Central China Real Estate Limited · HKEX:832
Central China Real Estate — Non-Deal Roadshow (October 2010)
35 slides from Central China Real Estate's roadshow presentation, October 2010
Slide 1: Management Roadshow Presentation
(Stock Code: 832) Management Roadshow Presentation 1
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Central China Real Estate Limited (the "Company") solely for use at this presentation and is subject to change without notice. The information contained in this presentation has not been independently verified. No representation or warranty, express
Slide 3: Senior Management Representatives
Senior Management Representatives Mr. Joe Tang Financial Controller, Company Secretary Mr. Vinh Mai Head of Investor Relations Mr. Guo Weiqiang Deputy General Manager of the Board Office Introduction 3
Slide 4: Agenda
Agenda Company Overview 5 Key Market Highlights 16 Financial Overview 24 Appendix I – Summary Financial Statements 30 Appendix II – Summary of Land Bank 34 Agenda 4
Slide 5: Central China Real Estate At a Glance
Central China Real Estate At a Glance Company Overview Dominance in Henan Property Market • Leading residential property developer in Henan with 3-5% market share from 2006 to 2009 • Diversification in Henan with footprint covering 22 cities through successful execution of “Provincial Strategy” Soli
Slide 6: Henan Province at a Glance
Henan Province at a Glance North-South, East-West Transportation Hub of China Above Average Real GDP Growth Extensive Large population of infrastructure (4,841 Henan (03-09) over 100m Avg 12.9% km of expressways) PRC (03-09) Avg 10.9% Beijing Urbanization Rate / Urban Population Growth Zhengzhou Xia
Slide 7: Land Bank Overview
Land Bank Overview Pursuant to the Provincial Strategy, CCRE has accumulated 62 projects (completed and under development) in 22 cities across Henan Province CCRE currently has a land bank of 11.3m sq.m across 41 projects in Henan; the Group had 23 projects under development, including 6 projects in
Slide 8: Key Milestones
Key Milestones Proven Track Record with 18 years of operating history in Henan Province 1992 2002 2005 2009 2010 - Chairman Wu - Began implementation of Provincial - Mr. Wu was awarded the “Most Influential - Issued HK$765 - Deep penetration established CCRE Strategy and increased geographic Person
Slide 9: Corporate Structure and Ownership
Corporate Structure and Ownership Mr. Wu Market Cap: Mr. Wang US$13bn Public Chairman and Founder CEO 100% 100% 100% 25% Joy Bright CapitaLand Super Joy BVI Cayman Islands BVI CapitaLand is one of the largest listed 47.2% 27.1% 0.7% property companies in Asia with market cap of US$13bn Central China
Slide 10: Effective Management Structure and Distinguished Board of Directors
Effective Management Structure and Distinguished Board of Directors Executive Directors Highly Independent Audit Committee Assists the Board with in-depth review of Mr. effectiveness of the financial reporting Mr.Po PoSum SumWU WU Chairman Chairmanofofthe theBoard Board process, internal control and
Slide 11: Disciplined Land Banking with Sufficient Low-Cost Land Reserves
Disciplined Land Banking with Sufficient Low-Cost Land Reserves Management has demonstrated a clear and focused strategy in acquiring new projects; CCRE has acquired new land selectively in a diligent manner to maintain its low land cost base Land Reserves Acquired (as % of Sales of Properties) CCRE
Slide 12: Proactive Financial Management
Proactive Financial Management – Prudent Long Term Financial Policies Key Financial Management Policies Diverse Funding Sources as of 7M2010 Low cost Maintain disciplined approach to acquiring low land bank cost land bank Bank loans 51.8% Other loans 33.7% Target Adhere to internal gross margin/net
