Turnover and Profit Attributable to Equity Shareholders Surge by 1.1 Times Respectively to HK$5,861.3 Million and HK$1,021.9 Million Respectively
HONG KONG, March 30, 2012 /PRNewswire-Asia/ -- Top Spring International Holdings Limited ("Top Spring" or the "Company" and, together with its subsidiaries, the "Group") (HKEx Stock Code: 3688), a real estate property developer in the PRC and one of the major real estate property developers in Shenzhen and Changzhou, announced its annual results for the year ended 31 December 2011.
Financial Highlights
Achieving outstanding results even in a tough market environment in respect of both satisfactory gross margin and the recognised profit and the financial improvement
In 2011, the Group recorded contracted sales of approximately HK$5,036.2 million, representing a decrease of approximately 16.2% over 2010. The contracted saleable gross floor area ("GFA") was approximately 263,662 sq.m., representing a decrease of approximately 15.8% over 2010. The decrease in both contracted sales and contracted saleable GFA were driven by the significant slowdown in the PRC property market as a result of the PRC government's policy measures aimed to sustain the long-term development of the property industry. The average selling price of its contracted sales, however, was not materially affected. (2011: approximately HK$19,101.0 per sq.m. and 2010: approximately HK$19,184.4 per sq.m.).
The Group's turnover increased by more than 1.1 times, to approximately HK$5,861.3 million for the year ended 31 December 2011 from approximately HK$2,759.9 million in 2010. This increase was primarily attributable to an increase in the Group's sale of properties, rental income, income from hotel operations and property management and related services income.
The Group's gross profit increased by approximately 1.3 times, to approximately HK$3,879.1 million for 2011 from approximately HK$1,685.6 million for 2010. The gross profit margin increased by 5.1 percentage points to 66.2% year-on-year. The increase in gross profit was primarily attributable to the increase in recognised sales in its Shenzhen projects with higher gross margin, in particular Shenzhen Hidden Valley Phase 4 and The Spring Land Phase 2 and 3. During the year under review, profit attributable to equity shareholders of the Company was approximately HK$1,021.9 million, representing an increase of approximately 1.1 times as compared with the corresponding period of 2010. The Board of Directors has declared final dividend of HK15 cents per share (31 December 2010: nil).
Mr. Wong Chun Hong, Executive Director, Chairman and Chief Executive Officer of the Group, said, "In 2011, the Group was able to achieve outstanding results even in a tough market environment in respect of both satisfactory gross margin and the recognised profit and the financial improvement. This proves the success of our strategies of 'quality property is a gateway to quality living', 'dual lines of medium and high-end residential and urban mixed use communities' and 'land acquisition policy focusing on low land cost and high appreciation potential'."
Maintaining brand advantages and achieving growth in prices with steady increase in rental income from investment properties
For the year ended 31 December 2011, the Group completed construction of The Spring Land (Phases 2 and 3), Shenzhen Hidden Valley (Phase 4) and Changzhou Le Leman City (Phases 6) with total saleable GFA of approximately 261,795 sq.m. For the year ended 31 December 2011, the Group's property development business achieved a turnover, net of sales return, of approximately HK$5,617.6 million with saleable GFA of approximately 222,095 sq.m. being recognised, representing approximately 1.2 times and 1.1 times, respectively, over the year ended 31 December 2010. The average selling price for the sale of properties was approximately HK$25,293.7 per sq.m. for the year ended 31 December 2011. (2010: approximately HK$23,733.7 per sq.m.)
During the year under review, the Group generated steady recurring rental income of approximately HK$104.7 million, representing an increase of approximately 13.4%, as compared with 2010. Excluding the shopping mall of Chengdu Landmark and the retail asset of Changzhou Le Leman City (Phase 9) which are under construction, the occupancy rate of all investment properties under operation was approximately 92.9%.
