

Limited (“GLP”), establishment of logistics property fund

Obtained 36 new projects in 2017. From the end of the Reporting Period to the date of the annual report, the Group obtained 8 new logistics

property projects, with an aggregate planned GFAof 3.34 million sq m.. At present, the accumulated GFAof the Group's warehousing

projects amounted to 4.82 million sq m.

Projects in steady operation with an average occupancy rate of 96%

Participate in the realisation of the privatisation of GLP, a modern logistics facilities provider

Established a logistics property investment fund worth RMB6 billion with cooperating parties

Chengdu Shuangliu Airport

Logistics Park

Guiyang Airport Logistics

ParkFoshan Baini Logistics

Park

222017 Major work / Business overview / Others

Continued to actively explore businesses in skiing resort, elderly care, education and industrial

offices

Elderly Care: Two-level classification, five products, 15 cities, approximately 170 projects (including 50 projects with beds)

Education: Full-time school（participates in the operation of over 10 schools), urban campus, community campus, and outdoor campus

Skiing resort: Operates Jilin Vanke Songhua Lake Resort and Beijing Shijinglong Skiing Resort, with an accumulated visits of 500,000, a record high in the

2017/18 snow season.

Awarded the “2017 Best Skiing Resort in China” by the 5th World Ski Award

Others: Cooperates with Banyan Tree Singapore to expand hotel and relevant businesses; joins hands with CMC to explore products and services in cultural field

23

Business partnership scheme Technology empowerment

Online mobile customer service platform “Home service”, different types of digital

marketing tools such as “Home online”, “Home sharing” and “Home purchase APP”, the

ICP system, which fully integrates the core business processes, the integrated data

analytics platform – IDP system will support delicacy management of business

operation and expansion of scale, increase operational efficiency, reduce costs,

enhance customer experience, and raise service quality;

Explore the integration of new technologies such as artificial intelligence, Internet of

Things and cloud computing into business operation, and initiate pilot projects of new

businesses such as Port Apartment, property services and industrial offices , to

increase growth momentum of new businesses

2017 Major work / Organisation management

Organizational Empowerment

Based on the principles of “consensus, joint-

creation, common commitment and sharing”, to

commence organisation restructuring, explore the

system to raise strivers

To encourage creation of true value; further fine-

tune its remuneration mechanism

24

Effective fulfilment of social responsibilities

Environmental protection: actively participate in United Nations Climate Change Conferences, initiate

waste sorting; promote clean kitchen stoves in rural areas

Precise poverty alleviation, embark on implementation of village revitalization

• Host China Pavilion at the UN Climate Change Conference for five consecutive years; commenced waste sorting in 289 communities in 30 cities ;

launch Rural Green Source Plan, and encourage rural residents to use clean stoves

• Donate for the establishment of Tibet Intangible Cultural Heritage Museum in Lhasa, Tibet, jointly

with Shenzhen municipal government;

• Taheman School built with the aid from Vanke was tested and proved during the earthquake

occurred during the year;

• 12 poverty alleviation photovoltaic power station constructed with donation from the Company in

Zhangbei County commenced grid-connected power generation

• Participate in the construction of Dongluo Village Pilot Exotic Rustic Garden in Xinghua city,

Jiangsu Province

2017 Major work / Social responsibilities

252017 Major work / Social responsibilities

Effective fulfilment of social responsibilities

Care for children, initiate activities to support education;

• Support those with birth defects, care for children with autism;

• Continue to closely monitor improvement in teaching quality of Methodist School established with the support of the Company; support

education in rural areas and support rural teachers in such provinces as Yunan and Guizhou;

• Invite 100 teenagers from Xiongan to Vanke’s navigation winter camp

Healthy sports: Promote a variety of healthy sports, to encourage people to live “a healthy

and rich life”

• Organised 84 “Run for Fun” activities in 42 cities; named as “China’s Mass Sports Advanced

Unit for 2013-2016” by General Administration of Sport of China in recognition of its success

in organising “Run For Fun” for five consecutive years

Contents

Highlights

2017Major Work

Future

Prospects

1. Financial guidance

2. Business overview

3. Organization

management

4. Social responsibility

The industry welcomes the arrival of a new era after the

19th CPC National Congress

Positioning: Persists with the principle of building housing for accommodation, not for

speculation

Mechanism: expedites the development of a housing system, securing mainstream supply

with multiple sources; and encourages both housing rentals and purchases

Objective: Enables whoever needs accommodation to be housed

28

A solution

provider for

better life

Utilize its ability and niches in

customer demand analysis

and in creating the means to

satisfy customer experience,

explore people’s demand for

better life

Provide efficient and cost-

effective solutions

A contributor to

real economy

Insist on “creating true value”

for real customers;

Provide real products and

services;

Contribute to the real economy

with unwavering efforts

A test field for

innovative

exploration

Establish globally advanced

proprietary intellectual

property, and expand to

environmental protection

and other sectors;

Adhere to mixed ownership;

Set a benchmark for

business partnership

scheme management

A creator of

harmonious

ecosystem

Harmony between people and the

Nature;

Harmony among people;

responsible for stakeholders; pay

attention to village rejuvenation;

achieve upstream and

downstream business

development

Future prospects

Positioning in the new era: Urban and rural development and

daily life services provider

29

Customer-

centered

Cash flow as

the foundation

Executes the

strategy of “urban

and rural

development and

daily life services

provider”

