Zhong An Real Estate Spoils RMB 10 Billion Acquisition Project
The business is concentrated in the Zhongfang Zhong An Real Estate (672) in the Yangtze River Delta region. Last year, the sales of sales buildings exceeded 10 billion for the first time, reaching 10.1 billion yuan (RMB, the same below). When Shi Ancheng, chairman of Zhong An Real Estate, said in an exclusive interview, this year’s sales target is 15 billion yuan, an increase of nearly 50% year-on-year, focusing on acquiring new projects through acquisitions.
Facing the continuous tightening of the real estate environment, Shi Qicheng believes that the pace of urbanization in the Mainland is still rapid, and there is still much room for real estate in towns with good industrial distribution and continuous population inflows. In the next step, ZhongAn will focus on expanding its business outside the Yangtze River Delta, and will enter cities such as Xi’an, Wuhan and Kunming, hoping to develop projects in partnership with partners through the “Industry + Finance” model.
Zhong An did not issue final interest last year, and the stock price continued to be under pressure. Shi Yucheng explained that Zhong An’s investment in capital expenditures such as acquisitions and land purchases this year will reach 10 billion yuan, and the business is still in a period of high growth. It needs to increase investment and accelerate the pace of development. Therefore, it hopes to retain shareholders’ funds. At the same time, it also hopes to expand as soon as possible and strive to distribute dividends to shareholders as soon as possible. The future dividend payout ratio will not be lower than the average level of the industry.
Earlier, many mainland property companies had come to Hong Kong to invest in land, or “flagging" the property market in Hong Kong by buying old buildings. Some local developers have mentioned that, in general, the debt ratio of the inner house is relatively high. It may be risky to invest in Hong Kong in mainland China. He also believes that many insiders do have a high debt ratio, rely on high turnover to support performance, and try to sell quickly and quickly. On the other hand, in the Hong Kong market, the development cycle of real estate development is relatively long and the period of capital repatriation is relatively long. If the housing enterprises have high liabilities, depending on the business model of the Mainland, investment in Hong Kong may also be unsatisfactory or unsustainable. Therefore, when an in-house person comes to Hong Kong or invests abroad, he must be especially careful about controlling the leverage ratio and other factors.
No financing pressure
Shi Yucheng said that this year will increase investment, while the net debt ratio will still be controlled within 70%, compared to a 60% net debt ratio in 2017 rose slightly. He stressed that the group did not have financing pressure and the current debt situation was still at a normal level. The average financing rate for bank borrowing was about 5.9%, which was also lower than 6.1% in 2017.
The Group plans to develop 15 “children theme concepts” new commercial complex “Happy Times” in the first and second tier cities of Jiangsu and Zhejiang in the next five years, and cover all aspects of children’s health, education, entertainment and sports. At present, the first “Happy Hour” theme shopping mall has opened in Hangzhou. The area of similar commercial complexes ranges from 70,000 to 120,000 square meters.