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HONG KONG, Aug 30, 2017 - (ACN Newswire) - A pioneer integrated service developer in planning, investment development and operation of large-scale industrial towns in China, China VAST Industrial Urban Development Company Limited ("China VAST" or the "Group," Stock code: 6166) announced its unaudited interim results for the six months ended 30 June 2017. Profit attributable to owners of the Company surged 142.4% to RMB493.3 million.
- Revenue increases 11.5% to RMB1,399.3 million
- Gross profit soars 94.1% to RMB922.4 million; gross profit margin rises substantially from 37.9% for the same period in 2016 to 65.9%, mainly due to generally higher gross profit margin of land development projects for sale when compared with the sale of properties and land preparation and investment services
- Profit attributable to owners of the Company surges 142.4% to RMB493.3 million
- In the second half year, apart from focusing on developing Longhe Park, the Group will commence foundation works of other projects and construction of three projects namely Yulong Bay Phase II, Foxconn City Phase III and Hongtai Commercial Plaza
For the six months ended 30 June 2017, the Group's revenue totaled RMB1,399.3 million, representing an increase of 11.5% when compared with revenue of RMB1,255.3 million for the same period in 2016. During the period, more than 90% of revenue was contributed from land development projects for sale, which generally have a higher gross profit margin than sales of properties and land preparation and investment services. As a result, the Group's gross profit for the period jumped 94.1% to RMB922.4 million, with gross profit margin rising sharply from 37.9% for the same period in 2016 to 65.9%. Profit attributable to owners of the Company soared 142.4% from RMB203.5 million for the six months ended 30 June 2016, increased by RMB289.8 million.
For the six months ended 30 June 2017, basic earnings per share were RMB0.30 (2016 interim: RMB0.12), and diluted earnings per share were RMB0.26 (2016 interim: RMB0.12).
The Board has resolved to not declare any interim dividend for the six months ended 30 June 2017.
Mr. Wang Jianjun, Board Chairman of China VAST, said, "This year is the third anniversary of China VAST's listing on the Main Board of The Stock Exchange of Hong Kong Limited. Over the past three years, with aggressive advancements made in the Group's business development and our accelerated strategic presence in industrial towns, new growth drivers have emerged. We have focused on coordinating developments in the Beijing-Tianjin-Hebei region and supporting the national strategy for Yangtze River Delta Economic Zone. We have actively cooperated with local governments in our focus regions to develop industrial town projects and have targeted enterprises among seven industries, namely, aviation and aerospace, big health, new energy materials, internet and electronic information, high-end equipment manufacturing, biopharmaceutical, and culture and tourism. From our relentless efforts, China VAST has achieved satisfactory results in the first half year, marking the Group entry into a rapid development path."
Business Review
Industrial Town Development
For the six months ended 30 June 2017, the Group recorded fee income of RMB1,286.6 million from land development projects for sale, representing an increase of RMB694.6 million when compared with RMB592.0 million for the same period last year.
China VAST currently provides planning, development and/or operation services in 10 industrial town projects, consisting of (i) Longhe Park; (ii) Longhe Resort; (iii) Guangyang Technology Regeneration Park; and (iv) Yongqing Vast Industrial Town Park, all of which are located in Langfang, Hebei Province; (v) VAST Zhangjiakou City New Industrial Park; and (vi) Zhangjiakou Modern Industrial Park, all of which are located in Zhangjiakou City, Hebei Province; (vii) Shijiazhuang General Aviation Industrial Town Park; and (viii) Shijiazhuang Gaocheng Vast Insudatrial Town Park, all of which are located in Shijiazhung City, Hebei Province; (ix) Chuzhou Park in Chuzhou, Anhui Province; and (x) VAST Ezhou Industrial Park in Ezhou City, Hubei Province. After over 10 years of development, Longhe Park is progressing towards its maturity in a fast development stage. The remaining nine projects are in the early stage of planning and development. However, with the improvement and betterment of the terms of cooperation agreements signed between the Company and local governments, some of the Group's cooperation agreements enable it to record revenue in the early stage of development, thus providing support for development projects on a rolling basis.