Works with business

partners

Constantly create

additional real value

Realises quality

development

Becomes a respectable

enterprise in this great

new era

Future prospects

Materialises the spirit of the 19th CPC National Congress,

focus on offering a better life for people

30

• Explores more investing and financing

models

• Maintains a safe and sound balance sheet

• Maintains leading credit rating in the

industry

• Establish model products, model projects,

model services

• Enhance reputation and brand influence

• Determine momentum of investment according to sales

proceeds recovery and financing status

• Expand channels to obtain resources, acquire land resources

at reasonable price

• Closely monitor acquisition and merger opportunity

• Carry out the strategic planning for

businesses related to urban and rural

development and daily life services

• Explore a sustainable development model

Product

DevelopmentFinancing

Investment

Future prospects/ Operations strategies

Quality development, prudent investment, continued strengthening of

balance sheet

31

35.4536.52

29.24

24.48 23.01

26.31

Future prospects/ Operations highlights

Intensifies development in conurbation, insist on building quality housing for ordinary people, emphasises on development of rental housing

Build “quality housing” for ordinary people, maintain leading market position in terms of sales amount

In 2018, the floor area of new construction started of the Company’s existing projects is expected to reach 35.45 million sq m, up by 21% when compared to

the planned area of new construction started in 2017; the floor area of projects to be completed is expected to be 26.31 million sq m, up by 7% from the

planned completed area in 2017

In 2018, plans to obtain over 100,000 units of rental housing and to have more than 50,000 units to commence operation

Unit: million sq m

Floor area of new construction

started

Completed floor area

2017 planned

2017 actual

2018 planned

32Future prospects/ Operations highlights

Strategic planning for urban and rural development and daily life

services, fostering new growth momentum

Further expand property services, commercial property development and operation, and logistics

warehousing by leveraging property development business

Continues to lead in

reputation and

operational efficiency

Insists on “Built for

families”

Continues to increase scale

and profitability of high-

ended warehousing

business , explore cold

chain businesses

Commercial property

development and

operation

Property services Logistics warehousing

33

Create the best

customer experience

and increase customer

visits

Continue to explore the elderly

care business model based on

integrated “city-community-

home services”

Strengthen the strategic

planning for education

services in the aspects of

full-time, community, and

outdoor education

Elderly careSkiing resort Education

Actively explore businesses such as elderly care, education, skiing resort, to meet people’s demand for

a better life

Future prospects/ Operations highlights

Strategic planning for urban and rural development and daily life

services, fostering new growth momentum

34

More effort to cultivate "strivers",

implement the business

partnership scheme

Strengthen technology

empowerment to support

business development

Fine-tune risk

management

Future prospects/ Organisation management

Continues to optimise organisation management to enhance operational efficiency

35

Lead in environmental

protection and

standardisation in residential

development

Step up efforts in precise

poverty alleviation

Promote healthy exercise

including “Run for Fun” in

cities and communities

Future prospects/ Social responsibilities

Fulfil corporate social responsibilities, be a good corporate citizen

谢谢聆听

0755-25606666

0755-25531696

[email protected]

www.vanke.com

Vanke Center, No. 33 HuanmeiRoad, Dameisha, Yantian District,

Shenzhen

Meisha EducationLife Vanke Port Apartment ShenzhenVanke Weekly Songhua Lake Resort

YearTotal assets（’00

million）

Net assets

attributable to

equity shareholders

of the Company

（’00 million）

Revenue（’00 million）

Net profit

attributable to

equity sharehoders

of the Company

（’00 million）

2007 1,011 293 335 48

2008 1,206 319 386 40

2009 1,380 374 460 53

2010 2,160 442 478 73

2011 2,965 530 677 96

2012 3,791 638 969 126

2013 4,795 769 1,275 151

2014 5,086 882 1,380 157

2015 6,115 1,002 1,843 181

2016 8,308 1,134 2,289 210

2017 11,654 1,327 2,373 281

Appendix / The Company’s assets, revenue and profit in the past 10 years

Fully diluted ROE （%）

16.55

12.65

14.26

16.47

18.17

19.66

19.66

17.86

18.09

18.53

21.14

Appendix / The Company’s liabilities and cash in hand in the past 10 years

YearTotal gearing

ratio（%）Net gearing ratio

（%）Monetary capital

（’00 million）

Interest-bearing

liabilities（’00

million）

Receipt in advance

（’00 million）

2007 66.5 23.3 170 250 216

2008 67.8 33.1 200 328 239

2009 67.1 19.7 230 319 317

2010 74.7 17.5 378 474 744

2011 77.1 23.8 342 504 1,111

2012 78.3 23.5 523 716 1,310

2013 78.0 30.7 444 767 1,555

2014 77.2 5.4 627 690 1,817

2015 77.7 19.3 532 795 2,126

2016 80.5 25.9 870 1,289 2,746

2017 84.0 8.8 1,741 1,906 4,077

YearSales area

（’0000 sq.m.）Sales amount

（’00 million）Book area

（’0000 sq.m.）Book amount

（’00 million）

Sold but not yet

booked area

（’0000 sq.m.）

Sold but not yet

booked amount

（’00 million）

2007 614 524 394 332 291 238

2008 557 479 451 382 346 273

2009 664 634 605 455 344 357

2010 898 1,082 452 471 680 820

2011 1,075 1,215 562 666 1,085 1,222

2012 1,296 1,412 899 954 1,355 1,437

2013 1,490 1,709 1,231 1,250 1,437 1,623

2014 1,806 2,151 1,259 1,353 1,670 1,946

2015 2,067 2,615 1,705 1,793 1,841 2,151

2016 2,765 3,648 2,053 2,229 2,280 2,782

2017 3,595 5,299 1,981 2,277 2,963 4,143

Appendix / The Company’s sales and recognition in the past 10 years

China Vanke Co., Ltd. 2017 Annual Results Presentation€¦ · Highlights 02 Highlights 2017 Best...

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