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GemdalePI Announces 2013 Annual Results Revenue Reaches HK$291 Million After the Adjustment of Financial Year Net Profit Soars by 131% to Record High

[7 March 2014, Hong Kong] Gemdale Properties and Investment Corporation limited (“GemdalePI” or the “Company” and together with its subsidiaries, the “Group”, formerly known as Frasers Property (China) Limited, stock code: 535), a leading property developer and operator in Greater China, is pleased to announce its unaudited annual condensed consolidated results for the fifteen months ended 31 December 2013 (“the period under review”).

Following the change of the ultimate holding company to Gemdale Corporation (“Gemdale”) on 28 September 2012, the name of the Company was changed to Gemdale Properties and Investment Corporation Limited on 12 March 2013. In addition, the financial year end date of the Group has been changed from 30 September to 31 December effective from 2013 to align with that of Gemdale such that the current financial reporting period would be a 15-month span from 1 October 2012 to 31 December 2013. The corresponding comparative amounts shown covered twelve months period from 1 October 2011 to 30 September 2012, and therefore may not be entirely comparable with amounts shown for the current period.

During the period under review, the revenue of the Group increased by 46% to HK$290.7 million. It was mainly due to increase in rental income as a result of higher rental rates upon the renewal of the leases of Vision Shenzhen Business Park (“VSBP”) and Internet Plaza (“SIP”), an additional three months rental income was included in current period compared to last year. Meanwhile, the Group settled transactions from some residential units of Shenyang Yijing project launched in October 2013. During the period under review, the Group recorded 131% increase in profit attributable to owners of the Company at a historical high of HK$1,149.4 million, against profit of HK$497.2 million for the twelve months ended 30 September 2012. On a per-share basis, the Group recorded basic earnings of HK$0.1323 and is pleased to recommend a dividend of HK$0.01 per share.

As at 31 December 2013, the Group’s deposit, bank and cash balances and restricted cash increased by 21% to HK$1,857.7 million from HK$1,537.9 million as at 30 September 2012.

In property development aspect, during the period under review, the revenue increased 155% to HK$55.5 million, representing 19% of the total revenue. The revenue of the current period was mainly contributed by the settlement from part of the Shenyang Yijing project and the sales from the remaining car park spaces in Hong Kong.

In business park segment, the revenue for the fifteen months ended 31 December 2013 grew from HK$177.6 million to HK$235.2 million representing 81% of the total revenue. This improved revenue was due to the higher rental earned by VSBP and SIP, and rental income of fifteen months recorded for the current period against twelve months for the last year.

Furthermore, the Group’s high quality housing products continued to attract medium to high income level end-users. Sales performance became prominent starting the fourth quarter in 2013 after more saleable resources being available after asset injection in August 2013. With more residential projects being available for sale, property contracted sales increased significantly to RMB4,232 million, corresponding to a sales gross floor area of 334,400 square meters. Contracted sales are from major projects including Beijing Mentougou, Shanghai Shanshui Four seasons, Shenyang Riverfront Left Shore, Shenyang Yijing, Tianjin Tijing, Xi’an Tanghua Road and Xi’an Yanxiang Road.

In property leasing aspect, for the fifteen months ended 31 December 2013, with the increase in rental rate for expired leases and therefore a higher average rental rate, rental income increased to HK$235.2 million (2012: HK$177.6 million). Taken into account of the fair value gain of HK$1,413 million (2012: HK$668 million) in respect of the investment properties, segment profit was HK$1,784 million (2012: HK$807 million). As at 31 December 2013, Vision Shenzhen Business Park Phase 1 and 2 in Shenzhen Nan Shan district was 97% let while the occupancy rate for the Beijing Internet Plaza was 100%. The Group owns 100% and 60% of these projects respectively.

In land bank aspect, the Group succeeded in entering into five new cities including Shenyang, Dalian, Tianjin, Xi’an and Ningbo during 2013. A total of four new acquisitions of land parcels were transacted through participation in public land auctions, with an approximate gross floor area of 1,338,000 square meters in aggregate added to the Group’s land bank for a total consideration of approximately RMB2,84 million. Besides, the acquisition of six residential projects from Gemdale Corporation at consideration of HK$1,272.7 million, gives the Group an extra land bank of 1,500,000 square meters. As at 31 December 2013, total land bank of the Group (in terms of gross floor area) amounted to approximately 4 million square meters in eight different cities in the PRC.

Looking ahead, Mr. Xu Jiajun, Chief Executive Officer and Executive Director of GemdalePI, said, “We believe that a sizable and quality land bank is the most important successful factor for a property developer. Timing for acquisition of land bank at competitive pricing is the core successful factor for the Group. In the future, the Group will expand the business to nationwide property market in the PRC and sustain the growth momentum. According to the positioning strategy of the Group, we will place full efforts in developing “quick turnover” properties (including residential and commercial properties) for sale in the short to medium-term in order to balance the cash flow, accelerate the speed of development. In the medium to long-term, the Group will be positioned as a national developer for urban complexes and the holder of exquisite commercial property and continue to bring satisfactory returns to the shareholders.”