Although the real estate market and construction resumed in the first two months of 2020, from the point of view of land acquisition arrangements, Yuexiu Property’s expansion rate has not slowed down.
Editor’s note: This article is from Economic Observer Online , Author: Chen Bo, reproduced with permission
At the results conference on March 10th, Lin Zhaoyuan, chairman of Yuexiu Real Estate (00123.HK) stated that according to the plan, the investment quota in 2020 will be around 30 billion yuan, up 55% year-on-year. This investment quota accounts for more than 40% of the contracted sales in 2019.
The cumulative contract sales of Yuexiu Real Estate in the first two months of 2020 were 4.266 billion yuan, a year-on-year decrease of about 39%. For the annual sales target of 80.2 billion yuan, the completion rate is only 5.3%. “The target of 80.2 billion has taken into account the impact of the epidemic,” said Lin Zhaoyuan.
In 2019, Yuexiu Real Estate’s 11 cities across the country added 7.77 million square meters of land reserve and construction area, and the amount of land acquisition and security deposits was 19.4 billion yuan. This part of land acquisition does not include equity acquisition expenditures. In the second half of 2019, Yuexiu Real Estate will increase its land acquisition budget from 15.9 billion yuan to 17.9 billion yuan.
Although the real estate market and construction resumed in the first two months of 2020, from the point of view of land acquisition arrangements, the expansion of Yuexiu Property has not slowed down.
Lin Zhaoyuan revealed that the saleable value of Yuexiu Real Estate in 2020 is 146.1 billion yuan. According to the sales target, the expected rate of removal is about 55%. “It depends on the market to be conservative. From the management perspective, it is basically an objective arrangement.” He said that if a large discount is given on the sales price, de-chemicalization will certainly speed up.
Conservative sales goals are based on reality. Since the Spring Festival of 2020, the progress of most real estate projects has been affected by one to two months. The first principle of Yuexiu Real Estate is to maintain a balanced cash flow and require sales planning and investment. The plans match each other.
According to Lin Zhaoyuan, apart from Hubei, all of its sales offices are now open: the resumption rate of projects under construction outside Hubei has also reached about 85%. “It is expected that the return rate will reach 90% by the weekend.”
The sales volume of Yuexiu Real Estate in 2019 was 72.1 billion yuan, of which Hubei contributed nearly 10% of its performance, and seven projects in Wuhan contributed 4.72 billion yuan in sales, accounting for 6.55% of the total sales performance. Lin Zhaoyuan said that Wuhan will still be a key development area in the future.
Lin Zhaoyuan found that with the gradual slowing of the epidemic, the sales volume at the sales office also gradually picked up. “Since the resumption of work, we have increased the project investment and development progress, hoping to grab back the lost one-month construction period. In the market, we can catch up. “
As of 2On December 31, 019, Yuexiu Real Estate had cash and cash equivalents of approximately 24.106 billion yuan. During the same period, the debt due during the year was 7.138 billion yuan. In addition, Yuexiu Real Estate’s short-term loans also include accounts payable and bills of 2.433 billion yuan and other liabilities of 89.722 billion yuan.
“Our cash flow is sufficient. If there are some good projects, we can still seize the opportunity to acquire some land. It may be more positive when we encounter some land with reasonable prices.” Lin Zhaoyuan said that the investment plan will require Match cash flow arrangements.