- May 15, 2013
- Over RMB831million Revenue Recorded in 2013Q1
Over RMB831million revenue was brought by the sale of land use of land parcel in F1-1 Shanghai Luodian project, increased by 1,124% comparing with the same period last year. Profit attributable to shareholders is RMB133,199,000, increased by 366% comparing with the same period last year.
In the light of continued tightened restrictions on the real estate market, the Central Government introduced “Five New Measures” to regulate the real estate industry, which imposed more stringent restrictions on property purchase, property loans and property prices. For purchase of second-hand housing, a 20% individual income tax will be strictly implemented. In March, various local governments started to formulate a series of implementation rules in respect of the “Five New Measures”.
Nevertheless, according to the official statistics of the National Bureau of Statistics, during the first quarter, total floor area and amount of commodity properties sold across China were 208.98 million square meters and RMB1,399.2 billion, representing a year-on-year increase of 37.1% and 61.3% respectively. The real estate market has shown a tendency of “rapid growth in fixed-asset investment and substantial increase in property sales” under the background of the fairly good performance of our national economy. With regard to land transaction, the supply and transaction volume of residential land in 300 cities across the country increased by 22.7% and 38.8% respectively over the corresponding period of the previous year, and the land sale price increased by 88%. As property developers continued their strategies, which have been implemented since the second half of the previous year, of seeking quality land sites in hotspot cities such as Beijing, Shanghai and Hangzhou, the unit gross floor area price has presented a structural growth. As a result, the unit gross floor area price of residential land in 300 cities across the country has risen to its highest level since 2011, representing a year-on-year increase of 37%, and the premium rate has rebounded to 15.6%. This reflected that the national land market is experiencing high-speed rebound thanks to the strong momentum brought by urbanization.
In March 2013, Premier Li Keqiang, when hosting an executive meeting of the State Council, urged to step up the formulation of a middle and long-term development plan for China’s urbanization and to improve the relevant supporting policies and measures. During his investigation and inspection in various places, he restated that the new urbanization must be supported by agricultural modernization. Meanwhile, the human-oriented urbanization and the agricultural modernization should complement each other. This indicates that a nationwide new urbanization has entered an important stage of actual implementation.
In the first quarter, a land parcel (F1-1) located in Shanghai Luodian project was successfully auctioned and sold by the Shanghai Municipal Bureau of Planning and Land Resources. After passing through 78 rounds of bidding, the piece of land was sold at RMB1,350 million with a premium over reserve price at over 40% to Zhenro Group Company Limited (“Zhenro”). Zhenro, one of the top 50 playersamong “China’s Top 500 Real Estate Developers in 2012”, principally engaged in large scale developments in new towns and high-end developments in prime municipal districts in Fujian. Zhenro’s aggressive bidding for a land in Shanghai reflected its confidence in the high end positioning of Luodian project and the outstanding quality of the land parcels.
The land parcel, with a plot ratio of 1.01 times, was equivalent to 111,122.12 square meters in terms of GFA. Land sale price was equivalent to approximately RMB 12,270.28 per square meter of site area and RMB 12,148.80 per square meter of GFA. The sale price of this land parcel at the Luodian project set a new record in the entire Shanghai Baoshan District this year. Average sale price in terms of site area was 24% up from to the land auction in November, underscoring the strong recovery in the land market.
The Company will continue to apply for land auctions in line with local governments’ land grant quota and schedule. A certain portion of the Company’s secondary real estate development projects will also be completed gradually this year and are expected to generate considerable cash inflow for the Company. We consider it reasonable to believe that our unique business model and prudent cash flow management will inevitably lay a solid foundation for the sustainable development of the Company and will advance steadily in the process of new urbanization.