Expanding low cost and high growth potential land reserves
In 2011, the Group acquired additional commercial and residential lands in Tianjin, Huizhou and Changzhou. The total plot ratio GFA of new land bank was approximately 1,120,105 sq.m. and the average cost was approximately RMB849.6 per sq.m. The Group had a total of 14 projects over 7 cities in various stages of development, with a total net saleable and leaseable land bank of approximately 3,966,242 sq.m. The average cost was approximately HK$2,311.5 per sq.m.
Improving management capability and establishing outstanding management team
During 2011, in order to further improve the management capability, the Group appointed a new Chief Operating Officer from the senior management team who processes comprehensive professional knowledge and good execution capability. Meanwhile, the Group also internally appointed a new executive Director and recruited an additional non-executive Director from outside to enhance the Group's stability and sense of forward-looking when it formulates its business strategies. Top Spring International currently has a total of ten Board of Directors on its Board.
Further enhancing advantages and competitiveness to adapt to challenges
Up to 25 March 2012, the Group has achieved contracted sales of approximately HK$906.2 million with contracted saleable GFA of approximately 71,914 sq.m.
Looking forward, the Group will launch new projects mainly including The Spring Land (Phase 4), Hangzhou Hidden Valley (Phase 1), Tianjin Le Leman City (Phase 1), Changzhou Le Leman City (Phase 7 (4-A)), and residual residential, office and retail units from The Spring Land (Phases 1-3), Shenzhen Hidden Valley (Phases 1-4), Chengdu Landmark, Changzhou Le Leman City (Phases 1, 2, 3, 6 and 7 (4-B)) and Changzhou Landmark (Phase 4) in 2012, with a total market value estimated at approximately HK$9.0 billion.
For land bank replenishment, the Group is of the view that quality investment opportunities will likely arise in the second half of 2012. Under the guiding principle of sound financial condition, the Group will continue to exercise strict discipline to acquire quality, cost-effective land bank with strong appreciation potential and to explore any opportunities to acquire some distressed assets in the Group's focused regions of Pearl River Delta, Yangtze River Delta Regions, Beijing-Tianjin and Chengdu-Chongqing regions and continue to focus on the development and sales of medium and high-end residential development and operation of urban mixed-use communities and will continue to board its product range.
Mr. Wong said, "Looking ahead, we are of the view that a series of industry control measures including 'price restriction', 'purchase restriction' and 'credit limit' policies to curb the excessive growth of housing prices issued by the Chinese Government before will continue to be in force. Notwithstanding the current challenging market condition, we remain confident of the medium-to long-term development of the Chinese property market, as we believe residential and commercial property markets should benefit from the combined effect of consistent growth in household incomes and urban population in China."
Mr. Wong concluded, "Going forward, the Group will adhere to its mission 'quality property is a gateway to quality living', and continue to enhance its product quality and brand awareness. For operation and management, the Group will seek to arouse the staff's enthusiasm, improve operational efficiency, enhance corporate governance and broaden financing channels at home and abroad to further consolidate its financial strength, in order to improve the Group's self-advantages and competitiveness in the challenging market and achieve a multi-win-win situation among the Group, customers, shareholders, partners and employees."
About Top Spring
Top Spring is a real estate property developer in PRC specialising in the development and operation of urban mixed-use communities and the development and sale of upscale residential properties in the Pearl River Delta, the Yangtze River Delta Beijing-Tianjin and Chengdu-Chongqing regions. Based in Hong Kong and Shenzhen and under the leadership of Mr. Wong Chun Hong, our Founder, Chairman and Chief Executive Officer, as at 31 December 2011, we had a total of 14 projects over 7 cities in various stages of development in Shenzhen, Changzhou, Hangzhou, Chengdu, Dongguan and Tianjin, totalling a net saleable/leasable GFA of approximately 3,966,242 sq.m.. On 23 March 2011, Top Spring listed its shares on the Main Board of The Stock Exchange of Hong Kong Limited and opened the door to the international capital market.
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