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| - Revenue Surges 38%, Net Profit Margin 30.1% |
HONG KONG, Apr 3, 2017 - (ACN Newswire) - The pioneer integrated service developer in planning, investment development and operation of large-scale industrial towns in China, China VAST Industrial Urban Development Company Limited ("China VAST" or the "Group", HKG: 6166), announced its unaudited annual results for the year ended 31 December 2016.
Revenue of the Group for the year ended 31 December 2016 amounted to RMB1,965.2 million, representing an increase of 38.0%. The increase was mainly due to the revenue arising from the expansion of the Group's land development business. The income from properties sales increased at the same time, benefiting from the rising housing prices in the Beijing-Tianjin-Hebei region. For the property development business, the Group recorded revenue from the sales of properties of RMB989.7 million for the year ended 31 December 2016, an increase of 5.2% compared with the revenue of last year. Though for the year ended 31 December 2016, the Group delivered commercial and residential properties of 128,566 sq.m., representing a decrease of 20,312 sq.m. compared with the area of property delivered last year. The Group still recorded a growth in the overall property sales revenue due to the rising housing prices in the Beijing-Tianjin-Hebei region.
For the year ended 31 December 2016, the gross profit of the group amounted to RMB624.4 million, an increase of 2.2% compared with the gross profit in 2015, which was primarily due to the fact that most of the income for the year arose from land preparation and investment services attributable to VAST Ezhou Industrial Park, Shijiazhuang General Aviation Industrial Town Park and Shijiazhuang Gaocheng Vast Industrial Town Park, all of which had a lower gross profit margin. Gross profit margin was 31.8% for the year ended 31 December 2016 (2015: 42.9%).
The basic earnings per share for the year ended 31 December 2016 was RMB0.41 (2015: RMB0.31). The diluted earnings per share was RMB0.41 (2015: RMB0.31), and both recorded a positive increase of 32.3%. The Board has decided the payment of final dividend of HKD0.12 per share.
Mr. Wang Jianjun, the Board Chairman of China VAST, said, "Through tremendous efforts made over the past years, the Group has developed its innovative industrial town-oriented business model and explored various opportunities, and has focused on the development of large-scale industrial town projects within the strategic areas under the Beijing-Tianjin-Hebei Coordinated Development and Yangtze River Delta Economic Zone Development. Currently, the Group is cooperating with local governments in Langfang, Zhangjiakou and Shijiazhuang in Hebei Province; Ezhou in Hubei Province; and Chuzhou in Anhui Province in relation to the development of a number of industrial town projects."
BUSINESS REVIEW
Industrial Town Development
China VAST currently provides planning, development and/or operation services in 9 industrial town projects, consisting of (i) Longhe Park; (ii) Longhe Resort; (iii) Guangyang Technology Regeneration Park, all of which are located in Langfang, Hebei province; (iv) VAST Zhangjiakou City New Industrial Park; and (v) Zhangjiakou Modern Industrial Park, all of which are located in Zhangjiakou City, Hebei Province; (vi) Shijiazhuang General Aviation Industrial Town Park; (vii) Shijiazhuang Gaocheng Vast Insudatrial Town Park, all of which are located in Shijiazhung City, Hebei province; (viii) Chuzhou Park in Chuzhou, Anhui province; and (ix) VAST Ezhou Industrial Park in Ezhou City, Hubei province. Longhe Park is progressing towards its maturity in an active development stage. The remaining eight projects are in the early stage of planning and development. However, with the improvement and betterment on the terms of cooperation agreements signed between the Company and local government, some of the Group's cooperation agreements enable the Group to record revenue in the early stage of development, thus providing support for developing project on a rolling basis.
The Group recorded fee income of RMB155.2 million from development projects of land for sale in Longhe Park for the year ended 31 December 2016. An aggregate of 30,015 sq.m. of land in Longhe Park was sold by the relevant local government for a total land premium of RMB54.8 million. During the year, the Group received promising income contributed by the other four new industrial parks despite recording a decrease in the income from Longhe Park. In respect of fee income arising from land development for sale, the Group continued to develop Longhe Park while actively pushing forward other land development projects in the Beijing-Tianjin-Hebei region, so as to maintain a stable income source.
Property Development
The Group recorded revenue from the sales of properties of RMB1,019.2 million for the year ended 31 December 2016. Gross floor area ("GFA") sold totaled to 136,294 sq.m., and average selling price ("ASP") totaled to RMB7,478 per sq.m. In respect to property development, the Group intends to commence construction of four projects in 2017, including Yulong Bay Phase II, Foxconn City Phase III, Hongtai Commercial Plaza and Tanghai Project. Revenue from sales of properties during 2017 is expected to be derived mainly from sales carried forward from four projects including Hongtai Longdi, Hongtai Meishuguan, Yulong Bay and Electronic Information Industrial Park.
Property Leasing Income
For the year ended 31 December 2016, the Group's property leasing income was RMB21.2 million, and gross profit was RMB18.8 million. In the future, the Group will consider the synergies created by the increase of housing units through the development of real estate related business to determine the input of resources on the leasing business.
Mr. Wang concluded, "Given China VAST's extensive experience in the development of large-scale industrial town projects and its four core service capabilities, namely in regional industry positioning, planning and design, in infrastructure investment, in formation of industry, marketing and promotion, and in operation and management of industrial towns, we have pioneered the development of the industry successfully over the past years. In this regard, I with the China VAST management team have full confidence in the future development of the Group. The Group will continue to steadfastly implement its diversified, flexible and versatile business strategy through a professional, innovative and pragmatic approach, with the aim to strengthen profitability, reinforce our distinctive position as China?s leading service provider in planning, investment, development and operation of industrial towns, thereby earning the greatest value for customers and generating more promising returns for shareholders."
About China VAST
Founded in June 1995, China VAST Industrial Urban Development Company Limited (HKG: 6166) is one of the pioneer providers in the planning, development and operation of large-scale industrial town projects. Riding on its experience in property development accumulated in the initial stage, China VAST Development transformed into a pioneer in new urbanization construction in 2005. The Company has been committed to develop large-scale industrial town projects in the strategic planning areas under the integration of Beijing-Tianjin-Hebei coordinated development and the Yangtze River Delta Economic Zone development, demonstrating its four comparative advantages including: unique abilities in industrial town planning, design and positioning, infrastructure investment and construction, marketing and promotion, and related auxiliary facilities for logistics, residential and commercial properties. Through cooperation with local governments under long-term agreements, unlike other ordinary property developers, industrial towns are designed to provide a wide spectrum of comprehensive and professional services for regional industrial development and development, including planning and design, industry positioning, land preparation, infrastructure construction, marketing and promotion and related auxiliary facilities for logistics, residential and commercial properties.
Currently, China VAST Development is working together with local governments of Langfang, Zhangjiakou and Shijiazhuang of Hebei province, Chuzhou, Anhui province and Ezhou, Hubei province in respect of development of nine industrial town projects with project planning areas of approximately 90 sq.km. Focusing on the optimization of infrastructures in the above-mentioned regions, transformation of industry and construction of urbanization as well as building and realizing fully integration of working and living communities for its residents, China VAST Development is sparing no effort to become a leading integrated developer and operator of industrial towns in China. http://www.vastiud.com/.
Topic: Earnings
Source: China VAST Industrial Urban Development Co. Ltd
Sectors: Daily Finance, Real Estate & REIT
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From the Asia Corporate News Network
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