Slide 13: Strong and Long-Term Relationship with CapitaLand
Strong and Long-Term Relationship with CapitaLand Became CCRE’s strategic partner in 2006 (pre-IPO) – 29.75% Strategic Partner CapitaLand further invested RMB500m in 2007 – up shareholding to 36.14% Post IPO in 2008 up to now: shareholding at 27.1% CapitaLand’s long term commitment to the Chinese ma
Slide 14: Strong and Long-Term Relationship with CapitaLand
Strong and Long-Term Relationship with CapitaLand CapitaLand Ownership Structure 1 Platform for expansion into 2 Market Growth Potential Central China Rapid economic growth & Geographic diversification urbanization in Central China Temasek Holdings Untapped mass residential market Central government
Slide 15: Agenda
Agenda Company Overview 5 Key Market Highlights 16 Financial Overview 24 Appendix I – Summary Financial Statements 30 Appendix II – Summary of Land Bank 34 Agenda 15
Slide 16: A Relatively Healthy Real Estate Market
A Relatively Healthy Real Estate Market - Steady Growth in Purchasing Power Rising GDP Per Capita Rising Disposal Income Per Capita (RMB) YoY Change (%) (RMB) YoY Change (%) 25,000 80% % 12.9 16,000 60% 6% GR: 14,372 : 18. 20,477 70% A AGR 13,231 14,000 0 9 C 50% 20,000 0 9 C 18,408 – 20 – 20 11,477
Slide 17: Strong Industry Foundation
Strong Industry Foundation 郑州宇通客车股份有限公司 河南双汇投资发展股份有限公司 建业广场 郑州思念食品有限公司 Henan Shuanghui Jianye Square Investment & Development Co.,Ltd. ZHENGZHOU SYNEAR FOOD CO. LTD ZHENGZHOU YUTONG BUS CO.,LTD -Luohe–GFA 44,000 sqm – food & sausage – Office, Apartment -Zhengzhou – business vehicle -Zhengzhou – food
Slide 18: Market Leader in Henan – Market Share Leadership
Market Leader in Henan with Strong Brand and Premium Pricing – Market Share Leadership With 18 years of commitment to the Henan property market, CCRE has been able to garner market share and is regarded as a leading residential property developer in Henan 2008 - 2009 Market Position in Selected Mark
Slide 19: Market Leader in Henan – Branding and Premium Pricing
Market Leader in Henan with Strong Brand and Premium Pricing – Branding and Premium Pricing Superior product quality, combined with a strong brand name and track record have allowed CCRE to command higher average selling prices than its competitors in Henan 2009 & 2010 Established household name in
Slide 20: Market Leader in Henan – Product Innovation and Market Segmentation
Market Leader in Henan with Strong Brand and Premium Pricing – Product Innovation and Market Segmentation Diversified product lines catering to mid-to-high end market segments in Henan CCRE Has Developed Various Product Lines Customized to Varying Market Segments Forest Peninsula U-Town Code One Cit
Slide 21: Proven Execution Track Record
Proven Execution Track Record – Strong Execution Capabilities – GFA Completed A proven track record over the past 18 years demonstrating strong execution capabilities and success in entering new markets within Henan, especially after implementation of the “Provincial Strategy” in 2002 Cumulative GFA
Slide 22: Well Positioned in a Sizable End-User Market
Well Positioned in a Sizable End-User Market – Affordable Housing & High End-User Demand Supportive real estate market: strong economic growth and demand and supply dynamic for growth Housing Affordability Comparison(a) High End-User Demand Affordability ratio Upgrade and first-time purchase represe
Slide 23: Agenda
Agenda Company Overview 5 Key Market Highlights 16 Financial Overview 24 Appendix I – Summary Financial Statements 30 Appendix II – Summary of Land Bank 34 Agenda 23
