After spending 81.2 billion to acquire land, China Overseas Real Estate achieved a profit of 25.8 billion in the first three quarters

Reporter｜Zhang Ziyi

The report for the third quarter of 2022 released by China Overseas Properties (00688.HK) recently was exceptionally simple, and did not explain much about the declining profit situation.

According to the third quarterly report of China Overseas Real Estate, in the first three quarters of this year, China Overseas Real Estate recorded a revenue of 121.31 billion yuan, and an operating profit after deducting gains from changes in fair value of investment properties and net foreign exchange gains and losses was 25.81 billion yuan.

In terms of sales performance, the company achieved contracted property sales of 201.3 billion yuan during the period, of which the third quarter contracted property sales amounted to 62.8 billion yuan.

Judging from the performance of a single quarter, in the third quarter of this year, China Overseas Real Estate recorded a revenue of 17.52 billion yuan, and an operating profit after deducting the gains from changes in the fair value of investment properties and net foreign exchange gains and losses was 1.8 billion yuan, a decrease compared to the same period last year. reduce.

China Overseas Real Estate said that under the policy of “housing, not speculating,” the real estate policies of local governments are closer to the market, and policies are implemented according to the city to actively promote the healthy development and virtuous circle of the real estate market. Although the sales value of domestic commercial housing declined year-on-year in the third quarter, the decline was narrower than that in the first half of the year. The Group is cautiously optimistic about the bottoming out of the mainland real estate market.

Fitch Ratings also believes that China’s latest support measures aimed at stabilizing the real estate industry and revitalizing the confidence of home buyers may not be enough to stimulate demand for home purchases. Loose housing policies have generally led to a small rise in some high-tier cities and state-owned housing companies, but as long as homebuyer confidence remains low, new home sales across the country are likely to remain sluggish.

The decline in the performance of China Overseas Real Estate is only a side profile of the entire real estate industry. However, China Overseas Properties adheres to the strategy of investing in first- and second-tier cities, and its stable financial position shows its development resilience.

As of the end of September, China Overseas Properties has added a total of 31 new land parcels in 13 cities in China, with a new total floor area of ​​5.53 million square meters, an equity area of ​​5.28 million square meters, a total land price of 81.21 billion yuan, and an equity amount of 73.52 billion yuan.

In the third quarter alone, China Overseas Properties added 10 parcels of land in 7 cities in China, with a new total floor area of ​​1.95 million square meters and an attributable area of ​​1.82 million square meters. billion.

Since the second half of the year, China Overseas Real Estate won two land parcels in Tianjin at a cost of 3.465 billion yuan in October; in September, the third batch of centralized land supply in Beijing cost 14.745 billion yuan to win three land parcels. In the first half of the year, China Overseas Properties invested more than 10 billion yuan in the acquisition of equity interests in related projects located in Guangzhou, Shanghai, Chengdu and other cities.

China Overseas Real Estate said that in the future, it will continue to rely on the development strategy of steady and long-term development, adhere to the investment strategy of “mainstream cities, mainstream locations, and mainstream products”, go all out to increase the sales rate, pay close attention to reducing costs and increase efficiency, and strive to create better business performance.

In addition, China Overseas Real Estate’s financial status and smooth financing channels also make it particularly advantageous.

As of the end of the third quarter, the balance and cash of China Overseas Land and Investment Bank were 119.35 billion yuan, with a net debt ratio of 43.7%, the lowest debt ratio in the industry, and a healthy financial position.

On October 25, China Shipping Enterprise Development Group Co., Ltd.’s 2022 public issuance of corporate bonds to professional investors has been accepted by the Shenzhen Stock Exchange, with a proposed issuance amount of 15 billion yuan; on September 20, China Shipping Enterprises issued 1.5 billion yuan of corporate bonds .

According to incomplete statistics, since the beginning of this year, CNOOC has issued 16.5 billion yuan of bonds in the open market, including 9 billion yuan of medium-term notes and 7.5 billion yuan of corporate bonds.

According to a report released by CICC, although the company still has a certain gap compared with the data of the same period in 2019 and 2020, it is still ahead of its peers. In particular, the company’s profit margin performance continued its comparative advantage, and it has begun to show signs of stabilization and improvement. Although the company’s reported gross profit margin in the first half of the year fell by 5 percentage points year-on-year to 23.5%, it has shown an improvement trend from 19.5% in the first half of the same period in 2021, and is still at the leading level in the industry.