Soon after the release of Greentown China's results, Greentown China made new moves in the land auction market, successively acquiring high-quality land in Suzhou and Ningbo, and fulfilling the quality development plan with practical actions.
On March 27, Greentown won the No. 02 plot of Shuanghu Plate in Suzhou Industrial Park at a total price of 3.082 billion yuan, with a premium of 18.22% and a transaction floor price of 65,022 yuan/㎡, and on the 28th, Greentown won the land plot of Ningbo High-tech Zone with a transaction floor price of 20,984 yuan/㎡ for 1.735 billion yuan.
After this round of in-depth adjustment cycle of the real estate industry, people's housing concept is changing from a simple "house to live" to a higher demand for "living in a good house".
The two pieces of land that Greentown has just acquired provide natural and advantageous conditions for it to build a "good house". Among them, the Suzhou Shuanghu plate plot, not only occupies the scarce resources of the city, the plot ratio is only 1-1.02, you know, low density is the best product for Greentown to build, and the Ningbo high-tech zone plot, there is no price limit for new houses, but also gives Greentown more room to play in product strength.
This round of adjustment has had a profound impact on the industry, but Greentown China stands out, not only ranking first in the industry in terms of product strength, but also maintaining a rare trend of positive growth in a number of operating data.
At the recent performance meeting, Zhang Yadong, chairman of the board of directors of Greentown China, explained the deep-seated reasons behind this: "Good products and good houses are the foundation and guarantee of Greentown's performance. “
In order to achieve this goal, Greentown China continues to promote the three reforms of "reform, change and improvement", and is committed to improving product quality and comprehensive operation quality.
Zhang Yadong said that in 2024, the core of Greentown is "reform, change and improvement", and Greentown will continue to deepen internal reform, transform to connotative development based on "quality improvement", and continuously improve its competitiveness and adaptability.
To make up for shortcomings, the proportion of equity in new projects rose to 74%
According to the performance data disclosed by the company a few days ago, Greentown will achieve operating income of 131.383 billion yuan in 2023, an increase of 3.3% year-on-year, and net profit attributable to shareholders of listed companies will reach 3.118 billion yuan, an increase of 13.1% year-on-year.
Judging from the data, the direct reason for the significant increase in shareholders' profit is that Greentown China has greatly increased the proportion of shareholders' equity by increasing the proportion of equity in the past year. In 2023, in the company's comprehensive income statement, the proportion of shareholders' profit and loss of listed companies to annual net profit increased significantly from 30.98% in the previous year to 46.68%.
It is obviously not easy to do this in the current environment of the overall shrinkage of the industry.
On the sales side, Greentown China's contracted sales in 2023 will be 301.1 billion yuan, of which self-invested sales will be 194.3 billion yuan and equity sales will be 127.6 billion yuan, up three places year-on-year, entering the top 8 in the industry.
On the investment side, Greentown acquired 38 new ones last year, with a total construction area of 5.57 million square meters, a total equity land payment of 59.5 billion yuan, and an average floor price of 14,231 yuan per square meter. Among them, 84% of the new value is located in first- and second-tier cities, and 58% is located in the three hot cities of Beijing, Shanghai and Hangzhou, and the equity ratio of new projects has increased by 5 percentage points to 74%.
As of the end of 2023, the total value of Greentown China's land reserves reached 629.2 billion yuan, with a construction area of 37.2 million square meters, an equity construction area of 23.32 million square meters, a total saleable construction area of 24.99 million square meters, and an equity saleable construction area of 15.57 million square meters.
What is even more commendable is that with its strong product strength and project operation capabilities, even in the current real estate downturn, Greentown still achieves the first hot sales of new projects, and the profits of new projects continue to consolidate, with an average net profit margin of more than 8% at all project levels in 2023.
According to the data, 26 of the 38 new projects have been opened that year, accounting for 68%.
In other words, 39% of the value of Xintuo's 142.5 billion yuan has achieved sales conversion in that year, reaching 54.9 billion yuan, and this figure is 50.1 billion yuan in 2022.
Li Jun, Executive Director and Vice President of Greentown China, said at the results meeting that in order to ensure "both quantity and quality", Greentown strictly arranges according to cash flow, converges and focuses, adheres to differentiated investment, deeply cultivates core cities, snipes at investment opportunistic cities, and achieves one-in-one investment, and at the same time further concentrates on areas with market safety, enhances the ability to resist risks, continues to improve the equity ratio of new investment projects, and consolidates future profit margins.
Living within your means, "financial soundness" is the number one priority
In addition to the high-quality development of "both volume and price", another key word of Greentown in the past year is "stability", which is also a prerequisite for Greentown to still sit firmly in the industry's quality benchmark position in the current complex and changeable industry environment.
According to the financial report data, Greentown's monetary funds as of the end of 2023 were 73.4 billion yuan, and the operating cash flow was positive 23 billion yuan, an increase of 58% year-on-year at the end of 2022, both reaching a record high.
The financial structure was also exceptionally stable, with the cash short-term debt ratio of 2.3 times continuing to remain high, the weighted average financing cost further decreased by 10 basis points from 2022 to 4.3%, a record low, and the debt due within one year was RMB32.5 billion, accounting for 22.3% of the Group's total debt at the end of 2023, which remained low.
In terms of onshore bonds, in 2023, Greentown China issued RMB13.853 billion of bonds in the primary market, and completed the replacement of US$1.172 billion in overseas financing (including US$450 million in advance replacement of debt due in 2024).
It is worth mentioning that up to now, the refinancing of Greentown's overseas debt due in 2024 is progressing smoothly, and a number of banks have issued approvals, and the company plans to complete the replacement of the debt due for the whole year in the first half of 2024.
Geng Zhongqiang, executive director and executive president of Greentown China, said that this year will start arranging the early replacement of debt due in 2025.
Geng Zhongqiang also introduced that in the first half of last year, the last 1.5 billion yuan of domestic perpetual bonds were repaid, and the perpetual bonds were cleared, completely plugging the gap that eroded profits.
Thanks to this, on March 26, Morgan Stanley, an international rating agency that has always been "unpretentious" to domestic real estate companies, issued a report expressing optimism about Greentown China, maintaining its "overweight" rating, and predicting that the company's earnings compound annual growth rate from 2024 to 2026 will be between 10% and 15%.
Despite this, for the sake of "stability", when talking about the investment plan in 2024, Guo Jiafeng, executive director and chief executive officer of Greentown China, bluntly said that the investment work this year is more difficult to do, and the market may face greater challenges, and the new value of goods is expected to be around 100 billion yuan, mainly depending on sales and cash flow.
Guo Jiafeng said that cash flow is the top priority of the company, the company monitors the cash flow situation every day, and will update the cash flow on a rolling basis every month according to various types of income and expenditure, and the company should ensure that the main expenses such as land acquisition have no negative impact on the group's cash flow security. We will continue to strictly control the net asset-liability ratio within 80% throughout the year to maintain positive operating cash flow.
However, for the sales market, Guo Jiafeng predicts that the policies in the core first- and second-tier cities are expected to accelerate the implementation and the effect will gradually appear;