2019.05.24

Recently, Times China (01233.HK) has heard a lot of good news! On May 23, Times China was named one of the "2019 Best 50 China Real Estate Listed Companies with Strongest Comprehensive Strengths" (38th place) and the "2019 China Mainland Top 10 Real Estate Companies Listed in Hong Kong by Finance Stability" by virtue of its strong comprehensive strengths and outstanding performance.

The "2019 China Real Estate and Property Management Services Listed Companies Appraisal Results Conference" jointly held by the China Real Estate Association, China Property Management Institute, Shanghai E-house China R&D Institute and China Real Estate Appraisal was held in Hong Kong on May 23, 2019. Times China (01233.HK) was ranked the 38th place among "2019 Best 50 China Real Estate Listed Companies with Strongest Comprehensive Strengths" by virtue of its strong comprehensive strengths and outstanding performance.

On the same day, the "2019 China Real Estate Listed Companies Research Results Conference and the 17th China Real Estate Investment and Financing Conference" held by the Enterprise Research Institute of the Development Research Center of the State Council, Tsinghua University Center for Real Estate, and China Index Academy was held in Beijing. On top of the summary of research experience in the past, the research group has further improved the research methodology and index system, conducted comprehensive and objective assessment, and scouted for excellent listed real estate companies with high-quality growth and great investment value. Times China was named one of the "2019 China Mainland Top 10 Real Estate Companies Listed in Hong Kong by Finance Stability."

▲ 2019 Best 50 China Real Estate Listed Companies with Strongest Comprehensive Strengths

▲ 2019 China Mainland Top 10 Real Estate Companies Listed in Hong Kong by Finance Stability

Excellent performance and increasingly growing sales year by year

In 2018, the accumulative contract sales amount of Times China was RMB60,595 million, a year-on-year increase of 45.5%, with the annual target completion rate of 110.2%, creating a record high in the sales history. The overall scale has moved on to a new level. Looking back to the sales performance of the company since it went public, during the four years of 2015 through 2018, the compound growth rate of the contract sales amount was as high as 45.9%. Times China has become a model of sound and rapid growth in the industry.

The growth of sales performance has not only expanded the enterprise scale, but also embodied the stable improvement of the comprehensive strengths of Times China. As of the end of 2018, the total assets of Times China were RMB129,050 million, a great year-on-year increase of 27.3%, and the scale of assets expanded largely at the same time.

▲ Photo: Sales results of Times China during the period of 2014-2018

In terms of capital performance, Times China has maintained prudential financial performance. As of the end of 2018, Times China's net debt ratio stood at 62.6%. Its cash balance reached RMB27,426 million, with good liquidity.

New breakthroughs in urban renewal via in-depth development in the Guangdong-Hong Kong-Macao Greater Bay Area

Times China has continued its in-depth development in the Guangdong-Hong Kong-Macao Greater Bay Area, while it gains more presence in other highly potential Chinese cities or regions, to maintain its sound and rapid development. As of the end of 2018, the city layout of Times China covered the economically developed cities of the Pearl River Delta region, such as Guangzhou, Shenzhen, Foshan, Dongguan, Zhuhai, Huizhou, Zhongshan, Jiangmen, Qingyuan and Zhaoqing; Changsha, Hunan; and Chengdu, Sichuan. It had 99 projects at different development stages, of which 96 were located in major cities of Guangdong. Most of them are located in the Guangdong-Hong Kong-Macao Greater Bay Area, due in large part to its great geographical advantages and development potential.

In terms of the land reserves, in 2018, Times China adhered to its in-depth development in the Guangdong-Hong Kong-Macao Greater Bay Area, and expanded its land reserves through multiple channels, such as participating in the public auction held by the government, urban renewal projects, primary land development, cooperation and acquisition. In 2018 it acquired 23 new plots with a total floor area of approximately 3.2 million square meters. Among others, the new land floor area in the Guangdong-Hong Kong-Macao Greater Bay Area was 2.79 million square meters, accounting for 87% of the total new land reserves. Significantly, in 2018 Times China established its presence in Jiangmen and thus created a more complete layout in the Pearl River Delta. That October 2018, Times China tapped into Chengdu, the core of the southwestern metropolitan circle for the first time. Then, in March 2019 it made arrangements in Hangzhou and thus expanded its strategic layout to eastern China and achieved a new breakthrough in its business layout.

As of the end of 2018, Times China was equipped with land reserves of approximately 18.45 million square meters, those located in the Greater Bay Area (including Qingyuan) accounting for approximately 93%, laying a solid foundation for the future development of the company. In addition, Times China has worked on urban renewal and made new breakthroughs. In 2018, it successfully transformed four urban renewal projects with the total new land reserves of nearly 900,000 square meters and the total value of nearly RMB14.5 billion.

Prudential finance and increasingly growing profitability year by year

In 2018, despite the slowdown in the industry's growth, Times China maintained rapid development and achieved substantial improvements in multiple core indicators, whose profitability was enhanced continuously. In 2018, Times China recorded operating income of RMB34,375 million, a year-on-year increase of 48.7%; net profit of RMB4,811 million, a year-on-year increase of 44.0%; core net profit attributable to shareholders of RMB 4204 million, a year-on-year increase of 66.0%; gross profit rate of 30.9%, a year-on-year increase of 3 percentage points; EPS of RMB0.24, a year-on-year increase of 58.9%.

▲ Photo: Earnings of Times China during the period of 2014-2018

Thanks to continuous improvement in profitability and a sound financial policy, Times China has been able to maintain its good debt structure. As of the end of 2018, Times China held cash and bank deposits of RMB27.43 billion, a year-on-year increase of 59.4%, indicating good liquidity. Its net debt ratio was 62.5% and the ratio of cash to short-term debt was 3.75x; adequate currency funds exempted the company from debt-service pressure in the short term.

Pursuit of knowledge, philosophy and change with a commitment to becoming a Fortune Global 500 company

On March 1, 2018, the company changed its name to "Times China" formally, and adjusted its vision to "becoming a Fortune Global 500 company." Its new goal is to transform itself into an enterprise worth hundreds of billions in the short term. To realize that goal, Times China has established the new positioning of an "urban-development service provider," strategically upgrading from the traditional property enterprise to the urban-development service provider.

The core business of Times China is real estate development. Meanwhile, it will also expand its business focusing on the new positioning of "urban-development service provider," not only serving the "people" who live in cities, but also serving the "cities" where people live. To this end, Times China will be committed to providing multi-dimensional services for urban development, and on the basis of ensuring the continuous and steady development of the core business, it will gradually develop the industry, business, urban renewal, finance, long-term rental apartments, community services, logistics and warehousing, education, furniture decoration and other business sectors and explore diversified value.

Highly praise from the capital market and increasingly improving financing capability

Benefiting from excellent performance and good operation, Times China improved its financing capability continuously in the past year. Since 2018, the company has obtained multiple large-scale financing, including the USD500 million in senior notes issued in January and due in 2021, USD450 million senior notes whose issuance was announced at the end of May and due in 2021, and the non-public offering of domestic corporate bonds with the principal of at most RMB5 billion whose approval by the Shanghai Stock Exchange was announced in August.

▲ Table: Some financing events of Times China since 2018

Based on solid performance in the capital market, Times China has received high praise from several investment banks, which have elevated its target price this year. Accordingly, there is great potential for growth.