Yuexiu Real Estate releases 2023 annual report: land reserves in core cities exceed 90%, and diversified business layout continues to be optimized
On March 26, Yuexiu Real Estate Co., Ltd. (00123.HK, hereinafter referred to as “Yuexiu Real Estate”) released its 2023 annual performance report. During the reporting period, Yuexiu Real Estate achieved operating income of 80.22 billion yuan (RMB, the same below), a year-on-year increase of 10.8%, and core net profit reached 3.49 billion yuan. On this basis, the board of directors announced a final dividend of 0.134 yuan per share and a full-year dividend of 0.347 yuan per share. The dividend payout ratio is 40% of core net profit. It is worth mentioning that in 2023, Yuexiu Real Estate achieved contracted sales of 142.03 billion yuan, a year-on-year increase of 13.6%, and the growth rate is at the forefront of the industry.
In 2023, under the dual challenges of continued adjustment in the real estate market and the need to restore consumer confidence, Yuexiu Real Estate successfully achieved performance growth through precise investment, in-depth promotion of diversified businesses and efforts in digital marketing.
Contracted sales grew steadily, with the growth rate ranking among the top in the industry
As the real estate industry enters a new stage of development, urban differentiation and regional differentiation have intensified. Yuexiu Real Estate has demonstrated strong anti-cyclical resilience by virtue of its layout in hot cities and its excellent product capabilities. The annual report shows that Yuexiu Real Estate achieved contracted sales of 142.03 billion yuan in 2023, completing 107.6% of the annual sales target of 132 billion yuan, an outstanding performance. According to CRIC data, in 2023, Yuexiu Real Estate’s contract sales growth rate will rank first among the TOP20 real estate companies.
Yuexiu Real Estate will focus on the Guangdong-Hong Kong-Macao Greater Bay Area in 2023. The annual contracted sales volume in this area is 71.60 billion yuan, a year-on-year increase of 20.0%, and its contribution to Yuexiu Real Estate’s annual sales accounts for more than 50%. The total contracted sales amount in East China, the central and western regions and the northern region was 70.43 billion yuan, a year-on-year increase of 7.8%, of which East China contributed 26% to its annual sales. In addition, as of December 31, 2023, Yuexiu Real Estate’s sold and unaccounted contract sales amounted to RMB 199.28 billion, an increase of 11.3% from the beginning of the year.
In terms of business strategy, Yuexiu Real Estate implemented the precise marketing strategy of “one plate, one strategy”, continued to focus on digital marketing and precise pricing, improved the sales rate, and successfully completed the full-year sales target.
Thicken the financial safety cushion and expand diversified financing channels
In the stage of deep adjustment of the real estate industry, the importance of the ability of real estate companies to resist risks has been further highlighted. In 2023, Yuexiu Real Estate’s financial stability and security will be further strengthened.
As of December 31, 2023, Yuexiu Real Estate’s total cash and cash equivalents and deposits in monitored accounts were approximately RMB 46.10 billion. Excluding advances, the asset-liability ratio, net borrowing ratio and cash short-term debt ratio were 67.4%, 57.0% and 2.01 times respectively. The “three red lines” indicators maintained the “green level” and the financial indicators were healthy and safe.
Yuexiu Real Estate’s debt structure continues to be optimized, diversified financing channels continue to expand, and average financing costs further decline year-on-year. The weighted average borrowing cost for the year fell 34 basis points year-on-year to 3.82%. The average borrowing cost at the end of the period further dropped to 3.63%, and financing costs were in a dominant position in the industry. During the period, it successfully issued a total of RMB 6.9 billion corporate bonds, with a weighted average lending rate of 3.37%; issued overseas RMB free trade zone bonds of RMB 3.4 billion, with a weighted average lending rate of 3.92%; and issued the first RMB 1.21 billion dim sum overseas. The bond has a coupon rate of 4%. The rights issue was completed, raising net funds of approximately HK$8.3 billion, and the rights issue was oversubscribed by 1.15 times.
core cityearthstoreovertakeNinety percentinvestment qualityContinuous improving
The size and structure of land reserves have always been important indicators for the outside world to examine the health of real estate companies. As of the end of 2023, Yuexiu Real Estate has a total land reserve of approximately 25.67 million square meters, with first-tier and core second-tier cities accounting for 95%, of which first-tier cities account for 44% and core second-tier cities account for 51%. In terms of regional distribution, the Greater Bay Area accounts for 42%, East China accounts for 19%, and the central and western regions and northern regions account for 39%. It can be seen that in terms of investment strategy, core first- and second-tier cities are still the key areas for Yuexiu Real Estate’s strategic layout.
In 2023, Yuexiu Real Estate will add a total of 28 new land parcels in 11 first- and second-tier cities through the “6+1” diversified reserve growth model, with a total construction area of approximately 4.91 million square meters and an additional salable value of approximately RMB 130 billion. Among the new land reserves, TOD projects are still the bright spots. Yuexiu Real Estate has developed a total of 9 TOD projects in Guangzhou and Hangzhou. The total land reserve of TOD projects reached 3.31 million square meters, accounting for approximately 12.9% of Yuexiu Real Estate’s total land reserve. The high-quality land bank has opened up imagination space for the future development of Yuexiu Real Estate.