For the six months ended 30 June 2017, the fee income from the development of industrial town projects in Longhe Park amounted to RMB979.9 million. The relevant local governments sold an aggregate of 354,805 sq. m. of land in Longhe Park for a total sum of RMB1,778.3 million. The land area sold and land premium were significantly higher than those for the same period last year (same period in 2016: an aggregate of 30,015 sq. m. of land sold for RMB54.8 million). During the period, the income from land preparation and investment services generated by Shijiazhuang General Aviation Industrial Town Park and Shijiazhuang Gaocheng Vast Insudatrial Town Park was RMB182.7 million and RMB124.0 million respectively (calculated by cost plus method).
Property Development
As at 30 June 2017, the Group's revenue from the sale of properties was RMB97.1 million (2016: RMB655.6 million), mainly due to a decrease in the area of properties delivered. Gross floor area ("GFA") sold totaled 13,275 sq. m., and the average selling price ("ASP") was RMB8,449 per sq. m. The Group had 20 projects at various stages of development, including residential, commercial and industrial projects, as well as a land reserve of GFA of 1,440,850 sq. m..
Property Leasing
As at 30 June 2017, the Group's revenue from property leasing amounted to RMB15.5 million (2016: RMB7.7 million). The Group had seven completed investment properties. In the future, the Group will consider the synergies created by the development of its real estate-related business in determining the input of resources to the leasing business.
Looking ahead, and with respect to the development of industrial town projects, apart from focusing on developing Longhe Park, the Group will continue to commence foundation work of other projects in the second half of 2017. It has confidence in executing this year's development plan and revenue proposal as laid out by the management of the Company at the beginning of the year. As for property development, the Group intends to commence construction of three projects, including Yulong Bay Phase II, Foxconn City Phase III and Hongtai Commercial Plaza, in the second half of 2017. The income from the sale of properties for the second half of 2017 is expected to be derived mainly from sales carried forward from four projects, including Hongtai Longdi, Hongtai Meishuguan, Yulong Bay and Electronic Information Industrial Park.
Mr. Wang concluded, "In the future, the Group will continue to vigorously seek in-depth cooperation opportunities with different segments of society, including governments, industry associations and enterprises, and will capitalize on industrial towns that promote sustainable economic and social development of the region. The Group will seize business opportunities arising from the coordinated development of the Beijing-Tianjin-Beijing region, Yangtze River Economic Zone and the national 'Belt and Road' strategy, and capitalize on our advantage as a listed company benefitting from state policies, in a bid to develop the Group into a leading integrated developer of industrial towns in China and generate more promising returns for our shareholders."
China VAST Industrial Urban Development Company Limited (Stock code: 6166)
Founded in June 1995, China VAST Industrial Urban Development Company Limited is one of the pioneer providers in the planning, development and operation of large-scale industrial town projects. Riding on its experience in property development accumulated in the initial stage, China VAST Development transformed into a pioneer in new urbanization construction in 2005. The Company has been committed to develop large scale industrial town projects in the strategic planning areas under the integration of Beijing-Tianjin-Hebei coordinated development and the Yangtze River Delta Economic Zone development, demonstrating its four comparative advantages including: unique abilities in industrial town planning, design and positioning, infrastructure investment and construction, marketing and promotion, and related auxiliary facilities for logistics, residential and commercial properties. Through cooperation with local governments under long-term agreements, unlike other ordinary property developers, industrial towns are designed to provide a wide spectrum of comprehensive and professional services for regional industrial development and development, including planning and design, industry positioning, land preparation, infrastructure construction, marketing and promotion and related auxiliary facilities for logistics, residential and commercial properties.
Currently, China VAST Development is working together with local governments of Langfang, Zhangjiakou and Shijiazhuang of Hebei province, Chuzhou, Anhui province and Ezhou, Hubei province in respect of development of ten industrial town projects with project planning areas of approximately 150 sq.km. Focusing on the optimization of infrastructures in the abovementioned regions, transformation of industry and construction of urbanization as well as building and realizing fully integration of working and living communities for its residents, China VAST Development is sparing no effort to become a leading integrated developer and operator of industrial towns in China.
Topic: Press release summary
Source: China VAST Industrial Urban Development Co. Ltd
Sectors: Daily Finance, Real Estate & REIT
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