Slide 24: Key Achievements in 7M 2010
Key Achievements in 7M 2010 7M 2010 total sales increased by 133.5% over 7M 2009 to RMB1.72 billion 7M 2010 total GFA sold increased by 97.5% over 7M 2009 to 372,723 sq.m. 7M 2010 net profit increased by 113.3% compared with 7M 2009 to RMB235 million. 7M 2010 ASP rose by 15.7% year-on-year, from RMB
Slide 25: Strong and Consistent Turnover Growth
Strong and Consistent Turnover Growth Turnover (RMB m) FY07 – FY09 CAGR: 22.6% 3,227 3,725 2,740 1,822 1,723 738 FY07 FY08 FY09 LTM(a) 7M FY09 7M FY10 GFA delivered (‘000 sqm) FY07 – FY09 CAGR: 15.6% 846 722 662 495 373 189 (a) FY07 FY08 FY09 LTM 7M FY09 7M FY10 Recognized ASP (RMB / sqm) 4,154 4,01
Slide 26: Sustainable Profit Growth with Continuous Margin Improvement
Sustainable Profit Growth with Continuous Margin Improvement Supported by Efficient Cost Structure Gross profit (RMB m) and margin Cost of sales(a) (as % of property sales) CAGR: 36.2% 70.5% FY07 – FY09 2.5% 65.4% 64.8% 61.7% 1.3%58.9% 1.6% 59.8% 38.4% 40.3% 1.6% 1.4% 34.7% 34.7% 37.2% 1.4% 1.8% 1.2
Slide 27: Conservative Capital Structure with Sufficient Liquidity
Conservative Capital Structure with Sufficient Liquidity and Improved Credit Metrics Liquidity overview (RMB m) Total debt / EBITDA(a) 31 Jul 10 Convertible bond 557 4.0x 4.0x 3.9x Bank loans 1,993 Other loans 1,295 1.1x Total debt 3,845 (b) Cash & cash equivalents 2,018 FY07 FY08 FY09 LTM Restricte
Slide 28: Q&A
Central China Real Estate Lindted QéaA Q&A
Slide 29: Agenda
Agenda Company Overview 5 Key Market Highlights 16 Financial Overview 24 Appendix I – Summary Financial Statements 30 Appendix II – Summary of Land Bank 34 Agenda 29
Slide 30: Summary Income Statement
Summary Income Statement (RMB m unless specified) FY2007 FY2008 FY2009 7M FY2010 (a) Turnover 1,822 3,227 2,740 1,723 (a) Net revenue from property sales 1,663 3,001 2,660 1,650 (a) Net revenue from other business 159 226 80 73 Cost of sales (1,308) (1,989) (1,788) (1,083) Gross profit 513 1,238 952
Slide 31: Summary Balance Sheet
Summary Balance Sheet (RMB m unless specified) FY2008 FY2009 7M FY2010 Assets Cash and cash equivalent 928 2,365 2,018 Restricted bank deposits 410 507 707 Properties for sale 4,804 5,247 6,027 Investment properties 255 264 267 Trade and other receivables 223 276 620 Prepaid tax 28 42 106 PP&E 211 2
Slide 32: Summary Cash Flow Statement
Summary Cash Flow Statement (RMB m unless specified) FY2007 FY2008 FY2009 Net cash generated from/(used in) operating activities (274) 259 15 Of which increase in properties for sale (1,209) (963) (388) Of which (decrease)/increase in receipts in advance 371 (440) 823 Net cash used in investing acti
Slide 33: Agenda
Agenda Company Overview 5 Key Market Highlights 16 Financial Overview 24 Appendix I – Summary Financial Statements 30 Appendix II – Summary of Land Bank 34 Agenda 33
Slide 34: Summary of Land Bank
Summary of Land Bank Land reserve is sufficient for 4 to 5 years of development Construction Construction City Project Total GFA (sqm) % of ownership commencement completion U-Town V 118,896 100% Sep-09 Dec-11 U-Town VI 127,010 100% Dec-10 Aug-12 U-Town VII 113,563 100% Aug-10 Dec-10 Landmark (Zheng
Slide 35: Summary of Land Bank (cont'd)
Summary of Land Bank (cont'd) Land reserve is sufficient for 4 to 5 years of development Construction Construction City Project Total GFA (sqm) % of ownership commencement completion Kaifeng Zhengkai Forest Peninsula 785,971 60% Apr-08 Jul-13 Jiangye Dahong City Garden 15,973 60% Nov-07 Dec-10 Kaife
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