Among them, Yuexiu Real Estate’s northern region is located in five cities: Beijing, Qingdao, Jinan, Shenyang, and Yantai, and has created 25 quality projects. In 2023, Yuexiu Real Estate’s top product “Yue” series will be located in Xiangshan, Beijing. Xiangshanyue is located in the Xiangshan villa area of Haidian, surrounded by three mountains and five royal gardens, with multi-dimensional supporting resources on the side. It has a profound cultural heritage and magnificent scenery. It has the prosperity of an international city, is hidden in the mountains, and is luxurious in the environment. It is one of the models of the harmonious era. do.
At the same time, Yuexiu Real Estate actively carries out forward-looking layout, and its business covers construction, development and operation in many fields. In 2023, Yuexiu Real Estate made breakthrough progress in the field of urban renewal. Guangzhou’s Lirendong Old Village Renovation Project has made substantial progress, with the overall contract signing rate reaching 82%. The total salable value of the Guangzhou Lirendong Old Village Renovation Project is approximately RMB 69 billion, of which 340,000 square meters are planned to be supplied in 2024, with an additional salable value of approximately RMB 18 billion. The overall contract signing rate for the Guangzhou Nanyang Electrical Appliance Factory urban renewal project has reached 90%, and the total salable value of the project is approximately RMB 4.5 billion. In 2023, Yuexiu Real Estate won its first urban renewal project in Hongkou District, Shanghai, with a total salable value of approximately RMB 3 billion.
The strategy of “promoting both commercial and residential development” continues to deepen and advanceEmpower business development
The report shows that Yuexiu Real Estate still implements the development strategy of “promoting both commercial and residential properties”, and continues to optimize the “asset manager” commercial asset management model through the “dual platforms” of Yuexiu Real Estate-Yuexiu Real Estate Trust, and continuously improves its commercial operation capabilities.
During the reporting period, the commercial properties directly held by Yuexiu Real Estate achieved rental income of approximately RMB 487 million, a year-on-year increase of 49.7%; Yuexiu Real Estate Fund, which holds 37.89% of the shares, achieved operating income of approximately RMB 2.087 billion, an increase of 11.4% year-on-year; the office building industry The overall situation remains stable. The operations of retail shopping malls have steadily recovered. The revenue of Four Seasons Hotel and Ascott Apartments has increased significantly. The professional market has also achieved an increase in occupancy rates and a substantial increase in revenue. At the same time, Yuexiu Service Group Co., Ltd., in which Yuexiu Real Estate holds 66.92% of the shares, also achieved good operating results. It achieved annual revenue of approximately RMB 3.224 billion, a year-on-year increase of 29.7%, with an area under management of 65.21 million square meters and 280,000 service owners. account, the profit attributable to shareholders was 487 million yuan.
After years of accumulation, Yuexiu Real Estate has also achieved satisfactory results in the health care business. Up to now, Yuexiu Health Care has deployed 22 projects in the Greater Bay Area and the Yangtze River Delta region, with nearly 8,000 operating beds. Currently, there are 7,273 beds in operation. The occupancy rate has been greatly improved, and the health care business is at the forefront of the industry. .
Outstanding ESG performance, repeatedly recognized by ratings
During the reporting period, Yuexiu Real Estate’s various ESG key performance indicators were good. Electronic signatures reduced carbon emissions by 13.5 tons. Capital transformation of business management projects reduced carbon emissions by 1,311 tons. Project environmental impact assessment coverage, employee health examination coverage, and The coverage rate of green convention signing for Grade A office buildings and the coverage rate of special business ethics audits both reached 100%. Yuexiu Real Estate has also formulated a “double carbon” strategy and plan and is committed to building more high-standard green buildings, low energy consumption and prefabricated buildings.
Yuexiu Real Estate’s good ESG development results have also been recognized by many mainstream rating agencies. In 2023, Yuexiu Real Estate received a 4-star rating from the “Global Real Estate Sustainability Benchmark” (GRESB), was selected into the “China ESG Listed Companies Greater Bay Area Pioneer 50” for the first time, and won the “Hong Kong Corporate Governance and ESG Excellence Award” for the first time. Yuexiu Real Estate Real Estate also became the first real estate company in the Greater Bay Area to win the award since the award was held in 2007.
Lin Zhaoyuan, chairman of Yuexiu Real Estate, said: In 2024, Yuexiu Real Estate will focus on the work theme of “overcoming difficulties to stabilize growth, lean management and excellent performance”, and develop with the construction of “lean management” and “new capabilities, new mechanisms and new culture” internal driving force, actively respond to market challenges, with a contracted sales target of RMB 147 billion and a salable value of RMB 270 billion in 2024. It will continue to pursue the path of high-quality and sustainable development under the new industry environment and new competitive landscape, and continuously improve shareholders’ satisfaction. Return on capital and shareholder value.
